Cover Story

The Boss


Morgenthau escorts Sotomayor to reception
Photo by AP images

Morgenthau came a bit late to the profession: Between college and law school he spent 41⁄2 years in the Navy, mostly as executive officer on two destroyers in World War II, rising to the rank of lieutenant commander. When one was torpedoed and sank he treaded water for hours, and then swam to get attention from another ship. His surviving crew was plucked from the Mediterranean.

“I guess we were lucky,” he says.

That heroic tale clicked with Patterson, who had been decorated for bravery in World War I. Then in 1940, at age 49, he left his seat on the New York-based 2nd U.S. Circuit Court of Appeals to go to boot camp and regain his commission in anticipation of the next war. While emptying garbage cans on KP, Patterson learned by phone he would be leaving camp for appointment as U.S. undersecretary of war. He later would become the secretary.

“He either liked you or he didn’t like you,” Morgenthau recalls of his job interview with Patterson, where he’d been steered by one of his Yale Law School professors. “And I was lucky. He liked me.”

Morgenthau frequently mentions luck, and it graced him early; he was born to wealth and privilege.

Morganthau and President John F. Kennedy
Photo by Bettmann/Corbis

He went to work at what is now Patterson Belknap Webb & Tyler for $3,600 a year, top dollar for new lawyers at New York firms in 1948. He quickly became Patterson’s right hand as they litigated for big corporations. They also defended some of those swept up in the anti-Communist frenzy of the early 1950s, including pushback of a blacklist threat against the actor Edward G. Robinson.

“Unlike most Wall Street lawyers of that day, he would take loyalty cases,” says Morgenthau. “He didn’t care what anybody else thought. He did what he thought was right.”

Morgenthau went on every trip with Patterson but one. He was supposed to have gone but stayed behind to write a brief that was due. Patterson died in a plane crash on the return to Newark’s airport in a blizzard in 1952. Once more, luck was with Morgenthau.

Morgenthau has long since become legend, at times larger than life: The DA on TV’s Law & Order—the image of district attorneys many Americans grew up with—was loosely based on him. Steven Hill, just two years younger, played the part for the show’s first decade, and as DA Adam Schiff he channeled Morgenthau: the voice with gravel and gravitas, a no-nonsense style, pulling back for the big picture and laconic cuts through the clutter when brainstorming cases with his assistants.

Unsuccessful NY gubernatorial bid in 1962
Photo by Grey Villet/Time Life Pictures/Getty Images

Morgenthau is America’s DA. Thousands of young lawyers have worked for him, many idolized him, and more than 80 of them went on to become state and federal judges, including U.S. Supreme Court Justice Sonia Sotomayor, an assistant DA from 1979 to 1984.

Morgenthau became known for applying the same zeal and toughness to financial crimes as to violent crimes—justice for rich and poor alike, some of his former assistants like to say. Critics say he put too much emphasis on white-collar crime, but violent crime plummeted in New York City during his tenure.

“The young people in our office just flock to him, in part because he’s famous,” says Martin Lipton, a founder of Wachtell Lipton who brought Morgenthau to what may be the toughest hire in the country. “And they feel they’re getting good advice. He’s consulting with the litigators and he’s helpful just talking about problems.”

The firm knocked out walls to turn three offices into one for Morgenthau when he arrived in January. Still, the new digs are considerably smaller than the capacious, wood-paneled office with the signature scent of cigars he had occupied just weeks before as Manhattan’s top prosecutor.

Many of Morgenthau’s prosecutors referred to him simply as “the Boss.”

“We really worshipped him,” says Gary Naftalis, an assistant U.S. attorney under Morgenthau in the late 1960s, before the Boss became DA. “What he did was set a great tone. It was the most exciting place to be in the law and we were there to do great things without fear or favor. That’s a great feeling in life.”

There is a twice-told tale from those days about a prominent lawyer, a political operator who asked Morgenthau for the small favor of briefly delaying indictment of his firm’s client so it could get its fee.

Morgenthau sought out the AUSA handling the case and asked whether it was ready to go to the grand jury. The answer was no; it was on a backburner. Morgenthau told him to move on it immediately, and there was an indictment the following week.

The word was out: no fear, no favor.

“He is one of the handful of people in this world who actually live up to their reputations,” says Naftalis, firm co-chair and litigation head of New York’s Kramer Levin Naftalis & Frankel. And while perhaps at times the Boss thought, “What would Patterson do?” his assistants were invoking Morgenthau in similar fashion.

Morgenthau is credited with developing white-collar crime prosecution as we know it after longtime friend President John F. Kennedy appointed him U.S. attorney for the Southern District of New York in 1962.

In a landmark case in the late 1960s, U.S. v. Simon, the 2nd Circuit upheld the convictions of three accountants who certified a company’s misleading financial reports. Two of the three were higher-ups at what then was the accounting firm Lybrand, Ross Bros. & Montgomery. At trial their lawyers showed that the men had followed generally accepted accounting principles; Morgenthau did not disagree.

“But our position was that fraud trumps accounting rules,” he says.

Morgenthau had anticipated the Enron scandal. He created the first financial securities fraud bureau in a U.S. attorney’s office. The Simon case sent notice to professionals.

“But they didn’t listen,” he says. Before he left, his office brought cases against big banks, but others are now left to investigate the opaque financial deals that led to the 2008 financial meltdown.

Morgenthau’s voice is so deep and gutteral that sometimes even his low-key exuberance comes across as gruffness. Despite a patrician upbringing both in Manhattan and on his family’s estate not far away in the Hudson River Valley’s Dutchess County, his accent has touches of pure New York City. For example, “had to” becomes “hadda.”

His was the first DA’s office in the country to get a murder conviction with no body and no witness. “The FBI was on it and I hadda call [then-FBI Director] Louis Freeh and get them to back off,” Morgenthau says of one of those cases. As for controversy over such a prosecution, he has said that if you don’t bring the case, “it encourages people to do away with the body.”

His direct manner and lack of political bluster hurt in a losing bid for governor in 1962, when Morgenthau tried to unseat incumbent Nelson Rockefeller. And he can be so reserved as to seem shy. The style works better one-on-one, in small groups or in professional gatherings.

More than 20 years ago when Morgenthau was in his mid-to-late 60s, whispering campaigns said he was getting too old for the job. But political campaigns against him failed; he kept getting re-elected. Then the Bank of Commerce and Credit International caught his eye in the late 1980s. It would be the biggest banking fraud investigation in history. It was a comeback from never having left, giving him a second wind that held through retirement last December. It sealed his reputation as America’s DA.

Morgenthau has made his biggest mark going after complex financial fraud, and in more recent years he dealt serious blows to funding for terrorists and development of weapons of mass destruction by taking on big banks that did more than just look the other way as the money funneled through.

BCCI was the beginning. The worldwide banking behemoth was started by Arab investors who secretly bought their way into U.S. banking, and was a financial nexus for money flowing to and from drug cartels, terrorists and rogue dictators.

Morgenthau got indictments of BCCI and two of its principals. Ultimately, the bank was forced to close, and in a guilty plea to both federal and state charges BCCI paid $10 million in fines and forfeited $550 million in assets.

Meanwhile, in 2003 Morgenthau’s investigation of the Enron scandal led to nearly $300 million in settlements from JPMorgan Chase & Co. and Citigroup. And in 2005 his office got convictions of former Tyco International CEO Dennis Kozlowski and his top lieutenant, Mark Swartz, for looting the company of $100 million.

But in the aftermath of the Sept. 11 attacks, Morgen- thau had begun focusing even more on terrorism’s financial underpinnings. Late last year the Swiss bank Credit Suisse Group paid $536 million and admitted helping Iran and other rogue nations by stripping away the source of certain transactions. Morgenthau’s investigation showed the Iranians were secretly purchasing materials for, among other things, long-range missiles and development of nuclear weapons.

In a similar matter earlier last year, Lloyds TSB Bank agreed to pay $350 million to settle Morgenthau’s investigation.

“One thing I learned about banking a long time ago, it’s all about deposits,” Morgenthau says. “Only the threat of criminal prosecution keeps them honest.”

At first, in the BCCI case, the federal government was pressured into joining and working the case from Washington, D.C. In other, later cases, the feds have joined in more easily.

Manhattan is sometimes as much cauldron as melting pot, and Morgenthau’s office prosecuted criminal cases that churned in the city’s tabloids as well as in national headlines. In 1990 five black males under age 16 were convicted of raping and nearly killing a woman known as the “Central Park jogger.” But the final headlines in the case would have made Morgenthau’s mentor proud—and perhaps would be too shameful for many other prosecutors.

After the teens had served between six and eight years each behind bars, another man confessed to the crime in 2002. DNA evidence bore out his claim. Amid calls to overturn the convictions, the New York Police Department dug in its heels, as did some current and former prosecutors in the DA’s office, including the one who had prosecuted the cases.

Morgenthau moved to have the convictions set aside. And they were.

“I think it was his finest hour,” says Barry Scheck, co-founder and director of the Innocence Project, which promotes the use of DNA evidence to reverse erroneous convictions. “Very few DAs would have done that, but he could with his stature, self-confidence, guts and commitment to principle. In that and other cases I’ve seen, I believe he has asked, ‘Is this the right thing to do?’ ”

With that praise, Scheck is a soloist in a large chorus. But you don’t live to be 90 years old and still on your game at this level without having plenty of foes. (Though if you outlive most of them, your stories trump.) Even now they tend to go off the record; such is the reach of Morgenthau’s power and suasion.

Some complain that as DA he would go after cases better left untouched, or better handled by the feds, or that he pickpocketed away some of them in closely chronicled turf battles. Morgenthau’s dustups with some federal prosecutors, especially former U.S. attorneys Rudolph Giuliani and Mary Jo White, are legendary.

Morgenthau growls when asked about them: “That’s bullshit. I mean that happened once in a blue moon. The press loves it. But it’s generally not the top-level people who started it; it’s the guys at the working level who don’t know the other is on it and then you’re put in a position of trying to—I mean, that’s nonsense.”

Competition can sharpen any market, but having it among prosecutors might make things even worse for their targets.

“There have been many instances over his long tenure as DA where he creatively applied our state criminal statutes to bring cases which the U.S. attorney could have and would have brought under the broader federal criminal statutes—if they fit,” says Roger L. Stavis, a criminal defense lawyer at New York’s Gallet Dreyer & Berkey. His tone and words are measured, as if to indicate he is holding back.

And a longtime dean of the New York City criminal defense bar who went up against Morgenthau’s office often over the years is engaging at the outset of a telephone interview until learning it has to do with the former DA. “I’d rather not comment,” he says, without even a “goodbye” before cradling the receiver.

Morgenthau has always moved easily in the highest realms of politics, wealth and power—something that might put others on edge. It helps that he was born to it.

His immigrant grandfather, Henry Morgenthau, made a fortune in New York City real estate and was President Woodrow Wilson’s ambassador to the Ottoman Empire (Turkey). He was the highest-level government official to report mass killings of Armenians by the Turks.

Morgenthau addresses post-9/11 civil unrest
Photo by AP Images

Henry Morgenthau Jr., Robert’s father, was close to Franklin D. Roosevelt, who named him U.S. treasury secretary during the Great Depression and World War II. Later in the war, Henry Morgenthau’s pressure helped breach the State Department’s intransigence over aiding and rescuing Jews fleeing the Nazis.

Young Bob Morgenthau spent his summers as a teen racing small sloops on Cape Cod with Jack Kennedy and watching movies in a small theater at the Kennedys’ vacation home. He was having lunch with U.S. Attorney General Robert Kennedy by the pool at Kennedy’s home in McLean, Va., on Nov. 22, 1963, when a call came from FBI Director J. Edgar Hoover to report that the president, Kennedy’s brother, had been shot.

In the 1980s Morgenthau was criticized for giving a highly sought job as assistant DA to JFK Jr. His reply at the time: “If having a famous father were a disqualification, I wouldn’t have gotten my job.”

Morgenthau grew up as a family friend of the Roosevelts as well, and he was at their getaway cottage in 1939 for a picnic with King George VI and Queen Elizabeth. Hot dogs were served.

On leave from the Navy, Morgenthau once tended bar at his parents’ Dutchess County apple farm for FDR and British Prime Minister Winston Churchill, serving mint juleps.

Name-dropping often becomes for Morgenthau a question of whether to tell his stories or not. In some instances he might otherwise deprive historians. For example, he has fascinating inside skinny on the scandal that brought down Justice Abe Fortas, who resigned from the Supreme Court in 1969. It resulted from an investigation by then-U.S. attorney Morgenthau’s office.

In 1967 and 1968 Morgenthau got stock fraud and perjury convictions of the Wall Street financier Louis Wolfson, a friend and former client of Fortas’. Morgenthau eventually learned Fortas was still receiving a $20,000 annual retainer from Wolfson.

Morgenthau says he called his boss, U.S. Attorney General Ramsey Clark, suggesting Clark pass the information along to Chief Justice Earl Warren, who was considering retirement.

“I checked back with him in a couple of weeks and got sort of equivocal answers as to whether he’d done anything,” Morgenthau says, “so I called [Justice] Byron White.” White had been his boss as deputy attorney general and, before that, a law school classmate. “White told me later that he told the chief justice, who said that Clark had never spoken to him, and that Warren called Fortas in and Fortas said there had been some talk, but he’d never taken any money.”

But he had, and still was doing so. It would come out later that Fortas asked President Lyndon B. Johnson to pardon Wolfson.

Morgenthau said that during the Wolfson investigation he got weekly calls from Fred Vinson Jr., head of the Justice Department’s criminal division and son of the former chief justice by that name.

“He’d say, ‘You’re being abusive and unfair to Wolf?son,’ ” Morgenthau recalls. “And I’d say to my assistants, ‘Let’s not waste any time and move this case along.’ ”

Morgenthau’s take: Wolfson was very close to Fortas, who in turn was close to the president, and pressure ensued.

John Moscow, who headed the DA’s white-collar crime bureau under Morgenthau, says he watched a number of times as Morgenthau’s background proved either disarming or formidable—often an admixture—in high-level meetings.

Over the years, Moscow came up with a number of the creative and innovative —devious, critics say—ways to bring international financial crimes to trial in state court in Manhattan. But when he worked the BCCI case, Moscow asked Morgenthau to be lead counsel, at least outside the courtroom.

“I’m as good as anybody at finding the facts, but for persuading the deputy governor of the Bank of England to help our investigation, I didn’t have the gravitas he had,” says Moscow, now a criminal defense lawyer in the New York City office of Baker Hostetler.

Indeed, Lord Eddie George, the deputy governor, was impressed and persuaded when meeting at Morgenthau’s office in 1991. He had perhaps been guided to notice a letter framed on the wall from Lord Beaverbrook, the former British cabinet minister, and addressed to Morgenthau’s father as treasury secretary, thanking him for the lend-lease program that provided American war materiel and other supplies to the British during World War II.

“He’s privy to political gossip and facts going way back and in fascinating parts of the world,” Moscow says of the Boss. “He can talk about a lot of things that keep people interested.”

Fine cigars sometimes help.

Washington, D.C., uber-lawyer Robert S. Bennett, best known for defending President Bill Clinton in the Monica Lewinsky scandal, met with Morgenthau while representing Clark Clifford in the BCCI banking scandal. Moscow was handling investigations of Clifford and his partner, Robert Altman, who had been chairman and president of First American Bankshares, which secretly fell under the control of BCCI. Bennett wanted to persuade Morgenthau not to go forward with the case.

“He offered me a gigantic cigar, and in those days I was still smoking them,” says Bennett. “This one almost killed me. It was a cigar of cigars. He smoked one, too.”

Upon advice of his physician, Morgenthau has quit cigars altogether. But they were once a large part of his life, both as a pleasure and a trademark. As the BCCI scandal unfolded, Moscow described his boss’s love of rolled and wrapped tobacco to a London newspaper: “He’s dedicated to the seizure of contraband. He feels he should destroy all Cuban cigars by burning them. Personally.”

But though personally charming toward Bennett, Morgenthau refused to back off on Clifford. Later a judge set aside the indictment because of Clifford’s failing health. And the case against Altman proved to be one of the biggest losses ever for Moscow and Morgenthau. A jury acquitted him after the defense challenged the indictment by declining to put on a single witness.

For those who say the DA’s office sometimes chased after small stuff, Moscow says Morgenthau “has a good sense of what is important and what is not. He was not one to just say, ‘Oh, that’s illegal so you shouldn’t do it.’ ”

Morgenthau can’t help but to have measured himself in the job. He had big shoes to fill when he was first elected in 1974, replacing the legendary Frank Hogan, who had been DA for a then-unprecedented 32 years.

Henry Morgenthau III, in the 1991 book Mostly Morgenthaus: A Family History, wrote that his father was proud of Robert as the third generation of Morgenthaus in politics. He wrote that his brother used Hogan as his measure in the job and that “Bob seemed determined to maintain—indeed to enlarge—the legend.”

Robert Morgenthau did much more than that, and served three years longer. His reach and reputation were worldwide. The nation’s legal community, especially in New York, is sprinkled with lawyers who learned from the Boss.

Who knows, eventually the methodology he applied to root out the financial underpinnings of terrorism might eclipse the historical achievements of his father and grandfather.

If luck would have it.

View videos of Robert Morgenthau

Accepting a lifetime achievement award:

Also see Morgenthau:

Announcing his retirement (YouTube)

In a February, 1995, interview on the Charlie Rose show (60 minutes)

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