Who is Donald F McGahn?

The role of White House Counsel was invented in the 1950s. For a modest salary of $176,461 its incumbent must keep the President on the straight and narrow (or not, as the case may be). No less than three previous office holders have served jail sentences (Erlichman, Colson and Dean after their respective stints in Nixon’s team). George W. Bush’s pick, Alberto Gonzalez, is meanwhile remembered mainly for his infamous torture memorandum.

Obama soberly picked a former Assistant US Attorney, W.Neil Eggleston, whose track record included prosecuting the corrupt Illinois Governor, Rod Blagojevich.

The next White House Counsel will have the tricky job of steering Donald Trump on a legal Presidential course despite his continued ownership of a complicated global fleet of business interests, licensing arrangements and property deals.   Last week Trump told the NY Times “the president can’t have a conflict of interest”.

He did not mean it was forbidden. He was claiming that a president’s financial interest can never constitute a conflict in law. He’s clearly been getting advice – but who from?

It looks very much like it’s Donald F. McGahn. On Friday it was announced that Trump had appointed him as White House Counsel. A keen libertarian, McGahn has advised a range of Republican politicians. He also served a three year term as Chair of the US Federal Election Commission. He reputedly changed it single handedly from an enforcement agency overseeing fair elections to a ‘non-enforcement agency’. In 2009, the year of McGahn’s appointment, the FEC imposed a total of 248 penalties for election breaches. By the following year that number had dropped to 34.

The choice is a telling one. If law enforcement is slipping down the agenda of the US President the ramifications for the rest of the world will be considerable.  It may look inconsistent with Trump’s pick for Attorney General, the hardliner Jeff Sessions. But it’s not really. The trick here is to pursue a very hard line but confine its operation to the narrowest criteria possible.

That way the occasional unlucky loser (often a foreign owned company like BP) gets the book thrown at it. The rest suffer no action at all.

Is Trump “too big to fail?”

President-elect Donald7Trump has nominated his Attorney General, the charmless US Senator for Alabama, Jeff Sessions.

Sessions has previously been refused judicial office on the basis of past alleged racist utterances. It appears to be well documented that he once called a senior white lawyer “a disgrace” for representing black clients. It is not clear why Trump didn’t think this excluded Sessions outright from the position of senior law officer in the United States Government. No decent country should tolerate such a thing. This point will be made forcibly in confirmation hearings and his appointment may go no further.

But if it does, and if he takes up the role of Attorney General, one additional matter that will interest white collar lawyers is his attitude to corporate crime. In contrast to the prevailing ethos in the Obama administration, not only is he remarkably tough on drugs, he is also remarkably tough on companies that break the law.

The Senate Judiciary Committee hearing on James Cole’s nomination as deputy to Attorney General Eric Holder took place on 15 June 2010. Senator Sessions gave Cole a roasting for his attitude on “Too big to fail”, quoting a speech Cole had made in 2006. “The experience with Arthur Andersen taught the Government something. The consequences were too drastic and hurt too many innocent employees. The Government now tries to work settlements with companies that find themselves in that kind of predicament…”.

Sessions’ comment on this was “It seems to go beyond strict enforcement of the law and try to preserve corporations who perhaps should be charged and suffer whatever consequences might result from their criminal acts”.

Cole defended his position by reference to the thousands of innocent employees and shareholders which might suffer in such circumstances, and went on to be confirmed by a largely Democrat Committee.

But consider this. The DOJ under Loretta Lynch has been pressing Deutsche Bank to pay a £14billion penalty. Donald Trump happens to owe Deutsche Bank over £300 million on various property deals, and it’s said no other bank is willing to extend him this kind of credit.

How will Trump and Sessions sort this one out?  Perhaps ‘too big to fail’ has life in it yet!