Regardless whether the recent e-mails concerning the AIG bailout that have surfaced (as a result of Congressman Issa’s FOIA request) do or don’t indict Geithner, our Turbo Tax challenged Secretary of the Treasury, they are, at the very least, a huge embarrassment to the legal profession. Although the Fed’s General Counsel claimed that Geithner had no clue as to what going on, hardly a resounding endorsement of his management skills, it seems clear that the Fed and AIG’s in-house lawyers did.
There seems to be little doubt that the failure to disclose was clearly illegal. As the crisis develops, the next pressing questions are, What is the Attorney General is going to do? Is the profession going to be embarrassed again? And, if it becomes clear that enforcement action is required and the Attorney General does not vigorously enforce the law, What is the ethical obligation of responsible government lawyers?
A number of years ago, ACC had a significant internal debate concerning whether in-house lawyers who were punished for insisting that their client act in accordance with the law should have access to the same legal remedies as other employees who were terminated or otherwise punished for insisting on legal compliance. The debate split over the issue as to whether the in-house lawyer was simply required to resign and have no further rights against the company. My recollection is that no one believed that the lawyer aware of improper conduct by the client could turn a blind eye and go on as though nothing was happening.
Many government lawyers are likely to find themselves in similar positions as in-house attorneys discover that the company’s general counsel is either condoning – or actively participating – in illegal conduct. As this crisis plays out, details of the conduct becomes clearer and proper course of legal conduct becomes far more defined, the actions of the Attorney General may once again test the resolve and the credibility of our profession as we see how the government lawyers react.