GRAEME SLOAN/SIPA USA VIA AP
The Washington, D.C., offices of Jones Day
This article appears in the December 2022 issue of The American Prospect magazine. Subscribe here.
Servants of the Damned: Giant Law Firms, Donald Trump, and the Corruption of Justice
By David Enrich
Mariner
Jones Day, one of the world’s largest and most powerful law firms, disgraced itself in its work for Donald Trump. The firm bears much of the responsibility for Trump’s destruction of the norms upon which democracy depends. It ultimately did not cross a line to keep Trump in power after the 2020 election, but drew the line just inside of Rudy Giuliani.
David Enrich, the business investigations editor for The New York Times, tells that story in Servants of the Damned: Giant Law Firms, Donald Trump, and the Corruption of Justice. But Enrich also reports the role of Jones Day and other giant law firms with giant clients—“BigLaw,” in the lingo—in the destruction of norms on which America’s rule of law depends. It is difficult to imagine Trump as more than a minor vanity candidate if those norms still held.
I have a history with Jones Day. Enrich’s account of the firm over the last four decades is for me the story of the road not taken.
I NOW REPRESENT A UNION PENSION PLAN in litigation over the servicing of subprime mortgages in which the pension plan invested through mortgage-backed securities. Jones Day represents Wells Fargo, one of several defendants. Servicers take kickbacks from insurers and other vendors, impose contrived fees on homeowners that servicers keep for themselves, and charge wildly excessive fees in foreclosures, which we argue violates bright-line legal protections of pension plan investments.
We filed the lawsuit on March 5, 2018. Almost five years later, the judge has yet to decide threshold legal questions, largely because Jones Day, and the BigLaw attorneys for other defendants, have filed hundreds of pages of briefs on every imaginable argument, no matter how strained, to dismiss the lawsuit, which required that we file hundreds of pages of briefs to respond. Until the judge decides those issues, the lawsuit is in hiatus.
I now have a low opinion of Jones Day, but that has not always been so. In 1977 and 1978, I worked for Jones Day during the summers while in law school. My friends took summer jobs with law firms in New York and Washington. I took a job with a Cleveland firm to be contrary. It was not a step down: Jones Day had a national reputation and an enviable roster of clients. It represented manufacturers, utilities, railroads, real estate companies, department stores, and parts of John D. Rockefeller’s old Standard Oil empire. The dignified office in the Union Commerce Building felt like the big time.
Enrich’s history paints a before-and-after picture. To show the before, he tells the story of a horrific industrial accident in a densely populated neighborhood in Cleveland in 1944. East Ohio Gas Company stored liquefied natural gas at extreme low temperatures in four large tanks. A leak in one of the tanks led to an explosion and fire that destroyed two factories and 79 homes, killed 130 people, and hospitalized 225 more. The bodies of 61 victims were unidentifiable.
In recent years, Jones Day has used their influence for clients’ benefit and the firm’s profits.
East Ohio was a Jones Day client. A team of lawyers quickly considered the company’s options. Instead of obstructing legal proceedings to wear down victims and minimize settlements, or trying to blame homeowners for improper fireproofing—what Enrich calls a “scorched-earth approach”—Jones Day advised the client to accept responsibility and pay fair compensation. Within a few months, East Ohio paid what would today be $100 million.
My own experience was also that the firm told clients to do the right thing. A partner assigned me a research project for a manufacturer of consumer products. A discounter wanted to sell the client’s products at a lower price, and the client was reluctant to displease established customers with unwelcome price competition. The client developed a list of possible restrictions on the resale of its products, and ran them by Jones Day.
I spent a couple of weeks on the research. Restrictions on retail sales were generally permissible if there was a legitimate business reason, but not if imposed to hinder competition. From what I was told, the client’s motive was only the latter. I concluded that since we knew the client’s only true motive was anti-competitive, all of the restrictions would violate the antitrust laws and the firm could not allow the client to say otherwise in legal proceedings. The partner agreed and said he thought the firm could talk the client down.
My experience at Jones Day was consistent with what my law professors said in class: Law was an honorable and learned profession that I should be proud to have entered. I liked Jones Day, and they liked me well enough to offer me a permanent job upon graduation. I would have taken their offer had I not gotten an offer of a clerkship from a federal appellate judge in North Carolina, my home state.
IN 1985, JONES DAY TOOK ON a new client, the tobacco company R.J. Reynolds, in lawsuits brought by smokers for lung cancer and other related diseases. RJR would eventually account for 19 percent of the firm’s total revenue, almost $94 million a year.
Courtesy Brad Miller
The author, from the Columbia Law School annual, circa 1978
The approach of cigarette manufacturers was “never [to] settle cases—only fight, fight, fight.” Jones Day adopted the strategy to blame the victims. The firm contended that the connection between smoking and health problems was not “scientifically established,” nor was smoking addictive. Smokers continued to smoke because smoking was an “enjoyable habit,” much like chocolate.
Another Jones Day client was Abbott Laboratories, a leading manufacturer of powdered baby formula. Abbott faced lawsuits on behalf of newborns who contracted meningitis shortly after drinking Abbott’s formula. Infants who survive meningitis often have severe and permanent brain damage and are unable to care for themselves for the rest of their short lives. Abbott’s defense in every case was that something else could have caused the infant to contract meningitis.
In tobacco and baby formula cases, Jones Day adopted the scorched-earth tactics that the firm advised East Ohio against in 1944.
The firm made burdensome demands for information about every aspect of the plaintiffs’ lives, supposedly to identify other possible causes of the illnesses. In a baby formula case, Jones Day tried unsuccessfully to introduce into evidence a restraining order against a family member issued years after the child contracted meningitis. In a smoking case, a lawyer questioned the widow of a smoker in a deposition about an affair that her husband had, which was the first time the widow learned of the affair. A Jones Day partner told Enrich that a sexually transmitted disease could have caused her husband’s cancer, and the questions therefore were relevant.
Jones Day’s strategy, a Jones Day lawyer said anonymously, was “to make these cases extremely burdensome and expensive for plaintiffs’ lawyers.” Shortly before trial in a baby formula case, Jones Day delivered a “huge jumble of boxes” to the judge, which supposedly contained evidence that the firm might introduce at trial. The judge did not believe the firm would really use more than a fraction of the documents, but that it listed the documents as potential evidence “to snow the plaintiff’s lawyers with tens of thousands of pages of paperwork that they would have to sift through,” which the judge called “incredible obstructionist conduct.” The judge sanctioned one of the Jones Day lawyers after trial for “underhanded, win-at-all-costs tactics.” He told Enrich that “their conduct was appalling. It was the worst by a factor of ten” of all his years on the bench.
Jones Day won the case.
The judge’s criticism of the Jones Day lawyer appears not to have affected her standing in the firm. BigLaw firms apparently now regard such sanctions the way financial institutions regard SEC sanctions: as a cost of doing business.
JONES DAY HAD AMPLE TIME to prepare for Enrich’s book. Enrich sent “fact-checking memos” to lawyers as he did his research that laid out what he learned. Jones Day’s response was fierce. Enrich’s publisher received multiple letters attacking Enrich, “accusing me of bias and sloppiness and warning about the risks of publishing a book if it had any defamatory material in it.”
In an op-ed in The Wall Street Journal shortly after the book’s publication, Kevyn Orr, a senior Jones Day partner, said Enrich’s “goal is … [to] deny the protections of the law to the disfavored.” “Unlike totalitarian systems that ensure the ‘right’ person wins every case,” Orr wrote, “America’s adversarial process strives to ensure that cases reach the right outcome based on a dispassionate analysis of law and facts. For that process to function, there must be zealous advocates on both sides.”
There is more to the ethical requirements for lawyers than zealous advocacy. The conduct that Enrich describes violates the rules of court and the canons of legal ethics. Obstructionist conduct is unethical. It is unethical to make cases needlessly burdensome and expensive to wear down the other side. Attempts to intimidate an opposing party, or threats to expose painful personal information, are unethical.
Not even BigLaw’s stunted version of legal ethics excuses false evidence as “zealous advocacy,” however. Jones Day appears to have crossed that line too.
By the time Jones Day began to represent R.J. Reynolds in 1985, the tobacco industry had known for at least 30 years that smoking caused a number of deadly diseases. The industry had known for at least 30 years that nicotine in cigarettes was highly addictive, and had manipulated nicotine levels to addict smokers and keep them addicted. A federal judge in 2006 required the tobacco industry to admit that the industry had lied to the public for decades about the health effects of smoking and the addictive power of nicotine.
The industry told those same lies to judges and juries, also for decades, with great success. The industry paid scientists to lend their name and reputation to scholarly articles, ghostwritten by the industry, that questioned the health effects of smoking and the addictive power of nicotine, and could use those articles in court to buttress their experts’ testimony.
Did Jones Day really not know the truth?
IN MY SUMMERS AT THE FIRM, the most senior partners were mostly conventional Republicans, whose politics aligned predictably with the interests of their clients. I was a pro-environment and pro-worker Democrat, and that was not a problem. (They may have thought I’d grow out of it.) And there were politically active Democrats at the firm. A Democratic partner in his forties supposedly had his eye on a congressional district in the suburbs, although he never made the race.
Jones Day’s political involvement appeared to be part and parcel of the firm’s role in the community generally. Jack Reavis, the managing partner in the ’60s, was a pillar of Cleveland’s business establishment. Reavis established the Businessmen’s Interracial Committee on Community Affairs after riots in 1963 to ease racial tensions. He received the NAACP’s Human Rights Award in 1969 for his effort.
According to Kevyn Orr, the firm is still motivated by that same laudable devotion to public service. “We are proud,” Orr wrote in his op-ed, “that our lawyers have held senior positions in every presidential administration, Democratic and Republican, for decades.”
But in recent years, Jones Day has not grown political influence by political and civic involvement, or used its influence selflessly for the public good. Jones Day has hired lawyers who came with influence, and used their influence for clients’ benefit and the firm’s profits.
PATRICK SEMANSKY/AP PHOTO
Former White House counsel Don McGahn, who brought together Jones Day
Jones Day saw a business opportunity in the 1980s to represent savings and loans. The Reagan administration largely deregulated S&Ls, which predictably resulted in questionable practices. Jones Day went on a hiring spree of S&L regulators to attract prospective clients.
Jones Day’s largest S&L client was Lincoln Savings and Loan. Lincoln aggressively sold bonds issued by its parent corporation to customers, “who tended to be elderly and not very financially savvy.” The bonds offered a substantially higher interest rate than certificates of deposit. About 23,000 of Lincoln’s customers bought the bonds. The parent eventually defaulted on the bonds. Jones Day did the legal work. After the S&L regulator, the Federal Home Loan Bank Board (FHLBB), seized Lincoln in 1989, Jones Day paid federal regulators $51 million over its role. Federal regulators charged that the firm concealed improper practices; at the very least, the firm failed to blow the whistle.
Lincoln’s CEO Charles Keating served four and a half years in prison for fraud. Five senators known as the “Keating Five” pressured the FHLBB on Keating’s behalf to back off an investigation of Lincoln. Keating had made $1.3 million in contributions to the senators.
The head of enforcement for the FHLBB, Rosemary Stewart, testified before the Senate ethics committee that she had not felt political pressure to go easy on Lincoln, which contradicted the testimony of other FHLBB witnesses. Other FHLBB officials and lawmakers criticized Stewart for the slow response to the S&Ls’ losses.
Stewart quit the year after Lincoln failed and joined Jones Day’s Washington office. “This sort of thing happens all the time in Washington,” the firm’s managing partner said in response to critics. That’s still true: The list of lawyers with “government experience” on the firm’s website is 11 pages long.
DON MCGAHN JOINED JONES DAY in 2014 to establish a political and election law practice to advise Republican candidates and officeholders and rightist organizations like the NRA. McGahn was a former Republican chair of the Federal Election Commission and a long-standing party apparatchik. The firm hoped McGahn could also strengthen the firm’s political influence.
In 2015, McGahn signed the Trump campaign as a client. Trump had been a client of McGahn’s late uncle, who had been a lawyer in Atlantic City. Trump eventually stiffed McGahn’s uncle for his fees and then sued him, the way Trump often ends relationships with lawyers. Still, Trump said he remembered McGahn’s uncle fondly. McGahn claimed implausibly that he and Trump were kindred spirits in their opposition to the Republican establishment.
After Trump’s unexpected election in 2016, McGahn became White House counsel and was able to fill dozens of senior administration positions with Jones Day lawyers. Some Trump loyalists initially distrusted McGahn as “the embodiment of the corporate sleaze that oozed through the swampy capital.” The distrust grew with each hire. Trump had campaigned as a populist “who might really shake things up in Washington,” Enrich writes. “Thanks in large part to [McGahn] and his Jones Day crew, this presidency was shaping up to be just as corporatist as any other Republican administration. Maybe more so.”
Trump had a singular lack of interest in policy and the work of government. Most appointees had free rein; McGahn in particular wielded enormous power over judicial appointments, essentially hand-picking a big chunk of the federal judiciary.
Jones Day saw the Trump relationship as “a client development opportunity,” one lawyer told Enrich. The book describes one such example of the apparent value to clients of the firm’s connections: a U.S. attorney investigation into Walmart pharmacies for filling “preposterous numbers of opioid prescriptions.” Federal prosecutors in Plano, Texas, told Jones Day, Walmart’s counsel, to expect an indictment. But the DOJ in Washington, which was teeming with former Jones Day lawyers, said that there was insufficient evidence, and ordered an end to the criminal investigation. The DOJ ordered that civil litigation be delayed, which went on for years with little explanation. The lead Plano prosecutor resigned in protest, and publicly charged that DOJ’s political appointees improperly interfered.
ENRICH’S ARGUMENT THAT LAW CHANGED from a profession to an industry in the ’80s is persuasive. Perhaps I was a naïve twentysomething in the ’70s, with a romanticized idea of the profession that I entered, but the change is palpable.
Enrich’s explanation of why law changed is less persuasive. He points to the Supreme Court decision in 1977 that struck down the ban on lawyer advertising and almost all other lawyer marketing, after which law firms aggressively courted new clients. Gossipy legal trade rags like The American Lawyer reported how much money lawyers at different firms made, which became how lawyers judged themselves and other lawyers.
Enrich is correct that lawyers became much more mercenary, but there were more powerful forces at work than marketing and The American Lawyer. BigLaw’s clients changed and expected their lawyers to change too.
The ’70s were the end of the Great Compression, a period when wealth and income inequality closed significantly as a result of government policies—highly progressive taxation, union contracts, minimum-wage laws, and tighter business regulation. Many corporate leaders accommodated themselves to those policy changes. Some corporations embraced “stakeholder management” that balanced the interests of shareholders, employees, customers, creditors, communities, and the public good.
But others never accepted the policies, and thought demands from the left for even more would never end unless they were challenged and defeated. The famous Powell Memo in 1971 rallied big business to the fight. Economists like Milton Friedman and corporate leaders like Jack Welch argued that the only proper purpose of corporations was the maximization of profits for shareholders. In 1982, conservative and libertarian law students formed the Federalist Society to challenge supposedly leftist influence in American law. McGahn, a member since law school, used the Federalist Society to vet his picks for judicial appointments.
Much of American business felt a renewed sense of entitlement to seek maximum profits without restraint or consequence. If a law firm said no when the corporation wanted to hear yes, the corporation could easily find law firms that would say yes. Many old-school law firms did not survive the change. In 1994, The New York Times reported that “in the last four years, more than a dozen firms, ranging from 30 to 250 lawyers, have folded, merged or been acquired to become the New York branches of giant firms with home offices in other cities.” As a partner in one firm said, “The coin of the realm ceased being loyalty, predictability and continuity, and became money, money and money.”
Enrich tells an important story of the gradual corruption of the rule of law, and of the broader corruption of our society. A nation in which victims of wrongs by the powerful must endure endless scorched-earth legal tactics to seek justice is a different nation from the one in which the victims of the East Ohio explosion and fire in 1944 received prompt and fair compensation. A nation in which wide swaths of law are unenforced because government lawyers see the corporations that violate the law as potential future clients is a different nation from one in which government lawyers vigorously enforce the law to protect ordinary Americans.
It is an unhappy and alienated nation that distrusts and disrespects public and private institutions alike.
