SACRAMENTO — Liberals often complain about the greed of
profit-seeking corporations, while conservatives likewise complain
about abuses by government officials. Both sides might take notice
of something that seems to epitomize the worst of both worlds —
government agencies that use their power to bolster their own
budgets.
An
eye-popping
example – filled with
allegations
of fraud, corruption, and official misconduct – is
unfolding in a northern California legal case involving state and
federal efforts to secure a massive financial settlement from the
state's largest land owner, Sierra Pacific Industries.
Authorities say a bulldozer from a subcontractor working for the
Shasta County-based lumber company sparked the "Moonlight Fire"
that burned 65,000 acres in northeast California in 2007. Sierra
Pacific has long denied responsibility for it, but after a
courtroom setback, the company agreed to a $55 million settlement
and agreed to give the government 22,500 acres — much less than it
could have owed if it lost a prolonged court battle.
But earlier this month, the government's case continued to
unravel. Sierra Pacific filed a
100-page
motion with the U.S. District Court accusing prosecutors
of fraud and a cover-up – and asking it to vacate the
settlement.
Its filing included a 15-page declaration from a former U.S.
Justice Department prosecutor who argued that it was the first time
in his long career that he "was pressured to engage in unethical
conduct as a lawyer." E. Robert Wright said he was removed from the
case given his "zero tolerance of litigation misconduct by the
government."
Another former federal prosecutor quoted in the filing resigned
from the case after saying: "It's called the Department of Justice.
It's not called the Department of Revenue." Sierra Pacific
officials say prosecutors covered up information that undermined
their account and benefited from funds collected from wildfire
defendants.
"The entire original prosecution against Sierra Pacific appears
to have been driven by the Department of Justice's interest in
hitting a 'deep pocket' for millions of dollars of revenue," argued
the
New York Observer's
Sidney
Powell, who views it as a pattern by the department to use "its
overwhelming litigation might" as "a tool of extortion."
The company's arguments were bolstered by a Plumas County
Superior Court decision in January blasting the behavior of
California Department of Forestry and Fire Protection officials,
who were working with federal prosecutors on the case and seeking
their own damages for fire-related costs.
Writing that he had not been so disappointed and distressed in
his 47 years in the courts, Judge Leslie Nichols ruled that CalFire
"engaged in a systematic campaign of misdirection with the purpose
of recovering money from the defendants." Nichols said "the
misconduct in this case is so pervasive that it would serve no
purpose for the court to even attempt to recite it all here" — and
then
awarded
Sierra Pacific $32 million in damages, in a case still being
appealed.
On October 14, the federal court did something unusual:
It
recused
all judges in the district from handling the case, and
referred it to
Alex
Kozinski, chief judge of the federal Ninth Circuit Court of
Appeals, to assign a judge from outside the area to the case.
For those who think the Justice Department might clean up its
act in the wake of these allegations and court actions, consider
the prosecutors at the center of the controversy were among those
who just received top
department
awards "for the successful settlement negotiations and the
predicate fraud investigations" and for securing large settlements
in various cases.
The Moonlight Fire case isn't a rare instance where agencies use
their power to secure large payments that then benefit government
agencies. Local, state and federal officials routinely rely on the
proceeds from
civil-forfeiture
cases to balance their budgets.
As Sierra Pacific noted in its filing, federal prosecutors'
legal obligation is "not that it shall win a case, but that justice
shall be done." And it's not to use formidable government power and
questionable tactics to enhance the bottom line. Regardless of our
politics, everyone should agree on that.