In the late 1980s, as federal prosecutors in Manhattan (where Rudy Giuliani was the U.S. Attorney) were leaking information to the media about the alleged misdeeds of investment banker Michael Milken, the Milken team asked to meet with federal officials. Milken and his lawyers believed that what Milken was doing was legal but perhaps misunderstood, and their stated purpose for meeting was to help “clear up” any misconceptions that federal agents and the media, which already had received illegal leaks from prosecutors about grand jury testimony, might have had.
After the meeting began, however, Milken’s team quickly realized that the feds were not there to discuss the fine lines and regulation of large-scale finance, but rather to charge Milken with as many crimes as they could. Because leaking grand jury information to the media is a federal crime, Giuliani’s prosecutors already had broken the law, so if any real criminals were in that conference room, they were employed by the U.S. Government.
We know how things turned out. The feds went after Milken’s father (who was in his 90s at the time) and Milken’s brother, letting Michael Milken know that they would find a way to throw both of them into prison (which would be a death sentence for the elder Milken) unless Michael Milken pleaded guilty. Faced with what really was a hostage situation, Michael Milken threw himself at the mercy of the court and ultimately went to prison for a couple of years. As one of the U.S. attorneys in the case bragged a few years later in a speech to law students at Rutgers University, the feds had criminalized what at worst were technical violations of ubiquitous securities regulations, violations that in previous years had not been considered crimes…