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March 2014

Government’s Top Thug Preet Bharara Shakes Down Toyota

Written by , Posted in Big Government, The Courts, Criminal Justice & Tort

Preet Bharara is a rogue U.S. Attorney and government thug. The latest victim of one of his shakedown scams is Toyota:

The original uproar was set off when a Lexus crashed in San Diego on Aug. 28, 2009. In later investigations, both Nhtsa and the San Diego County sheriff’s office concluded that the car had been fitted out with too-long floor mats belonging to another model, trapping a floored accelerator.

Horrifying as mat-entrapment accidents may be, they are rare: The feds have identified only one fatal Toyota crash with this pattern other than the one in San Diego. There also is nothing unusual about sudden-acceleration claims—they’ve been lodged against Audi, NSU.XE +0.02% Honda, Ford, Mercedes, GM, GM -0.84% Subaru, basically every auto maker.

Toyota had recognized the mat concern as early as 2007 on a Lexus model, and now, out of caution, it also recalled millions of cars to have gas pedals altered so oversize, stacked, or otherwise errant mats would be less likely to overtake and smother them.

Nevertheless, the Justice Department on March 19 announced a one-count wire fraud indictment of the Japanese company, simultaneously settled by Toyota’s agreement to pay $1.2 billion. Why the huge sum? Supposedly, the company had made that much in extra sales by inappropriately reassuring the public, Congress and regulators that it was adequately handling the (almost entirely bogus) furor.

…Manhattan U.S. Attorney Preet Bharara’s statement of agreed facts fulminates about a second supposed coverup, that of “sticky pedal” syndrome: unwanted friction might make some gas pedals stick on the way back up. Toyota informed Nhtsa about sticky-pedal in October 2009, but the feds complain that the company should have come clean a few weeks earlier than that.

Left out of all this is the conclusion reached in the Nhtsa’s 2011 report: There was no evidence sticky pedals played a role in any of the accidents. The agency also acknowledges that sticky or otherwise, a gas pedal can be overridden by properly functioning brakes.

Providing an addendum to his op-ed at the Cato Institute blog, Walter Olson highlights some of the draconian terms in the “agreement” offer that Toyota no doubt understood it could not refuse:

A couple of other points I didn’t have room for in the WSJ piece: Toyota is settling the government’s trumped-up single charge of mail fraud by way of a so-called Deferred Prosecution Agreement, or DPA, and its terms really must be seen to be believed. “Toyota understands and agrees that the exercise of the Office’s discretion under this Agreement is unreviewable by any court,” appears on clause 14 on page 6, with “Office” referring to the office of the U.S. Attorney for the Southern District of New York, currently Preet Bharara. And if you are expecting even the tiniest squeak from anyone at Toyota in contradiction to the government line, even around the coffee machine at the local dealership, consider clause 13, which states: that Toyota “agrees that it shall not, through its attorneys, agents, or employees, make any statement, in litigation or otherwise, contradicting the Statement of Facts or its representations in this Agreement.” If DoJ catches wind of any such statement it can revoke the agreement not to prosecute, without of course having to give back the billion dollars. “The decision as to whether any such contradictory statement shall be imputed to Toyota for the purpose of determining whether Toyota has violated this agreement shall be within the sole discretion of the Office.”

When people talk about federal prosecutors having become a law unto themselves, this is the sort of thing they mean.

Appalling stuff, but this is really just par for the course for Bharara, whose unquenchable quest for power has turned him into one of the government’s more vile goons. He touched off an international incident last December when he arrested and subjected to a strip search an Indian diplomat over a petty minimum wage issue. He later added fuel to the fire he created with one of America’s strongest Asian allies by going off half-cocked and lashing out at critics with a “defense” of his action that was thoroughly unprofessional in tenor and tone, which further antagonized India and undermined efforts of the State Department to calm the matter. Investigative reporter Gary Weiss correctly observed that, “there is something seriously wrong with [Preet Bharara’s] judgment and temperament.”

He’s not the only one tired of Bharara’s antics. U.S. District Judge Richard Sullivan criticized the “tabloid tone” of Bharara’s typical pretrial grandstanding.

But it’s still business as usual for Manhattan’s U.S. Attorney, whose aggressive tactics are typically celebrated thanks to the heavy dose of economic populism that accompanies his agenda. So long as he targets unpopular segments of society, his overreaches will be tolerated  by the cocktail crowd. In fact, they generally criticize him for doing too little on Wall Street. In that regard, Bharara resembles much more a demagogic politician than an agent and enforcer of the law. The law is simply a tool that he is perfectly comfortable perverting to his nakedly self-interested ends. Given the significant and largely unchecked power he wields, that makes him one of America’s most dangerous thugs.