Graham is a Connecticut lawyer; one of us. I went to his sentencing to find out why he used his highly regarded expertise as a lawyer to document and help conceal a sham transaction between AIG and Gen RE, one intended to mislead analysts and investors into believing that AIG was in stronger shape financially than it was.
I was curious. Why would a lawyer do such a thing? Why would a Connecticut lawyer do such a thing? He and I had at least that one thing in common: a license to practice law in Connecticut. Did he realize what he was doing? Was it one of those situations that, in hindsight, is so obviously wrong but that at the time appeared to be in a gray area of the law, an area calling for a business decision about willingness to take risk.
Part of the SEC indictment piqued my interest for two reasons: (1) the indictment included quotes from telephone conversations between Graham and others, which meant, I assumed, there had been a wiretap in place; and (2) Graham is quoted as saying something that I venture to guess thousands of lawyers counseling corporate clients have said:
Graham: There’s folks at pay grades higher than mine that have made the business decision they’re willing to do that.
Every corporate transaction involves legal issues and business issues. The line between them is often murky. Doubt is usually resolved in favor of it being a “business decision” because – in most cases – clients call the shots.
So I went to Federal District Court in Hartford on April 30th, 2009 to find out more about Robert Graham. We are the same age. We have both counseled corporate clients. In counseling corporate clients we have both deferred to the client on business decisions. We are both Connecticut lawyers. He was about to be sentenced. I was going to watch from the back of the courtroom. I didn’t know what to expect. As it turned out, the day was full of surprises.
The first surprise was outside the courthouse. There is a plaza in front of the courthouse. The entrance is set back from the street. There are six objects separating the plaza from the sidewalk. Two very large, not terribly attractive wooden planters and four large, ugly blocks of concrete. I hadn’t expected to see blast barriers outside the courthouse. Only later did I see the connection between the blast barriers and what I was going to hear and see in the courtroom.