Lehman Brothers Records Discarded?

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Rep. Henry Waxman (D-Calif.) just sent a letter to Lehman Brothers CEO Richard Fuld, who’s scheduled to testify before the House Oversight Committee on October 6, to follow up on a previous document request. Among other things, the committee had sought e-mails and other documents that had been sent or received by Fuld over the past six months. According to Waxman, Lehman blew [PDF] Thursday’s deadline to produce the records. And Fuld’s counsel has apparently told the committee that he doesn’t expect to have much to turn over.

In conversations with Committee staff, your counsel stated that he and his team are working on collecting your e-mails from this time period, but they expect to produce relatively few to the Committee because you were an infrequent user of e-mail.

Your counsel and his team have also informed Committee staff that they do not currently plan to produce any documents sent, received, or reviewed by you during the past six months that are nonelectronic, such as internal memoranda from company officials, assessments of the company’s potential liabilities, or warnings of the company’s impending collapse. According to your counsel, although these documents did exist at one time, they were typically “discarded.”

Discarded? Sarbanes-Oxley, signed into law after the Enron debacle, forced publicly traded companies—such as Lehman Brothers, before it was delisted by the New York Stock Exchange—to comply with heightened record-retention procedures. And it imposes strict criminal penalties on anyone who tampers with company records:

Whoever knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any case filed under title 11, or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both.

It’s unclear whether the documents in question are covered under Sarbanes, but, just the same, “discarded” doesn’t seem like it’s going to fly, particularly since congressional scrutiny is the least of Lehman’s problems. The failed investment bank is currently under investigation by the FBI, as well as the subject of multiple lawsuits, including a class action that was filed earlier this week.

And Waxman is growing testy with Lehman’s lack of cooperation, too.

It is difficult to understand how Lehman Brothers is unable to produce a single internal document that went to or from the CEO’s office over the past six months. It is also difficult to understand why there is no log, file, or other record documenting where these internal documents went.

For these reasons, I request that you inform the Committee by the close of business today whether you will agree to expand your search of documents to include company officials and employees outside the office of the CEO. If we do not receive such a commitment, the Committee will begin the process of seeking these documents by compulsory means.

Have a nice weekend, Mr. Fuld.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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