The Oath with Chuck Rosenberg
8. Barbara McQuade: Greed and Power
Chuck Rosenberg: Welcome to The Oath. I’m Chuck Rosenberg. I’m so glad you would join us for another fascinating conversation from the world of public service. This week I sit down with Barbara McQuade, the former United States attorney for the Eastern District of Michigan. Barb is a Detroit native. She grew up here and before becoming the United States attorney served as a line federal prosecutor for twelve years in that wonderful office. Today on The Oath, Barb and I talk about a number of the cases she supervised as U.S. attorney—from one of the most outrageous health care frauds ever committed by a doctor in the United States to a public corruption case involving former Mayor Kwame Kilpatrick. Barb McQuade, welcome to The Oath.
Barbara McQuade: Thanks very much Chuck.
Rosenberg: I should let folks know we’re actually sitting in a beautiful office on the campus of the University of Michigan Law School where you’re on faculty.
McQuade: Yeah it’s a beautiful place, and I consider myself very lucky to be here.
Rosenberg: Well thanks for having us. So I’m interested Barb in lots of things about you including what drew you to public service, but you didn’t start in public service. You actually started as a newspaper reporter.
McQuade: Yeah. I think my first memory of current events in the world is Watergate, and I was probably a little young to understand what was happening in real time. I think I was nine or ten years old when Watergate was going on, but I remember seeing that in the headlines every day and wondered what that was, and I remember asking my mother and she told me that Watergate was an office complex and that just made me even more confused, but as years went on I was really curious and studied it and wanted to learn more about it.
Rosenberg: Your mom was literally correct.
McQuade: She was. She was literally correct, but you know of course it was so much more. It was shorthand for the scandal, and I knew it was something that the president had done that was bad, but I didn’t know much more about it. But I studied it as years went on.
Rosenberg: So it sparked an interest.
McQuade: It did. And you know the first interest it sparked really was in the reporters who were involved in that case, Woodward and Bernstein, and I really appreciated the watchdog role that they played in holding public officials accountable. I felt very betrayed by what President Nixon had done and recognized the work that Woodward and Bernstein had done to expose that wrongdoing. And so that sparked an interest in journalism for me.
Rosenberg: I think Bob Woodward and Carl Bernstein drove a lot of folks into journalism, including you.
McQuade: I bet that’s the case. You know people will ask me my major and although my diploma says economics I feel like I majored in The Michigan Daily. When I came to college here at the University of Michigan I spent a lot of time there—probably too much time there, but most of my classmates and I were inspired by Watergate. And of course we were all around the same age, and we all saw ourselves as the next Woodward or Bernstein.
Rosenberg: And so you actually joined a paper when you graduated. Tell us about that.
McQuade: After graduation I went to a newspaper in Rochester, New York. I applied to probably every newspaper in the country and that was the one that would have me, and it was a wonderful place with wonderful people.
Rosenberg: Did you have any connection to Rochester?
McQuade: I did not. I just went there for the job and enjoyed it very much. Worked with some wonderful people. I went back to law school after just a year. It really was with the full intention that I would return to journalism but that it was a good time in my life when I was unattached and had the time and the freedom to study law fully expecting to go back into journalism but found that I loved the law and that that was another way to serve as a gatekeeper of society to hold wrongdoers accountable.
Rosenberg: Before we get to law, and there’s a lot of law in your career Barb. What did you cover in Rochester? What did you do?
McQuade: I started in news but as often happens in my life I gravitated towards sports, which is a strong interest, and so as the low man there I did things; high school swim meets and lacrosse games. I did 5K and 10K races, fishing derbies, beach volleyball; all kinds of things, and it was great fun.
Rosenberg: Like you I’m a huge baseball fan, and Cal Ripken played minor league baseball in Rochester before he came up to the Orioles. Were you there at the same time?
McQuade: He did. No, he had left; was already in the Major Leagues by this time. This was in the late 1980s, but the Rochester Red Wings were certainly one of the beats that our paper covered.
Rosenberg: Awesome. So you decided to go to law school, and you came back to the University of Michigan where you had done your undergraduate work to attend law school here.
McQuade: I did, and it was a wonderful experience. I know you’ve said this before Chuck. I really enjoyed law school.
Rosenberg: I did too.
McQuade: Some people will say it’s a good thing to have done and see it as sort of a necessary evil. You know like, I needed to get the root canal so that I could have healthy dental work. I enjoyed it. The experience here at the University of Michigan Law School, I think, is one that’s really supportive and collegial in addition to being intellectually exciting. And so I really loved the law and the experience I had here at the law school.
Rosenberg: Now you said you had been attracted to journalism. You went to law school with the expectation of going back into journalism?
McQuade: I did. I thought I would do that, but you know once I got here.
Rosenberg: Things changed.
McQuade: Yeah, I got a taste for the law and saw what opportunities there were. Things changed in the first job I had out of law school was as a law clerk to Judge Bernard Friedman, a wonderful mentor.
Rosenberg: So you know you’re the second guest on this podcast to have clerked for Judge Friedman, which makes him I believe the world record holder for law clerks appearing on The Oath.
McQuade: Yes. Jim Baker was a part of the Friedman law clerk family as well just before me, as a matter of fact, as a law clerk for Judge Friedman. But Judge Friedman has inspired many of his law clerks to go into public service: public defenders, prosecutors, judges, and the like, but it was during my time as a law clerk that I got to see the whole spectrum of the practice of law. Every kind of practice there is, and I saw the work of the U.S. attorney’s office, and I thought it was fascinating. While I was a clerk, one of the trials that occurred in Judge Friedman’s courtroom was a public corruption case involving the pilot for the city of Detroit, Jet. A city that was financially struggling and had a pilot who was taking city officials on junkets to Las Vegas and other places, and then lying about it by falsifying records stating that they were actually going to places for legitimate city business, and I was just so impressed with the way the assistant U.S. attorneys presented what was a very complicated—case wiretap evidence and FAA flight logs—and made it very interesting and understandable for the jury. And I saw that, holding wrongdoers accountable and thought wow that that’s something I would really like to try to do.
Rosenberg: I’d like to do that too.
McQuade: Yeah, exactly, and so I applied to the U.S. Attorney’s Office following my clerkship but at least in Detroit, in many places, it’s very difficult to get a job there right out of law school or right out of a clerkship because the competition is very keen, and so I went to private practice at a law firm I enjoyed very much, a law firm called Butzel Long in Detroit. Worked there for five years. You know every six months or so I would renew my application at the U.S. attorney’s office and after about five years they finally get tired of hearing from me I guess and agreed to hire me.
Rosenberg: Well I’m glad they did Barb. You know I did the same thing. I didn’t go to a law firm, but I went to law school with the idea of becoming a federal prosecutor and then tried like heck to get into a U.S. Attorney’s Office. As you note, it’s not easy to do.
McQuade: You started in the honors program at DOJ, I understand, right?
Rosenberg: I did.
McQuade: Were you able to burrow your way in into the Eastern District of Virginia?
Rosenberg: Burrow is the right verb. I tried very hard, and for several years, to become an assistant U.S. attorney, but I’d much rather talk about you. So you’re a line prosecutor. You’re handling all sorts of crimes from drugs to guns to immigration. What did you start off doing and tell us a little bit about it?
McQuade: I first joined in at the office’s General Crimes Unit, which is kind of the entry level position where new AUSAs come in. We get a lot of training, going to the National Advocacy Center, and a lot of mentoring but handling cases involving felons in possession of firearms for example; bank robbery cases, some lower level drug cases, counterfeiting, which is kind of an interesting crime that people are surprised still exists, but in many ways, has become very sophisticated in light of modern technology. Some immigration cases, and then some unusual cases. I had a wildlife case involving someone who was selling illegally obtained tiger pelts. We had importation cases of Cuban cigars across our border. We had the smuggling of humans across the border so incredibly interesting work.
Rosenberg: And you’re working with all different sorts of federal agents from DEA to FBI to ATF to Secret Service, I imagine?
McQuade: Yes, all of the different agencies, and so it’s a wonderful opportunity to learn kind of the whole of government from the executive branch, all of the agencies you know a lot about and even some of the more obscure agencies, but it was wonderful work. People were incredibly professional. It was the first opportunity I had to bring cases before the grand jury, which was also an incredible experience, and one of the things that always struck me was at the end of their service the grand jurors would so often comment on “you know I had no idea what these fish and wildlife agents did” or “I had no idea that Secret Service agents also investigated financial fraud,” and I’m so impressed with the quality of these agents, they’re so smart and diligent and hardworking and honorable. Just being able to work with all of them was really an incredible experience.
Rosenberg: I remember seeing brand new grand jurors at the beginning of a term, and they looked like they would rather be anywhere else on the planet than in that grand jury room. And then over 12 or 18 months their views would change. They would see what was actually happening in their communities, and they would meet the men and women trying to do something about it, and they usually left impressed.
McQuade: Although I think at the beginning they understood it was their duty to serve on a grand jury, no one was very happy about it, but by the end they were incredibly gratified and really thankful that they’d had that experience and that window into the inner workings of the executive branch.
Rosenberg: So before you could function as an assistant U.S. attorney you had to take the oath, and you told me a neat story about how you did so and how your view of it changed over time. Would you share that?
McQuade: Yes. So, I was told to report for my first day of work, and at that time the practice in my office was that you and your supervisor would go over in the chambers of the chief judge to take the oath. And I really viewed it as a kind of a formality, the first thing I had to do before I could get to work. I showed up with my supervisor in the chief judge’s chambers, and I was surprised to see my husband show up with our newborn baby, who he was staying home with at the time, but he was already an AUSA in the civil division at the office, and he knew how important the oath was.
Rosenberg: He had taken it.
McQuade: He had taken the oath. He was already there. He understood what an incredible responsibility it is to be an AUSA and the responsibility that I was taking on, and so he wanted to be there. He wanted to support me and show me how much it meant to him that he had taken the oath, and that I was going to be sharing in that with him.
Rosenberg: And so your view, at least initially, was that it was perfunctory; something you had to do and get out of the way so you could start working, and when you became the U.S. attorney in Detroit you had a different approach?
McQuade: Very much so. So that experience really helped me to see how important it is, and also just listening to the words about supporting and defending the Constitution of the United States. It’s a powerful moment when you take the oath and serving as an assistant U.S. attorney is a powerful responsibility, and so, Steve Murphy, who is now a district court judge—
Rosenberg: I know Steve. Fine fellow.
McQuade: He is, and I don’t know where he got this idea. Maybe it was from you but he began doing something different, which was when we had new AUSA join the office, he would convene a hearing before the chief judge in open court and invite family members of that AUSA and invite the whole office to come because he recognized how important the oath was and that was a tradition that I continued because again it’s important to the person coming in, and we wanted to impress with that person just how serious this oath was; that we meant it. That it was something we wanted to be reminded of, and I think it was just as important for the people hearing it again, the colleagues who surrounded that person as it was for the new AUSA. And so it has become a tradition in the Eastern District of Michigan to do it that way that continues to this day.
Rosenberg: Barb, you mentioned the many different types of cases you handled as an AUSA. One case you handled involved Iraqi spies, and I thought that was worth describing further for our listeners. A fascinating case.
McQuade: Yeah, so after 9/11 our office set up a national security unit, and I became part of that unit and handled a number of different kinds of cases. One series of cases we handled was so interesting: after the U.S. invaded Iraq in 2003, one of the things that happened was the U.S. Army went to the Iraqi Intelligence Service, which is sort of their version of the CIA, and grabbed all of the files that were in that building and then “exploited them” is the word they use. They had translators and experts go through those files they were in Arabic but to determine what they were and what they said and a few years later—
Rosenberg: When you say exploded you mean for U.S. intelligence purposes.
McQuade: Correct. And so there are a number of reasons that those documents would be used. But one of them was referral for a criminal prosecution. And there were files that were found that were source files for people living in the United States. And those files got sent to the FBI offices around the country where those people were living and three of them were in Detroit. There were three men living in Metro Detroit. They didn’t work together. I don’t know whether they knew each other or worked with each other. But there were files that showed their travel into and out of Iraq.
They met with handlers. They shared information, and they were reporting on Iraqi dissidents living in the United States who were speaking out against Saddam Hussein; they would attend their speeches and bring back recordings and newspaper articles at a time when it was illegal to travel to Iraq and to bring goods into Iraq.
Rosenberg: And so if these dissidents had family in Iraq they could be in grave danger based on the work of these Iraqi spies.
McQuade: That really is what I think makes their work so significant. Not only were they sharing information with a foreign adversary but they were sharing information about residents of Iraq who certainly were at risk.
Rosenberg: What happened?
McQuade: In all of those cases the defendants were convicted. One of them went to trial. Two of them pleaded guilty. But the cases were really quite strong. We had a (sic) interpreter come and interpret what was in the files themselves so the files were really some of the most powerful evidence. But we also had a witness who came and testified who was a former Iraqi intelligence officer who had been captured and was cooperating and he testified that he remembered that source information. He was the head of the Americas Desk for the Iraqi Intelligence Service, and he was aware of that source reporting, and actually they had taken action in response to information provided by that particular source. And so I think that brought home that these were genuine documents that it was utilized by the Iraqi intelligence service that they perceived that the information had value.
Rosenberg: That’s an amazing witness to have.
McQuade: It really was. And now one of the most interesting things about it is in addition to testifying, he testified under light disguise which is something I teach in my national security class. It’s not without controversy.
Rosenberg: So you said you teach “light disguise” in your criminal procedure class. What are the issues that arise?
McQuade: The defendant of course has a right under the confrontation clause to confront witnesses against them. Part of that is allowing him and the jury to see facial expressions, hearing a person’s tone and body language is important to assessing credibility, and so the jury is entitled to see those things. And so a disguise is permitted by the court. But as, you know, the independent arbiter, they’re in the court and making sure that everything is done fairly the judge wants to make sure that the jury can see those things—and so it might involve facial hair, it might involve changing a hairpiece. It might even be some sort of prosthetic facial feature—but it is subtle so that eyes are clear, mouth is clear, facial expression is clear.
Rosenberg: So it strikes a balance between protecting the witness and affording a defendant the right to confront that witness pursuant to the Constitution.
McQuade: Absolutely. So the witness’s identity was what was kept secret—his name and what he looks like, because the court of course is open to the public and anyone could come in and see what he looks like. But the defendant also has a right to confront him and to ensure that he is exposing the jury to any potential biases, and so that the jury can read any of that body language that might be indicative of credibility.
Rosenberg: How many years did you spend as an assistant U.S. attorney.
McQuade: I was an assistant U.S. attorney for 12 years, roughly five in the general crimes unit and then another seven doing national security cases.
Rosenberg: And then you became the United States attorney in the very district in which you had grown up as a prosecutor. How did that happen?
McQuade: So in 2009 I was nominated to become the U.S. attorney in the Eastern District of Michigan. An incredible honor working with wonderful colleagues. You know, the honor of a lifetime. I enjoyed both of those jobs for a total of 19 years in the Eastern District of Michigan.
Rosenberg: While you were the U.S. attorney, Barb, you had some fascinating cases in your district. I was reading about one of them that I would love for you to talk about. You had a doctor by the name of Farid Fata who was a self-professed cancer specialist who had committed a massive fraud on his patients. Can you talk about him and what he did and what you found?
McQuade: Yes. So Farid Fata was a very successful oncologist cancer doctor in metro Detroit. He had seven offices and a really thriving practice. What he was convicted of was lying to patients, telling them that they had cancer when they did not.
Rosenberg: Why in the world would anyone do that.
McQuade: He did it so that he could administer expensive chemotherapy treatments for which he could bill Medicare and receive reimbursements, and we believe he profited by about 17 million dollars by doing that.
Rosenberg: And you know how many patients he lied to in that way?
McQuade: We were able to account for 550 that we were able to document. We believe there’re probably more, but those were the ones that were the clean cases that we could present in court and make a provable case.
Rosenberg: It’s astonishing that a doctor—and doctors also take oaths, right, to care for their patients and do no harm—would actually lie to them about cancer and then treat them for a disease they didn’t have.
McQuade: It really was stunning and in fact at first it was difficult for patients to believe that he had done this. They they defended him in the early going I think until the evidence came out in court, because they were just so horrified that anyone could do that. And you know even though those patients, while they were relieved to learn that they didn’t actually have cancer—that was great news—many of them had endured chemotherapy for many years, or many had had spouses who had endured chemotherapy for years and were now deceased, and some of them had suffered permanent injuries to organs and nerves. Some had lost their teeth. And so they were very angry. But one of the things that was really interesting—because that’s something I wrestled with quite a bit, too—is how could anyone be so monstrous as to do this to someone.
Greed is one answer, but at his guilty plea, when the judge asked him why he had done this, he told the judge he did it out of greed and also for power. He seemed to enjoy having power over people’s lives. I mean, for many of them, he ultimately was able to tell them that they were in remission or he had cured them. Perhaps that was some of the power that he enjoyed as well.
Rosenberg: That’s an astonishing answer. Barb, the way this came to light is also a fascinating story. One of the patients who had been treated for cancer, and who did not have cancer, was a woman named Connie Flagg. Tell us what happened to Connie Flagg and how this case—how this crime came to the attention of the men and women in your office.
McQuade: Yes, so Connie Flagg was a 51 year old woman who was in good health. She had a blood test that showed a high level that caused her primary care physician to have some concerns that perhaps she ought to see an oncologist. And so she saw Dr. Fata. We have heard later that most doctors would have done additional testing or maybe monitored your situation; he told her, falsely, that she had cancer and that she needed to begin chemotherapy treatments right away. So after her first chemotherapy treatment, she was home and, you know, distraught thinking about her diagnosis, and she had an unpacked suitcase—a suitcase that she was in the process of unpacking—on the floor and she was home, it began raining, so she ran upstairs to close a window and as she turned around she tripped over that suitcase she was in the process of unpacking and broke her leg and thought, “oh boy, I’ve just gone from bad to worse” and went into the hospital with a broken leg. It was over the July 4th weekend. And so Dr. Fata was out of town and not available to tend to her.
Rosenberg: What year?
McQuade: 2013. So a different doctor—part of Dr. Fata’s practice—was making the rounds instead and checked on her.
Rosenberg: Dr. Soe Maunglay, who worked for Dr. Fata.
McQuade: Yeah, and who had already had some suspicions about his irregular practices and in fact had given notice to leave that practice the following month, but was still finishing up his his work with Dr. Fata and during his rounds checked on her.
McQuade: Coincidentally, while she was at the hospital, looked at her file, looked at her injury, and asked her, “Who told you you had cancer?” And she told him Dr. Farid Fata.
Rosenberg: And this confirmed some of Dr. Maunglay’s concerns about Dr. Fata’s practice of medicine.
McQuade: Yes. And so he discovered in her files that she did not have cancer. He looked at her patient records, and he told her, he urged her to get a second opinion.
Rosenberg: Did she?
McQuade: She did. And found out that she did not have cancer.
Rosenberg: So what did Dr. Maunglay do with this? It must have been very disturbing to see that his colleague had begun treating Ms. Flagg for cancer when in fact she was cancer-free.
McQuade: He was, he said he was distraught about it. He went back, and he spoke to the office manager at Dr. Fata’s his practice, a man named George Karadsheh, and told him what he had discovered. And George Karadsheh also had his suspicions about Dr. Fata from having been the office manager. He wasn’t a doctor, he wasn’t a medical professional, but he had heard from nurses and others who had left working there after short periods of time—because of suspicions that something was amiss—and he had had the experience of serving as a “relator” in a qui tam case previously. Now that’s a case where there is a fraud against the government—a litigant, a private litigant, may come to the government and share this information about fraud against the government so that the government can file a lawsuit to recover the fraud loss—
Rosenberg: —and the person who comes forward would be the relator.
McQuade: The technical term is relator, sometimes we refer to them as a “whistleblower.” Oftentimes it’s an insider like that. And their incentive is that they get a share of the recovery that the government is able to earn from this lawsuit.
Rosenberg: You used another term, qui tam. What does that mean?
McQuade: You know, it’s a Latin phrase; I think it means something like “he who sues on behalf of the king” and the idea is that this person has come in and can file his own lawsuit and also join in the recovery that the government receives as a result of this lawsuit—you wouldn’t have known about it otherwise, but now the government is able to sue for losses that it incurred as a result of this wrongdoer’s misconduct.
Rosenberg: So, the office manager, Karadsheh, believes that the government is being defrauded by Dr. Fata, and Karadsheh brings a qui tam lawsuit in which he is the relator—those are all the technical terms. But as you said so eloquently, and so succinctly, essentially he is a whistleblower. What happens next?
Rosenberg: George Karadsheh had been a whistleblower once before, so he knew how to go about filing a qui tam lawsuit.
McQuade: He filed (sic) a lawyer, very good relator’s counsel, who came to the U.S. attorney’s office and met with the chief of our Civil Affirmative Litigation Unit and agents of the FBI and HHS—Health and Human Services. And he shared with them this story of what had been happening. That was on a Friday afternoon. And I remember getting a call from this AUSA, Peter Kaplan—wonderful lawyer—who immediately recognized—
Rosenberg: —you’re the U.S. attorney now—you’re, you’re the boss.
McQuade: Yes. And Peter immediately recognized that if what he is saying is true, then people are being injured every day that Dr. Fata is in practice. In fact, what he said and what I believed is, you know, these cases can be really hard to prove because the spectrum of what is reasonable medical care is quite large. And so even if this doctor is being very aggressive, it’s probably not beyond what is medically reasonable. But just in case, we probably ought to treat it as if it’s true and I agreed with him. And so FBI agents, HHS agents, and AUSAs worked around the clock for the next several days over the weekend to try to confirm whether this was true. They were able to access records through the Medicare system and hired an expert to look at these records, and out of the representative sampling I think she looked at 12 patient records. They went 12-for-12 of people who had been diagnosed with cancer who did not have cancer.
Rosenberg: These types of cases can take months, if not years, to prove, and you had a team of agents and prosecutors who in 72-96 hours establish probable cause to believe that Dr. Fata was committing a crime. I don’t know that people will appreciate how fast and how well they did their work.
McQuade: I agree, it was incredibly fast. Part of it is because they immersed themselves in it all weekend and worked on it. They did get that confirmation from the expert and knew what they had, they spent all day Monday putting together a search warrant affidavit, search warrants, a complaint for an arrest, a plan for executing all of those search warrants. They searched every one of his locations—seven, plus his home, in an arrest warrant—and so all that material was done, but the other thing they did check that was so impressive is thinking through patient care. Because, if they were to take down his practice on that Tuesday morning as they intended, that meant patients scheduled to have chemotherapy treatments that day would be turned away. And so one of the other things that—we had a wonderful victim-witness coordinator named Sandy Palazzolo, she worked with her team to put together a list of alternative cancer providers in the area and a protocol for patients to get their patient files, which they would need to take to a doctor to get care while the agents and prosecutors and civil attorneys were working on the plan to arrest and search Dr. Fata’s home and premises. The victim-witness folks were working on a plan to take care of the patients.
Rosenberg: I’m so glad you mentioned the victim-witness folks because when I was an assistant U.S. attorney we had several in our office and they were magicians—they could do anything, immediately, to take care of people. And their level of commitment and passion and dedication was, I think, unrivaled. It’s a part of the U.S. attorney’s office that I think lots of folks don’t know about.
McQuade: Yeah I think we don’t see it but it’s so incredibly important. When we had victims who were testifying in court involving loved ones who were murdered, or when we had children who were testifying in cases of child exploitation or sex trafficking, the victim-witness coordinators were there making all the arrangements but also sometimes sitting in court and holding somebody’s hand or escorting them around the courthouse. And so they really do wonderful work.
Rosenberg: I wanted to share with you, Barb, a very brief story about a case I worked on as a junior junior prosecutor. We had a doctor in the Eastern District of Virginia, Cecil Jacobson, who was a fertility specialist and committed two different types of fraud on his patients. One is, he was inseminating patients with his own sperm and the women he was treating, the families he was trying to help have a child, didn’t know that. And second, and just as insidious, he was injecting his patients with massive amounts of HCG, human chorionic gonadotropin, the hormone that a woman’s body would produce if she were actually pregnant such that their bodies were mimicking pregnancy. And then after 18 or 20 or 22 weeks he would tell them falsely that their fetus had died, that they had lost their child. All of that was a fraud. And again, as with Dr. Fata, it was just unfathomable that a medical professional would do that to patients. I think perhaps for the same reasons: money and power.
McQuade: That is incredibly shocking. When you were working on that case, Chuck, how did you deal with the victims in that case?
Rosenberg: Well, again, I was the junior junior prosecutor. It was led by a very talented AUSA named Randy Bellows who’s now a state judge in Virginia. And so I basically did a lot of research and whatever Randy needed me to do. But when you mentioned victim-witness specialists, again, here’s a place where we used them because we had to figure out even how to approach people to let them know what had happened to them, and some cared deeply and some didn’t want to know. And so we needed the expertise of ethicists and victim-witness specialists and other doctors to help us understand how we could approach the victims of Dr. Jacobson’s fraud
McQuade: And what did you end up doing? I’m not sure I would know whether it’s better to tell people about this or to not tell them—is that, is it less cruel…
Rosenberg: As I recall, we sent out a letter to those who had been victims of the insemination fraud and told them that we might have information that might be important to them and they could avail themselves if they wished. And many did and some did not. We were counseled to give as much choice to the victims as possible and not to just drop a bombshell on their front doorstep out of the blue.
McQuade: Yeah, I think that’s one of the things, probably, the public doesn’t see a whole lot, is the care with which people who are victim-witness coordinators spend a lot of time thinking about how best to treat victims of crime.
Rosenberg: You know, I was also lucky, Barb, because I learned from Randy Bellows and his co-counsel Dave Barger, who were consummate professionals, about how to handle not just a complex case but a case that was fraught with emotion. Whatever happened to Dr. Fata in your case?
McQuade: Eventually entered a guilty plea. The evidence was really quite overwhelming against him. It was really irrefutable medical records that could prove his guilt and so ultimately he pleaded guilty. He was sentenced to 45 years. And, you know, for a man who is about 50 years old at the time of sentencing that is essentially a life sentence. You know, some of his victims wanted more, more time or even the death penalty, which was not eligible in a case like this. But you know, I thought it was a substantial sentence and, and appropriate under the circumstances.
Rosenberg: And parole is not available in the federal system.
McQuade: Yeah that’s right. So he’ll serve close to 45 years. If you behave yourself in prison, then you do get some modest credit for the time. But he will serve a substantial sentence, and I think when you think about all the reasons that we have sentencing—deterrence and protecting the public, promoting respect for the law, and all of those things—and even just due punishment—the sentence was appropriate in a case like this.
Rosenberg: Remarkable how somebody’s interest in money and affection for power could hurt so many people.
McQuade: There were other doctors too who were really horrified by this behavior because as we know most doctors are attracted to medicine because they want to help people.
Rosenberg: Overwhelmingly so.
McQuade: Absolutely, and so I think that’s why it was just so unthinkable that Dr. Fata would view patients not as, you know, someone that they want to heal but a prospect for profit.
Rosenberg: I remember talking to some other doctors during the Cecil Jacobson investigation, and I think horrified is the right word. They could not begin to understand how a member of their profession could do this to people.
McQuade: Yeah. And in many ways I think it caused patients to accept advice that they might otherwise have been skeptical about. And so, you know, the advice of getting a second opinion is, is probably, is probably always good for everyone.
Rosenberg: In your office when you were a U.S. attorney you also brought a series of fascinating public corruption cases centered around a former Detroit mayor Kwame Kilpatrick. I was hoping you would talk about that, too.
McQuade: Yeah. Kwame Kilpatrick was an incredibly talented and charismatic mayor of Detroit. He was young when he became the mayor. And I think he came in with a lot of promise of leading Detroit, which had had some financial struggles into a new era.
Rosenberg: His mother was a local congresswoman, right?
McQuade: She was Carolyn Cheeks Kilpatrick. He came from a family of sort of political royalty, his father had been a county commissioner as well, and so his name was known. But you know, he was a kid who grew up in Detroit, did all the right things, stayed in school, worked hard, and ascended to mayor. And I think people were very hopeful of his leadership. But as the evidence showed at trial, very quickly he saw his role as mayor as an opportunity for profit, that convictions in the case centered around a few different things.
Bribery schemes—to do business with the city of Detroit, you had to pay him or his father a consulting fee just to get in the door. Public Works contracting was a big source of ill-gotten gain for Kwame Kilpatrick; if you wanted to do business with the city of Detroit in a public works contract you had to hire his good friend Bobby Ferguson to do your contracting and you had to pay him 25 percent.
At least one instance, the contractor said, “Well I don’t need an excavator, I already have an excavator.” And was told, “Well that’s good because he’s not going to do the work anyway.” And that was a big part of the scheme. There was 83 million dollars in fraudulent billings by Bobby Ferguson for excavation work.
And then another part of it was the mayor had something called the Kilpatrick Civic Fund, which was intended to raise money for the people of Detroit, seniors and children. He spent that money instead on himself—more than two hundred thousand dollars on things like yoga lessons and a leather jacket and golf clubs and travel to resorts for vacation and children’s camps and the like.
Rosenberg: Ultimately, I think I read about 30 people were convicted as part of the Kwame Kilpatrick web of fraud.
McQuade: Yeah, and I think that’s one of the things that’s so interesting and important about that case. People look to Kwame Kilpatrick as, you know, the person who was at the center of that, and he was. But it’s a really great lesson, I think, in how tone starts at the top, because he really created a culture of corruption within city government. As you said, 30 people who were either city employees or contractors doing business with the city of Detroit were convicted of federal offenses. And it just became a way of doing business in the city of Detroit that if you had the authority to award contracts you asked for a little money, a little something for yourself.
At trial, evidence of an e-mail came out from an associate of Kwame Kilpatrick that said, “How come Bobby is the one who always gets rich? When’s it going to be my turn to make a little money off of a deal?” And so it really, I think, is an example, Chuck, you know, how we often hear about tone starts at the top and you need to create a culture of integrity and a culture of compliance. And I think sometimes people wave it that, like, you know—of course that’s going to be the culture. And that certainly has existed in the places where you and I worked at the Justice Department. But it doesn’t exist everywhere and when the boss makes it clear that it’s okay to accept bribes and that’s just the way business is done, people begin to do it without even batting an eye. Corruption was really quite pervasive and lasted for a long time.
Rosenberg: Barb, whatever happened to Kwame Kilpatrick.
McQuade: He was convicted at trial and sentenced to 28 years in prison in 2013, and so he continues to serve that sentence today. But, you know, it was a really remarkable job by a prosecution team and a team of agents at the U.S. Attorney’s Office and the FBI. We also had an environmental agent involved in that case who talked about the sewer contracts and that was a very interesting piece of the case. So, really tremendous work, and one of the big breaks that came in that case actually occurred when the Detroit Free Press printed the content of text messages between Kwame Kilpatrick and his chief of staff with whom he was having a romantic relationship. And while they were interested in that aspect of the case, our team realized that if there were text messages about that, then there were also likely text messages about the corruption and public contracting that was subject of the case.
And so they got a search warrant to obtain the content of those text messages and that ended up being really important evidence in the case.
Rosenberg: Did they find evidence of the corruption and the text messages?
McQuade: They did, and they used it extensively at trial to corroborate the testimony of witnesses. So if there was a contractor who had been shaken down for a bribe, not only was he able to testify about it, but we were able to show text messages between Bobby Ferguson and Kwame Kilpatrick about the very things he was talking about.
Rosenberg: And that corroboration is so important in the work you do in court.
McQuade: Yeah, it was really powerful. I think that you know you can sometimes dismiss witness testimony as biased or forgetful or misunderstanding what was actually going on. But when you could confirm what they were saying with a text message in the words of the defendants themselves it was incredibly powerful.
Rosenberg: There’s another case that came up during your tenure as U.S. attorney, Barb, that I wanted you to talk about. Really interesting. The Volkswagen Corporation had been cheating on EPA emissions tests. Not the typical case you might find in a U.S. attorney’s office, but an important one.
McQuade: Yeah. This was an interesting case and it arose here in Ann Arbor, Michigan. There’s an EPA testing lab here that tests cars for emissions to make sure they’re complying with EPA regulations, that the emissions going into the air are within legal limits. And I got a call one day in 2015 from EPA and the criminal division in Washington of the Department of Justice that they had become aware that Volkswagen was cheating on the test—and not just a little bit. They had designed software that they’d installed in the vehicles that could cheat the tests, so that the car sort of knew when it was on a dynamometer, which is the testing machine, and it would switch into a mode that would burn clean. And so the car might have been, you know, less powerful, it might have been less fuel-efficient, but it was clean and it would pass the test. But when the car was on the road, it would switch over to drive mode and it would spew more than 40 times the legal limit.
Rosenberg: And the software was purposefully coded, designed in this way.
McQuade: It was. It was created so, you know, sometimes you have these cases where there is a problem with a vehicle, and then people lie about it to cover it up. This was one that was intentionally created from the start to cheat the test.
Rosenberg: Who is charged and why?
McQuade: Ultimately Volkswagen the corporation was charged, and seven executives were also charged. We began an investigation, it included talking with lots of witnesses, people who were employees, as well as reviewing e-mails and memos, and found that some very high-level folks—you know, department heads, division heads—had been involved in the creation of this. It was part of Volkswagen’s goal to create what they refer to as “clean diesel” and, so, diesel engines that could be sold in the United States that were cost-effective, that were fuel-efficient, and that were clean—and they weren’t able to make their own goal. We talked a little bit about you know cultures of organizations, and I think one of the things that Volkswagen got caught up in is they were determined to meet their goal. And so when they couldn’t do it legitimately they found a way to cheat to meet that goal.
Rosenberg: You know sometimes in white collar cases we end up charging corporations rather than individuals. And that is somewhat controversial. Can you talk about the theory behind charging a corporation as opposed to charging an individual—I know in this case he did both. But that’s not always true.
McQuade: Yes. So there are a number of factors that you look to, the Justice Department has factors that should be considered when considering whether to charge anyone and then whether to charge the corporation or the individual—and so, when it’s the corporation that is benefiting as such, as a corporation, then in the control group the leaders and managers of that organization were involved in the decision that was illegal, then the corporation is a proper defendant. But that does not obviate the possibility of also charging individuals, and so, as I said, there were seven individual employees who are high level managers of the corporation who were involved in making these decisions. They were within the scope of their authority. They did it to benefit the corporation, and they, you know, were fully aware, intentionally, of doing this. Now, I should say these are allegations because some of them remain at large in Germany. Germany does not extradite its own citizens, but two of those individuals were in the United States and were convicted here.
Rosenberg: Coincidentally, in this case your professional life intersected with the professional life of one Bob Mueller.
McQuade: Yeah that’s right. At the time of the criminal prosecution, Robert Muller had been appointed the special master in a civil case. So the owners of vehicles had brought a lawsuit, there was multi-district litigation going on in the Northern District of California.
Rosenberg: What does it mean to be a special master?
McQuade: A judge may appoint someone to assist him in the administration of his duties. You know, a judge lacks the expertise and also the time to administer, sometimes, aspects of a particular case. In the Volkswagen case, the task that needed to be performed was to take this settlement money and then figure out a fair way to dole it out to the victims. It required a process, developing a process, figuring out the calculations and doing it in a fair way. And so Bob Mueller was hired to do that work on behalf of the judge.
Rosenberg: The judge had great confidence in Bob Mueller and asked him to serve as a special master.
McQuade: Yes. And so, when a judge chooses a special master, it’s because he respects that person’s expertise and fairness in ability to do it. He’s really acting in the stead of the judge, almost a contractor for the judge.
Rosenberg: And Bob was no longer the head of the FBI. He was in private practice. This was the period between when he was director and before he became a special counsel.
McQuade: That’s right. So the judge should—Judge Breyer, brother of the Supreme Court Justice—in the Northern District of California had appointed Robert Mueller to be the special master to help put together a settlement in the civil case. And so we were working in tandem on different projects but we had sort of a common goal of resolving the case. And so he telephoned me and came out and met with me in Detroit. And, you know, every time we met the message that he had for me was the importance of urgency in a case like this. He said, you know, “cases like this can really languish.” There’s an awful lot of evidence to be collected and what’s most important is that you move expeditiously and act with urgency because the longer the investigation goes on, the more stale the evidence becomes. You will lose records, and memories will fade. And so you really need to push your people to to act with urgency and I did, I did that. And as a result I thought we had a very favorable outcome for the government, which had been defrauded, as well as for the individual customers who’d been defrauded. Volkswagen ultimately paid up a 4.3 billion dollar settlement to resolve criminal and civil violations.
Rosenberg: I have such great admiration for Bob Mueller.
McQuade: Yeah, same here. He is, you know, the quintessential professional. He’s soft-spoken. He’s understated. He has great humility. You know, I began the conversation by referring to him as Mr. Mueller because I’d only met him before in his capacity as FBI director when we overlapped in those jobs and he insisted I call him “Bob.” You know, he was always in his shirt sleeves, rolled up, ready to work. And so I also have great admiration for him.
Rosenberg: White shirt, no doubt.
McQuade: Absolutely, nothing but a white shirt.
Rosenberg: In early 2017, President Trump issued an executive order known as “the travel ban.” 1.0, the first version. Talk about how that affected the work of your office and also how it led to your realization that you would need to leave this job that you loved.
McQuade: When President Trump was elected in 2016, I realized that I would probably be replaced. That is typical. But it was a job that I loved and I was determined to, you know, hang on as long as I could. I felt like we had so many of these cases that were still wrapping up—the Volkswagen case, for example, was scheduled for sentencing in March.
Rosenberg: And you had been in the office for almost 20 years.
McQuade: I had, I had you know many friends. I loved the work, I loved the mission, I loved the people. I wasn’t eager to leave. And, you know, I really wrestled with the idea of, you know, I could stay as long as I could. Who knows, maybe I could stick around even, you know, in the Trump presidency. I never really saw myself as a political appointee, you serve in a Democratic or Republican administration—I’d been an AUSA through multiple administrations of both parties, I really valued the work.
Rosenberg: Same here, same same view of the work and of the job.
McQuade: Yeah. And, you know, that it wasn’t driven by politics, it was really driven by facts and evidence and law. And so, you know, just working along and then the travel ban went into effect on a Friday. I think, you know, 5PM or so and that weekend was really chaotic. There was no advance warning to people at the airport who were working in Customs and Border Protection; we were getting a lot of calls from government officials, a lot of calls from citizens who had loved ones who weren’t allowed back in. One part of that was to apply to lawful permanent residents—green card holders—who had traveled overseas and were returning home and were told they couldn’t enter the country and were being detained. And so it was quite chaotic.
That Monday a lawsuit was filed in the Eastern District of Michigan, like many other districts, and I was sitting with our lawyers who handle immigration cases, really wrestling with how we were going to defend what appeared to be an indefensible order and really reached no resolution that day—just kind of tearing our hair out going through language of statutes and trying to figure out how we were going to defend this thing.
Rosenberg: It was your obligation, if you could, to try and defend that executive order. Is that fair?
McQuade: Yes, and if you know any reasonable argument can be made in defense of it, you do that. That’s what you do as a government lawyer. It doesn’t mean you agree with the policy behind it. There are lots of laws, the policy of which I don’t necessarily personally agree with, and that’s okay if there is a reasonable argument to be made. I’m the government lawyer, and you make the argument.
Rosenberg: But I want people to understand that it was your duty to see whether or not you could advance a reasonable argument in defense of the executive order.
McQuade: That’s right. I mean, you can’t go into court and make a frivolous argument. You have to find some reasonable argument to make. We were having a hard time finding any reasonable argument to make to defend at least that first version of the travel ban.
Rosenberg: So what happens that night.
McQuade: Well, I got home and when I arrived home I checked my messages on my phone and I saw one from Sally Yates to all U.S. attorneys saying that she was directing us not to defend the travel ban because she was not convinced that it was constitutional.
Rosenberg: And she was the acting attorney general at the time.
McQuade: She was. So it was her call to make. And she had issued that directive to all of us and so I I said out loud, “Thank you, Sally Yates!” You know, my family looked at me quizzically. You know, “What’s mom talking about?” And I said, “Oh, you know,” I told them in some shorthand what, what had happened, how it’s meant my day and she had just solved my problem because now we weren’t going to have to defend this, what I perceived to be, unlawful order anymore.
And so, you know, I spent the evening with my kids and later that evening I was sitting on my daughter’s bed with her, talking about homework or something, and I glanced down at my phone and saw a news alert from, you know, some news organization and, you know, in very cold, objective terms saw a news report that said “President Trump has fired Acting Attorney General Sally Yates.” And now I started to cry and my, my daughter asked me what’s wrong.
“Why are you crying?” And I said, “I just realized I can’t be U.S. attorney anymore.” You know, if I was going to have to defend laws that I thought were unlawful. I had the answer to my question. You know, maybe I could stick around, maybe I could serve in this administration. I realized I could not. And so it was a sad moment.
And so we had to proceed with the case. As luck would have it, someone in another district issued a nationwide injunction. And so our case was stayed and we did not have to come to terms with defending it. It was modified later, you know, and continues now in that modified form.
Rosenberg: But you left your job as U.S. attorney in the office you loved, nevertheless.
McQuade: I did. Oh, I was lucky enough to be able to land here at the University of Michigan and so I began in earnest to explore other opportunities right after that experience and sign an agreement here with the law school. And I’m so honored to come back and teach here, you know, there’s the Department of Justice, it’s an institution that I love. But another great institution is the University of Michigan. And so I’m honored to be here.
Rosenberg: And I mentioned at the beginning of this podcast that we’re sitting in your office on the gorgeous campus of the University of Michigan, almost as nice as the University of Virginia. And it’s really an honor to be able to spend some time with you, Barb McQuade.
McQuade: Thank you, Chuck, and thanks for coming to visit me here in Ann Arbor.
Rosenberg: Oh, it’s our pleasure. Thanks for being on The Oath.
McQuade: My pleasure. Thank you.
Rosenberg: Thanks to Barbara McQuade for joining me today on The Oath. I really enjoyed our conversation. Barb has been a tremendous friend and has also helped promote the earth on her Twitter feed. If you’re on Twitter and you like Barb—and there’s every reason you would because she does fabulous work on MSNBC as a legal analyst—you can find her at Barb McQuade on Twitter. Thanks Barb. My guest next week on The Oath is the former United States attorney for Chicago, Pat Fitzgerald. Pat has had a remarkable career in federal law enforcement starting as a line federal prosecutor, an assistant United States attorney in the Southern District of New York. There he prosecuted cases against al-Qaeda and against the Mafia. And we’ll talk about both of those next week on The Oath.