Leslie Caldwell, former head of the Justice Department’s Enron Task Force, has emerged as the lead candidate to become the department’s criminal chief, two people with knowledge of the matter said.
Caldwell, a partner at Morgan, Lewis & Bockius LLP, is in the final stages of the nomination vetting process, said the people, who asked not to be named because the selection process is confidential. They said Caldwell will likely be offered the job after the process is finished, which could be as soon as next month.
In January 2002, a month after Enron’s plunge into bankruptcy shocked the markets and raised questions about the reliability of public companies’ financial statements, Caldwell was tapped to head up a special task force dedicated to identifying and prosecuting criminal activity at the Houston-based energy company.
Over the next four years, the task force brought charges against 36 defendants, including former chief executive officers Jeffrey Skilling and Kenneth Lay and 25 other former Enron executives.
The task force also charged Enron’s auditing firm, Arthur Andersen, with obstruction following the widespread shredding of Enron-related documents in the weeks leading up to the company’s collapse.
The criminal charge effectively put Andersen out of business. Three years after a jury convicted the auditing firm in June 2002, the Supreme Court overturned the verdict. Caldwell left the task force to join Morgan Lewis in 2004.
Caldwell, if selected and confirmed, would step into the position vacated in March by Lanny Breuer. She would oversee a portfolio of prosecutions that include financial and health care fraud, organized crime and wrongdoing by public officials.
The vetting process marks a step in the Obama administration’s efforts to fill out Attorney General Eric Holder’s second-term team, which at one point this year lacked permanent appointees in at least six top positions.
Brian Fallon, a Justice Department spokesman, and Matthew Lehrich, a White House spokesman, declined to comment on the selection. Caldwell didn’t respond to a voice-mail message seeking comment.
Breuer, who led the division for almost four years, oversaw the department’s investigations into the financial crisis, as well as the criminal side of the probe into the alleged manipulation of global interest rates. He also directed the largest U.S. criminal settlement, the $4 billion deal with BP Plc over the 2010 Gulf of Mexico oil spill.
Breuer’s tenure drew criticism from lawmakers and consumer advocates for the lack of criminal charges brought against Wall Street executives and firms -- a complaint that continues to dog the Justice Department after the worst financial crisis since the Great Depression.
Lawmakers including senators Elizabeth Warren, a Massachusetts Democrat, and Charles Grassley, an Iowa Republican, have pushed the department for tougher settlements in more cases against banks.
Breuer said throughout his tenure and since his departure that, if his prosecutors had uncovered evidence to bring cases, he would have filed charges.
Mythili Raman, a career prosecutor, has served as the acting assistant attorney general in charge of the division since Breuer’s departure. Raman, who was Breuer’s chief of staff, has led the division’s continuing investigations into Libor manipulation by the world’s largest banks, foreign bribery and money laundering.
Raman’s experience and the continuity she brought to the position may have played a role in the length of time it took to replace Breuer, who announced in January he would be leaving.
In a May speech, Raman said prosecutors were pursuing guilty pleas, criminal convictions and “significant monetary penalties” from banks and their employees in the investigation into the rigging of benchmark interest rates.
Barclays Plc, UBS AG and Royal Bank of Scotland Group Plc have been fined more than $2.5 billion in the probe. Japanese subsidiaries of UBS and RBS both pleaded guilty as part of their resolutions. Traders rigged the benchmark to profit from bets on derivatives, while banks sought to submit artificially low rates to appear financially healthier than they were, according to regulators.