Mr. Comey Goes To Washington

The man who brought Martha to trial now leads the crackdown on corporate fraud

When the Bush Administration needed to fill the No. 2 slot at the Justice Dept. last fall, the job requirements were stiff. First, the new Deputy Attorney General (DAG) had to lead law enforcement's fight against terrorism. And with key trials lined up throughout 2004 for Enron (ENRNQ ), WorldCom, HealthSouth (HLSH ), and others, the Administration's record on pursuing corporate crime would depend on the DAG's diligence. Perhaps most important, the deputy would have to navigate political minefields, overseeing investigations that could damage President Bush in two areas where he is vulnerable in an election year: prewar intelligence failures and postwar corporate influence.

Meet James B. Comey Jr., the DAG from Central Casting. A career prosecutor, he was handpicked by former FBI Director Louis Freeh in 2001 to investigate the alleged al Qaeda operatives who bombed U.S. servicemen at Khobar Towers in Saudi Arabia. As U.S. Attorney in Manhattan, he crafted the novel legal theories used to charge domestic doyenne Martha Stewart and technology über-banker Frank Quattrone with obstruction of justice. And as a hard-nosed investigator respected by Democrats for his independence, he brings a measure of cover for Bush and Attorney General John Ashcroft in high-profile political probes.

Comey is just settling into his Washington office, but so far he's living up to White House hopes. Guilty pleas from Andrew and Lea Fastow in the Enron Corp. case gave him momentum as head of Justice's Corporate Fraud Task Force. He also won support from Democrats -- Senator Charles Schumer (D-N.Y.) called him a "spectacular choice" -- when he took over the Justice Dept.'s investigation into an Administration leak of the identity of CIA operative Valerie Plame, a case that could move uncomfortably close to Bush's inner sanctum. "Obviously, he will do the right thing and enforce the law, but we also felt very, very comfortable that Jim would be loyal to this President and a team player," White House Counsel Alberto R. Gonzales says.

Comey's warm relationship with the Administration could soon be put to the test. Justice is wading further into explosive territory as it takes a preliminary look into charges that Halliburton Co. bribed foreign officials while Vice-President Dick Cheney was CEO. In the Senate, furor over a GOP staffer's access to confidential Democratic Judiciary Committee computer files could spill into a criminal probe in Comey's jurisdiction.

Beyond the Beltway, Comey's legacy as a prosecutor is also on the line. One of his highest-profile moves was the indictment of Stewart, whose fate will soon be in the hands of a Manhattan jury. It's the first of a half-dozen big-name corporate-fraud cases making their way to trial this year (table). As the man who made the call to bust Stewart, Comey will get to take center-stage bows if prosecutors win -- or be forced to take the heat if they lose. "We're at a point now where we're going to be able to demonstrate to the American people that significant white-collar crooks get real jail time," he says.

If Comey gets any criticism, it's for overzealousness. His obstruction-of-justice case against Quattrone, Credit Suisse First Boston's (CSR ) top technology banker, relied heavily on a single e-mail and resulted in a hung jury. Comey charged Stewart with obstruction of justice -- but didn't bring charges on the underlying crime of insider trading, an unusual move for which he has been roundly criticized.

White-collar cases are harder to prosecute than most people realize, says Comey. "I'm not saying drug cases are easy, but all I have to do is connect you to the kilo. In a corporate-fraud case, I have to connect you to the transaction and prove what was in your head when you did it -- to a jury of 12, unanimously, beyond a reasonable doubt," Comey says. "What screws all that up is a lot of lawyers and accountants that defendants can point to and say: 'Well, I talked to my lawyer, and he said it was O.K."' Fortunately, today's prosecutors can exploit suspects' e-mail -- "the 20th century's gift to law enforcement," he quips.

WALKING TALL. At 6 feet 8 inches, Comey can be an imposing presence. A Sunday-school teacher originally from Yonkers, N.Y., Comey, 43, talks a lot about traditional values and likens corporate ethics to parenting. But while he has a strict view of the law and morality, the father of five does not come across as stern and humorless. Instead, he's polished, self-effacing, and witty. "You should say: 'He spoke with a religious fervor about prosecution,"' he says, when a reporter asks about his churchgoing. "No, no," he backs off. "It makes me sound like a nut."

Comey joined the Manhattan U.S. Attorney's office in 1987 under Mayor Rudolph W. Giuliani, making his mark by his willingness to take on hard cases. He led the prosecution of John Gambino in the early 1990s. Later, he headed for Richmond, Va., where he was part of the team that launched Project Exile, a tough-on-guns program that was credited with cutting the city's homicide rate. A few years later, the FBI's Freeh steered the investigation of the 1996 Khobar Towers bombing to Richmond, where, in 2001, Comey delivered 14 indictments. Six months later, President Bush nominated him to succeed Mary Jo White as U.S. Attorney for the Southern District of New York.

Now in Washington, Comey already misses the courtroom. But he's looking forward to imposing his unsparing brand of justice. "One of the reasons we insisted on guilty pleas from the middle people at WorldCom was that we wanted to make sure that people in Corporate America understood that 'I was only following orders' is not an excuse," he says.

Will Comey find himself in that same situation as he oversees sensitive probes in an election year? The political pressures he's about to face are likely to be just as intense as any confronting those wayward managers at WorldCom and Enron.

By Lorraine Woellert in Washington

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