Lehman Brothers Files for Bankruptcy; Firm Chairman Later Appointed Examiner to Investigate
On this day in 2008, the fourth largest investment bank in the country filed for bankruptcy protection. The collapse of 158-year-old Lehman Brothers Holdings Inc., the largest bankruptcy filing in U.S. history, was one event that precipitated the late-2000s global financial crisis. At the time, it was the largest failure of an investment bank in 18 years. “Throughout the day, employees carrying tote bags, suitcases and boxes packed with contents of desks and offices streamed out of Lehman's Times Square-area headquarters,” wrote the Chicago Tribune. In January 2009, the court appointed firm Chairman Tony Valukas as examiner, charged with investigating why Lehman had failed. Later that year, Chicago Lawyer magazine named Tony “Person of the Year,” in part because of his work on Lehman. In 2010, Tony presented his 2,200-page report, coined the “Valukas Report” and applauded for its clarity and usefulness in determining what brought about Lehman’s demise.
Operation Greylord - Undercover Probe into Corruption - Becomes Public
The undercover Operation Greylord investigation became public on this week in 1983. Tom Sullivan launched the joint investigation with the FBI after he became U.S. attorney for the Northern District of Illinois in 1977; Chuck Sklarsky was among its architects during his time as an assistant U.S. attorney. Ultimately, the operation led to the conviction of about 90 individuals, including judges, lawyers, deputy sheriffs, police officers and court clerks, on a range of charges including conspiracy and bribery. In an interview with the Illinois Supreme Court Commission on Professionalism, Tom recalled facing the difficult decision of whether to use real or fake cases to snare corrupt members of the Cook County judiciary. Although it would have been easier to have undercover FBI agents defend real cases, ethical and liability concerns caused the team to use fake cases. “If we use real cases and [the prosecutor or judge] takes a bribe and a guy is released from a minor crime and then goes out and commits a really horrible crime, I’m going to get blamed for it. So you can’t use real cases; you have to use fake cases. We had these wonderful FBI agents, just marvelous people who came up with this whole scenario of faking the reasons for being arrested,” Tom recalled. The probe continued under Tom’s successors, Dan Webb and then Tony Valukas. The investigation was made public and prosecutions begun during Dan’s tenure; Tony pursued and concluded the operation. When Tony left office in 1989, the Chicago Tribune observed that “corrupt judges, bankers, drug dealers, police officers, lawyers, business executives, aldermen, defense contractors, state legislators, sports agents -- all have been brought to justice by Valukas and his staff during his four years as U.S. attorney in the Chicago region.” In the aftermath of Operation Greylord, Jerry Solovy was appointed to lead a special commission to recommend ways to reform the system. Known as the “Solovy Commission,” the panel proposed the merit selection of judges, among other reforms, and issued several reports addressing disclosure rules regarding the judicial selection process.
Click here to download a copy of The Special Commission on the Administration of Justice in Cook County Report.
Senate Confirms Tom Sullivan's appointment as U.S. Attorney for the Northern District of Illinois
After Jimmy Carter was elected president in 1976, U.S. Sen. Adlai Stevenson III recruited Tom Sullivan to serve as U.S. attorney for the Northern District of Illinois. On this day in 1977, the U.S. Senate confirmed Tom’s appointment. Tom was ready to move into public service, although he knew at the outset that he would limit his tenure to four years. During that time, he investigated fair-housing violations and discrimination cases in schools and challenged police hiring practices. He also started the undercover Operation Greylord probe of corruption in the Cook County judiciary, a long-running investigation that would continue under his predecessors, including current firm Chairman Tony Valukas while he served in the same role from 1985-1989. When Tom left the office to return to the firm in 1981, the Chicago Tribune celebrated his “exemplary record.”