Post-FBI Work Can Pose Pitfalls For Ex-Agents

Friends of Ours ^ | 10/12/12 | Friends of Ours

[AtlasStalled]

Former special agents who once served their country in the fight against mobsters, terrorists and fraudsters often have second careers in the security or investigation departments of big companies and law firms.

However, jumping into the private sector is not without its pitfalls for one-time G-men. As much as they are prized assets by corporate America for their training, experience and contacts, the good reputation of these former agents also can be cynically exploited by those with sharp practices or shady reputations as a cover to deflect any suspicion into wrongdoing.

For example, Assistant Director Louis Nichols -- J. Edgar's No. 2 man -- left the FBI in 1957, and took a plum job making $100,000 a year at Schenley Industries which mob lackey Roy Cohn allegedly secured for him, and Louis Rosensteil, the company's president, was suspected of ties to Genovese mobsters Meyer Lansky and Frank Costello. And former special agent H. Paul Rico left the Boston field office in 1975 to become security head at World Jai Alai, and then was indicted for his alleged role in a 1981 murder as a tool of Winter Hill boss Whitey Bulger although Rico died in 2004 before the charge against him was resolved.

Indeed, in May 1962 while staying at the Volney Hotel in New York City, Meyer Lansky was recorded on a wire describing how the G-men could be co-opted in the private sector as "racketeers" and the "new mafia":

"They're nothing but racketeers, every one of them. After five years they get out, get on a big corporation's payroll. Now what happens, you and I . . . let's say I work for IBM. You came. They say [redacted] is doing the same business. He has no FBI guys working for him. Pop, they chop his legs off. They find him with a sweetheart, they find him with this, they find him with that. This thing's gonna get an investigation. It's a new mafia."

The potential pitfalls for former agents joining the civilian life came to the forefront recently for U.S. Congressman Michael Grimm, a Republican from Staten Island, NY, who spent a decade as a special agent with the FBI until leaving the agency in 2006. Grimm then opened a restaurant on the Upper East Side called Healthalicious with partner Bennett Orfaly, and federal prosecutors now allege that Orfaly has personal ties to reputed Gambino capo Anthony "Fat Tony" Morelli who "is serving a 20-year prison sentence for racketeering and extortion in an elaborate tax fraud" as reported by Alison Leigh Cowan for The New York Times:

"'Mr. Orfaly maintains constant contact' with Mr. Morelli in prison, [Assistant U.S. Attorney Anthony] Capozzolo told the court, noting that Mr. Orfaly 'has visited him and engaged in telephone conversations.'"

One unidentified source claims that Morelli is "like an uncle" to Orfaly as reported by Mitchel Maddux and Dan Mangan for the New York Post.

Orfaly is not accused of any wrongdoing, and Grimm previously sold his interest in the restaurant and insists he was unware of Orfaly's supposed ties to Morelli. In any event, many citizens probably are not thrilled with the idea that a special agent who worked undercover assignments targeting the mob after leaving the FBI became involved with a business partner who allegedly has a personal relationship with a reputed mobster. It's just not the prettiest picture.

Another former agent got employment at a law firm which subsequently was indicted. Steve Bursey spent 27 years at the FBI, and among his assignments was serving as the contact agent for undercover agent Joe Pistone who infiltrated the Bonanno crime family as Donnie Brasco. Immediately following his FBI retirement in 1997 Bursey joined the class action law firm Milberg Weiss to head its investigations department. In 2006 the law firm was indicted by federal prosecutors for an alleged decades-long scheme in which serial plaintiffs were illegally paid kickbacks out of the attorneys' fees for filing their shareholder lawsuits. Several heavy-weight partners were convicted for their roles and sent to prison, and the firm itself -- now known simply as Milberg LLP -- settled the criminal case by paying a $75 million fine and hiring a compliance monitor for two years according to a Department of Justice press release: "the settlement with Milberg reflects the seriousness of what was probably the longest-running scheme ever conducted by a law firm," said United States Attorney Thomas P. O’Brien, and "the monetary payment will punish the firm for allowing this conduct to occur."

Bursey and the others remaining at the firm were not involved in any wrongdoing but the optics of a former agent at a law firm which otherwise was thick with corruption may not have inspired a lot of confidence among all the good citizens who once paid his public salary. The federal investigation into Milberg Weiss commenced in 1999 -- two years after Bursey gained employment there -- but unflattering press about "professional plaintiffs" had been written about the firm going back to 1992 as reported by Peter Elkind for Fortune magazine. Indeed, Milberg Weiss was seen by many as the principal target of Congress in its passage of the Private Securities Litigation Reform Act of 1995 to address some of the perceived abuses in the lawsuit industry. Given Bursey's FBI background one reasonably may ask whether he ever entertained any suspicions about the kickback scheme prior to the indictment against his employer and several of its partners.

FBI agents see a lot in their work but once they leave the protective cocoon of the Bureau for civilian life maybe that's when they fully appreciate just what a wild world it is.

[SaraJohnson]

There would be nothing wrong with forbidding agents from certain associations and/or activities after they leave federal service. They get ample retirement benefits from the public.

I think government employees should not be able to operate in conflict of interest to the public they are paid to serve and protect. For example, I don’t think it is appropriate for public employees to be unionized because that activity is a conflict of interest pitting them against the public and in service to themselves. If they want to serve themselves, they can forgo working for the public and work in the private sector instead.

[capt B]

you mention a half dozen agents over a 55 year period. How many THOUSANDS of agents have retired during those 55 yrs. You’ve got to be kidding

[capt B]

you mention a half dozen agents over a 55 year period. How many THOUSANDS of agents have retired during those 55 yrs? You’ve got to be kidding

[tbw2]

Another source of employment for these folks is in security with defense contractors. Performing background checks for people applying to sensitive positions, performing security briefings, maintaining physical security, processing and transporting classified documents.