A coverup that nearly worked

A former Scotland Yard detective was being questioned last night on suspicion of involvement in the murder of a man whose brutal killing he investigated 21 years ago. Sid Fillery, once a Metropolitan Police detective sergeant, was one of five men arrested yesterday in connection with the murder of Daniel Morgan, a private detective, in March 1987. Morgan, 37, was found dead in the car park of the Golden Lion pub in Sydenham, southeast London, with an axe embedded in his head.

The failure to catch Morgan’s killers has dogged the Metropolitan Police ever since. Five murder inquiries have been conducted, giving rise to allegations of corruption within police ranks and claims of a cover-up. Mr Fillery, 61, was a close contact of the dead man’s business partner, Jonathon Rees, and one of a number of officers who moonlighted as security guards for Southern Investigations.

A year after the murder he was discharged from the Met on medical grounds and took Morgan’s position as co-director of Southern Investigations. The agency was wound up in 2003 and Mr Fillery now lives in Norfolk, where he is involved in the management of a pub. Mr Rees, 53, was also arrested yesterday over the murder, along with three other men — James Cook, 53, Glenn Vian, 49, and Garry Vian, 47. All five men attended a Central London police station where they were being interviewed. In a related development, a serving Metropolitan Police officer was arrested on suspicion of misconduct in a public office. Scotland Yard said that his arrest was not connected with the murder but with more recent events linked to the suspects.

Assistant Commissioner John Yates, who is in overall charge of the inquiry, said that the arrests were proof of “the Met’s continued determination to bring those responsible for this murder to justice”. The drive to solve the case stems from the sense, at the highest levels in Scotland Yard, that the long failure to do so continues to taint the force.

The arrests come three years into the fifth police investigation into Morgan’s murder. The crucial breakthrough came last year when a “supergrass” approached police with evidence. The Times has learnt that the informant volunteered information about criminal activity, including a claim that he had been offered a substantial sum of money to kill Morgan.

It is understood that he has agreed to testify under the provisions of the Serious Organised Crime and Policing Act 2005, which formalised Queen’s Evidence arrangements in British law. It is the first time that Scotland Yard has used the new legislation. The Times has also learnt that in the past three months another witness has come forward.

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Spitzerism Lives

Eliot Spitzer is no longer on the prosecuting side of the criminal justice system. But his brand of extrajudicial punishment is alive and well among U.S. Attorneys. Take the case of former Gen Re CEO Joseph Brandon, who was forced to resign on Monday although he has not been charged with any crime and was by all accounts a superb manager.

Without insisting on any grant of immunity, Mr. Brandon cooperated in an investigation of a fraudulent reinsurance transaction between Gen Re and AIG. That investigation resulted in the convictions of one AIG employee and six Gen Re executives. Prosecutors wanted to make it seven and named Mr. Brandon an unindicted co-conspirator. But instead of charging Mr. Brandon and having to convince a jury of his guilt, they made it clear to Warren Buffett, Chairman of Gen Re parent Berkshire Hathaway, that Mr. Brandon had to go, according to various media reports.

Mr. Buffett didn't respond to our call for comment, although news accounts duly note that he never hired Mr. Brandon and simply inherited him when he bought the company. Not so long ago, however, Mr. Buffett was full of praise for his manager.
In his annual letter to shareholders two months ago, Mr. Buffett gushed, "Now, thanks to Joe Brandon . . . the luster of the company has been restored." Mr. Buffett went on to say that Mr. Brandon and President Tad Montross "have been running the business for six years and have been doing first-class business in a first-class way, to use the words of J. P. Morgan." Sounds like Mr. Brandon deserved a raise, not a dismissal.

We're tempted to conclude that we wouldn't want to be in a foxhole with Mr. Buffett, even a "first-class" foxhole. But the sad truth is that the Sage of Omaha may not have had much choice. Fiduciary duty to Berkshire shareholders requires him to avoid a criminal indictment of Gen Re at any cost. Such a reputational blow is a likely death sentence for any financial company.

The Justice Department's 2006 McNulty Memo put modest limits on prosecutors' ability to extort settlements from corporations. But U.S. Attorneys still have a free hand to pressure companies to fire people as a show of cooperation. Georgetown business professor John Hasnas says prosecutors rarely if ever tell corporations to fire their target, although Mr. Spitzer was an exception. But all they have to do is to suggest that they are considering whether to indict the corporation, and that the extent of their cooperation will be considered in the decision, and "the message gets across."

So we have the spectacle of Nora Dannehy, less than two weeks into the job of Acting U.S. Attorney for the District of Connecticut, essentially deciding that she has the right to punish a man she wasn't able to make a formal case against. Even if you're never charged, much less convicted, prosecutors can still take away your livelihood.

There's also the not so small matter that firing Mr. Brandon may harm Berkshire Hathaway shareholders. Mr. Spitzer forced the dismissal of both Hank Greenberg at AIG and Jeffrey Greenberg at Marsh & McLennan. Both companies have since seen their businesses decline and their share prices plummet. We have come to a strange pass in this country when prosecutors who can't prove their case can nonetheless tell Warren Buffett who can run his companies.

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(And don't forget your ration of Wicked Thoughts for today)