US Justice Department removes lawyer prosecuting Donald Trump allies

But Geoffrey Berman refuses to leave post and says he will continue his investigations

Geoffrey Berman, the US attorney for the Southern District of New York, speaks at the Department of Justice in Washington on October 26, 2018. AP Photo

The Justice Department moved abruptly on Friday night to oust Geoffrey Berman, the US attorney in Manhattan overseeing key prosecutions of President Donald Trump’s allies and an investigation of his personal lawyer Rudy Giuliani. But Mr Berman said he was refusing to leave his post and his ongoing investigations would continue.

“I have not resigned, and have no intention of resigning, my position,” Mr Berman said. His statement came hours after Attorney General William Barr said Mr Berman was stepping down from his position.

The standoff set off an extraordinary clash between the Justice Department and one of the nation’s top districts, which has tried major mob and terror cases over the years. It is also likely to deepen tensions between the Justice Department and congressional Democrats who have pointedly accused Mr Barr of politicising the agency and acting more like Mr Trump’s personal lawyer than the nation’s chief law enforcement officer.

The move to oust Mr Berman also comes days after allegations surfaced from former Trump national security adviser John Bolton that the president sought to interfere in a Southern District of New York investigation into the state-owned Turkish bank in an effort to cut deals with Turkish President Recep Tayyip Erdogan.

Mr Barr offered no explanation for why he was removing Mr Berman in the statement he issued late on Friday. The White House quickly announced that Mr Trump was nominating the chairman of the Securities and Exchange Commission to the job, a lawyer with virtually no experience as a federal prosecutor.

Hours later, Mr Berman issued his own statement saying he had learned that he was being pushed out through a press release. He vowed to stay on the job until a Trump nominee was confirmed by the Senate, challenging Mr Barr's power to remove him from office because he was appointed to the job by federal judges, not by the president. Under federal law, a US attorney who is appointed by district court judges can serve “until the vacancy is filled”.

A senior Justice Department official said the department was pressing forward with its plans and would have Craig Carpenito, the US attorney in New Jersey, take over the office temporarily, starting on July 3. The official was not authorised to speak publicly about the issue.

Democrats have repeatedly accused Mr Trump's Justice Department of political interference, and those concerns have also been pervasive among some rank and file officials in the agency. The House Judiciary Committee Chairman Jerry Nadler said his committee was inviting Mr Berman to testify next week.

Federal prosecutors in New York have overseen numerous prosecutions and investigations with ties to Mr Trump in recent years. They include an ongoing investigation into Mr Giuliani’s business dealings, including whether he failed to register as a foreign agent, according to people familiar with the probe.

The office has also prosecuted a number of Trump associates, including the president's former personal lawyer and fixer Michael Cohen, who served a prison sentence for lying to Congress and campaign finance crimes.

Mr Berman has also overseen the prosecution of two Florida businessmen, Lev Parnas and Igor Fruman, who were associates of Mr Giuliani and tied to the Ukraine impeachment investigation. The men were charged in October with federal campaign finance violations, including hiding the origin of a $325,000 donation to a group supporting Mr Trump’s re-election.

Attention refocused on the Southern District this week after news organisations obtained copies of Mr Bolton's tell-all book. He alleges in the book that Mr Trump sought to cut a deal to stop federal prosecutors in New York from investigating whether Halkbank violated US sanctions against Iran, in order to free an American pastor imprisoned in Turkey.

Six weeks after the pastor’s release, Mr Bolton writes that on a call with the Turkish president,“Trump then told Erdogan he would take care of things, explaining that the Southern District prosecutors were not his people, but were Obama people, a problem that would be fixed when they were replaced by his people”.

The White House is seeking to block the public release of Mr Bolton’s book, saying it is being published without formal authorisation that the manuscript was free of classified information.

The episode Mr Bolton described occurred months after Mr Berman assumed the role of US attorney.

A Republican who contributed to the president’s election campaign, Mr Berman worked for the same law firm as Mr Giuliani and was put in his job by the Trump administration. But as US attorney, he won over some sceptics when he went after Trump allies, and had a direct hand in other investigations that have angered the president.

Mr Berman was appointed by then-attorney general Jeff Sessions in January 2018, after Preet Bharara, then US attorney in New York, was fired. Mr Bharara had refused to resign along with dozens of other federal prosecutors appointed by President Barack Obama.

Months later, FBI agents raided Mr Cohen’s offices, an act the president decried as a politically motivated witch hunt. Mr Berman recused himself from the prosecution of Mr Trump's lawyer, though it was never explained why.

The following April, in the absence of a formal nomination by Mr Trump, the judges in Manhattan federal court voted to appoint Mr Berman to the position permanently.

The White House never said why Mr Trump did not formally nominate Mr Berman. Yet there are clear  links between some of his investigations and the White House.

Mr Berman's office subpoenaed Mr Trump’s inaugural committee for a wide range of documents as part of an investigation into various potential crimes, including possible illegal contributions from foreigners to inaugural events. Weeks before the 2018 midterm election, Mr Berman announced insider trading charges against an ardent Trump supporter, Republican congressman Chris Collins. Mr Collins, who represented western New York, has since resigned.

Under Mr Berman’s tenure, his office also brought charges against Michael Avenatti, the combative lawyer who gained fame by representing porn actress Stormy Daniels in lawsuits involving Mr Trump. Mr Avenatti was convicted in February of trying to extort Nike after prosecutors said he threatened to use his media access to hurt Nike’s reputation and stock price unless the sportswear giant paid him up to $25 million.

The White House said in a statement Friday that Mr Trump was nominating SEC Chairman Jay Clayton to the post. Before taking the reins at the SEC, Mr Clayton was a well-connected Wall Street lawyer who represented and advised a number of major companies, including Goldman Sachs, Barclays, Deutsche Bank and UBS.