The prosecution relished stating how Rubashkin was accused of “91 counts of bank, mail, and wire fraud.” The sheer number conjures a man so steeped in crime that Jack the Ripper would appear like a choir boy by comparison.
The news outlets could not get enough of this story, and they broadcast every damning – and unverified – detail to the public. By the time Rubashkin went to trial, he had not only been criminalized in the public mind, but his very name evoked images of a conniving crook.
The attempt to make Rubashkin appear like an arch-villain by repeating, inflating, and exaggerating his alleged offenses is reminiscent of how the former Soviet Union contrived to turn a solitary good will gesture into numerous ones. For example, the Soviets would release an innocent man from a gulag prison camp, and then launch a press bonanza touting how humane, magnanimous, and benevolent they were.
First they would tell the U.S. Secretary of State that they were ordering the release as a matter of courtesy to honor his personal request. They would then preach the very same spiel to the German, French, Canadian, British, and Argentinian secretaries of state. Meanwhile, they would announce that because a philanthropic foundation had endowed the Bolshoi Ballet with a large gift, they had decided to release this prisoner. Afterward they would turn to a different foundation and propose that since they had released a man from the gulag, it would be appropriate for the foundation to donate to a worthy Russian cause. There was practically no limit to how much mileage the Soviets would stretch out of every rare and isolated humane act they performed.
Stacking the charges against Rubashkin was a ploy, as articulated by his defense attorney, Guy Cook, which succeeded in overwhelming the jury by the sheer magnitude of the supposed crime. The inevitable conclusion upon hearing such a number is, “Ninety-one counts? He must have done something terrible. Even if he’s only guilty of a quarter of them, he must be a criminal!”[1]
Assuming that the federal prosecutors were merely doing their job of pursuing law-breakers, there is still something fundamentally unfair and at-all-costs-esque about how the counts were presented in this case. The government had indeed identified a man who had misled authorities about the way he ran his business, and then lied about it. Punishment would surely be meted out for his crime. Yet the prosecution was not satisfied.
The ignominy of this approach can be illustrated through an analogy from baseball, where there is an unwritten rule not to steal bases when you are crushing the other team. The run discrepancy is embarrassing enough, but to steal from first to second looks unwarrantedly low. As a rule, baseball players and managers are not highly educated. The number of MLB players who have graduated law school and passed the bar exam can be counted on one hand missing a few fingers, yet even they understand the protocol and modus operandi of decency.
The prosecutors resisted moving the trial out of Iowa, where there was never a chance of a fair trial. Upon reading the responses of the questionnaires completed by potential jurors to test their biases, the federal judge had no option but to move the trial out of state. Alas, if the objective was to get away from a prejudicial jury pool, would it not have made more sense to move the trial to Minneapolis, as the defense suggested, or Chicago perhaps? Moving it just over the state line to South Dakota did little to separate the proceeding from the Iowa media or the attitude of distrust toward outsiders, which would be less prevalent in major urban centers.
Naturally, all of these events had a negative impact on Agriprocessors, but banking arrangements continued for five months until the loan was called on October 23, 2008. On November 5, 2008 Agriprocessors filed for Chapter 11, five days after Sholom Rubashkin had been arrested on immigration-related charges.
Factors cited for the bankruptcy protection filing included a loss of most of the workforce due to the May 2008 immigration raid, declining demand for the firm’s products, and increased costs in the aftermath of the blitz. When bankruptcy trustees tried to collect outstanding receivables, they discovered how fast and loose Agriprocessors had been with its financials, as there were millions of dollars unaccounted for. “Customers were telling us that, ‘Well, this invoice was paid already,’ or ‘That’s not a real invoice,’ or ‘You know, I don’t know what that is. I’ve already paid it,’” said Mark Ross, chief restructuring officer.[2]
By this point the Rubashkin Family had no other recourse but to sell the business. Proceeds from this sale would have alleviated the lion’s share of Agri’s loan and significantly diminished First Bank’s losses, but the prosecutors spooked any potential buyer. Interested parties were threatened by the U.S. Attorney’s Office that forfeiture proceedings would be used to seize the company’s assets if members of the Rubashkin family would have any role in the plant – even as consultants. Bidders were required to sign an affidavit disclosing any continued involvement with the Rubashkin family, a measure that the defense aptly labeled the “No Rubashkin Edict.”
Who would want to enter the business of national kosher meat distribution which the Rubashkins had developed into a $300 million enterprise, without any input from these key players? As Rabbi Menachem Genack, CEO of OU Kosher noted,[3] it was the Rubashkins who knew the wholesalers, distributors, customers, and every aspect of the business. Without Rubashkin family involvement, the purchase lost its appeal and depressed the sale price by millions.
Interested buyers were offering substantial amounts for the purchase, but the edict caused the company’s value to sharply diminish, and concomitantly increased the bank’s loss. Agriprocessors sold for $8.5 million in 2009, even though its assets had been valued at $68 million.
(To be continued)
Chodesh Tov – Have a pleasant month!
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[1] Yated Ne’eman November 13, 2009
[2] Constance Parten, American Greed, CNBC, March 23, 2011