Op-Ed: Is Rubashkin The Victim In Agriprocessors Verdict?

Is the guilty verdict returned against Sholom Rubashkin by a jury of seven women and five men in Sioux Falls, S.D., the ultimate vindication of those who condemned Rubashkin from the time allegations against the kosher meat giant Agriprocessors were first publicized? Few will look beyond the word “guilty” and the seeming enormity of 86 counts to see whether Rubashkin actually committed acts that deserve criminal condemnation and imprisonment.

Although Americans have always been rightly proud of the principle that no one can be severely punished as a criminal without a jury’s imprimatur, jury verdicts are fallible. Cardozo Law School’s “Innocence Project” cites 245 defendants who were exonerated in recent years by incontrovertible DNA evidence after juries or judges had found them guilty.

Sholom Rubashkin’s defenders cannot ever hope that DNA evidence will demonstrate his innocence of the many counts of bank fraud that federal prosecutors think they proved during a four-week trial. His lawyers announced that an appeal is “certain,” and there appear to be substantial grounds to challenge the fairness of his trial. But well over 90 percent of federal criminal convictions are upheld on appeal, and the distorted public perception of Rubashkin — falsely portrayed as an ogre in the general media and even by many Jewish publications — deprives him of the sympathy that an appellate judge should feel for a father of 10 who is facing prison.

But it is worth stepping back to evaluate whether — even taking the prosecution’s proof as totally credible — Rubashkin deserves the condemnation he is receiving. Even the prosecutors did not claim that he intended, when arranging Agriprocessors’ $35 million line of credit from a St. Louis bank, to steal the bank’s money. The evidence at his trial showed that Agriprocessors was in constant financial turmoil, and that Rubashkin was scrambling to maintain a cash flow that would enable him to pay cattle dealers and the huge ongoing expenses of a growing business. In order to meet these obligations and, at the same time, not disappoint the charities and Jewish institutions that had come to rely on the Rubashkins’ largesse, Sholom wheeled and dealed in ways that he could not justify when subjected to after-the-fact scrutiny by federal investigators.

Would the lending bank have lost its money if federal agents had not conducted an immigration raid on the Postville, Iowa, plant in May 2008? Probably not. The evidence at trial established that the bank’s officers were aware or could easily have discovered much of what Rubashkin was doing to keep his business afloat, and that they really did not care so long as Agriprocessors continued to pay interest on its loans. The federal raid to find and arrest the 389 aliens who were working at the Agriprocessors plant even though they had entered the United States, illegally effectively closed the plant. It plugged the plant’s cash flow and threw the business into bankruptcy.

The imminence of a possible raid in Postville was public because a detention camp was being prepared nearby. Rubashkin retained a prominent international law firm to negotiate with the federal immigration officials so as to resolve his immigration problems and remove illegal employees without a raid. The law firm had represented a large non-kosher beef-slaughtering operation that had employed hundreds of illegal aliens, and the lawyers had succeeded in avoiding a raid. In the case of Agriprocessors, the federal agents refused to call off the planned raid, and this enforcement action and its attendant national publicity doomed the Postville operation. (Under the Obama administration’s new immigration policies, immigration raids are no longer conducted.)

United States law protects banks against deliberate fraud that is designed to steal their money. Federal prosecutors have recently taken to using the bank-fraud law to prosecute when borrowers’ records show dubious transactions even though the banks are not truly defrauded. After the raid, federal agents carted off Agriprocessors’ financial records and interrogated its bookkeepers. As a result, Rubashkin — who had been arrested once on charges that he violated a 1986 law that made it a crime to hire illegal aliens (not seriously enforced until almost two decades after its enactment) — was arrested a second time for bank fraud.

Jurors in Rubashkin’s bank fraud trial were surely influenced when they heard that bogus invoices were created to puff up Agriprocessors’ receivables and when the lawyer who succeeded Sholom as chief executive officer testified that Rubashkin told him that payments to the bank were delayed because the money was needed “to pay operating costs.” The probability that the false invoices and the temporary diversion of receipts did not cool the bank’s ardor to continue the line of credit so long as Agriprocessors kept paying interest when it was due did not dull the impact of this proof on the jurors.

Prosecutors knew that this kind of evidence would seal Rubashkin’s fate with a jury, and that is why they were content to have the bank fraud charges tried before the immigration allegations and why they refused to offer him, in plea negotiations, any prison sentence less than 10 years. The claim that Rubashkin knowingly hired illegal immigrants to work at the Postville plant remains to be tried. Whether the government will actually take those charges to trial given the successful bank fraud prosecution remains to be seen.

Although she had directed that the immigration and the bank fraud charges be tried separately, the federal district judge allowed the prosecution to present testimony in the bank fraud trial that Rubashkin had approved the hiring of illegal aliens. The evidence established that the immigration agency had repeatedly sent an undercover agent to the Agriprocessors employment line with false documentation, but the agent was turned away twice because he could not establish his legal immigration status. Only after he was given bona fide documentation by the federal agency was he accepted as an Agriprocessors employee. This proof severely damages the charge that Agriprocessors had no screening process and deliberately hired illegal aliens.

Rubashkin’s local trial lawyers appear to have presented an honest and forceful defense but were unable to counter the impression conveyed by the instances when false financial documentation was generated with Rubashkin’s approval. Specialists in criminal defense are reluctant to put their clients on the stand because they can be subjected to withering cross-examination.

It is to Sholom Rubashkin’s credit that he took the stand and admitted to having “made mistakes,” but that acknowledgment apparently did not sway the jury.

There was a time when federal sentencing guidelines imposed mandatory jail terms under mathematical formulas that would, in a case involving fraud on a $35 million bank loan, result in an effective life sentence for Sholom. The Supreme Court has invalidated the mandatory aspect of these guidelines, but they are still highly influential with sentencing judges. Nonetheless, the courts are now obliged to consider a range of sentencing factors, including the impact on a defendant’s family and other criteria that call for a reduced prison term in Rubashkin’s case. Although the federal judge has heretofore shown little compassion, she has the authority to impose a sentence that is “sufficient, but not greater than necessary,” to satisfy the purposes of criminal punishment.

What will history say about this concluded trial? Notwithstanding the jury’s verdict, it is still an open question whether the Rubashkin scandal is truly what was done by Sholom Rubashkin rather than what has been done to Sholom Rubashkin.

Nathan Lewin is a Washington, D.C., lawyer who has represented Agriprocessors in the past.