Court asked to discipline ex-prosecutor overseeing bailout

Court asked to discipline ex-prosecutor overseeing bailout
By Brad Heath
USA TODAY
May 18, 2012

Maryland regulators are asking the state's top court to discipline a former federal prosecutor — now helping to oversee the government's $700 billion bailout — for a secret arrangement targeting a prominent banker who had not broken the law.

Their request comes nearly five years after Justice Department officials were alerted that the lawyer, John Sellers, had reached a secret agreement with American Express' international banking arm barring the company from rehiring its former top executive. The department later withdrew that agreement and said in a rare public letter that it had no evidence that the banker, Sergio Masvidal , had done anything illegal.

The case is one of only a handful over the past decade in which state authorities in charge of regulating the legal profession have sought to discipline a federal prosecutor. It comes as lawmakers have expressed concern about the Justice Department's handling of misconduct by its attorneys. In April, a Senate committee said it "questions the judgment of the Department" in assigning some of the prosecutors responsible for the tainted corruption case against former senator Ted Stevens to other high-profile investigations.

An internal Justice Department probe concluded in October 2010 that Sellers had committed "reckless" misconduct by not telling his supervisors or a federal court judge about the side agreement. Sellers left the agency before it could take any action against him ; he landed a new job as an attorney for the special inspector general overseeing the federal bailout, state and federal records show .

A USA TODAY investigation in 2010 found that federal prosecutors rarely risk losing their jobs for misconduct, and that actions by state regulators are uncommon.