Dear Attorney General Ashcroft:

As you will recall, in late June we wrote to you about the French bank, Credit Lyonnais, which played a significant role in the allegedly illegal acquisition of Executive Life Insurance Company.  At that time, there were rumors that the French government was bringing diplomatic pressure to discourage the indictment against the bank being prepared by the U.S. Attorney=s Office in Los Angeles.

We were very pleased to receive a reply from Daniel J. Bryant, Assistant Attorney General stating that prosecutorial decision on this case would be made on the merits, and not because of pressure from any source.

The alleged illegal conduct of Credit Lyonnais led to the enrichment of the French bank in amounts exceeding $6 billion while more than 300,000 policyholders -- most of whom are from California - were left without much-needed annuity payments. As a result, both the California Department of Insurance and the State Attorney General have brought civil suits seeking damages for those defrauded policyholders.

There are new reports that the Department of Justice is now considering a settlement with Credit Lyonnais, thus rejecting the recommendation of the career prosecutors in the U.S. Attorney=s Office.  Given the magnitude of this case and its potential negative impact on the California lawsuits, we are troubled by this prospect.

The California lawsuits have been removed to Federal District Court where, to this point, the discovery process has been guided by the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters.  The process has been difficult and time-consuming.  Apparently, the process has been so plagued by failure of the defendants to reply in a timely manner that the district court judge may be asked to require that discovery in the cases be guided by the Federal Rules of Civil Procedure.
 
During the investigation process, the California State Attorney General and Department of Insurance have maintained close contact with the U.S. Attorney in the Central District of California.  The state entities have willingly shared with the U.S. Attorney information brought to light in their investigations that could be of assistance to the federal criminal investigation.  To this point, the U.S. Attorney=s office has been unable to reciprocate.

The California Department of Insurance now believes that the U.S. Attorney=s office has obtained in its investigation numerous documents that go directly to the culpability of Credit Lyonnais.  They suggest that these documents may rebut arguments that the new leadership of Credit Lyonnais and its successor companies have rehabilitated the bank.  If the cooperation of the French defendants in the discovery process does not improve, these are documents that may never be made available to the plaintiffs seeking recovery for thousands of injured California policyholders.

Before you arrive at any decision on former Deputy Attorney General Terwilliger=s proposed settlement, we encourage you to meet with Executive Life policyholders, including a number who are physically impaired and were dependent on Executive Life annuities.  They should be afforded the same opportunities and access as Credit Lyonnais=s representative.

We urge you to accept the recommendations of your own attorneys, permit them to proceed with the indictment of Credit Lyonnais they have advised and bring to justice those responsible for defrauding hundreds of thousands of Americans.

However, if you do not indict, any settlement must include an agreement by both the DOJ and Credit Lyonnais that would permit the U.S. Attorney=s office to release any documents related to their investigation that include information not provided during the civil suit discovery process.  If release of these documents would require court approval, we would ask that the DOJ make such a motion on behalf of the California plaintiffs.

Thank you for your attention to this very important matter.

Sincerely,

HOWARD L. BERMAN
Member of Congress
 

NANCY PELOSI
Member of Congress 

cc:  Assistant Attorney General Michael Chertoff