Rajat Gupta - A Corporate Honcho's Stunning Fall From Grace

Friends Rally Around
He turned to his expansive network of important friends in high places to garner support for him. From former UN chief Kofi Annan, Nobel laureate Amartya Sen to Microsoft Co—founder Bill Gates, about 400 acquaintances, former colleagues and friends wrote to US District Judge Jed Rakoff detailing Gupta’s philanthropic work, his otherwsie unblemished career and his track record of making significant contribution to charitable causes like AIDS/HIV, malaria and public health. “I know most personally that the poor of the world have a profoundly capable and articulate advocate in Rajat Gupta,” Gates said in his letter.

The Microsoft founder had worked with Gupta when the Goldman executive had served as chair of the Global Fund to Fight AIDS, Tuberculosis and Malaria. Gates said while he was “not in a position to comment on any of the particulars of the case” against Gupta, he wanted to lend his voice “to round out Rajat’s profile as you consider the appropriate sentence for him.” “Many millions of people are leading better lives — or are alive at all — thanks to the efforts he so ably supported,” Gates said in his letter. Annan said Gupta has worked on many projects with him, including one on management reform at the UN in which Gupta was an adviser. “I came to respect his judgment, and we became good friends,” Annan said in his letter.

“I urge you to recognise Rajat for the good he has done in the world, to give him the credit that he deserves for helping others and to take into account his efforts to improve the lives of millions of people,” the former UN chief said. Gupta’s lawyer Gary Naftalis sought probation for his Harvard-educated client, saying Gupta is willing to live in Rwanda and work with the local government on health care and agricultural initiatives. Naftalis said Gupta’s “once sterling reputation, built over decades, has been irreparably shattered, and his business and philanthropic accomplishments tainted.”

Probation Is Sufficient Punishment
Gupta’s “monumental fall” is itself severe punishment and courts have previously recognised that “if used wisely, probation is sufficiently serious punishment to satisfy the statutory mandate that the sentence reflect the seriousness of the offence and provide just punishment,” he said. Naftalis said Gupta could work with homeless and runaway youth and offered “a less orthodox but innovative proposal” of him living in the backward districts of Rwanda and working with local government on health care initiatives with particular focus on HIV/AIDS and malaria and agricultural development.

Bharara sought a prison term of 8-10 years for Gupta, who he said repeatedly flouted the law and abused his position of trust and in his “callousness and above-the-law arrogance” committed crimes which were “extraordinarily serious and damaging to the capital markets.” “Gupta’s crimes are shocking,” Bharara said last week, adding that “a significant term of imprisonment is necessary to reflect the seriousness of Gupta’s crimes and to deter other corporate insiders in similar positions of trust from stealing corporate secrets and engaging in a crime that has become far too common.