LIFE BEHIND BARS: Matthew Kluger reveals all
The perpetrators of financial crimes—like insider trading, fraud, embezzlement, or money laundering, to name a few—have traditionally been punished very little. When they do have to serve real time, they receive only quick stints in prison.
But Preet Bharara, the U.S. Attorney for the Southern District of New York has been determined to change that. He has helped lead a crackdown that, since August 2009, has resulted in 90 defendants being charged with insider trading. Eighty-four individuals have been convicted or pled guilty to crimes, an impressive record for a prosecutor.
Sentencing, for the most part, is another story. Many people who plead guilty to or are convicted of financial crimes are given probation or light sentences, with only brief terms in prison. But there are notable exceptions. In 2011, Raj Rajaratnam, co-founder of Galleon Group, was given an 11-year term in prison. A year later, Matthew H. Kluger, a lawyer, got 12. It was “the longest sentence ever meted out in an insider trading case,” according to the United States Attorney’s Office for the District of New Jersey, which brought the prosecution against Kluger.
Kluger was an attorney working on mergers and acquisitions for well-regarded law firms, including the white-shoe Wilson Sonsini Goodrich and Rosati. For 17 years, he was meeting up with a friend, Kenneth T. Robinson, who then passed confidential information on forthcoming mergers to a friend of his, a trader named Garrett Bauer. There was never any direct communication between Kluger and Bauer. But when Robinson eventually conducted a trade in his own name, rather than through Bauer, the SEC caught on. (In June 2012, Bauer pled guilty to conspiracy to commit securities fraud and other crimes. He is serving a nine-year sentence in Montgomery. Robinson pled guilty to securities fraud and conspiracy in April 2011 and, after cooperating with authorities in the investigation, was sentenced to 27 months.)
Two years into his long sentence, Kluger sat down with Fortune for a rare in-person conversation in the empty visiting room of the federal correctional institution in Morgantown, W.V. The former hotshot M&A attorney (he was disbarred in New York and in Washington, D.C.) spilled the beans on everything from the misery of solitary confinement (only three showers a week are permitted), to the pain of facing his parents (when they first visited him, they could only view him on a security camera), to the internal currency in prison (At Morgantown, it’s packages of cooked mackerel).
What follows is a condensed and edited transcript of that conversation.
(For our rankings of 10 infamous financial felons—plus the surprising tales of 15 lesser-known federal inmates—see “Orange is the New White-Collar.“)
Fortune: Let’s start by trying to get a sense of your daily routine. Could you walk me through it?
Matthew Kluger: Here, they make everybody work. Everyone has to have some sort of job. It’s not a real job—you know, with 1,100 people to do work and not much work to be done, they are make-work jobs.
My make-work job is in food service. So I wake up at 5:30 in the morning, and I go down to the dining room to check in for breakfast at 6. I sign in at 6 o’clock and depending upon what my assignment is for the day at my job, I either leave almost immediately after I eat, and come back up to my housing unit, or I stay down there and do about 20 minutes’ worth of work.
What are the 20 minutes of work?
I go and clean up the line—the place where they’re going to serve the food. I clean it up slightly from the night before, but it’s pretty clean already, so I’m just basically wiping it down, mopping the floor where I’ll be standing. It really is literally 20 minutes.
So you’re not actually cooking. Are you washing dishes? What exactly are you doing?
Generally I’m serving the food. They have people who wipe tables. They have people who cook food. They have people who get the meat ready to be cooked. They have people who get vegetables ready to be cooked. They have people who serve food.
The kitchen staff must be the biggest staff.
People who take garbage out, that is the biggest staff. And they have three times as many as they actually need. Same as in the dining hall.
What do inmates call the dining hall?
Well, the others call it the “chow hall.” I like to tell people it’s the dining hall.
Have you taken any interest in cooking since working there?
It’s something that I already know how to do. My undergraduate degree is in hotel administration from Cornell, so I know my way around food service. But they’re not really interested in my expertise. It’s like, “Yeah, that’s nice. Now go ahead and serve some food. Serve some hot dogs, whatever.”
But when you come in in the morning, everything’s already prepared. You just have to dish it out.
I don’t serve breakfast. They have people who have to get up even earlier than I do. They get there at 4 in the morning. I get there at 6:30 and clean up from the night before.
Then after breakfast there’s a two to two-and-a-half hour break and we go back down at 9:30. We eat lunch before everyone else eats lunch so that we can be ready to work, and then we work through the lunch hour, which goes from 10:30 to 11:30. My obligations for the day are then done.
Is that seven days a week?
That is five days a week.
So your job ends up being about an hour’s worth of work, five mornings a week. That doesn’t sound so bad.
It’s nothing. There are other jobs that one can get, and some of them are a little more serious than the one that I have, but most of them aren’t. I mean, there are people who do grounds work, and the grounds workers definitely work longer days, and they want to work longer days. They want to stay busy doing that.
Now, there are some people who do more work in the morning. During breakfast they’ll wipe tables and clean things up, or stay longer after breakfast and mop floors and that sort of thing. I could push to work more hours to get paid slightly more, but–
They pay you for the work?
Oh, they pay you, yeah.
How do you receive that pay?
It gets electronically deposited into your account, much the way you get paid, although it’s a lot less. We get $15 a month.
And can you access that money?
Yeah. Oh, access it as money? No. You access it for purchases in the store.
What’s in the store?
The store has cosmetics. Or as they call them, “hygiene items.” Like shaving cream and shampoo and things like that. They have some clothing. You can wear shorts and sweatpants, and you can buy sneakers.
Shorts and sweatpants that look different from your prison uniform? [Kluger is wearing a tan, short-sleeved v-neck shirt and matching pants; it looks similar to doctor’s scrubs.]
Yes. But you’re not allowed, in here, to wear anything other than your uniform.
So why would you buy clothes?
So you can wear them out there. Outside. In here, in the visiting room, I have to wear the uniform. And they sell watches, which I have one of, but you’re not allowed to wear it in here, either, so that’s why you’re not seeing it on me. It’s a Timex Ironman, you can look it up online. And we get to pay probably double what they charge at Walmart, but I’ve actually gotten used to my digital watch. I like that. I’d never had one before.
What else is in the store?
All manner of junk food. And they pander to the lowest common denominator: a lot of Little Debbies, doughnuts and Nutty Bars and things like that. They have some healthier stuff. You can buy tuna. You know, packages of Chicken of the Sea tuna.
You can buy some nuts and some other things. Sodas. Your basic 7-Eleven fare is basically what it is. And you can spend up to $300 a month on that stuff.
How would a person even spend $300 a month just on junk food and tuna?
Oh, there are people who spend that and more. Anyone outside can deposit money into your account. So I probably spend $250 a month. These days I don’t buy my full, because I eat in the dining room. But other people make their own food. They sell turkey logs and other prepared foods, and chicken packages and tuna. And people do some pretty creative things with making food.
What if it needs to go in the microwave?
There is no microwave here. There was at Butner; there isn’t here.
[Kluger began his sentence at a federal prison in Butner, North Carolina, which is much bigger than Morgantown and has higher security; he was transferred to Morgantown in October 2013.]
They decided there was too much dissention. The microwave creates problems because people want to use it and then other people don’t want to let them use it. They want to dominate it. So we use hot water. We use 190-degree hot water. And there are people who do some very creative things.
You could make Cup Noodles.
Oh, they get much more creative than that. They make all sorts of wraps and things. And they use an iron like a George Foreman Grill. I don’t do any of that, it’s too much bother.
So I probably spend 250 or $300 a month. Because we also pay for phone calls or email access.
You can email in here.
You can email, yeah. It’s through an outside service that monitors. They do the email for two reasons. One is, they make money from it. But the other thing is that it gives them an electronic data mining capability to monitor what people are saying and what’s being said coming back in. So it actually works to everyone’s advantage unless you’re doing something you’re not supposed to be doing with it.
Is there a limit on how many times you can use email a day?
No. As much as you can spend, you can email. There is a limit on phone calls. Phone calls are 300 minutes a month, which sounds like a lot, but it really isn’t. It goes very quickly.
And do people fight over the computers the way they do over the microwave?
Less. It’s an organized system where people line up and get ready. And it’s not usually a long wait. It’s a 10- or 12-minute wait. They have just enough computers. The other thing that we can do is to download music. You can buy an mp3 player. It’s a Sansa brand. It’s an off-brand that’s been specially designed for prison use. So the storage capability that it originally came with has been disabled, but you can download music off of a site that we have access to. They charge more than iTunes. There are no 99-cent songs. These are all dollar-something, or about $1.50 a song.
When do you listen to music?
I use the mp3 player mostly to run. We have a track out back. The facilities here are pretty decent. I mean, they’re bare bones, but they’re not bad.
What else can you do once your work is over?
I go for a run on the track outside. Maybe watch a little television, maybe do some crossword puzzles. Maybe go play Risk. I’ve been playing Risk with this kid that I’m kind of friendly with. We have religious services that are available, so I’ll go do that some days. They cater to everything under the sun, except if you’re a mainstream Protestant you’re out of luck. I grew up Protestant. My father’s Jewish, so I go to the Jewish services Friday night. It’s a social thing. And then it reminds me how out of touch I am with that whole world. And the closest thing they have to the mainstream Protestant group that I grew up with, which was the Episcopal Church, is the Catholic thing. They bring in a real priest, a guy from Nigeria. And we have pianos. We have a lot of musical instruments. We had them at Butner too. There was more talent at Butner because the sex offenders tend to be creative, educated, white guys, and we had some famous musicians.
Is there a gym?
There’s a gymnasium where they play basketball.
What about a gym for working out?
Well, there is an outdoor workout area with weights here, and that’s its own thing. I won’t go near that.
That’s dominated by… certain groups of people. Huge guys who are in there all day, and in the winter they’re out there in the freezing cold doing it. It’s crazy.
They’ve eliminated weights in the BOP [bureau of prisons] system generally. But a lot of facilities have said, “We’ll keep ours until they break, and then we’ll get rid of them.” So they aren’t buying any new ones. They’re not really maintaining them. They don’t encourage weights. There are different explanations that float around as to why. I think in higher security level facilities the fear is they don’t want people getting even bigger than they already are.
But they also have a gym that has some treadmills, some ellipticals, some bicycles. They have spin classes. You’d be surprised.
When you say “class,” is there an instructor?
There is an instructor. It’s usually an inmate instructor. It can be an inmate instructor who actually knows what he’s doing or one who’s taken the class for four weeks, maybe, who’s learned how to do it. But I don’t think it’s much different from what you’d get at your local Bally’s, quite honestly. I don’t think Bally’s goes out and hires the best and the brightest. So, you have those classes. You have calisthenics classes. You have all sorts of classes. You can sign up and go for a 10-week session, and you go and you get credit for having gone, credit for being a good citizen, basically.
Would doing a more demanding job make you a better citizen? Is there a job you’d rather be doing than the kitchen work?
What I’m doing right now is what they assigned me. And I’m probably at some point soon going to switch over and do something in the library.
The jobs that would make the most sense for me are jobs that they don’t have all that many of. Like being a tutor. A lot of people are in a GED program here. It’s a requirement for people who haven’t graduated high school that they enroll in GED classes. And I don’t know how long they have. There’s a length of time they have to keep at it before they’re deemed hopeless or they’re allowed to deem themselves hopeless and quit. So there are some inmate tutors. I haven’t really looked at that.
Would you enjoy tutoring?
At Butner I did teach some classes at night, some adult continuing education classes. Here they’re more sensitive about things that have legal subjects. At Butner they didn’t care, so I taught a business law course. Here, if it has the word “law” in it, they’re not interested in hearing about it. They don’t want you to do that.
And that’s anyone, right—they don’t want any convicted criminal teaching law—that’s not specific to you?
Not specific to me, no. The same thing goes for the law library. At Butner, they encouraged lawyers to work in the law library. Here, my understanding is that either officially or unofficially, they won’t allow it.
When did you transfer from Butner?
October. And I stayed at Butner longer than I had to, because I liked it.
Well, you get used to things and you make friends and you develop relationships, and yeah, you don’t want to be uprooted. So I wanted to stay for a little bit longer.
See, I was there not because I was a high security level prisoner, but because my sentence length was more than ten years to serve. It was ten years, four months when I started, and they couldn’t overlook the four months. So I started at Butner.
But once you start to develop these relationships you don’t want to just leave. So they had to keep me on a special thing they call “management invariable.” And then finally they called me in and said, ” We need these beds for people who need these beds, and you can’t stay here anymore. Pick a camp and go.”
It’s surprising that it was even up to you to extend your time there and delay the transfer.
Yeah. Well I mean, on some things, they are flexible; on some things they’re extremely rigid. It really depends on who you’re dealing with. In this system, the biggest consistency is all the inconsistency.
Let’s return to your daily routine. When you finish your duties in the kitchen, what do you do?
After 11:30 in the morning, I’m free to do what I want. I will either go spend a little bit of time in the library.
What do you read?
I don’t know what you know about my background, but my dad is a Pulitzer Prize-winning author. [Richard Kluger’s book, Ashes to Ashes: America’s Hundred-Year Cigarette War, the Public Health, and the Unabashed Triumph of Philip Morris, won the Pulitzer Prize for General Nonfiction in 1997.] So he sends me stuff. And my cousin is a journalist. He’s the science editor for Time magazine.
And you can receive all those magazines? Do they have subscriptions, or do you have to order it?
You can order your own subscriptions. And the library gets the Wall Street Journal, gets Fortune, gets Time and some other magazines.
Is there anything you read every day?
I’ll swing by the library and read the Washington Post and the Wall Street Journal pretty much every day. But I go to the library mostly to help people—I get bombarded with legal questions.
Yeah. I’m a rock star because I’m a lawyer. I’m not the only one here, but I’m probably the best-credentialed one here. I think people understand that. And the other thing is that unlike some of the others, who will make inmates pay them for doing work, I will never accept anything from anyone.
So this pay is different from the real money that the prison pays you for your job, through direct deposit. How can inmates make other inmates pay them?
They pay each other in food—or sometimes, I’ve seen it, they have money sent to a relative. People charge a lot for things that they shouldn’t be charging for. I don’t charge, for a number of reasons. The first is that it’s against the rules.
But leaving that aside, I don’t charge because I don’t want anyone ever to have a sense that I owe them something. If I help someone, it’s because I have determined that they have a meritorious claim of some sort, and they’re lost without some help. So I’ll sit and help them.
There are guys so intimidating that you won’t use the weights, yet you’re also helping some of your fellow inmates with legal questions.
The social stuff is very complicated. You’ve got an incredibly diverse crowd. You’ve got everything from inner city drug dealers to—well, I live next door to a Harvard grad. I’m a Cornell grad. There’s a Stanford grad.
Are these all white-collar guys?
These are all white-collar guys. No, actually, the Stanford guy is a doctor, who got a drug conviction. Too many prescriptions.
Anyway, you have this need to get along with a broad range of folks, and there’s going to be the tension you would expect there to be. There’s less of it here than there was at Butner, and the higher security levels you go to, the worse it gets.
When I was in transit [from Butner] to here, I was being held at this BOP central transit center in Oklahoma City: 5,000 people sitting there on any given day—it’s unbelievable. It’s at the airport. They pull the plane right up and they have a jet way. It’s quite an amazing thing to see.
So I got there. I went to my room. And my room was occupied by a black guy. I went and started moving in, because we talked and the black guy was also going to Morgantown. About ten minutes later, some big, white, tattooed guy, an Aryan Brotherhood, Texas guy, pulled me aside. He pointed to some tables and said, “This is where we sit.”
“We,” meaning you, too.
Well, I was a little confused about that. I wasn’t sure whether he was saying, “This is where we sit, so stay away from us,” or “This is where we sit, and you’re welcome to join us.” And then about ten minutes later, a guard came over and said, “I’m moving you to a different room.” I said, “Why?” He said, “because your friends there said it was unacceptable to them for you to be in a room with a black guy.”
So they moved me into my own room. Which was fine. I mean, I felt bad. I felt very bad. But I was happy enough to get my own room for the six days that I was there.
I’ve met interesting characters here, and I met interesting characters at Butner. My best friend at Butner was a 28-year-old sex offender who grew up in a trailer in rural South Carolina. I mean, I grew up in Connecticut, and later I went to prep school. This is not really my thing.
So you do meet some interesting people, and you learn to interact with people you would never outside of here have had the opportunity to interact with.
So race matters.
Race matters. Yeah. Race definitely matters. I would say in some prisons they’re 50 years behind the times. Here we’re only 10 or 12 years behind, or 20 years behind the times. No, there is a very “us and them” view—now, that doesn’t mean that there’s no interaction. And I have a couple of black friends. But by and large, there’s a lot of suspicion and wariness.
Is there one group of prisoners that’s particularly tough?
No. Here no one is big and tough. This is like Camp Cupcake. These are people who have no interest in losing their ability to be in a place that looks this nice and that has no fence. So even people who are not good people tend to behave themselves here. I’ve seen a couple of fights, but they’re more like middle school fights than prison fights.
No one is making shanks.
No one is pulling out a knife, right. I mean, it’s going to be a couple people taking a couple half-hearted swings at each other, and that’s going to be about the end of the story. At Butner I saw a couple fights where there was blood, so that was a little worse. The further down the chain you get, the more mild it gets.
I mean, you asked if I cook. I could probably get to cook, but the guys who control the kitchen wouldn’t want that, and they only work in the kitchen so they can steal food.
People steal food? When, after the meal?
Often before the meal. The economy in here is them stealing food and then selling it to inmates.
But most of the food isn’t wrapped, right? How can you walk off with it? It must be hard to steal, say, a portion of mashed potatoes.
Yes, but you can take a bread bag and put chicken in it. You can steal ten hamburgers. You can steal boiled eggs. You can steal bags of bran flakes. In the morning we get little breakfast bars. Those are wrapped, so they’ll take those out like crazy. You’re allowed a piece of fruit here. You weren’t at Butner. People will steal extra fruit.
I have never walked out of the chow hall with anything. But the couple times that they have randomly searched me for stuff, it’s like, “Guys, this stuff wasn’t good enough the first time. I certainly don’t want to take it out of here.”
Is there any time that you could be eating other than at the three meals? When you go to the store, maybe.
The store is a once-a-week opportunity. You go on the day that it’s your day. As you would imagine, the store doesn’t work with you wandering in and going through shelves. You fill out a slip and it’s carefully controlled. A few inmates work in there, they fill a shopping basket as if they were working at Amazon in the olden days, right, pulling stuff off the shelves, getting it ready in a little shopping cart. That’s a good job to have. That pays well.
What are the other good jobs?
The jobs that have you sitting around all day. Like they have a paint shop, for example. Someone told me he worked in the paint shop. And they sit there and nothing gets painted because they have a very limited budget for paint. I knew someone who worked in the paint shop for eight months, and I said, “Oh, did you enjoy painting?” He said, “I don’t know. I never got to paint.”
My roommate works in what they call fixed equipment, which means fixing stuff. I asked him how that goes. He said, “I don’t know. I’ve never fixed anything.”
How would you get a desirable job? If the store clerk job pays well, for example, how would you get it?
You work your way up through. Those guys start in the laundry generally. Another job with a lot of people sitting around. They legitimately need 8 or 9 people to staff the laundry. They probably have 40 people to staff the laundry.
If you do a good job and impress people, you can move into that kind of job. I’m going to try to move I think to the library, and it’s just a matter of waiting for someone to leave. There’s someone who is leaving, and I’m going to try to take his shift. And it helps if one of the other inmates who works there, and is friendly with the staff guy who runs the thing, says, “This is a guy who I’d like to be working with.”
The staffers in that situation would rather have people get along. So if it’s someone’s friend, that’s the way it works. It’s the same way it works on the outside. There’s a bit of nepotism, I guess, or whatever.
And do you spend much time in the library by choice? Do you read a lot?
I do. Well, I spend time in the library mostly doing legal work with people in the afternoon. I’ll do an hour or two. It’s about all I will give anyone.
Then we also watch television, to get back to the daily life. We have six or seven televisions that are in different rooms, and there’s all the nonsense about how you choose what you’re going to watch.
And you can only watch live television. You can’t watch something from, say, Netflix.
That’s right. But we do have a movie theater. We have an auditorium where they show movies once a week, and it is a Netflix movie. They have a Netflix membership and they get movies. Movies have to be PG-13. BOP doesn’t allow R-rated movies. I’m not sure why that is. I let my 13-year-old watch R-rated movies. But anyway, we get some good stuff, and we get some bad stuff. We had “Blue Jasmine,” for example, which was one of the good things.
It’s hard to imagine that most inmates like Woody Allen.
Most people didn’t get it. Even the people who were smarter didn’t get it for the most part.
Have you heard of “Orange Is the New Black?”
Yes. We read. We get newspapers, we get magazines.
It’ll be interesting for you eventually to watch that, if you ever choose to.
Right. I mean, I’ve read the book. There are some things in there that are very accurate and some things where she seems to have lapses in memory.
And you’ve seen prison movies obviously. You’ve seen “Shawshank Redemption.”
Right, all those things. And this is nothing like that.
What are some of the things that are most inaccurate in the portrayal in movies and on TV about federal prison?
One thing is in prison movies they have the, standing in this open shower. We have real showers with curtains; it’s like you would have at your gym.
Look, the biggest problem here—not problem—but the couple things that are the worst about being here, have nothing to do with the facilities or things that you can show visually on TV. When they do prison movies, they have to be visual, so you’ve got to make it look bad. Here, you look around, and it looks pretty nice, and our living quarters is not quite consistent with what you see. They’re pretty cramped and, you know, it’s thin mattresses and no springs and that sort of thing, in little cubes with very little privacy and not much storage space and common bathrooms.
But, you know what, if this were filled with 1100 people that you want to hang out with, this would be a fine place to be. Unfortunately it’s not.
So the biggest problem is other people. It’s being with this diverse crowd of people who are generally angry, somewhat antisocial, not the kinds of people that you want to spend your time with in the outside world. So that makes it hard.
The federal prison system really more than anything else is a jobs program. At Butner, the average staffer was someone who, following an inauspicious military career, used the federal hiring preference to get a federal job, but the BOP wasn’t their first choice. You know, they were thinking FBI, Secret Service, and they ended up there.
Here it’s a little different. You have more people who wanted to work here because they’re from the local area, and they wanted to stay in the local area. And as jobs go, this is a very good job in the local area. But that being said, the staff here is probably on the whole much worse in terms of interaction with inmates than the staff was at Butner. At Butner there was kind of a live-and-let-live sort of relationship. Here, there’s much more “let’s see if we can get you, if we can catch you at something,” even if it’s a very minor something. And they’re very bad about what they catch people at. They catch people at little nonsense.
The things that really affect quality of life seem to zip right over their heads, like our bathrooms smelling like smoke a lot of the time. There’s a lot of smoking going on. You’re not supposed to be smoking here.
How would a person get cigarettes?
People sneak out and get them. Up the hill there’s a little road—
They can get that far?
Oh, yeah. Why not? [There are, believe it or not, no guards outside in front.]
Why don’t people just try to run?
Where are you going to go? Anyone here could leave any time he wanted, but because everyone here has less than 10 years left to go, why would you do that? You’re going to spend the rest of your life looking over your shoulder and not being able to live a life. They’ve only got less than 10 years. They’re just going to get their time done and go home and do their thing.
Interesting to hear 10 years spoken of in those terms: “only” 10 years.
Well, I say “only” 10 years—and most people don’t get here the minute they have 10 years. Usually they have less than that to go when they get here. But if you’ve got six or seven years to go, and you’re weighing, “Do I want to run to Brazil and start a new life and never see my family again, or do I want to just tough it out?” You tough it out.
Do most of the men in here have families?
Most. Well, that varies by socioeconomic beginnings. There are lots of people who have lots of kids. I don’t know if that means they have families.
I remember, at Butner, I was in the shower, and there were two guys talking. And one of them said, “How many kids do you have?” And the other guy said, “Eight.” And he said, “How old are they?” And the guy goes, “13, 14, 15, 15, 15, 15, 15, and 18.” He said, “Oh, you got some twins?” “No.”
He knew their ages, at least.
Yeah. I have three kids.
Does your family visit you?
They do visit. It varies, but about every eight weeks. They live in northern Virginia near the DC area, which is where I was living. I was working in the DC office when I… when all this happened.
So they didn’t have to relocate based on where you were imprisoned.
Right, they did not. And generally the BOP is good about putting people relatively close to home to try to encourage visits. The general rule is that they try to get you within 500 miles — air miles, not road miles — of what they consider to be your permanent residence. And they’re very good about it. My observation has been while there are definitely people who are where they shouldn’t be, by and large, they get that right and they get people relatively close to home, within five or six hours I would say. Most people are within visiting range of their home address.
When they visit you, what is the tone? Is it a sad, difficult thing every time?
It gets easier. But it’s still an emotional event. My kids are young. I’ve got two 12-year-olds and a 13-year-old about to be 14. They visited last weekend actually, and they hadn’t been here in four or five months. And that was an emotional event. They really miss having me home so it’s very hard. And I feel incredible guilt for what I’ve done to them by being here.
Do the men in here talk about their wives with each other?
Yes. Absolutely. The general maturity level is very low. There’s a lot of very misogynistic, you know, Old World attitudes. It’s more leering and, you know, listening to people say, “Oh yeah, if I were drunk, I might do her.” Like, come on.
And there is probably some bigotry.
Oh yes. There are all types in here. Not very many Asians. There are probably a dozen Jews, maybe 15 Jews. Yeah, there are old prejudices, very, you know, stupid old prejudices from people who just don’t get it. I mean, they’re not very sophisticated folk.
And you were saying that at Butner you had more friends.
Right. Well see, at Butner you had all the sex offenders. The sex offenders tend to be educated and white, even if they’re a little creepy and weird.
When you meet people and you make friends, does everyone know each other’s full first and last name? Is there any sort of secrecy?
There is no secrecy. None. You know who these folks are. And very few people tell you the entire truth about themselves, so although you’re not supposed to, you usually have a friend or relative look them up to figure out what the real scoop is.
Just because you’re curious?
Well, because you’re curious and because you’re putting a certain amount of faith in them in spending time with them and you want to know to what degree you’re being misled. The white-collar guys are actually much worse about that than the other guys. All these scam artists making up all these stories, and working on their next scam along with it.
So you sometimes have family or friends on the outside search things for you. What else can they do, can they bring you things when they visit?
They can’t bring anything. They can buy you food at these vending machines, which people look forward to, but I mean, they’re vending machines. The only things that you can ever get are books, and they can only send paperback books. Hardcovers have to come directly from the publisher so they know they haven’t been altered and turned into stashes for things.
Is it loud in here, during visiting hours?
It’s private enough. I mean, you’re sitting near people, but you can usually stake out an area where you can have a private conversation.
In the TV room, you can’t hear anything other than people yelling. You listen to the TV on your mp3 player. And we have a couple of public rooms that have tables where you can play cards, hang out, have little conversations, whatever.
One of the things really missing in prison, you never have comfortable seating. There’s no such thing, ever, as sitting in a comfortable seat. Not the bed, not anything. It’s not like college, where you have a lounge.
In other ways, it’s like a college, but not quite. The food is generally okay. It’s certainly edible, and it gets more edible the longer you are used to it.
You know, it’s not fancy here, but it’s probably fancier than the average American taxpayer would like it to be. I would say everything here is probably slightly better than the average American taxpayer would like it to be.
The food that they serve at the higher security levels is actually better than what they serve here. It’s the same, but it’s done better because, you know, how do you shut people up? You keep them fat and happy.
They feed them better, and it means that they’re less likely to have people stabbing each other. Here they take more shortcuts. They don’t follow as many of the national rules. They’re a little fast and loose here. So they’ll serve us expired things.
Is the staff bearable?
Here, I don’t have any staff friends particularly. At Butner I did. I had a guy who was a staff friend. A guard. He liked me, and would bring me stuff he wasn’t supposed to bring me—like I got to eat a lot of Bojangle’s chicken that he would sneak me and say, “Don’t tell anyone.” Not in the Bojangle’s box. He would put it in something else and say, “Plausible deniability, it came out of the officer’s mess and you found it.”
I got in trouble when I first got here for maintaining a relationship with him. You’re not supposed to communicate with people who are in other prisons. When I first got here, I was sending emails home and they were getting forwarded to him so we could stay in touch.
And that got you in trouble?
That got me in trouble. I knew I wasn’t supposed to be doing it, but at Butner, what that would have resulted in is someone calling me in and saying, “Knock that off.” Here they turned it into a big, huge deal. I got to see what solitary confinement was like, right after I first got here.
They put you in solitary for sending emails to a guard from another prison.
Well, it’s not solitary, it’s two people in a room. Anyway, they weren’t suggesting that there was anything nefarious about the communication, just that you weren’t allowed to do it.
How long were you in solitary?
Eight weeks! Now, during that time, can you still—
Nothing. You’re locked in a little room. You can only shower three days a week and the bathroom is in the room.
How do you take meals during that time?
They shove them through a little slot in the door, like what you see in a prison movie. That is just as it is portrayed. Oh, and worse than portrayed, because on TV they can’t show you that the heat doesn’t work. It’s freezing. I kept asking the guard, “Can I get another blanket?” And he’s like, “Listen, I’ve been working in here for five years. I have to wear my long underwear to work. I’ve been complaining for eight years, and I’ve gotten nothing. What do you think you’re going to get?”
That is a severe punishment for sending emails.
Right. So I learned my lesson.
And the guard didn’t get in trouble over at Butner?
No, no. At Butner, they don’t care. The only thing consistent is the inconsistency.
What about outside, in the back, are there guards everywhere? Or are there areas where no guard would see you?
No, there’s not staff everywhere, but there aren’t very many private places. They don’t want there to be private places. If there are private places, it’s going to encourage people to do things they’re not supposed to do.
At Butner there were more private places. There were some music rooms, and because there were a lot of sex offenders, it was more sexual activity going on there in the private places. Here there’s not so much of that. Here I guess there’s a mop closet late at night or something, but I’m usually asleep by 9:30 so whatever excitement is going on in the middle of the night I’m not a part of and don’t know about.
What kinds of group activities are there? Do you play cards?
People play cards. I’ve learned here how to play some rummy, and I learned how to play something called Chinese poker. But I don’t do too much cards.
Other group activities, well, people do exercise together. There are basketball pickup games. We have pickle ball, which is kind of like paddle tennis. My kids play it in gym class, so it’s a real thing. It’s like a very small tennis court with a low net, and you use big paddles and a whiffle ball. They have racquetball walls, and handball, people play that. They have a softball league. They have some soccer that goes on. There was more soccer at Butner, but we had a lot of Mexicans there, so they were really more into the soccer. There was football at Butner. They don’t do much of that here. They might do some flag football.
And there’s a rec staff that actually does plan some group activities. They have a canasta tournament, a Trivial Pursuit tournament to the basketball games and the basketball league. So I mean, there are opportunities to stay relatively busy.
That’s why if someone said to you, “You can come spend a year here and you’re going to be surrounded by people who you want to spend time with,” you really, well, that wouldn’t be bad. There’s no traffic. You don’t have to drive to CVS to get your prescription. You walk over to the medical thing.
So, I would like not to be moved out of here. Well, I would like to eventually go somewhere—I mean, this is fairly big, as these minimum security places go, and they have some people here who have as many as 12 points.
What are points?
They assign security points. I have three, and that was only after I got in trouble for the emailing. I think I had one before I got in trouble. So there are people here who have a lot of points. 95 percent of the problems here are caused by 5 percent of the folks. But the staff is on constant guard for all this stuff going on, so they make life more miserable for everyone else. I would rather go to a smaller place with fewer of the less well-behaved folk.
That’s interesting, because you would think the known is always better than the unknown. Another place might be worse.
Do I want to go next week? No. But there will come a time I think when it gets old and you want to get some fresh blood. Now, it depends also on the relationships. People here spend less time than people in Butner, so my friends at Butner were generally people who were going to be there as long as I was going to be there or longer. Here, my better friends have dates where they’re going to be gone. Like the guy I was playing Risk with, who I’ve become pretty friendly with, is leaving in July. He is here on a short 18-month sentence.
You see a lot more people here where the government is wasting its time and money. I mean, this is a guy who got 18 months for letting a friend mail him some marijuana at his house. There were probably better ways to give him the wake-up call.
Do you feel that way about yourself?
Well, now I probably have only seven and a half years left. Or actually less than that. I think it’s probably six and a half to seven, and there’s some legislation pending that will probably shorten things a bit.
Look, among white-collar people here, if I hear one more person who tells me how innocent he is, I’m going to, you know, have to find a gun and shoot him.
But no. I did what I did. I did all the stuff they said I did. Or, I did most of the stuff that they said that I did.
My only complaint with the system is that I didn’t really need to get a 12-year sentence. As you know, there was a quirk that they brought my case to New Jersey instead of New York. If I’d been sentenced in New York, I think there’s almost no doubt, I probably would have gotten five years, six years, and would be not that far from the door. I got a New Jersey judge who wanted to send a flashing red message of caution and she wanted to set a record, and she set a record.
The longest in US history. 12 years. Raj [Rajaratnam, of hedge fund Galleon Group] only got 11. When the Wall Street Journal puts out its list, which they do all the time, I top the list.
Is that a weird sensation for you, being in the news?
If you had asked me 15 years ago what I would like to have a pencil sketch in the Wall Street Journal for, it wouldn’t have been this. But yeah, I mean, you get used to it, to it being that.
Do you read it all? Every time you’re mentioned somewhere?
Yeah. And people here see it. People come up and say, “You’re in the Wall Street Journal today.” And I say, “Yeah, I saw that one. You’re the fifteenth person who’s told me that. Yeah, thanks.”
People sort of think it’s cool. I don’t really particularly think it’s cool. It will be cool if something happens and I’m able to leave earlier. That I’d like to read.
Back before you were ever arrested, was there a time when it occurred to you that you might end up in jail?
No. Well, I always knew that I was committing crimes that could land me in jail, but when I got arrested, this scheme was over. We were done. I had moved on. I wasn’t working in the law business anymore. So I had put it behind me and was going off into the sunset. We unfortunately did one or two too many. But no, I really did fully believe that I was going to be able to ride off into the sunset and that no one would ever know that it happened.
I never thought that if I did get caught and if we did get in trouble that it would be a 12-year sentence and quite as life-changing as it’s been.
When you got arrested, did you have a time when you sort of sat down with your kids and explained?
I explained exactly what had happened. They’re pretty smart kids. I told them the full basics of insider trading and exactly what it was.
I definitely highlighted the fact that it’s a victimless crime, that the people from whom [Garrett] Bauer was buying stock, Bauer probably actually helped them out. They probably got a couple pennies more than they would have gotten otherwise. If you created a billion-dollar victims compensation fund, and said, “Line up,” there’d be no one lined up. There’s no one who can line up. I guess some of the people to whom Bauer sold off that stock paid a slightly higher price than they would have otherwise. So it had a market effect but a very minor market effect. And believe me, the guy who bought the stock thinking it was a good investment and then got a bump in value two weeks later isn’t going to line up to chase Bauer for the three extra cents a share he paid. He got more than he bargained for anyway.
Was part of it making clear to them, ‘Hey, there are people who go to prison because they’ve killed people, they’ve raped people, that’s not your dad.”
Exactly. That’s exactly right.
And then I said, “There are lots of kids whose dads go off to war. They go to Iraq. They get a three or four-year deployment and they do it three, four, or five times in a row. And those kids have to worry not only that dad is gone, but that dad may get killed. Your dad’s not getting killed.”
Do you worry about how they see you?
I guess no. I mean, I don’t worry about how they see me now. I don’t know what level of resentment they’re going to have later in their lives as they look back. I guess it depends on whether including this all in their college essays gets them in or doesn’t. It’s a good story.
When you think about the amount of time you have left, how do you cope with that and get through each day? Do you do a countdown?
No. What is unbelievable is, though I don’t do much of anything all day, a lot of days it doesn’t feel as if I have enough time to do all the things I want to get done. So the days go pretty quickly. The weeks go pretty quickly.
They punctuate the day here with a lot of needless interruptions. During the week they count us, let’s see, how many times? 4pm, 9pm, midnight. 3 in the morning, 5 in the morning.
Aren’t you asleep during those last two checks?
Yeah, they don’t wake you to do that.
The ones at 4 PM and 9 PM you have to be standing by your bunk. But the problem is in preparation to get that count going, they call you back inside and they waste a lot of time. You just do a lot of sitting around. And then after the 4PM count you go to dinner, but you go in by unit, based on how well you did in the prior week’s inspection. So there’s a lot of down time.
Do you feel that in your time so far, your character has changed at all?
You know, I’m different from a lot of the people here. A lot of the people here—not all of them—have not had stable, normal relationships in their lives. They haven’t lived with their kids. They’ve beaten their wives, whatever. Or they’ve left stray children all over the East Coast. And they’re not very good at interpersonal stuff. So I find that I’ve become a magnet—sometimes for good, sometimes for bad—for people who find it refreshing to meet someone who’s more of a normal human being, I guess.
When you look at the friends that I have, I think if you asked them what it is that they like about me, the Harvard guy next door who’s older than I am, he’s 61, he would tell you it’s because I’m a lot like him. So that makes all the sense in the world. If you asked the 29-year-old who’s bounced around, floundered around, basically done not much of anything, I think he would tell you, “This is the smartest guy who’s ever respected me. And it feels good.”
The real question here is how you stay sane.
Because it’s not that bad. The daily life is not that bad. There are frustrations, but I think for white-collar people, there’s also absence of frustrations. I don’t pay bills. I don’t deal with traffic. I don’t have a lot of the same commitments that I had on the outside. So life is much less stressful in a lot of ways. And it’s a bad thing to say that it’s kind of like a spa experience, but in some ways it is. It’s just lasting a lot longer than I would like it to last.
Already it has been longer than I would have liked it to last. And that’s one of the silly things about these sentences: I get it. I mean… I can’t reoffend. No one’s going to let me near sensitive merger information again and I was a pretty law-abiding citizen other than that. So, you know, I am no threat to anybody. I’ve lost my license to practice, and even if I had my license to practice, no one’s going to hire me to be an M&A lawyer. They’re not going to hire me to be some other kind of lawyer. I’m not going to do something else. So my career is gone. I was embarrassed publicly. Really, they got what they needed. I get it. So all this other time is kind of superfluous.
And I will tell you that some of the people don’t reform. I mean, the people stealing stuff out of the kitchen, they’re continuing on the same path that they always — and I can tell you by looking at people who is probably coming back, you know, who’s going to leave and go right back to their old ways. Some of them will do it because it’s what they plan from the beginning. Some of them will do it because they slip and they don’t have any other choices.
It’s a cycle. So I don’t have that level of despair that a lot of people have, and I don’t have that level of uncertainty. I stay sane by trying to be nice to people, by trying to be helpful to people with the legal work, and with emotional support—telling people it’s not so bad.
How often does someone new come in here?
Every day. Almost every day during the week. Usually a lot of people descend on whoever it is, so I wait a little bit of time. I haven’t really developed the close relationships here that I had at Butner.
You probably will, though.
Well, I’m not sure that I will. It’s kind of a different crowd. But you know, some. And then it’s frustrating because then those people leave, so you’re constantly looking to redevelop that.
Because of that, is there any real permanent social hierarchy?
Not really. The guys who get their position to run the TV room or something, you know, that’s their social scene—they run what they run. But no, there really isn’t any hierarchy. But there are people everyone knows.
How long does it take for the shock to wear off? Like when you wake up in the morning and forget for a moment, and then, “Oh, yeah. I’m in prison.”
I never really had that. You prepare yourself, mentally. I did a lot of online research. I head a pretty good sense of what it was going to be like. I was never afraid of it.
Remember, I started [at Butner] with big barbed wire fences and people who did tell you that they would shoot if you tried to climb the fence. I’m not sure they could have shot straight, but that’s a different story. They certainly told you they would shoot you.
But I figured that if you just do what you’re supposed to do and you are reasonably nice to people that you’ll do okay. That doesn’t mean I haven’t had any conflicts, but I haven’t had many.
Is violence a fear?
No, I don’t worry about that.
Doesn’t happen here?
It happens. I mean I’ve seen a little bit, but not much. I’ve seen people get hit.
No, no. That doesn’t happen here. That didn’t happen at Butner either. I’ve been told that at a little higher security level, I would get extorted for lots of money probably. But I’m never going to be there.
At Butner there was a lot of consensual sex. There wasn’t sexual violence. Anyone who was having sex was doing it because he wanted to or because he was getting paid to do it.
What about your parents, do they visit?
Yeah, they visited once at Butner, and once here, although that was sort of bad because their trip was during the time I was in the shoe and they could only see me on a video screen in that room.
You couldn’t talk to them?
Well, I could talk to them, but I couldn’t see them. I was down the hill and they were in a little room.
Did they know when they were visiting that you were going to be in there?
Yes, they did. They didn’t know how the visit was going to work, though. It was… very bad.
How difficult has it been for them? Is there any shame there because they’re your parents?
My dad has gone through stages. He was very, very, very, very unhappy and very ashamed at first. Now he’s sort of transitioned into really feeling that I got a raw deal on the sentence. And I think he’s come to realize that what I didn’t wasn’t that… in the greater scope of harm to society, you know, or in the greater scope of how bad your child can be, I didn’t reach those heights. Which is not to say that I don’t understand that what I did was wrong and that I don’t feel bad. I definitely do. I don’t want to minimize my guilt, as a lot of people here do. But it didn’t need a sentence that matches what people get for killing people or for raping people.
What is the advice that you would give someone headed here next week?
Be careful about trusting people. You know, for the most part, these are criminals that you’re with, and you’re not going to get a straight story from a lot of them. So be careful how much faith you put in the things that you hear. Which is different from “be wary of what they want from you” because it’s not that. I mean, people coming in thinking that everyone’s going to want some sexual favor from them. No. I mean, someone may try to work you for stuff—a few packages of mackerel or tuna or something—but that’s the worst that ever happens. Not here, because they’re very sensitive about it here, but I’ve helped people with money. I’ve sent money to people and helped them with things.
Here, they’re very… they think that if you do that, you’re doing it not to help someone, but you’re doing it to—
Extort them later.
Well, no, that you’re probably buying some illegal contraband thing. But at Butner I was able just to get on the phone and say, “Yeah, send my friend this much money,” and no one cared. Because they knew that I wasn’t gambling or doing any of that other stuff. But here, they’re a little more nervous.
If it were you, what I would say is probably the hardest thing to get used to is that you’re just going to be a number. And that, by virtue of the fact that he got a federal job, someone who you probably don’t have a whole lot of respect for is going to tell you to mop the floor. You just have to shut up and mop the floor.
Have you noticed at all the popularity of social media?
Oh, sure. I’ve only been in here two years; that stuff existed. I had a Facebook page. I probably still do. I was on LinkedIn. But we can’t use it here.
I probably am more tuned into the outside world here than I was in the outside world. When I come up for the break, I watch the Today Show in the morning. Not the whole thing, but I watch part of it. The local news.
Sports? The World Cup is starting.
The World Cup’s not so big here, but the basketball Finals were definitely very big. There’s a lot of gambling that goes on in here.
But they can’t trade money, really.
Well, they trade these packages of canned fish. That’s the currency here. At Butner, the currency was stamps.
How would you make the fish?
No, no, you buy it. You buy a thing of mackerel from the store.
Right, but then you can’t just eat it.
Well, you can. It’s cooked fish. People who work out in the weight pit do eat it as protein to build their muscles. But it’s nasty. It’s really nasty, unpleasant stuff.
You use it for all the things you end up having to pay for. Like haircuts.
You have to pay for that?
You’re not supposed to. They’re not supposed to charge. But no one’s going to cut your hair unless you pay for it. So that’s a couple bucks every time you get your hair cut. I have someone who cleans my little cube. That costs $4 a month.
You could probably clean it yourself.
I could, but for $4 a month, they come in, they clean your area, they empty the wastebasket.
Who are these people? Other inmates?
Yeah, just people who need to make money. And there are people who sell food. They make prepared foods. I don’t usually buy that, because it includes stuff stolen out of the kitchen. And stolen out of the kitchen often means that it was shoved in someone’s pants or something. I’m not interested.
The mackerel cans are like the stamps at Butner; they respected it as currency. Stamps that were unusable. You could even take stamps that were stuck back-to-back, and that still counted as two stamps.
It’s like a token.
It’s like a token, or paper currency. They respected the fact that at some point it had value, and it still had value because of what it was, not because it could actually be used for what it was supposed to be used for.
Is there a brand name on it?
Yeah, it’s Chicken of the Sea. They use the real thing. It’s usually Chicken of the Sea. At Butner it wasn’t. It was a brand that they bought called Fresh Start, but here it is the real thing. I buy ten of them a month, just to have.
Inside, it looks like cooked slices?
You know, I’ve never actually opened one.
I’ve owned them, but I’ve never opened one. It smells really awful, too. And that’s one of the reasons I’m glad they don’t have microwaves because when they had the microwaves at Butner, they cooked that stuff, and the whole place smelled like nasty cooked fish. I do buy tuna, and I will eat that. And they do these little tuna steaks in a chili sauce that are pretty good in a package. I buy that and I will eat that.
Do a lot of guys get makeshift tattoos in here?
I certainly haven’t, but some do, yeah. They make a tool using a motor from a pair of hair clippers that’s broken. They use a guitar string as the needle, and they use art pens as the ink. And they do very good work.
What about alcohol? Are people making toilet wine?
At Butner they were making wine. They would take orange juice and hide it in bags in the ceiling and make wine. Here, I don’t think they make so much. I think here you can get someone to run up the hill and meet up with someone from the outside to get a bottle of vodka or something.
Alcohol was offered to me once around Christmas. I wasn’t interested. This is the last place in the world you want to be drunk. This is the last place in the world I want to be drunk. And they do test. They’ll do random breathalyzing and they’ll do random urine tests, stuff like that. At Butner I didn’t do alcohol, but there were these pills people had that made you kind of drunky and they wouldn’t show up on a test if they tested you. So I did that occasionally. Here I’ve done nothing.
There’s a whole underground economy in cigarettes, alcohol, and marijuana. Oh, and illegal cell phones. People have illegal cell phones. I’ve never seen one. Well, I’ve seen them, but I’ve never touched one.
Generally, people who run up the hill have a short-lived career. They get caught eventually and get shipped out of here. But some of them don’t care because they make thousands of dollars in the interim.
It seems crazy that you could hypothetically run outside and up the hill with impunity.
It’s pretty thinly staffed. Because people here are supposed to be able to behave themselves. And if the worst thing that they do is go get some cigarettes from up the hill, was it really worth spending another half a million dollars a year to stop that from happening? Probably not.
But isn’t that the kind of thing that would result in shoe?
If you got caught, yeah. Absolutely. And you’d be sent somewhere that had a fence.
(Whatever happened to Bernie Madoff? Or Bernie Ebbers? Or Jeff Skilling? Check out our ranking of 10 infamous financial felons, along with a host of other surprising business crooks currently behind bars. See: “Orange is the New White-Collar”)