by Rajat Gupta
Again and again, the prosecutor sought to ensure that not one disease would be mentioned, which was absurd, since global health was the context in which several of these witnesses knew me. Indeed, those who’d worked with me at the Global Fund could not even state the organization’s name without mentioning three diseases. As a result of the numerous constraints, each of these illustrious people was given only a few minutes on the stand—a travesty in my mind, when hours and hours had been dedicated to the testimony of those with nothing more to offer than the authentication of phone numbers and trading records. But such was the judge’s ruling.
Character aside, my defense depended on two essential points: the timing of the Voyager dispute, which undermined the idea that I would be doing Raj any favors; and the Loeb evidence, showing that Raj had an alternative Goldman source who had been caught tipping him on several occasions about other companies. We needed at least one of these arguments to plant reasonable doubt in the minds of the jurors.
The problem was, we had very little evidence to show for the Voyager dispute. Ravi, the one person who could have corroborated the story, including the critical details of timing, had let me down. We couldn’t risk subpoenaing him, because he’d clearly switched his loyalties and we couldn’t trust him to simply tell the truth. At least he had not ended up testifying for the prosecution, but that was cold comfort. My lawyers decided against calling Renee, my secretary, because she did not have specific memories of the incidents in question, and she was clearly terrified at the thought of being subjected to cross-examination. We had been hoping to call the lawyer with whom I’d discussed possibly suing Rajaratnam in 2008, but the judge ruled against it on a technicality. That just left Greg Orman, my financial advisor. His testimony could offer validation of my claim that the Voyager dispute had begun in mid-2008, although he had not been as close to the situation as Ravi. During cross-examinations, we’d managed to bring into evidence much of the email correspondence relating to JP Morgan’s document requests, as well as the dual statements, and we intended to play the October 2, 2008, wiretapped call between Rajaratnam and his lieutenant Sanjay Santhanam, in which Rajaratnam says, “I hope Rajat is a big boy,” and admits, “I didn’t tell him I took that equity out.” But we needed an authoritative voice to counter the government witnesses who had set the date in 2009. After much discussion, we’d decided that Sonu would take the stand and testify as to the conversation we’d had about Rajaratnam’s duplicity on her birthday in September 2008. The lawyers had been hesitant, but she’d insisted she wanted to do it. Would it be enough? I didn’t know.
I was a little more hopeful about the Loeb defense—if the judge allowed it to go ahead. We intended to play the two wiretapped conversations between Loeb and Rajaratnam, as well as show numerous emails in which Loeb was trying to get Raj to call him urgently. We also had evidence of Loeb’s ongoing relationship with Adam Smith, the Galleon trader who had pleaded guilty to insider trading and testified at the Rajaratnam trial. Smith had been Loeb’s principal contact. We had subpoenaed Loeb to appear as a witness. However, Brodsky, predictably, was trying to bar the Loeb tapes and other evidence. The judge had yet to rule on the matter.
Meanwhile, we called a handful of other witnesses. Richard Schutte, the former Galleon COO, testified about the legitimate sources of information that influenced how Galleon made investment decisions, and we showed documents that included advice to buy Goldman based on analyst predictions. Schutte’s testimony also highlighted the close relationship between Galleon and Goldman and the amount Galleon was paying Goldman annually—revenue that we knew had a bearing on Loeb’s compensation. Schutte also testified that he had been involved in almost every personnel decision at Galleon during the time in question, and to his knowledge I had never been chairman of Galleon International.
Suprotik Basu, the young executive from the World Bank who’d been Ray Chambers’s right-hand man, was our next witness. He had been present during many of my meetings on September 23, 2008, since he and I had been working intensely on the malaria initiative. While he had not been in the room when I was on the Goldman board call or when I called Raj, we had hoped he could testify to the more important matters that were occupying my attention that day. However, he would have to do so without mentioning malaria too often. He at least was able to confirm my phone habits: “My picture of him is with an earpiece in his ear constantly, doing different phone calls between meetings.”
A strange mix of pride and shame overwhelmed me as Sonu took the witness stand, so poised and articulate. I was grateful she’d been willing to do this, but it should have been me up there, not her. My eldest daughter has tremendous courage and integrity, and I often think of her as my moral compass. I had not been joking when I told the several hundred assembled guests at her wedding that when faced with difficult decisions, I often ask myself, what would Sonu do? But now she was doing the thing I had chosen not to do. Of course, it was not exactly equivalent—her testimony carried far less risk. Nevertheless, as I listened to her answering the prosecutor’s questions, for the hundredth time that day I doubted my decision not to take the stand.
Sonu recounted the weekend of her thirtieth birthday, a few days before the Buffett deal in September 2008, when she came home to find me distraught over the revelation of Rajaratnam’s duplicity and I told her the whole story in detail, sitting in the library. Her testimony about this helped to establish the critical dates, but I was not sure it would be enough. Would the jury believe her over Anil? In his cross-examination, Brodsky asked only two questions.
“Ma’am, do you love your father?”
“Yes, I do,” Sonu replied.
“You would do what you could to help your father?”
“I would do many things to help my father,” she replied, her composure unruffled. “I would not lie, though, on the stand.”
After Sonu’s testimony was adjourned for the night, the battle over the Loeb evidence came to a head. I was not present for this conference—feeling helpless and exhausted, I waived my right to appear and went home to be with my family. I was losing the will to fight—and what could I do anyway but sit silently while every door to the truth was closed in front of us? In my absence, one more was slammed shut: in a final blow to our already weakened defenses, the judge made a ruling that we could not present the Loeb evidence, dismissing it as “replete with inadmissible hearsay” and likely to “create endless confusion on the part of the jury.”
Sonu completed her testimony, though severely curtailed by the prosecutor’s multiple objections, and we called our final character witness, Todd Summers, who had worked with me at the Global Fund. He was followed by James Roth, a client relations guy from Goldman Sachs, who briefly testified about how he prepared Goldman president Gary Cohn for his meeting with Rajaratnam in the summer of 2008, and finally we called an associate from the law firm who had assisted in preparing our summary charts and would testify to their accuracy and the methodology used to prepare them. At this point, it all felt like an afterthought—a pointless prolonging of our severely truncated case. We had no more substantive witnesses to call. My lawyers had decided not to call Greg Orman, feeling that we’d already brought into evidence all the information he would have testified to, and it wasn’t worth giving the prosecution the opportunity to cross-examine him. The last defense exhibit was the tape of Rajaratnam telling his lieutenant, “I hope Rajat is a big boy,” and admitting he never told me he took money out of Voyager. And then we were done. The defense rested its case—which to me barely felt like a defense at all.
I sat there, numb. Could this really be it? I felt these disjointed fragments weren’t enough. I wanted to leap up and tell the judge I’d changed my mind, I wanted to tell my story. How could the jury be expected to construct a convincing alternative to the government’s narrative from a couple of guys talking about yet more trading records and phone numbers, my daughter recounting one conversation, and a handful of people testifying that th
ey knew me to be honest but had no direct knowledge of the events in the case? But it was too late. The jury was excused, and the judge suggested that after a short break the lawyers could raise their objections to the instructions he intended to give to the jury the next day.
I’d had enough. I simply didn’t have it in me to sit through any more arguments over the finer points of the law. “Can I leave?” I asked Gary. After one look at my face, he nodded. “I’ll ask the judge to excuse you.”
The following day was dedicated to the summations, or closing arguments. They did indeed seem to sum up the whole trial, not just in content but in spirit. Mr. Tarlowe, speaking for the government, was eloquent and impassioned. He told their version of the story with great dramatic flair, evoking the chaos of the financial crisis, the now-familiar story of the Buffett deal, and so on. Accompanying his speech were dozens of detailed charts in which they displayed the cherry-picked selection of calls, trading records, emails, and so on that they claimed revealed a “pattern.” We had argued for the inadmissibility of these charts on multiple grounds, but the judge had allowed them in. Tarlowe asserted that the only reason I received no payment for my alleged tips was that Galleon lost money that year, and my compensation for the chairman job (which I never held) was tied to the fund’s performance.
It was a good story. Not a true story, but a convincing one nonetheless. When our turn came, Gary reiterated many of the themes from his opening statements, referencing the trial evidence supporting those themes: the lack of hard evidence, the complete absence of trading or financial benefit on my part, my attempted resignation from the Goldman board, and of course the Voyager dispute. He accused the government of having resorted to “one of the oldest prosecutorial tricks”—rolling out a parade of witnesses to “bamboozle people into thinking something was proven when it wasn’t”—and appealed to the jury not to be fooled. But without me telling a cohesive alternative story, could the jury really be expected to see the prosecutor’s case for the smoke and mirrors it was?
I found that even I couldn’t follow the narrative—and I had lived it. I had a sense, that day, of being almost outside of myself, observing the proceedings in the courtroom from a great distance. It was like a dream in which I could see events happening but was powerless to act or contribute in any way. I could barely hear Gary’s words, or those of Brodsky as he got up to give his rebuttal—until one phrase, toward the end of Brodsky’s speech, cut through my trance-like state.
“To believe the defense team, you have to believe that Mr. Gupta is one of the unluckiest men in the world. You have to believe he is a victim of these incredible incriminating circumstances happening to him again and again.” He went on, elaborating on his theme, but I was stuck on the phrase. The unluckiest man in the world? It certainly felt that way. Was it bad luck? Or was it simply my destiny? It was too late to take the stand and attempt to make sense of it to the jury. But how was I to make sense of it all to myself?
The next day, the judge charged the jury, and deliberations began. Now, all we could do was wait. It was Megha’s thirtieth birthday, and though none of us felt like celebrating, I insisted we go to a restaurant for dinner. I tried to focus my attention on my daughter, recalling how proud I was of her independent spirit, her creativity, and her dedication to making a career as an artist, despite numerous setbacks. But the look on her face made it difficult to forget. “Don’t worry, Baba,” she said, but clearly she was not taking her own advice. “I’ll be alright, baby,” I told her. “Are you alright?” Megha and I have a close bond that goes back to her earliest days. Anita always says that our second daughter, who was a colicky baby, preferred me to comfort her, and I was very successful in calming her. I wished I could do so now.
There was nothing to be gained from sitting around the apartment thinking about the outcome of the trial. Do your best and don’t be attached to the outcome of your actions. Never in my life had my father’s creed been put to a greater test. Could I remain unattached to the outcome of this trial, when it meant so much for my family and my future? Could I maintain the equanimity of the karma yogi as twelve strangers decided my fate? Could I let go of the feeling that I had been treated unfairly? And above all, could I put down my regrets? This last one was the hardest. After all, it is one thing to be detached from outcomes when one knows one has done the right thing to the fullest of one’s abilities. But I could not silence the voice in my head that told me I hadn’t done everything I could have done. I hadn’t taken the stand. Maybe it would not have changed the ultimate outcome of the trial, whatever it would be, but at least it would have allowed me to feel spiritually at peace.
The Verdict
“The jury has reached a verdict.”
Word spread fast through the cafeteria on the second floor of the courthouse. I was playing cards with two of my daughters and looked up in surprise. No one had expected it to come so quickly. How could they possibly have weighed up the enormous volume of evidence in such a short time? The jury at Rajaratnam’s trial had taken two weeks to reach a verdict, and they’d had concrete evidence to consider! I instinctively felt that this didn’t bode well, but I tried to keep those fears to myself. Carefully, I gathered up the cards and put them in their box. I looked around for Sonu, who had gone to catch up on some work, anticipating a much longer jury deliberation. She was nowhere to be seen. We all stood up, silent, and I hugged each of the girls. The crowd parted and people stepped back to allow my family to take the elevator alone. For thirty seconds, it was just us, sealed off from the world. I asked my daughters, “Are you okay?” What was unsaid, but understood, was that if they were okay, I would be okay.
We took our seats in silence, and Sonu came hurrying in—she’d been in a Starbucks down the street and noticed that the gathered throng of journalists at the next table had suddenly got up to leave, indicating that something was happening back at the courthouse. One of them told her there was a verdict. We all stood as the jury filed in. I noticed immediately that they were not looking at me, another worrying sign. As we waited for the verdict to be read, I glanced back and saw that the girls were sitting two on either side of their mother, as if to protect her. My overwhelming feeling was pain at having let them down. The events of the past few weeks swam before my eyes. All the rulings that went against us, the truncated defense, the choice to stay silent and not take the stand. It was too late now—none of it mattered. It was done. The jury foreman stood, and the courtroom fell silent.
“Has the jury reached a verdict?”
The foreman replied that they had, and the clerk read aloud the first of the substantive counts (Count 2), relating to March 2007. “Guilty or not guilty?”
“Not guilty.”
For a moment, there was pure relief. I heard Anita gasp behind me, but before I could even turn to her, my hopes were dashed by a string of “guilty” verdicts on Counts 3, 4, and 5, as well as Count 1, the conspiracy charge. I was acquitted on Count 6 as well (the one relating to the 2009 P&G earnings), but this was small comfort. The repeated word “guilty” mingled with the loud sobs of my youngest daughter, and all I could think of was my family. I went to them and gathered them all into a long hug. The courtroom fell silent. When I looked up, I saw tears in the eyes of many of the jurors. I believe they did not want to find me guilty; they simply had not been given a good enough reason not to.
16
360°
All the great utterances of man have to be judged
not by the letter but by the spirit—the spirit
which unfolds itself with the growth of life in history.
—Rabindranath Tagore, Sadhana
July 2012
The months following the trial were a strange limbo, as I awaited my sentencing. I tried to keep busy, spend quality time with my daughters and grandchildren, and avoid the pointless torment of replaying my trial and my decision not to testify.
I was also dealing with new feelings of betrayal. My friend and NSR partner Pa
rag Saxena had initially been very supportive, assuring me that he never wanted to benefit from my misfortune. I had resigned from my chairmanship and offered to pay all additional costs incurred as a result of bringing on new senior advisors. The understanding was that my family would retain our ownership, but I would pay for the incremental costs. Now, right after the verdict, he appeared to turn on us, trying to push me out of the fund and offering me cents on the dollar for our ownership. Without so much as a conversation, he sent me a legal letter giving me twenty-four hours to respond or lose the shares altogether. I fought back and refused to accept such an unfair offer. I was grateful for the support of my childhood best friend, Anil Sood, who stepped up to join the NSR board and protect my interests.
Parag had no legal basis for taking away our ownership—it felt like a bullying tactic, a calculation that I would give in at my most vulnerable moment. He knew very well that the fund would not have existed without me, as I had raised almost all of its $1.4 billion. After he realized he could not simply take our ownership for nothing, he started a multi-pronged strategy to take control. He attempted to push out the director appointed by our family and used management funds to pay himself, against the partnership agreement and without the permission of the directors. I have unsuccessfully tried many times to settle the matter amicably, even offering him a larger portion of the overall gain. On a personal level, this was one of the most painful and unexpected chapters of the entire story. I could barely summon the emotional resources to deal with it after the ordeal of the trial, but I could not allow myself to just roll over and accept this further injustice.
