Wednesday, October 21, 2009

Might white collar cases be next venue for innocence claims?

Given the scope of subjects covered on this blog, I don't focus as often as perhaps I'd like on white-collar crime issues, but here are several recent posts on the topic from others that deserve Grits readers attention:

Doc Berman ponts to the abstract of an academic paper by White Collar Crime Prof blogger Ellen Podgor who suggests that "the next phase of wrongful convictions might move beyond street crimes into the white collar world" because the "trial penalty" for not cutting a deal is so great that "in order to minimize the possible consequences, innocence becomes an irrelevancy." I certainly agree that's a big cause of false convictions, and not just in the white-collar arena. So if it takes white-collar cases to put the issue on the map, so be it.

Some of the best recent writing I've seen on this topic has come from Tom Kirkendall at Houston's Clear Thinkers, who believes that "There is a huge difference between what Marc Dreier did and what Jeff Skilling did. It reflects poorly on us that our criminal justice system cannot distinguish between the two." His post, "The reeling prosecution in the Skilling case," is a must-read. In another post he points out that
it's not every day that a federal appellate court concludes that a newspaper's coverage of a particular event was a major factor in the creation of a presumption of community prejudice," but "that's precisely what the Fifth Circuit Court of Appeals did with regard to the Houston Chronicle's coverage of the demise of Enron generally and the prosecution of Jeff Skilling specifically (see pp. 41-45 of the Fifth Circuit decision).
This morning, reacting to the dismissal of charges against Enron Broadband Director Scott Yeager, Tom suggests Enron prosecutors grossly abused their prosecutorial authority:

The prosecutors who pursued these cases ruined careers and harmed families by abusing the state's overwhelming prosecutorial power. They remind me of Ayn Rand's observation about socialists who use state power to further their supposedly altruistic goals:

"[T]he truth about their souls is worse than the obscene excuse you have allowed them, the excuse that the end justifies the means and that the horrors they practice are means to nobler ends."

"The truth is that those horrors are their ends."

It's rather amazing to me that so many people in Washington refuse to regulate corporations but it's somehow fine to prosecute their leaders for bad business decisions. Tom's right, there's a difference between Ponzi schemers or bribe takers and aggressive businesspeople who played by the rules of the game at the time but ended up losing money. I couldn't cite chapter and verse, but my sense is that part of the reason this trend has developed is that tort reform has disempowered civil courts as a meaningful remedy for investors in these multi-billion dollar calamities, so punitive criminal charges are all that's left as a remedy to recoup what they can from the losses and assuage the public anger in the aftermath.

7 comments:

Acerbic said...

It's something like the OJ trial, no one gave a crap about domestic violence or the broken justice system until he was let off the hook. Then suddenly everyone became aware of the issues.

I have no sympathy for these financial gurus who ruined our country with their scams. They are nothing more than sophisticated thieves as far as I'm concerned.

But like OJ, if all their prominence leads to a focus on the underlying problems then so be it.

Anonymous said...

Anyone who has listened to Markopolos' testimony before Congress this year in regards to Madoff and the SEC cannot help but find that the SEC failed in their duties as a regulatory body.

Too bad some of that prosecutorial zeal wasn't present at the SEC, beginning with the first complaint in 1992, when at least some of the damage could have been mitigated.

Anonymous said...

Maybe you should devote your entire time and blog to helping Bernie Madoff prove his innocence. I'm sure he was a victim of life's circumstances, and he's really sorry. At some point, he'll claim actual innocence.

Gritsforbreakfast said...

7:37, do you have a point or are you just being a little snot-nosed POS?

Anonymous said...

anon 7:37 there is no doubt that Bernie Madoff is guilty. That is not a question up for debate.

The real question is whether the government is broken and needs correcting in terms of both identifying and prosecuting the appropriate offenders.

There are a myriad of reasons outlined in the SEC IG reports about the failure in this particular case and brought up in the Congressional hearings. And there are countless civil suits and legal arguments being waged as to who should ultimately pay.

It is too early to know how it will all play out. But Grits has made the point that because the regulatory checks and the civil redress might not be enough to satisfy the investors losses, does that mean that criminal charges should then be brought to satisfy the blood lust? And if so, to whom?

If that is the case, I think the government might well begin with themselves.

Anonymous said...

Just in case somebody missed the show:
http://www.youtube.com/watch?v=uw_Tgu0txS0

And more:
http://www.youtube.com/watch?v=FOKSkaQoF_I

doran said...

Grits, thanks for providing the link to Tom Kirkendall at Houston's Clear Thinkers. Everyone would benefit from reading Tom's discussion.

Especially POSes like Acerbic and Anon.