In the movie A Man for All Seasons, Sir Thomas More had the following exchange with King Henry VIII’s henchman, Thomas Cromwell, when Cromwell threatened Sir Thomas for relying on his common law right to remain silent regarding the reasons for his refusal to take the King’s oath of allegiance to the then new Church of England:

Sir Thomas: You threaten like a dockside bully.
Cromwell: How should I threaten?
Sir Thomas: Like a minister of state. With justice.
Cromwell: Oh, justice is what you’re threatened with!
Sir Thomas: Then I am not threatened.

In this devastating Opinion Journal op-ed, the Wall Street Journal’s Kimberly Strassel conjures memories of the Sir Thomas-Cromwell exchange as she surveys the alleged threats that New York AG (“attorney general” or “aspiring governor,” take your pick) Eliot Spitzer has made over the past couple of years as he has demonized unpopular businesspeople to further his political career. As noted in this earlier post, Spitzer’s bullying of businesspeople is but one aspect of the dubious tactics that he used to regulate business in whatever manner he deems appropriate.
As noted earlier here, Spitzer is certainly not alone in using the power of his political office to criminalize easy targets for his own benefit. In fact, Spitzer’s approach is not even particularly original — he is essentially doing the same thing that Rudy Giuliani did 20 years ago in prosecuting Drexel Burnham and Michael Milken out of business. Back then, the politically ambitious Giuliani mounted a well-coordinated propaganda campaign (which, ironically, was facilitated by the Wall Street Journal reporter, James Stewart) that demonized Milken’s revolutionary financing techniques that unlocked billions in shareholder wealth during the 1980’s. Daniel Fischel brilliantly exposed Giuliani’s duplicity with regard to Milken and Drexel in his 1995 book, Payback: The Conspiracy to Destroy Michael Milken and his Financial Revolution, yet Spitzer and others continue to use the Giuliani model for abusing prosecutorial power to criminalize unpopular businesspeople for political or personal gain.
Interestingly, Fischel may take the witness stand as early as this afternoon as an expert witness for the defense in another case involving the demonization of unpopular businessmen, the Lay-Skilling trial. Although Enron’s collapse was the result of market forces, an American accounting icon was illegitimately prosecuted out of business as a result of Enron, causing huge job losses for multiple communities and untold financial hardship to thousands of employees throughout the country. Meanwhile, the lead prosecutor in that case parleyed his role in contributing to that economic hardship into a cushy partner position with a leading New York law firm.
Ms. Strassel’s piece is a powerful reminder that the Giulianis and Spitzers of the world have created — as Larry Ribstein has pointed out — a prosecutorial agency cost problem that is at least as troubling as the corporate agency cost problem that they prosecute. As Sir Thomas also reminds us, “do you really think you could stand upright in the winds [of abusive prosecutorial power] that would blow” if that power were to set its sights on you?