A good, old-fashioned snit between Texas political opponents gave the Houston Chronicle an opportunity this week to make a good point about the rule of law and the integrity of governmental investigations.
But in so doing, the Chronicle highlighted its failure to apply precisely the same standard to far more egregious examples of prosecutorial impropriety, a good bit of which is taking place in the Chronicle’s own backyard.
As this Washington Times article reports, Travis County District Attorney Ronnie Earle (first picture left) — who is investigating House Minority Leader Tom DeLay‘s campaign finance methods — characterized Mr. DeLay as a “bully” in a speech at a Democratic Party fundraiser in Dallas. Among Mr. Earle’s comments were the following:
“This case is not just about Tom DeLay. If it isn’t this Tom DeLay, it’ll be another one — just like one bully replaces the one before. This is a structural problem involving the combination of money and power. Money brings power and power corrupts.”
Well, level-headed liberals and conservatives agreed that Mr. Earle should not have sullied the integrity of the investigation into Mr. DeLay’s campaign finances by taking potshots at Mr. DeLay during a partisan gathering.
But Mr. DeLay’s hometown newspaper — the Chronicle — went even further and published this stinging editorial questioning Mr. Earle’s judgment:
Earle’s attendance and remarks attacking DeLay at a Democratic fund-raiser last week in Dallas damaged the credibility of his investigation with a stunning display of prosecutorial impropriety.
[I]t is inappropriate for a prosecutor to discuss a case under investigation in a political setting, or to single out a potential target of that probe for criticism.
The fact that Earle refuses to recognize his blunder and would do it again calls into question whether he has the necessary impartiality and judgment to conduct the investigation . . .
The Chronicle’s broadside toward Mr. Earle was made all the more surprising by the fact that the local newspaper has been a frequent critic of Mr. DeLay. So, the Chronicle editorial definitely scores some points for objectivity.
However, before the Chronicle editorialists pat themselves on the back too much for their fairness in defending Mr. DeLay against Mr. Earle’s imprudent remarks, they need to answer the following question:
Where has that objective viewpoint been over the past several years as other “stunning displays of prosecutorial impropriety” have been perpetrated on business executives, including many right under the nose of the Chronicle in Houston?
In that connection, it has become commonplace for officials of the federal government to conduct a virtual political rally as they flame already well-stoked local emotions against former executives of that favorite corporate pariah, Enron:
“[T]he president’s corporate task force, which celebrates its second anniversary tomorrow . . . [has demonstrated that] just the mention of the name Enron evokes images of duplicity and greed,” said Linda C. Thomsen, director of enforcement for the Securities and Exchange Commission;
“[T]he corporate culture of Enron guided by Mr. Lay is now synonymous with corporate fraud and greed at its worst. And Enron’s crooked ‘E’ logo depicts the corporate management team at Enron — crooked,” opined Internal Revenue Service Commissioner Mark W. Everson; and
In a December, 2004 interview, the Chronicle reported that Andrew Weissmann, director of the Enron Task Force, compared Enron executives to New York mobsters that he previously prosecuted.
Literally dozens of other examples of inflammatory public statements from Enron prosecutors and government officials could be cited.
Meanwhile, New York AG Eliot Spitzer went on the Sunday talk show circuit recently to condemn Maurice “Hank” Greenberg, one of the targets of the Lord’s ongoing investigation into American International Group, Inc.:
“These are very serious offenses,” stated Mr. Spitzer gravely. “Over a billion dollars of accounting frauds that A.I.G. has already acknowledged. . . That company was a black box, run with an iron fist by a C.E.O. who did not tell the public the truth. That is the problem.”
Now, let’s take stock here.
In each matter described above, prosecutors have made inflammatory public statements about subjects of their highly-publicized criminal investigations.
In Mr. Earle’s case, the Chronicle condemns his one imprudent remark in the strongest terms. But what has the Chronicle had to say about the multiple comments of the Enron prosecutors and Mr. Spitzer, which frankly are much more numerous and egregious than Mr. Earle’s relatively tame comments?
Nothing. Nada. Zilch.
The Chronicle’s blindspot is typical of the mainstream media’s apathy toward the prosecutorial misconduct that is taking place these days as big government criminalizes big business.
The existence of business fraud at companies such as Enron, WorldCom, Tyco and maybe even AIG does not necessarily mean that there is more misconduct in big business than in any other relatively large organization, such as big government or even big news organizations.
Nevertheless, prosecutors such as Mr. Spitzer and those on the Enron Task Force are publicizing these instances of business fraud to generalize arbitrarily against those who are easy and popular targets — i.e., wealthy (and apparently greedy) businessmen.
The Chronicle has embraced this public relations tactic while portraying the Enron Task Force as the defender of noble egalitarianism fighting against the forces of corrupt capitalism.
In the wake of such seemingly simple morality plays, many legitimate business transactions — most notably structured finance transactions that most prosecutors and journalists neither understand nor do the homework necessary to understand — are unfairly and incorrectly portrayed as complex business frauds.
Completely ignored in the process is the fact that such transactions build wealth in companies for the benefit of shareholders, and that such transactions are usually reviewed and approved by multiple professionals who are experts in such transactions.
The misguided nature of the government and the Enron bankruptcy examiner’s criminalization of Enron’s valid structured finance transactions has been well-chronicled by University of Chicago business professor and structured finance expert Christopher Culp in his recent books, Corporate Aftershock (Cato 2003) and Risk Transfer (Wiley 2004).
So, three and a half years now after Enron spiraled into bankruptcy, the Enron Task Force has completed one trial, and obtained one conviction and one acquittal of former Enron executives (the Task Force is currently conducting a trial against five former Enron executives in the Enron Broadband case).
Rather than prosecute clearly criminal conduct, the preferred approach of the Task Force has been to sledgehammer former Enron executives with multi-count indictments so that each of the executives is faced with the prospect of what amounts to a life prison sentence if they risk exercising their Constitutional right to defend themselves against the charges. Yale Law School Professor John Langbein has written and spoken extensively about how the government is manipulating this plea bargain system to pressure people to buckle and accept a plea, even if they are innocent.
Admittedly, some of the former Enron executives who copped pleas — notably Andrew Fastow, Ben Glisan and Michael Kopper — stole from Enron and thus, certainly engaged in criminal conduct.
However, many others who have entered into plea deals did not engage in any clearly criminal conduct. Rather, they entered into those deals simply because they could not risk either the financial drain or the long prison term that they faced if they attempted to defend themselves against the Task Force’s sledgehammer.
In the meantime, just to make sure that public perception remains inflamed against big business targets, Mr. Spitzer and the Enron Task Force continue to make inflammatory public statements and disclosures about their targets that strongly imply guilt and wrongdoing.
Again, what has the Chronicle had to say about this unsavory use of the government’s overwhelming prosecutorial power?
Nothing. Nada. Zilch.
The preservation of our freedom is inextricably tied to upholding the rule of law, and that includes restraining the government when it attempts to erode the rule of law to convict an unpopular defendant. As noted many times on this blog, this principle is precisely what Sir Thomas More was talking about in A Man for All Seasons when he made the following comments to young lawyer Will Roper, who had just confirmed that he would abuse the rule of law in order to achieve the laudable goal of convicting the Devil of a crime:
Oh? And Roper, when the last law was down, and the Devil turned ’round on you, where would you hide, Roper, the laws all being flat?
This country is planted thick with laws, from coast to coast, Man’s laws, not God’s! And if you cut them down — and you’re just the man to do it, Roper — do you really think you could stand upright in the winds that would blow then?”
Yes, I’d give the Devil the benefit of law.
For my own safety’s sake!
The Chronicle is right that even Tom DeLay is entitled to the protection of due process of law in the face of the overwhelming power of a governmental prosecution.
But so are former Enron and AIG executives.
Not only for their protection, but for ours.
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This post from last year addressed the economic failure of the urban rail system in Washington, D.C. Now, the Washington Post is running a series of articles (first one here) that is examining the dubious economics and management of D.C.’s subway system. Here are other posts on various urban rail boondoggles.
