Professor Ribstein at Ideablog is providing consistently insightful observations regarding the troubling trend of prosecutors to take on currently popular but ethically questionable criminal cases against corporate executives. Today, Professor Ribstein explores the agency costs of such prosecutions from the prosecutor’s side, and observes that many of these corporate executive prosecutions are an easy out for the prosecutors:

My point is that catching real criminals is hard work. The reason is that real criminals know that they’re criminals and that they have to work hard at not getting caught. Yet prosecutors are paid to catch crooks, and if they don’t get results they get fired, or at least don’t move onto to the jobs they really want, like governor or senator.
How much easier would be the lives of the Eliot Spitzers of the world if they could go after people who didn’t know they were criminals when they were committing their crimes? Even better — how about if their behavior wasn’t even clearly criminal when it was committed? They wouldn’t cover their tracks, or at least not very well. No more 7 years sitting in cars and talking to Adriana. All you have to do is look at expense accounts, or movies of parties on Sardinia.

Professor Ribstein concludes with these words of wisdom:

Of course we would prefer that prosecutors put the real bad guys away. But it’s nice for them if we let them off the hook when they grab headlines by bagging some slow-moving rich business people.
The best antidote is for the press and the rest of us, instead of lapping up the momentary satisfaction that corporate “thieves” are getting their just deserts, reflect on the damage this is doing to risk-taking, and ask whether this is the best use of prosecutorial resources.

The only comment that I would add to the Professor’s analysis is that federal judges also should play a key role in evening the currently unbalanced playing field in prosecutions of corporate executives.
Federal judges have the power and discretion (at least in areas other than sentencing guideline matters) to rein in questionable prosecutions of corporate executives. For example, federal judges should not allow prosecutors to sledgehammer corporate executives with indictments containing dozens of duplicative counts simply to pressure the executive to cop a plea rather than risk a life prison sentence if he elects to defend himself against the charges.
When principles of prosecutorial discretion are subordinated to the fame of popular prosecutions of corporate executives, the Article III protection from the passions of the moment that our justice system provides to federal judges is one of our society’s most important counterbalances to the state’s awesome prosecutorial power. This protection allows our judges to make unpopular but just decisions. In the current politically-charged climate of white collar prosecutions, true justice requires that our federal judges exercise that power.

This NY Times article reports on federal Northern District of Texas Judge Barefoot Sanders’ decision yesterday that upheld the Internal Revenue Service’s efforts to obtain the names of two KPMG clients who bought a tax shelter that the IRS contends is abusive. The two investors had previously sued KPMG in an attempt to prevent the disclosure. The decision is another setback for KPMG in this messy situation for the firm, which is the subject of previous posts here, here, here, and here.