A frequent topic on this blog has been the government’s questionable tactic of bludgeoning business executives into plea bargains by playing on the executive’s fear of a draconian prison sentence (often an effective life sentence) if the executive has the temerity to assert his or her Constitutional right to a fair trial by jury. Although prosecutors justify such tactics as a reasonable tool in seeking the truth about criminal acts of others, plea bargainers often undermine that goal by testifying falsely in order to obtain the favorable terms of the deal.
In this post, Ellen Podgor — who blogs with Peter Henning over at the smart White Collar Crime Prof blog — compares the sentences to date arising out of the prosecutions of former WorldCom executives, notes the wide disparity between those who cooperated with the government and those who did not, and then asks the right questions:

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You know that the criminalization of business in the post-Enron era has become routine when it’s newsworthy that the government has decided not to use its prosecutorial power to prompt another Arthur Andersen-type meltdown of a major accounting firm.
This NY Times article reports that KPMG and federal prosecutors have agreed in principle to a deferred prosecution deal under which the accounting firm would avoid a devastating criminal indictment for its involvement in the creation and promotion of questionable tax shelters in return for KPMG paying a hefty fine, which the Times article reports could be as much as half a billion dollars. Here are the earlier posts on the KPMG tax shelter probe and related problems.

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A couple of months ago, this post noted Wall Street Journal columnist George Melloan‘s op-ed on the Supreme Court’s Andersen decision in which he harshly criticized the government’s abuse of the rule of law to pursue currently unpopular businesspeople. Today, in this WSJ ($) Global View column, Mr. Melloan focuses on a common subject of this blog — the unjust nature of criminalizing corporate agency costs.
Mr. Melloan’s column focuses on the agency cost of corporate accounting:

Corporate accounting, contrary to popular belief, is chock-full of judgment calls. It’s a happy hunting ground for a prosecutor looking for decisions he can say were intended to mislead investors and might thus constitute criminal fraud. If an admiring press rewards him with a big headline, who’s to know, . . ?

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