Professors Bainbridge and Ribstein point to this Roger Parloff/Fortune magazine article that does a good job of summarizing the problems that confront the Enron Task Force in making its case against former key Enron executives Ken Lay and Jeff Skilling, a point that has been addressed in recent posts here, here, here and here. Professor Ribstein places the particular problems with the Task Force’s case against Lay and Skilling in the larger context of how justice and respect for the rule of law is eroded by such criminalization of corporate agency costs:
Lay and Skilling were not the best managers money could buy. But to apportion guilt in a way that maximizes the law’s deterrence function requires a scalpel, not the bludgeon of the criminal law.
And the moral force of the criminal law should be reserved for the cases that deserve it. Even if Lay and Skilling are convicted, the question wonít turn on, for example, whether they were at the scene of the crime. Of course they were. But the jury has to make a very difficult determination as to the precise positions of their eyes and ears. Years in jail should not hang on such details.
Just as years in jail should not hang on one’s duty to handle the closing of a presumably legal deal or one’s obtaining of an unenforceable oral assurance related to such a deal.
Peter Elkind and Bethany McLean, authors of the Enron book The Smartest Guys in the Room (Portfolio 2003), also weigh in here with a more extensive background piece on the case, which includes numerous examples of their decidedly biased view toward the Lay-Skilling defense. The piece is another example of the conflict of interest in covering the Lay-Skilling case that is common among certain mainstream media sources who have a vested interest in presenting the case in a light that is consistent with the view embraced in their book (that point was addressed earlier here).
