The Chronicle’s Mary Flood reports today on recent developments in the Enron-related Nigerian Barge case, in which four former Merrill Lynch executives and one former Enron executive are awaiting sentencing after being convicted last year of wire fraud and conspiracy charges in regard to a relatively small transaction in which Enron allegedly disguised a loan from Merrill as a sale of an interest in some barges off the coast of Nigeria. Two of the defendants are scheduled to be sentenced by U.S. District Judge Ewing Werlein this coming Thursday and the other three will be sentenced on May 12.
Ms. Flood and the Chronicle have gotten involved in the case by filing a motion to unseal pleadings after the Task Force and the defendants attempted to keep the Task Force’s recommendations relating to their sentences under seal (i.e., not available for public scrutiny). But one of the Merrill defendants — James Brown — earlier this week filed his objection to the Task Force’s sentencing recommendation in regard to him, and that pleading contains shocking information regarding the length of sentences that the Task Force is proposing. The Task Force Court is proposing sentences ranging from seven years for William Fuhs, the former low-level Merrill executive who had little control over the transaction, to an effective life sentence in prison for Dan Boyle, the former Enron executive who was in charge of closing the deal.
The basis of the Task Force’s draconian sentencing recommendations is the alleged loss to Enron resulting from the Nigerian Barge transaction. However, as noted in earlier posts here and in regard to the U.S. Chamber of Commerce amicus curie brief noted here, the Task Force’s position on the damages to Enron investors resulting from the relatively small barge deal is highly dubious and simply is not a credible basis for tossing business executives with no prior criminal record into prison for long periods of time.
Thus, even after the injustice of the sad case of Jamie Olis, the Justice Department continues its unfortunate policy of seeking maximum sentences against easy targets, such as relatively wealthy business executives. Given the utter lack of any perspective within the Justice Department regarding such matters, it’s going to take strong-willed judges to step in and impose sentences that relate fairly to the nature of the offenses. Let’s hope that Judge Werlein does just that on Thursday.