Ellen Podgor over at the White Collar Crime Prof Blog points us to two documents that raise important issues relating to the federal government’s questionable policy of attempting to regulate business through criminalization of what it deems to be questionable business practices.
Frank Quattrone’s appellate attorneys have based his appeal squarely on last week’s Supreme Court decision in Anderson. The following is the hard-hitting first paragraph from that brief:
The government’s brief is an effort to weave a rope of sand, and to imbue a trial with evidentiary substance and procedural fairness when it was sorely lacking in both. With regard to the evidence, the prosecutors dutifully characterize the defendant as plainly guilty, and describe their proof as “strong” or even “compelling.” [record reference omitted]. This is standard rhetoric for those who write the red-covered briefs in criminal cases. But if this was a “strong” case, then there is no such thing as a weak one. Notwithstanding the government’s cavalier description, this case turned on a “threadbare phrase,” United States v. Mulheren, 938 F.2d 364, 370 (2d Cir. 1991) — Quattrone’s one-line e-mail urging his colleagues to “follow [the] procedures” contained in a standard corporate document retention policy. As the Supreme Court reminded the government only recently, “[i]t is, of course, not wrongful for a manager to instruct his employees to comply with a valid document policy under ordinary circumstances.” Arthur Andersen LLP v. United States, No. 04-368, 2005 WL 1262915, *5 (U.S. May 31, 2005).
Moreover, Professor Geraldine Szott Moohr of the University of Houston Law Center has written this law review article — Prosecutorial Power in an Adversarial System: Lessons from Current White Collar Cases — in which she points out that the increasingly common prosecutorial tactic of bludgeoning white collar defendants into plea bargains undermines the deterrent purpose of such prosecutions. Here is the synopsis for the article:
Successful disposition of the cases against Arthur Andersen, Martha Stewart, high-level Enron officers, and scores of mid-level executives testifies to the authority of federal prosecutors. A review of these cases identifies the sources of prosecutorial power and traces their effect in the investigation, charging, and sentencing phases of white collar crime.
A comparison of the roles of American federal prosecutors and their European counterparts in investigating, charging, and sentencing corroborates the judgment that our present system has a decidedly inquisitorial cast. The power of inquisitorial prosecutors is constrained by inherent safeguards that impose formal and informal limitations on their discretion. In contrast, federal prosecutors exercise greater power in the investigation and charging phases and exercise even more authority in sentencing and plea bargaining. The combination belies adversarial values.
Retreat from the adversarial trial can undermine the goal of deterring business misconduct in several ways. Inconsistent sentences that result from plea bargains can forfeit the moral authority of criminal law in the business community, the very group one wishes to deter. In contrast, public trials provide a rationale for sentences and educate the business community about the illegality of specific conduct, a requirement for optimal deterrence that is especially relevant in white collar crimes. Public trials also strengthen shared social norms of the business community against fraudulent practices. In sum, disposing of criminal cases through quasi-inquisitorial investigation and plea bargaining forfeits an opportunity to reinforce the standards of lawful business conduct and thereby strengthen deterrence.
In that connection, note Professor Langbein’s related comments in this post.