Robert Weisberg is Edwin E. Huddleson, Jr. Professor of Law and director of the Criminal Justice Center at Stanford University, where he teaches a course on white collar crime with David Mills, who is a senior lecturer there. In this Wall Street Journal ($) op-ed, Messrs. Weisberg and Mills dissect the Justice Department’s indictment against eight former KPMG partners for their involvement in advising and promoting allegedly illegal tax shelters for clients of the firm. Messrs. Weisberg and Mills point out that there is just one small problem with the indictment:

In the months leading up to it (and the now-rumored indictment of other tax advisors on similar grounds), numerous news stories suggested the KPMG accountants had somehow knowingly participated in tax fraud by creating fake losses for wealthy clients. Whether or not this proves true, the indictment makes no such allegation.

H’mm. Sound familiar?
In this era of misusing criminal laws to punish merely questionable business transactions, precisely the same situation is also playing out — i.e., pre-emptive criminalization of business conduct being asserted before such conduct has even been determined to be illegal from a civil standpoint — in the sad case of Jamie Olis and in the Enron-related Nigerian Barge case, Coyote Springs case, the Enron Broadband case, and the government’s legacy Enron case against former Enron executives Ken Lay, Jeff Skilling and Richard Causey. The weakness of the government’s charges in the Enron-related cases has prompted an increasingly desperate Enron Task Force to engage in a wide range of abuses — such as intimidation of witnesses and proferring false testimony — in an effort to obtain publicly-expected convictions of business executives while denying those executives exculpatory evidence that they could present in their defense at trial. The same syndrome is also playing out with regard to Eliot Spitzer’s despicable public bludgeoning of former AIG CEO, Maurice “Hank” Greenberg.
Absent clear evidence of a crime — which should be easily explainable in an indictment rather than the amorphous messes that masquerade as indictments in the cases described above — all of these cases should be left to the civil justice system for remedying the actions that allegedly caused damages. That the government in many of these cases has resorted to serious abuses of power in an effort to obtain unfair convictions reflects that criminalization of business in the post-Enron era is much more about the political goal of placating public resentment toward wealthy business executives than upholding justice and the rule of law.
Are you listening, Tom DeLay?