NY Times on the sad case of Dan Bayly

Landon Thomas, Jr. of the New York Times has written this major Sunday Times article about the sad case of Daniel Bayly, the former head of Merrill Lynch’s global investment banking division who is presently serving a two and a half year prison sentence as a result of his conviction on corporate fraud charges in connection with the controversial Enron-related Nigerian Barge case.

Mr. Thomas’ article is an excellent portrayal of the extraordinary personal damage that is resulting from the Justice Department’s dubious criminalization of business in the post-Enron era. Mr. Thomas points out how that the implementation of that policy has moved beyond catching big fish such as Ivan Boesky or Bernard Ebbers and is now ensnaring relatively unknown business executives such as Mr. Bayly, who really had limited involvement in the underlying transaction involved in the Nigerian Barge case.

Moreover, Mr. Thomas delves extensively into the troubling conduct of Merrill Lynch’s management, which offered up Mr. Bayly and his three Merrill colleagues to the Justice Department as sacrifical lambs in an effort to avoid an indictment of the firm that might have prompted an Arthur Andersen-type meltdown. The disturbing nature of such corporate sacrificial lamb offerings has been a frequent topic on this blog.

Mr. Thomas’ article is a refreshing change from the more common demonization of business executives that usually takes place in the mainstream media. However, beyond the scope of Mr. Thomas’ piece is the distressing conduct of the Enron Task Force prosecutors in the Nigerian Barge case and the other Enron-related criminal cases. Regardless of what one thinks about the issue of whether the Nigerian Barge case should have been made into a criminal case in the first place, no reasonable analysis of the case can justify the Task Force’s suppression of the truth during the trial of case.

In short, the Task Force took a reasonably complex finance transaction between Enron and Merrill Lynch and criminalized it through a brazen web of distortion, suppression of key testimony, inadmissible hearsay, opposition to the defense’s jury instruction on the key issue in the case and prosecutorial misconduct. Rather than charging Mr. Bayly and his colleagues and then allowing the jury to sort through all relevant testimony and evidence in determining the truth, the Task Force presented to the jury a fictional screenplay of the underlying transaction and then effectively prevented Mr. Bayly and the other defendants from presenting the mountains of testimony and evidence that contradicted the Task Force’s fictional account. To make matters worse, the Task Force is deploying precisely the same deplorable tactics in its legacy case against former key Enron executives Ken Lay, Jeff Skilling and Richard Causey.

Thus, despite the enormous personal tragedies that each of the families of the four Merrill Lynch executives involved in Nigerian Barge case are enduring, the even greater tragedy of this case is the damage done to our system of justice and the Rule of Law. For as Sir Thomas More reminds us, if we do not require the state to adhere to justice and the Rule of Law in even cases against the unpopular business executives of the moment, then “do you really think you could stand upright in the winds [of abusive state power] that would blow then?”

The Enron Task Force’s suppression of the truth in the Nigerian case is showing us precisely what happens when such ill winds blow, and the resulting emotional trauma that the Merrill Lynch executives and their families are experiencing cannot reasonably be dismissed as merely a trade-off of an imperfect system.

3 thoughts on “NY Times on the sad case of Dan Bayly

  1. The NYT on Nigerian Barge

    The conviction of Merrill Lynchís Dan Bayly on rather flimsy evidence of criminal wrongdoing in the Nigerian Barge case has been well covered by Tom Kirkendall, with me following behind. The NYT discusses the aftermath ñ Bayly serving 30 months

  2. Why hasn’t anyone called foul on the the Bureau of Prisons that are now getting into the same game as prosecutors who have abused their immense powers in these same cases? The BOP has rules about who belongs in a camp and who belongs in low security and on up the scale. The BOP is breaking these rules when they imprison people like the Nigerian Barge defendants to low security and Jamie Olis to medium security. Those rules of designation basically state that prisoners are to be designated to the lowest security prison that maintains protection of the public and protection of the inmate population. They are bending their own rules to further punish these unpopular men who have no criminal records and who have no history of violence and are no threat to society– yes it is true- they are stripped of their ability to work in similar capacity and maybe unable to work in any capacity for any corporation or financial institution through their felony convictions. They are not a threat to society or to anyone around them- in fact, increasing these men’s security levels poses threats to them themselves. If you say, so what, recognize that the higher the security level the more of your tax dollars are used to house these people you dislike so much. Maybe this is about manipulating for the purpose of full employment for prison guards and BOP administrators but it certainly appears to have a baser purpose in the very public and very real additional punishment to these men and their families. The higher security also restricts them even during their visits with their families.
    The current prosecutorial process is a great punishment and is a great deterrent to anyone watching. Who wants to be splashed across the national news in handcuffs and that is just when accused? A trial and conviction is another world of punishment and to top it off with higher levels of security imprisonment against BOP placement rules but heck, why can’t the BOP take their hits too? So what if they break their own rules in the treatment of convicted felons- that seems to just be the new norm from our federal systems of trial and punishment.

  3. How Long Does It Take to Commit a White Collar Crime?

    A New York Times article (here) on the front page of the Business Section discusses the current situation of Daniel Bayly, a former senior Merrill Lynch executive who was convicted (along with four others) in the Enron Nigerian Barge trial

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