One of the former Enron executives who stood up to the Task Force is Sheila Kahanek, the former mid-level Enron accountant who was acquitted of fraud and conspiracy charges in the Task Force’s controversial Nigerian Barge prosecution. That case resulted in the questionable convictions of four former Merrill Lynch executives on charges that they assisted Enron in manipulating its finances in connection with a sale of an interest in some power-producing barges off the Nigerian coast.
In this important U.S. News interview, Kahanek tells her compelling story about being falsely accused of a crime and the ordeal involved in defending herself with limited resources against a prosecution team that has no such limitations. The entire interview is a must-read, but Kahanek’s answers to the following questions about the government tactic of preventing exculpatory testimony from coming to light and the high price of asserting innocence are particularly interesting:
The defense attorneys for Lay and Skilling have complained that the prosecution is scaring witnesses away from testifying for their clients. Did this happen to you?
It was extremely rare if you could get someone to return a call, much less answer your questions. Prosecutors have absolute power in deciding whom to indict, regardless of what the law says concerning the not-so-grand jury. It is an unfortunate reality that most people will not risk their freedom for that of another, particularly if they have a spouse or children.
So weren’t you tempted to plead guilty and limit your losses?
Absolutely not. Dan [her defense attorney, Dan Cogdell] and I got that clear from the start. A plea deal was not an option. It wasn’t an option. I had to know I fought for what was right. I had to be able to look myself in the mirror and know that I never compromised myself or the truth. Every day I had to dig into myself and find the strength to fight another day. I have asked a number of people with children: Would you stand up and fight if it meant you might not see your kids for 24 years, when you can take a deal for five years? No one has said absolutely that they would fight it. Someone told me: “When you have children it is not about you anymore.”
Read the entire interview, and then give some thought to the plight of William Fuhs, the former mid-level Merrill Lynch executive who was convicted in the same trial in which Kahanek was acquitted and who had virtually the same level of involvement in the transaction that formed the basis of the prosecution as Kahanek (Fuhs was the ministerial scrivener of the transaction and had no involvement in either the structuring or the negotiation of the deal).
Fuhs — who is in his early 30’s with a wife and two young children — now sits in federal prison awaiting disposition of his appeal for merely having documented a legitimate transaction that the government criminalized because of matters in which Fuhs was not involved.
What our Justice Department has done to Kahanek, Fuhs and the other Merrill Lynch executives involved in the Nigerian Barge case — and how the government is handling the Lay-Skilling prosecution — is a radical abuse of our criminal justice system, and the extraordinary damage to the individuals and families involved cannot be responsibly dismissed as a trade-off of an imperfect system.
As we watch principles of justice and the rule of law trampled upon in such cases, contemplate whether — as Sir Thomas More asked Will Roper in A Man for All Seasons — “Do you really think you could stand upright in the winds [of abusive state power] that would blow” if the government were to set its sights on you?