A Dirty Secret of the Enron Criminal Cases

Most mainstream media accounts of the Enron-related criminal prosecutions case have perpetuated the myth that the Enron Task Force has done a good job in handling the criminal cases, partly because the Task Force has obtained plea bargains from 16 former Enron executives.

Inasmuch as those former executives pled guilty, the media’s reasoning goes, that is proof that Enron really was just a den of thieves that needed to be eradicated.

However, the truth is far more nuanced.

At least several of those 16 plea bargains were the result of the Enron Task Force bludgeoning a former Enron executive who had not committed a crime into a plea deal to avoid the high risk of asserting innocence in a venue that is highly adverse to anyone that worked for the social pariah, Enron.

Indeed, any former Enron executive only needed to review the ordeals that Jamie Olis and the four former Merrill Lynch executives in the Nigerian Barge case — much less that of Ken Lay and Jeff Skilling — to be reminded that attempting to assert innocence in the face of weak criminal charges was a losing proposition.

Well, at least one former Enron executive who the Task Force bludgeoned into a plea deal is attempting to withdraw it.

Chris Calger, a former executive with Enron North America who pled guilty a year ago to a single criminal conspiracy count, has replaced the attorney who advised him in connection with that plea deal and hired Philip Hilder, Sherron Watkins‘ counsel (it’s a small world, isn’t it?) to file a motion requesting that he be allowed to withdraw his guilty plea.

As noted in this Tom Fowler/Houston Chronicle article on the motion, Calger argues that he should be allowed to withdraw his guilty plea because it was based on the Task Force’s malleable theory that any remotely questionable business judgment of a business executive is a criminal act of depriving the executive’s company (or, in the case of the Merrill Lynch executives in the Nigerian Barge case, of another company) of that executive’s duty to provide the company with the executive’s “honest services.”

Inasmuch as the Fifth Circuit eviscerated that theory in its recent decision in the Nigerian Barge case, Calger reasons that he should be allowed to withdraw his guilty plea.

The Calger plea deal was obtained under particularly egregious circumstances.

In an extraordinary exchange with an Enron Task Force prosecutor during the Calger plea bargain hearing, U.S. District Judge Lynn Hughes makes clear that the Task Force prosecutor neither understood the underlying transaction involved in the indictment nor could articulate precisely what crime Calger had committed. At the end of the hearing, Judge Hughes accepted Calger’s guilty plea, although it is clear from the transcript that he was troubled in doing so.

Calger’s guilty plea is only one of several that were obtained by the Enron Task Force under questionable circumstances. As with the Task Force’s equally dubious tactic of fingering dozens of former Enron executives as unindicted co-conspirators to induce them from testifying for Lay and Skilling (as well as for the Merrill Lynch executives and other Enron-related defendants), the Task Force’s bludgeoning of guilty pleas out of overwhelmed individuals is a serious affront to justice and the rule of law that the media has largely ignored.

Yale Law Professor John Langbien, who has written extensively on prosecutorial abuse in the American criminal justice system, puts the tactic of bludgeoning guilty pleas into perspective:

Plea bargaining concentrates effective control of criminal procedure in the hands of a single officer. Our formal law of trial envisages a division of responsibility. We expect the prosecutor to make the charging decision, the judge and especially the jury to adjudicate, and the judge to set the sentence. Plea bargaining merges these accusatory, determinative, and sanctional phases of procedure in the hands of the prosecutor.

Students of the history of the law of torture are reminded that the great psychological fallacy of the European inquisitorial procedure of that time was that it concentrated in the investigating magistrate the powers of accusation, investigation, torture and condemnation. The single inquisitor who wielded those powers needed to have what one recent historian has called ‘superhuman capabilities [in order to] . . . keep himself in his decisional function free from the predisposing influences of his own instigating and investigating activity.'”

I cannot emphasize too strongly how dangerous this concentration of prosecutorial power can be. The modern prosecutor commands the vast resources of the state for gathering and generating accusing evidence. We allowed him this power in large part because the criminal trial interpose the safeguard of adjudication against the danger that he might bring those resources to bear against an innocent citizen — whether on account of honest error, arbitrariness, or worse.

The pressure to cop a plea is overwhelming for individuals caught in the crossfire of a highly-publicized criminal investigation such as the one involving Enron. So, I ask again — who is the greater threat to justice and the rule of law?

The Chris Calgers of the world?

Or out-of-control prosecutors who place businesspeople in the untenable position of risking a long prison sentence for merely asserting their innocence?

Or a pliable media that largely ignores this injustice to fan the flames of the latest juicy story?

One thought on “A Dirty Secret of the Enron Criminal Cases

  1. Let’s not forget the first victim of the described bludgeoning, David Duncan, who has had his plea vacated. His plea was nominally based upon a similarly overbroad interpretation of a criminal statute, an interpretation that the Supreme Court ultimately gave the DOJ a good whack for pushing. The real basis was no doubt the untenable position he had been put in by the confluence of so many unfortunate circumstances.

Leave a Reply