Given this record of criminalizing business interests for political gain, it’s not surprising that New York’s next governor was stacking the deck to obtain convictions in a number of his prosecutions. This David Hechler/Law.com article reports the ugly news:

Like the U.S. Department of Justice, New York state Attorney General Eliot Spitzer has also pressured companies to stop paying the legal fees of employees who face criminal charges. Spitzer appears to be the only state AG who has raised fee payment as an issue. [. . .]
Most of Spitzer’s targets are financial institutions swept up in his probe of mutual funds. According to a Corporate Counsel review of 17 agreements that Spitzer’s office struck with companies accused of market timing, nine settlements included “no indemnification” clauses. These provisions prohibit a business from paying the legal fees of indicted employees unless its bylaws require it. In one instance, Bank of America Corp. agreed to a no-indemnification clause even though its bylaws require it to pay fees. Moreover, the bank had already begun advancing expenses in at least one case.
Spitzer’s office declined to comment on the no-indemnification clauses. (Spitzer is running for governor of New York.)

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As noted in this prior post, one of the most perverse elements of the government’s criminalization of business in the post-Enron era has been the trial penalty — that is, the substantially longer prison sentences that executives face if they elect their Constitutional right to a trial instead of copping a plea bargain.
Over the past two years, Stetson Law Professor Ellen S. Podgor has been examining the trial penalty over at the White Collar Crime Prof Blog. In this Law.com op-ed, Professor Podgor analyzes the current landscape well:

Whether it be an individual or company, it is clear that those who play in the government’s sandbox will be their friends and will reap enormous benefits through a sentence reduction or deferred prosecution. In contrast to the rewards received for cooperation, availing oneself of the constitutional right to trial by jury is an incredible gamble, with the stakes raised higher than ever before, as the sentencing guidelines provide for draconian sentences in white-collar cases. [. . .]
The government needs cooperators to make their cases. Cooperators also provide a more efficient system that reduces the costs for a government prosecution. But when the risk of a conviction after trial is so distinct from that received for cooperating with the government, it diminishes the right to a trial by jury, an essential part of our constitutional democracy.
Justice Byron White, in the famed case of Duncan v. Louisiana, 391 U.S. 145 (1968) noted the importance of this right when he stated that “the right to trial by jury is granted to criminal defendants in order to prevent oppression by the government.” Id. at 155.
We have to wonder whether this right is fully realized when so many individual defendants and companies are folding to government demands because of the high risk entailed in proceeding to trial.

Add in the willingness of prosecutors to scapegoat business executives and appeal to the resentment of most jurors toward wealthy executives, and you have an environment where gross injustices such as what happened to the Merrill Four in the Nigerian Barge case and the sad case of Jamie Olis, among others. Meanwhile, a serial liar such as Andy Fastow is rewarded, even when it is clear that he testified falsely (see also here) against Jeff Skilling and Ken Lay.
This is not the product of a rational criminal justice system.

Peter Elkind of The Smartest Guys in the Room fame has now turned his sights toward class-action plaintiff’s law firm, Milberg Weiss Bershad & Schulman (prior posts here). In this lengthy article (hat tip to Peter Lattman) entitled The law firm of Hubris Hypocrisy & Greed, Elkind uses his same irreverent Smartest Guys-style in telling the tale of how Milberg Weiss became a criminal defendant. For example, take Elkind’s description of L.A. lawyer-entreprenuer, Seymour Lazar, who the government alleges took illegal kickbacks from Milberg Weiss:

When Lazar appeared in federal court in L.A. earlier this year after being charged with fraud, conspiracy, and obstruction of justice in the Milberg Weiss case, it seemed a miracle he was still alive. A small, wild-haired man, Lazar, now 79, sat in a wheelchair and listened to the proceedings with a hearing aid. Later court filings detailing his medical history – and asking for the charges to be dismissed because the stress of a trial was likely to kill him – reported that Lazar was suffering from congestive heart failure, diabetes, renal failure, high blood pressure, anemia, gout, strokes, a suppressed immune system, and cancer (in remission).
Yet Lazar, who had pleaded not guilty, remained combative and defiant. He’d recently protested his innocence on the front page of the Wall Street Journal, declaring, “I swear, they treat me like an absolute thug. . . Who did I cheat? Did anybody get screwed?” While Milberg Weiss was insisting that it had no idea its “referral fees” were ending up with plaintiffs, Lazar admitted that Milberg had paid him. He simply argued that no one got harmed because the money came out of the law firm’s pockets.

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