Larry Ribstein has written a great article asking what should be the penalty for the sort of prosecutorial misconduct indicated by the Skilling brief?
While the law professor has some insightful comments throughout, the first paragraph particularly interested me. Ribstein says:
My sources tell me that the prosecutors probably have immunity. The argument for strong government immunity is that government agents, who don’t reap economic gains from their conduct, will be excessively risk averse. But what if there are great potential political and economic rewards from successful white collar crime prosecutions?
That’s something I’ve been mulling with my own sources. And the only conclusion I can come up with is, everyone has some skin in the game. You can’t be completely free of influence as a prosecutor. Some former Boy Scout wears a flag in his lapel and voila! Instant credibility! With all the government advantages, the possibility of reward for successful prosecution is too distinct a possibility.
Ribstein:
Keep in mind that Skilling was not prosecuted for stealing from his firm, but rather for lying. Moreover, there is far more robust market discipline for this kind of conduct than for prosecutors’ lying to courts.
If you’ll forgive the tangent, Skilling was convicted of a slew of crimes (lying to auditors, conspiracy, fraud) but not benefiting from those crimes. He was aquitted of all but one count of insider trading. The one insider trading conviction was for the sale of 500,000 shares of ENE on September 17, 2001. A full month after he had left the company – and as proven in court (but the jury didn’t understand) he was creating a ‘bull hedge’ with that sale. In any case, the jury said he was guilty of doing the crime but not actually doing it for any reason. This is one of the crazy things about the trial, and something that proves to me that the jury simply did not understand either the charges or what Skilling was actually doing. Their ignorance was yet another advantage for the prosecutors.
Of course, when Skilling is released, there will be no mea culpa from the gov. They will not apologize or even acknowledge the pain caused not only to Skilling but his entire family – and the Ken Lay family.
Coyote Blog also has some words on the subject of prosecutorial abuse.
Things They Say