Thursday, September 22, 2005

Can Anyone Make Sense Out of White Collar Sentencing?

The 8-25 year sentences handed out to former Tyco officers Dennis Kozlowski and Mark Swartz provoked some commentary that the punishment was too harsh, given that these were first time offenders who pose little threat to society, at least from the standpoint of being violent or engaging in clearly illegal conduct like drug dealing. On the flip side, former HealthSouth CFO Michael Martin, one of the five guilty CFOs at the company, was resentenced by Chief U.S. District Judge U.W. Clemon to spend seven days in prison, a $50,000 fine, and two years supervised release.  The government appealed the Judge's downward departure in the original sentencing, when Martin received a sentence of six months home confinement.  The Eleventh Circuit held that the sentence was unreasonable, applying Booker's newly-created standard of review.  A press release issued by the U.S. Attorney's Office for the Northern District of Alabama (here) quotes U.S. Attorney Alice Martin: “To send a former CFO who participated in this massive fraud for over 3 years to jail for 7 days is not justice. It is time for corporate criminals to be sent to prison in Birmingham." 

The cases are certainly different, given that Martin cooperated in the government  investigation while Kozlowski and Swartz went to trial and maintain their innocence.  At the same time, each case involved sentencing under largely discretionary systems.  When the Supreme Court declared mandatory sentencing guidelines unconstitutional in Booker and Blakely, many extolled the benefits of a return to judicial discretion in sentencing, that judges would be able to account for the particular circumstances in a case and individualize justice.  If judicial discretion is a positive aspect of the sentencing process, then why the criticism of New York Supreme Court Justice Obus' sentences given to Kozlowski and Swartz?  He observed the defendants first hand, heard all the evidence at trial -- twice, no less -- and assessed their statements at the sentencing hearing regarding their culpability.  Neither defendant appears to have expressed the slightest remorse for his conduct, defending the money they received to the last.  In that context, can we say that the judge's decision was too harsh, while it could be argued equally that perhaps he was not harsh enough? (Complaints about the policies of the New York correctional system that may assign these men to maximum security prisons, while well taken, are not directly related to the sentence imposed by the judge.)

If judicial sentencing discretion is a benefit, then we live with the decisions made by judges, at least when they are not extreme, although even that assessment would be subjective. If "discretion" is only a convenient avenue to get lower sentences, then any sentence greater than some undisclosed norm is too harsh, regardless of who has the discretion in the system. Was Chief Judge Clemon's decision to impose a seven-day sentence too lenient?  The judge may have been sending a message to the court of appeals not to interfere with sentencing decisions, seeking to find the very bottom of what can be a reasonable departure in a case in which the admitted fraud at HealthSouth totaled $2.7 billion.  If it is a test of wills between trial and appellate judges, a kind of turf battle, then the sentence is hardly defensible.  If the judge made a reasoned assessment of the harm, and the measure of the defendant's cooperation, then the discretion vested in the trial court permits such a departure, subject to appellate review for reasonableness.

The question comes back to how much discretion should the judges have.  The Federal Sentencing Guidelines took much of it away, only to have some of it restored earlier this year.  To the extent that disparity in sentencing emerges in the federal system, particularly in white collar crime cases, Congress may react by constricting judicial discretion once again.  Mandatory minimums, anyone? (ph)

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