Thursday, September 7, 2006
If the case is not going your way, wouldn't it be great if you could just change the law in your favor? A pipe-dream in most cases, at least outside of the corporate context ,where sometimes companies can change the rules in the middle of the takeover fight, and tax, where everything can be made retroactive. In a criminal case, one would certainly expect that the rules cannot be changed after the fact. In the wake of the death of Ken Lay, however, the government has asked U.S. District Judge Sim Lake to hold off on deciding the motion of Lay's estate to abate his conviction and indictment while it seeks to have Congress adopt legislation to overturn the abatement doctrine that controls the case. In a filing with the court (available below, courtesy of the Houston Chronicle), the government acknowledges, in effect, that the abatement doctrine applicable in the Fifth Circuit will result in having Lay's criminal record expunged, preventing prosecutors from using the conviction to support the criminal asset forfeiture it sought. As described by the government, this is "radical relief" that "unnecessarily harms crimes victims" by depriving them of the use of the conviction in seeking recovery, although it is the doctrine applied in every federal court and a number of states.
The legislative proposal would be retroactive to July 1, conveniently timed for five days before Lay's death, and it would create a new "special civil forfeiture proceeding" that would essentially preserve the conviction in those cases in which the defendant dies after the conviction but before a decision on the forfeiture or the completion of the first appeal as of right. The proposed legislation covers seven pages, and is followed by another seven-page analysis of the statute -- all to overturn one high profile case in which the government will be forced to proceed with a civil asset forfeiture case if it still wants Lay's assets, an avenue that presents greater hurdles to recovery.
The proposed bill and accompanying documents seem to represent a significant effort on the part of the Department of Justice, and raises in my mind this question: Does the Enron Task Force have too much free time? The number of cases in which abatement will occur is fairly small, I suspect, and it's not as if the government does not have access to civil forfeiture to recover Lay's assets. A less expeditious tool, but then Lay did die, so it's not as if he's trying to duck out on a potential penalty.
The government has framed the issue in terms of the rights of victims, noting that a civil forfeiture at this point could take years. While that may be true, does the fairly uncommon situation require that a well-established legal doctrine be overturned to permit the government to achieve a quicker result in only a few cases? Moreover, the assets in Lay's estate subject to forfeiture, assuming there are any, are not going to disappear, and they represent only a minute fraction of the losses suffered by Enron shareholders. It's ironic that the government's brief does not appear to acknowledge its recent position that Jeffrey Skilling is responsible, under principles of joint liability, for the entire amount sought through the criminal forfeiture (over $180 million). If that is the case, then is there really a need for the legislation to reach Lay's assets?
The government's position is that the abatement doctrine is a common law principle, and opinions discussing it certainly seem to reflect that it is an exercise of the court's equitable power. But could there be a constitutional basis for it? The right to appeal is not guaranteed by the Constitution, but if there is a statutory appeal as of right then due process and equal protection require that all defendants be treated similarly. Because the criminal conviction cannot be challenged after death, would it be a denial of due process if the conviction is not abated? Along the same lines, a defendant has a right to consult counsel, but of course that is denied in the "special civil asset forfeiture" incorporated in the legislation because the defendant is -- of course -- dead and cannot be consulted even though the conviction effectively continues. It may not be as simple as the Department envisions to just roll back the clock in this case.
And even if it can put the criminal forfeiture in the way-back machine, is it worth the effort, especially when it is certainly an open question whether Congress will choose to address the issue during its remaining few weeks right before an election when most of the federal budget has not been passed? (ph)