Sunday, September 24, 2006

Fastow to Be Sentenced This Week

Both Andrew and Lea Fastow were indicted.  Lea Fastow, the wife of the Enron CFO, plead guilty and served a one year term of imprisonment on a tax charge. (see here).  Andy Fastow stayed free during this time, taking care of the children and testifying for the government in the Lay/Skilling trial. (see here). 

Now Andrew Fastow will be sentenced.  He will receive a sentence of ten years pursuant to an agreement, although he will have to first listen to the sad testimony of victims who suffered as a result of his conduct as CFO at Enron. (see Houston Chronicle here). His lawyers will ask for leniency premised on him being a "changed" man (see here)

Several issues deserve mention here -

  • Is it fair for Fastow to receive this low a sentence all because he cooperated with the government? This is yet another case of the government providing an enormous benefit to someone who cooperates, while demanding a higher sentence for those who decide to go to trial. Selecting to use the constitutional right of a jury trial comes with the enormous risk of a significantly greater sentence if the jury returns a verdict of "guilty."
  • Should the government have given the plea for cooperation to this person, or did they select the wrong person in using their discretion? The government discretion to provide a "deal" to whoever they decide they would like, often produces inequities. In this case one has to ask whether Fastow was more culpable than Jeff Skilling or the now deceased Ken Lay. 
  • Is putting Fastow in prison the correct way to punish a white collar offender?  We did not fear Andrew Fastow while he was free pending his sentencing.  The Houston Chronicle reports on his admirable deeds and recognition for being a good father. (see here). This is a no-win situation.  As with so many white collar cases, the individual is not someone we fear once their ability to commit future white collar offenses is removed.  The sentence is for retribution, and incorporating the victim statements at the hearing just emphasizes this point. But many will suffer by sending Andrew Fastow to prison, most notably his children.  Is prison really the appropriate way to punish this individual, or should the sentence consider the unique characteristics and qualifications of the individual and punish the person with a sentence that will maximize those skills for the betterment of society?

(esp)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2006/09/fastow_to_be_se.html

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Comments

Frankly, the punishment for a CFO that cooks the books and steals from stockholders and employees, destroying lives and jobs, bankrupting many of them, and destroying their pensions should be death.

Posted by: jerry | Sep 24, 2006 10:32:21 PM

I think Brad DeLong answers these inane questions very capably at http://delong.typepad.com/sdj/2006/09/some_stupid_que.html

Posted by: Mark | Sep 25, 2006 8:33:18 AM

http://delong.typepad.com/sdj/2006/09/some_stupid_que.html

Posted by: Barry | Sep 25, 2006 10:33:00 AM

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