June 4, 2006
Evaluating Enron Related Prosecutions
A fascinating story in the NY Times here titled, "The Enron Case That Almost Wasn't" sums up the prosecution case against Ken Lay - "Mr. Lay was a liar." Larry Ribstein on Ideoblog raises some important questions about the government approach here. The Conglomerate Blog here, held an online symposium on Enron that covered significant issues raised by this trial.
The question now is whether being a liar should be a crime, and how is the government able to prosecute this type of activity under existing federal statutes. The answer is that federal statutes are written broadly to allow for prosecutions of ever-expanding forms of criminality. (see Brian Walsh's entry on Overcriminalized.Com here) Further, the vast number of criminal statutes in the federal code, allow for prosecutors to pick and choose which crimes they want to proceed with. But would this conduct need to be prosecuted if the statutes were clear, if there were a limited number of federal statutes, and if people knew what they were doing was wrong? (see post here on overcriminalization).
Jamie Olis Case Up for Hearing This Week
This coming week may shed more light on the Jamie Olis case, as experts will present evidence on what the court should use as the loss factor in determining the sentence. Olis, was employed at Dynergy. He was convicted of mail fraud, wire fraud, securities fraud, and conspiracy. His initial sentence of over 24 years was remanded by the Fifth Circuit (Judge Edith Jones authoring the opinion) as the trial court’s approach to the loss calculation failed to "take into account the impact of extrinsic factors on Dynergy’s stock price decline." (see some prior posts here and here)
Olis was only in his third year working at Dynergy. His boss, who testified against him, received a sentence of fifteen months in return for a plea that included cooperation. A co-worker, also indicted, received a sentence of one month.
In a post- Booker world this case is a perfect opportunity for the judge to go beyond numerical calculations. Should individuals be punished so greatly just because they assert their constitutional right to a jury trial? Should a sentence be so heavily dominated by a numerical calculation that bears little resemblance to the actual culpability of the individual? Professor Doug Berman has some excellent comments on this case here comparing this case with the loss presented in another white collar case. Here is another white collar case that should also be considered.