Saturday, December 8, 2007
Lord Conrad Black and his three codefendants, Peter Atkinson, Jack Boultbee, and Mark Kipnis, are scheduled to be sentenced by U.S. District Judge Amy St. Eve on December 10. An earlier post (here) discussed the contentions of the U.S. Attorney and the defendants over various Sentencing Guidelines issues, and the Judge has a range of issues to decide that will affect the sentence.
Unlike a movie or play, which builds to a climax, the sentencing of the four former Hollinger International executives goes in reverse order of public interest and corporate authority. Lord Black's sentencing is scheduled for 10:00 a.m. (CST), then comes Atkinson at 1:00, Boultbee at 2:30, and finally Kipnis at 3:30. It looks like Judge St. Eve has set aside two hours for Black, which may not be enough time given the number of issues the court will have to resolve. If you're looking for a Playbill for the proceedings, here's my run-down of the major issues that will affect the sentencing:
- Which Set of Guidelines: First up will be which version of the Sentencing Guidelines the Judge applies. The presentence report (PSR) recommends the 2007 edition for Black, which will trigger a substantially higher sentence than the 2000 version that is recommended for the other three defendants. The basis for recommending the current edition for Black is his conviction for obstruction of justice that occurred in 2005 when he was caught on camera removing files from his Toronto office. If Judge St. Eve opts for the PSR recommendation, and I think she will, then Lord Black is looking at a substantial prison term. For the other three defendants, the decision on this issue in Black's sentencing will be the tip-off for their sentencings. I expect Judge St. Eve to follow most of the recommendations in the PSR, so if she follows it for Black there's a good chance she will do the same for the other three.
- What Loss Amount: The loss figure applied to the crime is the primary driver of the sentence, and the PSR recommends $5.5 million as the applicable amount. The government wants $32 million, while the defendants want much less, to a low of $15,000 offered by Atkinson. The decision on which Guidelines to use plays into this issue because the 2007 version increases the sentence by four more levels with a $5 million loss than the 2000 Guidelines, resulting in a sentencing range that is about 50% greater. If Judge St. Eve opts for a figure other than that recommended in the PSR, that will tell you which direction the sentences are headed -- the higher the loss, the longer the sentence.
- Public Company Executive. After adoption of the Sarbanes-Oxley Act in 2002, the Sentencing Commission added a provision to crack down on senior corporate executives who engage in misconduct by adding a four-level enhancement for officers convicted of crimes in their role at the company. The PSR recommends against this enhancement for Black -- and it is inapplicable to the other three if the 2000 Guidelines are used -- because he did not misuse his position. This is the one issue on which I think Judge St. Eve might well reject the PSR's position because the enhancement is fairly clear and, based on the parties' briefs, the Probation Office may not have interpreted the provision correctly. If the four-level enhancement is added to Black's Guidelines calculation, then he's looking at a sentence 200% higher than he would receive under the 2000 Guidelines when the loss enhancement is taken into account. Add in the obstruction of justice enhancement recommended in the PSR, and his sentencing range is 97-121 months.
- Departures: The Sentencing Guidelines are advisory only, not mandatory, but Judge St. Eve is a former Assistant U.S. Attorney and unlikely to stray far from them. Once the Guidelines analysis is complete, then the Judge will have to address grounds for departure offered by the defendants. I doubt she will adjust the sentences significantly from the Guidelines range, but she could grant a small downward adjustment for each as a means of establishing the "reasonableness" of the prison terms, the requirement for all federal court sentences these days. This is a means but "bullet-proofing" the sentence.
- Bail Pending Appeal. After announcing of the sentence for each defendant, the court will have to decide on bail pending appeal. The presumption in the federal statute, 18 U.S.C. Sec. 3143, is that the defendant starts the prison term unless there is a substantial basis for an appeal that would result in overturning the conviction -- there's no issue that any of these men pose a threat to the community that requires incarceration immediately. It is really a crapshoot in white collar crime cases these days trying to figure out whether a judge will allow a defendant to remain out on bail until the conclusion of the appeal. While I think there's about a 1% chance of the defendants being taken into custody immediately, as happened to Richard Scrushy and Don Siegelman in Alabama, I suspect Judge St. Eve will not grant bail pending appeal and instead will give them a reporting date four to six weeks out -- after the holidays, to be sure. I base this on her opinion rejecting the defendants' motion for a post-verdict judgment of acquittal, which reads like a decision finding an inadequate basis for believing the court of appeals will overturn the verdicts. That is not a strong feeling, but more of a hunch. Even if Judge St. Eve denies bail, the defendants can appeal that decision immediately to the Seventh Circuit under Federal Rule of Appellate Procedure 9, which they are sure to do if their request is denied. While those motions are difficult to win, it is not impossible, as demonstrated by the Tenth Circuit's decision to order bail for former Qwest CEO Joseph Nacchio after the trial judge denied his motion.
- Where Will They Go to Prison. If Judge St. Eve denies bail pending appeal, then the Bureau of Prisons will determine where they will start to serve their prison terms. The defendants can request the court to recommend a specific facility, which Judge St. Eve would probably do, but the final decision is up to the BOP and it is even more of a crapshoot trying to figure out where they will end up. The BOP tries to place prisoners within 500 miles of their residence, but Jeffrey Skilling is enjoying the cold weather in the FCI in Waseca, Minnesota, which is not exactly a short hop from Houston. Because they are not U.S. citizens, the BOP rules require that Black, Atkinson, and Boultbee be assigned to a low-security facility, which would likely preclude an initial assignment to a prison camp.
- Can a Prisoner Be Transferred to Another Country to Serve The Term. As Canadian citizens, Atkinson and Boultbee could take advantage of the prisoner transfer treaty between the U.S. and Canada and request that their term be served there. Lord Black is a British citizen, having given up his Canadian citizenship to become a Lord, so he is not eligible under the U.S.-Canada treaty. He could seek to be transferred to the U.K., or under an international convention that both Canada and the U.S. have signed, he could seek a transfer to Canada as a "national" of that country, even though his citizenship is British. It all depends on how Canada defines who is a "national," a point on which I'm ignorant, and whether that country would be willing to accept him. This is all a bit premature, however, because the treaties require that the conviction be "final" and so long as an appeal is pending in the case I don't think there is the necessary finality.
I hope I got everything right in here, and if you see anything mistaken, aside from my judgment which is usually flawed, please let me know. Now, for the final question: What sentence will Black and the others receive? There's enough uncertainty that I can't make a firm prediction, but I can give an over/under based on two scenarios. If Judge St. Eve follows the PSR on the Guidelines version to apply to each, I would put the over/under on Lord Black at 100 months, with 45 months for Atkinson and Boultbee, and 36 months for Kipnis. If Lord Black is sentenced under the 2000 version, then the over/under for him would be 50 months. We shall see. (ph