Sunday, June 29, 2008

Recent Scholarship

Plea Bargaining's Survival: Financial Crimes Plea Bargaining, a Continued Triumph in a Post-Enron World


LUCIAN E. DERVAN
Affiliation Unknown


Oklahoma Law Review, Vol. 60, No. 3, Fall 2007
Abstract:     
This article examines the war on financial crimes that began after the collapse of Enron in 2001. Although many believed that the reforms implemented following this scandal led to greater prosecutorial focus on financial crimes and longer prison sentences, an analysis of data from 1995 through 2006 reveals that little has actually changed. The statistics demonstrate that the government's focus on financial crimes has not increased and prison sentences for fraud have remained stagnant. How could this be the case? It is this author's hypothesis that although prosecutors could have chosen to use new statutes and amendments to the United States Sentencing Guidelines passed in the wake of Enron to increase prosecutions and sentences, they did not. Instead, prosecutors are using their new tools to encourage defendants to accept plea agreements that include sentences similar to those offered before 2001, while simultaneously threatening to use these same powers to secure astounding sentences if defendants force a trial. The result is that the promises of post-Enron reforms aimed at financial criminals were hollow and served only to reinforce plea bargaining's triumph.

From Boardroom to Courtroom to Newsroom: The Media and the Corporate Governance Scandals

KATHLEEN F. BRICKEY
Washington University School of Law


Journal of Corporation Law, Vol. 33, p. 625, 2008
Washington U. School of Law Working Paper No. 08-05-01

Abstract:     
Enron and its progeny spawned an unprecedented amount of press coverage. To its credit the press has, in the main, acquitted itself well. But media coverage of the ensuing investigations and trials also has raised a host of provocative questions about judgment, professionalism and restraint. Using five high-profile criminal trials arising out of recent corporate fraud scandals as a springboard, this article provides a critical analysis of how media coverage - and defendants' efforts to spin that coverage - can influence the course and outcome of a trial. Some, but not all of the mischief originates with the press. Ever conscious of the potential for media coverage to alter the outcome, defendants in high-profile fraud trials have increasingly orchestrated costly multi-media public relations campaigns that demonize prosecutors, witnesses, and the press to exonerate themselves. The five case studies in the article highlight growing points of tension between the media and the courts and provide a concrete context for exploring the extent to which we should be concerned about the potential for aggressive media coverage and media manipulation to undermine the legitimacy of the courts, to affect the outcome of lengthy criminal trials, to play on the passions of the community from which the jury will be drawn, to subvert journalistic credibility and independence, and to invite more restrictive court-imposed rules governing media coverage of high-profile trials. The article concludes that if the press is to effectively perform its watchdog role, it should be mindful of the need to watch itself. Three appendices at the end of the article provide a media-centric postscript on coverage of the corporate governance scandals.

The Changing Atmospherics of Corporate Crime Sentencing in the Post Sarbanes-Oxley Act Era

PETER J. HENNING
Wayne State University Law School


Journal of Business and Technology Law, Vol. 3, No. 2, March 18, 2008
Wayne State University Law School Research Paper No. 08-09
Abstract:     
The Sarbanes-Oxley Act of 2002 has been viewed as a watershed event in dealing with corporate fraud. In addition to its extensive provisions dealing with internal controls and corporate accounting procedures, the law adopted new crimes and pushed the United States Sentencing Commission to enhance the Federal Sentencing Guidelines provisions for fraud and related offenses. Even before the adoption of the Act, the Commission had increased the potential punishment for white collar crimes by amending the loss table for fraud offenses. These two steps played a key role in the increased sentences imposed on defendants convicted for their role in corporate crimes, such as Bernie Ebbers (twenty-five years) and John Rigas (fifteen years). The Sarbanes-Oxley Act marked a change in the sentencing atmospherics for corporate crime that propelled judges to give out sentences that were unthinkable even five years earlier.

This article considers how the Sarbanes-Oxley Act changed the approach to sentencing of white collar defendants involved in corporate crimes. It uses a hypothetical case to illustrate how sentences under the Guidelines have tripled from what they would have been just a few years earlier. It then looks at the recent Supreme Court decision in Gall v. United States that emphasized the discretion federal judges have even under the Sentencing Guidelines to shape sentences that reflect the individual circumstances of the defendant. The change in sentencing created by the Sarbanes-Oxley Act may well be abating in the new era of discretion fostered by the Supreme Court.

(esp) (posting from Denver, Colorado)

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Comments

An empirical study is required on the issue of how many cases were proffered for investigation, how many were prosecuted, how many were declined and even how many cases were denied investigation personnel.

Does the Public Integrity Section and such units as the Pres Bush Corp Fraud Task Force comply with the protocol to assign a case number after one hour's effort?

Are such "special entities" required to provide the Office of Review and Oversight ("ORO") a case number report as is the standard at the DOJ, FBI or US Trustee's office?

If integrity of our system of justice and judicial process is sacrosanct, what bodies and persons are the overseers of such sine qua non issues?

All things reflect from senior management on down. The reason our Pres is so important documents this well. The current public perception of the system of justice needs a rating review and a Press report to the public at large.

Our systems are only as good as our effort's to keep such pure!

Posted by: Laser Haas | Jun 29, 2008 11:49:02 AM

great post! thanks very much for sharing

Posted by: Anti - crime | Jun 30, 2008 10:51:05 AM

It is fascinating that Professor Brickey has written an article about the impact of media coverage on white collar crime trials -- with significant skepticism of defendants' conduct -- without examining the role of the prosecution in the media circus. The criminal justice system in the United States is an adversarial system, and prosecutors use many strategies to create a public opinion of guilt before trial--calling televised press conferences to announce indictments, using inflammatory terms with the media to create the impression of guilt before trial, presenting one-sided accusations as statements of fact to an unsophsticated public, and regularly leaking information that is helpful to the prosecution. Goodness knows they're not out publicizing the exculpatory evidence they found. We have seen so many high profile examples of professionally and politically motivated prosecutions in recent years that it seems unfair to ignore the prosecutors' role in playing to the media.

Admittedly, the prosecution doesn't need to go to extreme lengths to influence the media, since the media can sell more papers by vilifying corporate executives (yes, even the WSJ) than by critically analyzing the government's accusations against white collar criminals. Certainly most corporate defendants would prefer that the media write and say as little as possible about their situation before the trial. But that is simply not the reality.

There is a tremendous amount at stake for someone accused of a crime and as we've seen (Arthur Anderson, maybe even Jeff Skilling, heaven forbid), just because someone is accused of a crime does not mean that one has been committed --- even where there has been a corporate failure or a financial restatement. Defendants cannot be condemned for defending themselves in the same forum in which the first trial occurs - the media.

Posted by: No Longer Naive | Jun 30, 2008 6:30:10 PM

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