Wednesday, September 3, 2008

Response to Frank Bowman

Guest Blogger - Stephanie Martz - Senior Director, White Collar Crime Policy, National Association of Criminal Defense Lawyers (NACDL)

Professor Frank Bowman’s piece in The Legal Times ("Somebody Has to Cry Foul," August 18, 2008) is geared towards a singular thesis – that "the decline of civil regulation makes open-ended criminal statutes necessary." As a philosophical matter, I do not think that open-ended criminal statutes are ever a good idea. They fail to put American citizens on notice that certain behaviors – especially in the white collar area – are in fact against the law. We are supposed to be particularly concerned about this in the criminal, as opposed to civil or regulatory, context because of all of the consequences that are uniquely attendant to criminal prosecution, such as the deprivation of liberty and the lifelong deprivation of civil rights, the social stigma associated with conviction and incarceration, and the singular moral force and deterrent effect of the criminal law. This is why we have the "rule of lenity," in which ambiguous criminal statutes are supposed to be strictly construed by courts. As Justice Scalia wrote just this term in United States v. Santos:

Under a long line of cases, the tie must go to the defendant. The rule of lenity requires ambiguous criminal statutes to be interpreted in favor of the defendants subjected to them. This venerable rule not only vindicates the fundamental principle that no citizen should be held accountable for a violation of a statute whose commands are uncertain, or subjected to punishment that is not clearly prescribed.

How does this principle comport with Professor Bowman’s praise for "flexible" and "open-ended" criminal laws? It doesn’t, I’d venture. Let’s take honest services mail fraud as a prime example of a flexible and open-ended criminal law. This law prohibits schemes or artifices to defraud another of your "honest services" – basically, it criminalizes deceit. As numerous courts and commentators have observed, this could conceivably turn taking home a couple of reems of paper from your office into a federal felony. The statute has no built-in limits on how it can be used, and courts have struggled to come up with a coherent set of them. At base, it’s unconstitutional for Congress to permit "a standardless sweep [that] allows policemen, prosecutors, and juries to pursue their personal predlictions" (Smith v. Goguen, 415 U.S. 566, 574 (1974). Professor Bowman seems comfortable with the standardless sweep, as long as it’s in the name of filling in for absentee civil regulators.

Indeed, Professor Bowman seems willing to elide the fundamental point about the due process and notice requirements of criminal law for a hodgepodge of pragmatic reasons, which can all be filed under the rubric of ‘our last worst hope.’ (My words, not his.) "Ideally," he writes, "most of this sort of [mis]behavior would be deterred or dealt with by public and private civil regulatory mechanisms, but those mechanisms have conspicuously atrophied over the past several decades." He argues that "textual flexibility" and "broad prosecutorial discretion" are necessary because civil regulatory bodies "cannot keep pace with the rapid evolution of modern business and finance." Professor Bowman makes no case, however, for why prosecutors are any better at sussing out complicated and often highly technical misconduct than the expert regulators. In fact, criminal prosecutors are far less likely to know the industry, the accounting rules, the compensation regimes, and all of the other details that make climbing the learning curve very difficult to do in each new case. He not-so-subtly accuses civil regulatory officials of capture—calling federal prosecutors "visitors from the normal world who apply ordinary understandings of right and wrong to what they find." But he declines to acknowledge that the flipside of capture is expertise, ability, and the institutional knowledge and perspective that help to ensure against overly aggressive (or overly lenient) enforcement decisions. The "commonsense judgments of prosecutors" that Professor Bowman extols are not, put simply, universally experienced by potential criminal defendants.

In order for us to engage in a more intelligent discussion of the pragmatic aspects of civil versus criminal enforcement of business crimes, it would be helpful if we were working with a complete and illustrative universe of enforcement statistics. While Professor Bowman refers to the frequently cited fact that white collar enforcement is slightly down these days, the Federal Justice Statistics Resource Center’s information shows that the number of federal mail, wire, securities, and related crimes that have been charged each year has remained fairly steady in the last ten years. (See this blog’s "White Collar Crime Prosecutions - A Long Way to Go to Hit the Levels of 5 Years Ago, May 14, 2008, referring to TRAC statistics on white collar crime enforcement.)

On a concluding note,I do think that his thesis should serve as a cautionary tale to those who would rail against the civil regulatory state: In the absence of civil enforcement, criminal enforcement will undoubtedly, unequivocally step into the breach. It’s a zero-sum game for American business.


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Reflections upon empirical studies on statistics of criminal acts, White Collar or otherwise, are at best, always biased. Being done the parties having a vested interest in the reporting.

An independent Statistical Committee needs to be created. Too much is at stake with sophisticative forum endeavors (Criminal, Civil and Prosecutorial) - sitting idle only will make matters worse for either agenda(s).

We most certainly take Joy in Professor Bowman's Title - Somebody has to cry foul.

We have been crying foul for years, (mostly to deaf, apathetic or disheartened ears) - but the foundational premise is sound.

Crying foul (not sitting idle) is where change Begins!

Posted by: Laser Haas | Sep 3, 2008 9:42:58 AM

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