Ending Legal Impoverishment

In a previous post, I wrote about the shameful, but ubiquitous, use of impoverishment by the federal government in prosecuting people. It is one of several obviously harmful practices that have taken over the system of criminal justice in the USA. Let’s put this into perspective.

The U.S. federal government is the most powerful entity in the world. The resources of any individual are negligible compared to those of the federal government. In America, we should be most protective of our individual liberties when facing the situation of the federal government wielding its enormous powers against a private citizen.

So let’s start with the basic concept that, in the USA, an accused person is presumed innocent until proved guilty. Therefore, an accusation (meaning an indictment in criminal cases) is not proof of anything — it is merely an accusation, nothing more. An indicted person is completely innocent and should be so treated until the Feds prove their accusations at trial. An accused person should not be punished prior to trial or have his ability to defend himself impeded in any way.

So, here is my proposal:

1. Abolish the ability of the federal government to seize the assets of an accused person. An accusation is not proof of anything — the accused person is innocent — his assets belong to him unless/until the Feds win a conviction. An alternative solution, if it is impossible to achieve the complete elimination of asset seizure, is to make the Feds pay a penalty for seizure of assets when the defendant is acquitted — the penalty must be large — I propose that the Feds reimburse the acquitted defendant by paying a penalty equal to at least four times the value of the improperly seized assets.

2. Make the accuser, the federal government, bear the full cost of the defendant’s legal costs as they are incurred. Only if the Feds win a conviction against the defendant must the defendant reimburse the Feds for the legal costs of his defense, and then, only that portion of the costs associated with the convicted counts — a defendant does not reimburse the Feds for the legal costs associated with acquitted or hung counts. In addition, the government must pay a penalty on counts that are acquitted — again, the penalty must be large — I propose that the Feds pay the defendant at least four times the legal expenses associated with the defense against the acquitted counts. If a defendant is exonerated on all counts, I would add an additional penalty of substantial damages for false prosecution.

I am not proposing these steps for private suits (although that situation needs reform also) — I am dealing here only with the situation of the state prosecuting private citizens — this is the scenario in which we need to be most aggressive in defending the rights of the individual. The implementation of these reforms would begin to re-introduce balance into a criminal justice system that is now stacked in favor of federal prosecutors:

* It would finally begin to penalize the ubiquitous practice of over-charging in which the Feds heap counts on defendants at will in order to increase their plea bargaining and trial advantages.
* It would mean that Feds could not seize assets to deprive defendants of the ability to hire good lawyers and to rebut charges.
* It would decrease the overwhelming leverage that Feds have in coercing plea deals.
* It would encourage defendants to exercise their Constitutional right to defend themselves at trial rather than yield to plea bargaining pressure.
* It would mean that all defendants have the financial means to defend themselves and to go to trial.
* It would mean that defendants who win would not be financially impoverished by the false indictments.
* It would encourage prosecutors to be responsible and conscientious in their prosecution decisions.

No, I am not optimistic that these reforms will be adopted any time soon. We seem to live in a time of acceptance (even broad encouragement) of intrusive government. But I can always press for change and hope that the act of highlighting solutions, along with the problems, will help clarify the issues so that more people become informed and involved in pushing reforms.

Legal Impoverishment

The impoverishment of defendants is a basic strategy of federal prosecutors. Prosecutors use impoverishment as a means to cripple the ability of an accused person to defend himself. This, of course, gives the prosecutors a huge built-in advantage over the defendant in plea bargaining and in trial preparation.

First, the prosecutors seize as much of a defendant’s assets as they can get away with, including the defendant’s life savings — this is money not available to the defendant to fund his defense. Then, they force a defendant into the incredibly expensive task of trying to defend himself against the wealthiest entity in the world, the U.S. federal government. As one Enron defendant told me:

“Fighting the federal government cannot be done halfway. To have any chance at all of defending yourself, you must decide that you are willing to put everything on the line, including everything you have earned over your lifetime. You must do this because you know you are fighting an organization without a conscience which wants only to win, and it will do anything it can get away with to beat you. Guilt or innocence, right or wrong, justice, the facts … these are of no concern to federal prosecutors after an indictment has been brought — they only want your scalp.”

A defendant knows that, if he actually exercises his Constitutional right to defend himself, he is likely to lose most or all of his life savings — this is true whether the defendant wins or loses at trial or in the appeals court. As I wrote in an earlier post, “being a prosecutor means never having to say you’re sorry.”

Is it any wonder that trial by jury is so rare? It should be a national embarrassment that 97% of all federal cases pursued by the Department of Justice (DOJ) last year were resolved by guilty pleas, not by trials. In the American system of justice, a defendant must be bold, almost to the point of rashness, to try to defend himself at trial — just getting to trial is likely to impoverish his family. A plea bargain deal is simply good economics for most defendants — pleading guilty of some crime is usually the best practical decision for a defendant, even when he is innocent.

Let me give you three examples of the Feds’ use of impoverishment in the Enron Broadband Services (EBS) cases.

Michael Krautz, an accounting executive at EBS, was acquitted of all charges after two trials. Michael not only lost his savings, but he also went into debt defending himself — and when he was exonerated, he was still in debt.

Scott Yeager, a marketing executive, won acquittals at trial and then was re-indicted by the Feds and threatened with a second trial. Scott eventually had all charges dismissed based on an appeals victory at the Supreme Court. However, even in “victory”, Scott could not recover his life savings, most of which were lost in his defense.

Rex Shelby, a software engineering executive, also won acquittals at trial and then was re-indicted by the Feds and threatened with a second trial. Rex was ready and eager to go to trial, but exhausted all his life savings and could not afford the expense of a second trial. He entered into an obviously contrived plea deal — the deal itself was favorable to Rex. However, the tragedy of this example is that Rex wanted to go to trial to exonerate himself, but had been so impoverished by the Feds that he could not afford to do so.

These EBS examples are not rare — just about any attorney can give you lots of additional examples. Clearly, the strategy of impoverishment has served the federal government well, but has done so at the expense of justice and fairness.

Impoverishment is an extra-legal practice that needs to end. I will follow this post up with another post in which I propose some reforms for ending the practice of impoverishment.

Cop Robs Bank

FBI announced today the arrest of a 23-year veteran of the Conroe Police Department on charges he robbed the First Bank of Conroe in August of 2008.

Sgt. Mike Tindall was listening to his police monitor and he robbed the very bank where he worked an off duty security assignment. He was off duty when the robbery took place. (Though I think the union will still claim that since he was there, he was workin’, damnit.)

The FBI said Tindall wore a motorcycle helment when he took over $28,000 from the bank tellers.

He faces up to 20 years in prison and a quarter million dollar fine if convicted. Not to mention the stigma of being a total jagoff.

The Perp Walk

One of my favorite subjects, the legitimacy of the perp walk, was discussed at WSJ Law Blog today. They have a whole gallery of Wall Street perp walks.

I believe perp walks are extremely prejudicial, they deprive suspects of due process by mistaking the guilty for the innocent, and they seem a bit like gloating. We can never stop prosecutors from boasting and strutting for the cams, but I think there should be a little more respect for the process.

At one time, they might have been useful. In mob cases of yore, the prosecutors would drag the wiseguys out before the cameras to show the ones who weren’t caught that they were about to be. It was a fear tactic, a way to send a message to everyone who ever did business with the suspect, which in today’s world just doesn’t translate. Maybe now that the Gitmo detainees are being offered rights to the American court room, we’ll see more terrorist perpwalks – though I tend to doubt it.  There is simply too much respect for terrorists by the media covering these things.  They’d much rather photograph Jeff Skilling or Martha Stewart at their moment of indignity.

But what is the purpose of the perp walk for corporate titans who may or may not have done something illegal? There is no “secret signal” being sent to any of the other hypothetical bad guys; it’s purely showbiz.

I realize that both prosecutors and defense teams will use any advantage they have once in the court room, and I have no problem with that – but before the trial, when these people haven’t even been formally charged with anything, they deserve the assumption of innocence. If we’re giving that to Khalid Sheikh Mohammed now, shouldn’t we at least give it to our own guys? Guys who work in skyscrapers instead of caves? Guys who build wealth, not destroy it? Aren’t they worth a little benefit of the doubt, as they’re constitutionally guaranteed?

Dial back the hubris, Prosecutors.

Ex-Merrill Banker Asks U.S. to Probe Enron Prosecutor (Part Two)

A commenter on a previous post about former Merrill Lynch executive James A. Brown’s request of the U.S. Senate, Justice Department and state bar authorities to investigate his claims of misconduct by a federal prosecutor pointed out a Bloomberg article with much more detail. I am so glad this was brought to my attention because the Bloomberg article by Laurel Brubaker Calkins is much more detailed and to my mind, much more honest than Kristen Hays’ Chronicle article that I originally quoted. Kristen Hays of the Houston Chronicle has a storied past regarding Enron articles. In short, she doesn’t seem to believe anything that doesn’t come out of the mouths of prosecutors. I recall exactly one Enron article that was neutral to slightly in favor of Jeff Skilling and that was on the eve of his appeal, April 2, 2008. It was so remarkably neutral that I even titled my post about it Chronicle Publishes Fair Article About Jeff Skilling. It was that unusual.

Laurel’s coverage, in contrast, has struck me as ethical and balanced, with no particular agenda. This Bloomberg article is generally true to form (there was one line that made me roll my eyes but whatareyagonnado?) She’s not pro-Enron, but she does give the facts and leaves the editorializing out, which is really all I can ask of a reporter.

In any case, do yourself a favor and read the article for fuller coverage of Brown’s complaint. The juiciest part, to my mind, was Brown’s attorney saying more complaints are coming. I am crossing my fingers: Andrew Weissman, please let Andrew Weissman in the mix. And Berkowitz. Oh GOD IN HEAVEN how I would love to see Sean Berkowitz do a perp walk. If not for Jeff Skilling and Dr. Lay, then for James A. Brown, who is every bit as deserving.

Deadline For Government’s Reply To Skilling

I am on the edge of my seat waiting to see the government’s reply to Jeff Skilling’s Supplemental Brief, which, of course, contained unsealed Fastow Notes excerpts and effectively proved the prosecution to be as corrupt as a Nevada gaming commissioner.   Today – Tuesday, March 25 – is the deadline for the government to file.   I expect them to minimize every accusation, distort the record, and basically pretend they aren’t in a kamikaze death spiral.

My prediction is that they claim, at least once and probably twenty times, that word omissions, alterations, additions vis a vis the Fastow notes were “not material.”  I loved watching them try to bolster Fastow, the admitted liar/wife-imprisoning/money-skimming/Enron screwing/selfish bastard as a reformed good guy on the stand.  Now, they have to repeat the act, but this time with their fingerprints all over his corruption.  They put him on the stand knowing he was lying (and from the looks of it, actually encouraging it).   How on earth will they defend this conviction?

Oh I can’t wait!  I must get my hands on it.  Hurry hurry hurry, you government bastages, and file the damn thing.

Nacchio Conviction Overturned

In the first of at least two cases that will unfold in the next two weeks,
a US appeals court on Monday overturned the conviction of the former chief of imploded telecoms giant Qwest Joseph Nacchio and sent the case back to court.

The 10th Circuit Court of Appeals in Denver ruled that the exclusion of key testimony from an expert defense witness during Nacchio’s hearing last year had resulted in an unfair trial.

That’s all I need to hear. Well, I know the 5th Circuit isn’t the 10th, and granted, I do not follow the Qwest case the way I do the Enron case, but it is appearing that prosecutor’s zest for getting white collar baddies might have resulted in sloppy casework.

Shocking, I know.  

Nevertheless, the government will retry Nacchio.   Some sources I have spoken to say this will likely be the case with Skilling.   Though of course it is agonizing for the family and for Jeff himself, I would much rather the government try him again in a fair, open, just trial than for him to suffer with the one he got. Ultimately, of course, the hope is that the court will recognize that Jeff’s opportunity for a fair trial has been irrevocably lost, and the government will dismiss with prejudice, sending Skilling home where he belongs.  Maybe with a cookie for his trouble.

Nacchio was one of many executives who made questionable decisions at the expense of companies, boards and employees during the 1990s boom.

Enron boss Jeffrey Skilling pulled a 24-year prison term last year, and WorldCom chief Bernard Ebbers was handed a 25-year sentence.

And Skilling will be walking among the normals again the first week of April. The tide is finally beginning to turn.