Too Big to Prosecute — DOJ Gives Giant Corporations a Pass

August 18, 2017
Submitted by: Love Knowledge
Category: Justice

The post Too Big to Prosecute — DOJ Gives Giant Corporations a Pass appeared first on WhoWhatWhy.

The Justice Department is often zealous, sometimes to the point of recklessness, in prosecuting street crime and drug offenses. But it has been dilatory and feckless — our podcast guest this week calls it “chickenshit” — in prosecuting white collar criminals, many of whom helped to bring down the US economy in 2008.

Once, not that long ago, the government prosecuted the likes of Michael Milken and executives of Enron, Adelphia and Worldcom. It may have been the golden age of white collar prosecution.

Today, executives at Wells Fargo, Goldman Sachs, and so many others that played roles in precipitating the 2008/2009 crash, have escaped the long arm of the law.

What happened? What’s changed? In part, it was a backlash to the Enron era. Suddenly, defending executives became an increasingly lucrative practice at elite law firms.

This created a revolving door between the Department of Justice and “big law” — with the result that prosecutors and defense attorneys on opposite sides of the table were often the same people wearing different hats.

In a story that involves the likes of James Comey, Preet Bharara, Sally Yates, and Eric Holder, this week’s WhoWhatWhy guest, journalist Jesse Eisinger, the author of “The Chickenshit Club: Why the Justice Department Fails to Prosecute Executives,” tells Jeff Schechtman that it was Comey himself who said that federal prosecutors who had never lost a case and shied away from bringing hard, complex cases, were obviously “chickenshit.”

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Full Text Transcript:

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Jeff Schechtman:	Welcome to Radio WhoWhatWhy, I’m Jeff Schechtman. Years ago you may remember that the presidential candidate and former US Senator John Edwards spoke of two Americas — one poor and one rich and powerful. The same might very well be said of America’s justice system — one which is zealous to the point of recklessness in prosecuting street crime and drug offenses; and the other that is benign and feckless in prosecuting the white collar crimes of many that have deliberately and criminally wrecked our economy and hurt real people. But this hasn’t always been the case, where once, not that long ago, the US prosecuted the likes of Mike Milken, the executives of Enron and Adelphia and WorldCom.
	Today, executives at Wells Fargo or Goldman Sachs or so many that clearly were responsible for the potential criminal acts that caused the 2008/2009 crash have escaped the long arm of the law. Why is this the case? What happened? What’s changed? And are the same forces that have given us our economy of two Americas also been responsible for two justice systems? We’re going to talk about this today with my guest, Jesse Eisinger. He’s a Pulitzer prize winning senior reporter at ProPublica. His work has appeared in The New York Times, The Atlantic, and The Washington Post. He was previously the Wall Street editor of Conde Nast Portfolio and a columnist for The Wall Street Journal. It is my pleasure to welcome Jesse Eisinger here to talk about his book “The Chickenshit Club: Why the Justice Department Fails to Prosecute Executives“. Jesse, thanks so much for joining us.
Jesse Eisinger:	Thanks for having me.
Jeff Schechtman:	The title of this book actually comes from a speech that Jim Comey gave. Tell us a little bit about that ’cause it really does set this up.
Jesse Eisinger:	Right, so your listeners will know Jim Comey from being recently fired as the FBI Director by Donald Trump, but 15 years ago he became the US Attorney in the Southern District of New York. The Southern District of New York, you have to understand, is the premiere office of the Department of Justice. It is where corporate crime is prosecuted the most — especially securities crime. He gathered all the criminal prosecutors together and these guys are really the best of the best — best schools, best clerkships — they think of themselves as the best, too. He gives them a speech and he says, “How many of you have never lost a case?” And a bunch of hands shoot up ’cause they’re brimming with pride at their records.
	He looks around the room and he says, “Well, me and my buddies have a name for you guys. You are the Chickenshit Club,” and the hands go back down. They’re feeling a little sheepish and he goes on to explain, “Well, you’re not about winning. That’s not your job. Your job is to take on ambitious cases and the most powerful actors and when you do that, you are doing justice. Sometimes you will lose, but your job is to do justice.”
Jeff Schechtman:	And was it a reality of the time that in fact there was this sense of wanting to win more than doing justice?
Jesse Eisinger:	Well, it always plagues the Department of Justice. They always want to win and you win by racking up cases against low-hanging fruit and people can’t defend themselves very easily. So, you know, what I say in the book is that there’s never been a golden age where if you were rich and powerful and breaking the law you were sure to go to prison, and you had no resources or political influence to bring to bear, but there have been silver ages where we used to do a little bit better, occasionally, and you mentioned a couple of instances with Milken and after Enron. Now we are in the bronze age or the stone age, where we just do not know how to do this anymore. We’ve lost the will and ability to prosecute top corporate executives.
Jeff Schechtman:	One of the things you talk about is that there’s been an almost cyclical nature to this. That after these prosecutions, particularly the Enron prosecution, there was, among the white collar bar in particular, a kind of push back to the government for over-prosecuting some of these cases.
Jesse Eisinger:	Exactly. That’s why the Justice Department has lost their will and ability. There was an enormous lobbying effort and pushback from corporations and the white collar bar in Washington, DC over the last decade and a half. The result of it is that they stripped prosecutors of tools that they used to prosecute corporate crime. They won in courts, so they used a legal strategy to challenge and appeal a lot of decisions. The appellate courts had been very friendly to them. They succeeded in changing the culture and the mindset of the Department of Justice.

Related front page panorama photo credit: Adapted by WhoWhatWhy from seal (DoJ / Wikimedia) and Spirit of Justice (Carol M. Highsmith / Library of Congress).

Last modified on Monday, 21 August 2017 16:37