Gretchen Morgenson of the New York Times reports on an investigation into the Department of Justice's -- and regulatory agencies' -- practice of letting errant banks and corporations defer prosection.
Federal prosecutors officially adopted new guidelines about charging corporations with crimes — a softer approach that, longtime white-collar lawyers and former federal prosecutors say, helps explain the dearth of criminal cases despite a raft of inquiries into the financial crisis.
Though little noticed outside legal circles, the guidelines were welcomed by firms representing banks. The Justice Department’s directive, involving a process known as deferred prosecutions, signaled “an important step away from the more aggressive prosecutorial practices seen in some cases under their predecessors,” Sullivan & Cromwell, a prominent Wall Street law firm, told clients in a memo that September.
The guidelines left open a possibility other than guilty or not guilty, giving leniency often if companies investigated and reported their own wrongdoing. In return, the government could enter into agreements to delay or cancel the prosecution if the companies promised to change their behavior.
But this approach, critics maintain, runs the risk of letting companies off too easily.
That's not an approach that takes into account, as one critic points out, that some of these companies are run -- deliberately -- as criminal enterprises.
Intended to make the most of the government’s limited investigative resources, the government’s cooperation with corporations and industry groups can work well and save money when business hums along as usual. But some veterans of government prosecutions question such collaboration in financial crisis cases, and contend they should have been pursued more aggressively.
“Traditionally, a bank would tell the Department of Justice when an employee engaged in crimes, but what do you do when the bank itself is run by a criminal enterprise?” said Solomon L. Wisenberg, former chief of the financial institutions fraud unit for the United States attorney in the Western District of Texas in the early 1990s. “You have to be able to investigate without just waiting for the bank to give you the referral. The people running the institutions are not going to come to the D.O.J. and tell them about themselves.”
Nor does this approach allay suspicions that, although corporations were given equal rights with "persons" some hundred-plus years ago, they have come to enjoy the status of super-persons with super-rights and super-privileges.
Persons don't enjoy deferred prosecutions. Sometimes they don't even enjoy real legal representation. Last night, the state of Texas -- with the cooperation of Congress and the Supreme Court and over the objections of international courts and the White House -- executed a man who had not been allowed full and proper legal representation.
In a 5-to-4 decision that split along ideological lines, the Supreme Court on Thursday evening rebuffed a request from the Obama administration that it stay the execution of a Mexican citizen on death row in Texas. The inmate, Humberto Leal Garcia Jr., was executed about an hour later. ...
...The administration had asked the court to delay the execution so that Congress might consider recently introduced legislation that would provide fresh hearings on whether the rights of Mr. Leal and about 50 other Mexican citizens on death row in the United States had been violated.
In 2004, the International Court of Justice in The Hague found that the inmates had been denied their rights under the Vienna Convention. The convention requires that foreigners detained abroad be told they may contact consular officials.
In 2008, the Supreme Court acknowledged that the international court’s ruling was binding but said that the president acting alone could not compel states to comply with it. Congress also had to act, the court said.
On Thursday, in an unsigned majority opinion, the Supreme Court said that Congress had had plenty of time to act and that the court would not now “prohibit a state from carrying out a lawful judgment in light of unenacted legislation.” ...NYT
Had Mr. Leal been part of a scheme to defraud countless home buyers, he wouldn't even be in jail. The institutions responsible for bringing the entire financial system to its knees, for getting people tossed out of their homes, and for our current unemployment numbers are in a special category.
The process, in the end, is cloaked, some critics say. The Justice Department does not disclose any details about its decision-making in specific cases, such as why it did not charge individuals at a company.
“We will not get an explanation of why there haven’t been prosecutions; at best, we will get a reference back to the Department of Justice manual that leaves the discretion to the prosecutors,” said Professor Ramirez of Washburn University. “The legal representatives will argue that since recoveries can be had by using civil measures, even private litigations, there’s no need to bring criminal measures. I disagree with that very much.” ...NYT
Would decent legal representation in Leal's trial have made a difference? Here's an excerpt from an NPR story on the case yesterday that indicates it could well have saved the life of the accused. Just as in the Department of Justice, prosecutors are allowed a free run in Texas.
MONTAGNE: Would better lawyers have made a difference for him, do you think?
GOODWYN: Well, perhaps. I mean trials are unpredictable. In order to be sentenced to death, Texas had to prove not only that Leal killed Audria Salceda, but that he also raped and kidnapped her.
The girl went to a party on San Antonio's south side, she became extremely intoxicated with alcohol, cocaine and marijuana, and a group of men took advantage of her, took her to the backyard and gang-raped her.
Later, when Leal got to the party that night and heard and found out what had happened, witnesses said he became very upset and wanted to take Salceda home. During that ride home, Leal says Salceda became agitated, she wanted out of the car, they struggled on the side of the road, and as he tried to get her back in the car, he pushed her and Leal claimed she fell and hit her head.
Now, prosecutors say Leal kidnapped Salceda from the party with the intention of raping her, and that he killed her by hitting her on the head with a rock or a piece of asphalt.
There's little question Leal killed her, either intentionally or unintentionally. But there was no DNA evidence that he raped her, and the evidence that he kidnapped her appeared even thinner.
And despite witnesses who said that Salceda had been gang-raped at the party, no one else was charged, just Leal.
