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Post by 2018 on Jul 22, 2017 8:22:56 GMT -5
Jesse Eisinger - The Chickenshi* Club: Why the Justice Department Fails to Prosecute Executives In the 1970s prosecutors began to go after top corporate executives who had committed crimes, even sending some to jail. Yet by 2008, the CEOs of the top banks and Wall Street firms responsible for the Financial Crisis were left alone. What had changed? Eisinger, a Pulitzer Prize-winning senior reporter at ProPublica, finds the answer mainly in the Justice Department, particularly, as his title suggests, with prosecutors too daunted by legal complexities or frightened of failure to do their jobs. He traces this lack of will to a constellation of shifts in both attitudes and power that have made corporate lobbying stronger and weakened government resolve to prosecute big businesses.
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Post by 2018 on Jul 22, 2017 8:25:34 GMT -5
www.ft.com/content/102ffa00-5bf4-11e7-9bc8-8055f264aa8bThe Chickenshi* Club by Jesse Eisinger — what happened to the DoJ?
An investigation into America’s treatment of corporate crime argues that the prosecutors lost their nerve www.ft.com/content/102ffa00-5bf4-11e7-9bc8-8055f264aa8b JUNE 29, 2017 by: David J Lynch In 2002, long before he became the most famous director of the FBI since J Edgar Hoover, James Comey, then the US attorney in Manhattan, issued a warning to the young lawyers on his staff. Do not join “the Chickenshi* Club”, he said, meaning the prosecutors who only brought to trial cases they felt certain to win. Playing it safe, Comey said, was not justice. It was, to use the technical term, chickenshi*.But since that time, according to author Jesse Eisinger, the entire US Department of Justice appears to have ignored Comey’s admonition. The DoJ, which in the 1980s prosecuted more than 1,000 executives and jailed bankers such as Charles Keating over the $150bn savings and loan scandal, failed to imprison any CEOs after the 2008 crisis that cost Americans $13tn.Eisinger, who borrows for his title Comey’s moderately profane appellation, details an unmistakable decline in the justice department’s willingness and ability to prosecute corporate crime. For the four years 2012-2015, white-collar cases made up just 10 per cent of the DoJ’s caseload — roughly one-half the share two decades earlier. “The justice system is broken,” Eisinger concludes, adding that the DoJ in recent years “became fearful of losing and lost sight of its fundamental mission to make this country a just place”.For Eisinger, this largely unrecognised alteration in the American judicial system helps explain the political unrest that catapulted a former reality television star to the White House. Along with the US government’s 2008 bailouts of the biggest banks, the failure to hold elites accountable for the financial crisis fuelled the public anger that led first to the Tea Party and Occupy Wall Street movements and later to Donald Trump’s improbable rise. As Eisinger writes in his well-reported tale, this deference to corporate power now appears to be a permanent feature of the American landscape. The author has the credentials to warrant a hearing. A veteran financial journalist with ProPublica, Eisinger won a Pulitzer Prize in 2011 for his reporting on the shady Wall Street practices that contributed to the financial crisis. He begins with the Enron prosecution in 2002, which involved charges against 32 individuals associated with a sprawling and deliberate corporate fraud. In an era of widespread wrongdoing at companies such as Tyco, HealthSouth and WorldCom, prosecutors secured convictions of Enron’s chairman Ken Lay and chief executive Jeff Skilling. But after several convictions were reversed on appeal and other corporate cases misfired, senior justice department officials grew more timid about white-collar cases. In particular, the pursuit of the accounting firm Arthur Andersen, which went out of business following its 2002 indictment, “became the great symbol of unjust white-collar prosecution”, Eisinger writes. In subsequent years, well-heeled corporate attorneys capitalised on the government’s mis-steps and the Supreme Court gradually disarmed prosecutors. Over time, the justice department’s zest for combat weakened until, by 2016, the DoJ no longer approached white-collar cases the same way. Eisinger’s book is replete with outsized personalities including Stanley Sporkin, the legendary 1970s-era enforcement chief for the Securities and Exchange Commission; US District Court Judge Jed Rakoff, who stood almost alone against the government’s weak-kneed posture; Preet Bharara, the US attorney in Manhattan and campaigner against insider trading; and top white-collar defence lawyers such as Robert Fiske and Reid Weingarten. Eisinger traces evolving legal views on how to deter white-collar crime, a debate that continues. Should individual executives be targeted, despite the difficulty of tracing corporate acts to specific men or women? Or is it enough to punish the corporation itself? Or does that just shift the pain of punishment to shareholders who themselves committed no wrong? The complex calculations can make it seem that white-collar crime is uniquely difficult to defeat, especially as Eisinger demonstrates that the legal system extends to corporate crooks an empathy that common criminals never receive. The author is unsparing in his account of the Obama administration’s failure to hold bankers to account. Early in the financial crisis, Treasury secretary Tim Geithner derided the public thirst for what he called “Old Testament justice”. Six years later, deputy attorney-general Sally Yates belatedly told federal prosecutors to start charging more executives. But not many were. “Aside from a few speeches, the White House took little concrete action on the prosecution of white-collar crime,” writes Eisinger. Today, rather than prosecute, the justice department often negotiates settlements with alleged corporate wrongdoers. These “deferred prosecution agreements” generally require companies to pay a sizeable fine, implement internal reforms, often under the gaze of an outside monitor, and promise not to repeat the offence. For the government, the settlements offer a quick end to what might otherwise be protracted litigation. For corporations, they have become another cost of doing business. Eisinger offers no happy ending. Corporate crime is not among Trump’s priorities. Under attorney-general Jeff Sessions, the justice department is focused on violent street crime and immigration offences. Jay Clayton, the new head of the SEC, emphasises capital markets reforms. “Any hope for tougher corporate enforcement,” Eisinger concludes forlornly, “appears laughably misplaced.” The Chickenshi* Club: Why the Justice Department Fails to Prosecute Executives, by Jesse Eisinger, Simon & Schuster, RRP$28, 400 pages David J Lynch is an FT Washington correspondent Photograph: New York Times/Redux/eyevine
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Post by 2018 on Jul 22, 2017 8:31:14 GMT -5
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Post by 2018 on Jul 22, 2017 8:31:38 GMT -5
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Post by 2018 on Jul 22, 2017 11:55:51 GMT -5
looks like portrush moved it to Off topic thread.. how exactly is this off topic?
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