Cook the Books, Get Life in Prison: Is Justice Served?
Monday, September 25, 2006
In the category of longest prison sentence, WorldCom Inc. founder Bernard J. Ebbers recently bested the organizer of an armed robbery, the leaders of a Bronx drug gang and the acting boss of the Gambino crime family.
It was a contest Ebbers surely would have preferred to lose.
Tomorrow, the man who once swaggered through the halls of his telecommunications company as a cowboy-booted billionaire is scheduled to surrender to authorities and begin a 25-year sentence. Federal prison policies virtually ensure that Ebbers, who has a heart ailment, will spend the rest of his life in prison for his role in an $11 billion accounting fraud.
Ebbers, 65, is to report to prison on the same day that former Enron Corp. finance chief Andrew S. Fastow will be sentenced by a federal judge in Houston. Fastow, who secretly pocketed more than $45 million in a scheme to disguise mounting financial problems at the energy company, faces a maximum of 10 years in prison as part of his plea deal.
The length of Ebbers's sentence when compared with others touches on one of the most controversial parts of the American criminal justice system: How large a pound of flesh should society exact for serious white-collar crime? When the victims are diffuse, the crime complex and the injuries economic, what kind of punishment constitutes justice?
A top executive who gambles his fate at a trial nowadays risks what amounts to a life term for fraud that can involve as little as $2.5 million in losses, said University of Missouri law professor Frank Bowman. Crimes such as first-degree murder, high-level drug dealing and espionage trigger similar recommendations.
"That means you have to equate fiddling with the corporate books with first-degree murder or treason," Bowman said. "My own sense is that any sentence over 20 years for anybody for an economic crime is hard to justify."
Public revulsion over financial crimes that cost small investors billions of dollars has barely waned since prosecutors began to investigate a string of corporate scandals in late 2001. The death of convicted Enron founder Kenneth L. Lay in July induced profanity-laden outrage from shareholders who felt they had been "cheated" out of seeing Lay sent to prison. Federal prosecutors seized the mood, imploring Congress this month to pass legislation that would make it easier for them to recover $43.5 million from Lay's estate, a process that has been seriously complicated by his death.
The drive to exact punishment even beyond the grave is a sign of vindictiveness in public officials and shareholders, defense lawyers contend.
Reid H. Weingarten, a Washington-based lawyer for Ebbers, said in an e-mail that the judge in his case had public relations, not justice, in mind. "The purpose of the sentence was to please and appease the howling mob demanding Ebbers's head, not a worthy goal of the criminal justice system," he said.
Fastow, 44, assessed the prospect of spending decades behind bars after the government hit him with a 98-count indictment for serving as the architect of the Enron fraud. Prosecutors also accused Fastow of enlisting his wife and using the bank accounts of his two young sons to siphon money from the company undetected. Lea W. Fastow, indicted to pressure her husband to cooperate with investigators, pleaded guilty to a tax charge two years ago for underreporting income from his business partnerships. She served almost a year in a high-security prison.
As part of the couple's package deal, Andrew Fastow pleaded guilty, agreed to testify against Lay and former chief executive Jeffrey K. Skilling, and negotiated a substantial break in his prison term. Skilling, 52, was convicted of 19 criminal charges in May and faces decades in prison when he is sentenced next month.