A new book reveals how US federal prosecutors twist the law to criminalise legal activities, with connivence from the media Sharp-elbowed business executives and grasping politicians may not be especially popular figures within the American iconography. But membership in either of those classes is not a federal crime. Except when it is. In an important new book, Three Felonies a Day: How the Feds Target the Innocent, Boston civil-rights lawyer Harvey Silverglate argues that over the past several decades the federal government, relying on vague, dangerously elastic statutes, has criminalised a whole range of activities. The result, Silverglate contends, is that people are regularly sent to prison for crimes they hadn't even known they'd committed. "Wrongful prosecution of innocent conduct that is twisted into a felony charge has wrecked many an innocent life and career. Whole families have been devastated, as have myriad relationships and entire companies," writes Silverglate, a friend as well as an occasional collaborator. Skeptical? Consider three prominent cases ripped from recent headlines: • Jurors in a federal courthouse in Brooklyn, New York, took just nine hours to acquit Bear Stearns hedge-fund managers Ralph Cioffi and Matthew Tannin of conspiracy and fraud charges related to the collapse of two hedge funds, a disaster that wiped out $1.6 billion in assets. It seems there was a problem: "It wasn't clear that there was a crime," Peter Henning, a professor at Wayne State University Law School, told Bloomberg. Oh, that. Well, never mind, and double jeopardy be damned. Prosecutors now say they'll bring a wire-fraud charge against the two. • The latest poster boy for financial shenanigans is Raj Rajaratnam, who manages a hedge fund called Galleon Group and who's been charged with insider trading. Rajaratnam actually lost money on those trades, which makes him either comically inept or innocent. The latter might be a good bet. As the New York Times put it: "Mr Rajaratnam and Galleon trade assets rapidly, gather information rapaciously and focus on short-term gains. But those tactics are not illegal." • Sal DiMasi, a former speaker of the Massachusetts House of Representatives, is fighting a federal indictment related to political favors he received on the grounds that the federal "honest services fraud" law he's accused of violating is "unconstitutionally vague", according to the Boston Globe. (Silverglate notes that no less an authority than supreme-court justice Antonin Scalia has worried that the "honest services" law could be used to criminalise just about anything, right down to "a mayor's attempt to use the prestige of his office to obtain a restaurant table without a reservation.") First, though, DiMasi must hang on to his lawyer: the feds have reportedly tried to deny DiMasi the counsel of his choice through a dubious conflict-of-interest charge and by attempting to persuade state officials to strip DiMasi of his pension. According to Silverglate, such aggressive prosecutorial conduct – or, rather, misconduct – is nothing new. Indeed, DiMasi is the third consecutive Massachusetts House speaker to be targeted by the feds. His immediate predecessor, Tom Finneran, Silverglate writes, was convicted of a charge related to his testimony in a civil suit involving redistricting, in which an inconsequential bit of witness-stand gamesmanship was transformed into something akin to perjury. Finneran is now a radio talk-show host, and not a very good one. Silverglate traces these practices back a half-century, to a time when federal prosecutors began departing from the common-law tradition that you can't convict someone of a crime unless there is criminal intent. The danger, warned supreme-court justice Robert Jackson in 1952, was that prosecutors would target a person and then try to find a law he may have broken – not a difficult task, he noted, given the "great assortment of crimes" on the books. Such targeting is compounded, Silverglate argues, by the practice of pressuring lesser targets to plead guilty and rat out higher-ups, knowing full well that the more florid the tale of wrongdoing, the more likely they are to receive a lesser sentence. He quotes his friend Alan Dershowitz, a well-known Harvard Law School professor, as saying that such witnesses are taught not only to "sing" but also to "compose". Silverglate's victims range from doctors to artists. Mainly, though, his cavalcade of the wrongly prosecuted are unsympathetic characters from the world of business – Reagan-era financial wizard Michael Milken, Enron major domos Ken Lay and Jeffrey Skilling, and Silicon Valley investment banker Frank Quattrone among them. By the time Silverglate is through, you are convinced that not only did they commit no crimes, but that their bad-boy images are largely a creation of the media, which eagerly passed along leaks from federal prosecutors. In fact, Silverglate makes a powerful argument that journalists, far from acting as an independent check on government, all too often are virtual collaborators in abusive law enforcement. "Reporters are too willing to sit down with their prosecutorial sources to learn about the evil-doers in the dock, without doing the hard work of understanding why and how the government claims their conduct broke the law, or even why and how they are supposedly bad people," Silverglate writes. The real cause of Wall Street's collapse wasn't conduct that was illegal, but, rather, conduct that was legal. With the financial markets rebounding even as unemployment continues to rise, and with Congress shying away from even the timid reforms proposed by the Obama administration, the public is demanding the legal equivalent of blood. Silverglate's cautionary tale is a worthwhile counterweight to that justifiable but misplaced anger.The wrong arm of the law
Wednesday, 18 November 2009
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