Random thoughts on the Enron verdicts

If Ken Lay doesn’t want to die in jail, he’d better figure out someone more important than he is who has committed crimes Lay knows about. Do any names leap to mind? If so, you’re as insanely partisan as I am.

1. Goody!

2. But it’s sad that Lay and Skilling were convicted only of stealing from their stockholders, not the stealing they did for their stockholders, e.g. in the California energy market.

3. Isn’t it amazing how little mention has been made in the mainstream press about the strong personal and political ties between a convicted felon and the President of the United States? I haven’t seen a single mention of the fact that when Lay was looting California, the Bush Administration stood squarely behind him, chanting the mantra “Market! Market! Market!”

4. Can Democrats in Congress to figure out a way to force a vote on demanding all the records relating to Lay’s participation in Cheney’s Energy Task Force?

5. Lay and Skilling will likely die in prison. I’m all for hammering white-collar criminals, but that seems excessive to me. Thirty-year sentences should be reserved for people who are too dangerous to let out. (And yes, I believe that about blue-collar offenders and drug dealers, too.)

6. Given the drastic fate that awaits the two convicts, letting them run free from now to September, without even ankle bracelets, seems like a virtual invitation to escape, especially if they have enough stashed away in gold bars or numbered bank accounts to bribe the officials of some reasonably comfortable third-world country. In addition, given that their sentences will, given their ages, effectively be of infinite length, that’s an extra five months of freedom that they haven’t really earned. Why should it take five months to look up the sentencing guidelines?

[Prof. Bainbridge seems inconsistent on this point. He argues convincingly that the two men might well have the capacity to flee. Their motivation for doing so could hardly be stronger. He reports that their chances of beating the case on appeal are somewhere between slim and none. But Prof. Bainbridge rebukes Jack Cafferty of CNN and calls him “anti-business and anti-capitalist” for, among other things, complaining about the release, pointing out that the bail reform act provides for incarceration pending sentencing or appeal unless the defendant isn’t likely to flee and has meritorious grounds for appeal.]

7. As the top conspirators at Enron, Lay and Skilling didn’t have the option Fastow and some of the other smaller fry had, of “cooperating” against their superiors. Skilling looks to be in a completely hopeless position. But Lay might not be. A reduced sentence can be given for “cooperation” not only against other participants in the criminal scheme in which a defendant was charged, but in any other criminal case. For example, if Mr. Lay has information about criminal acts by &#8212 just to pick a couple of names at random &#8212 George W. Bush or Richard Cheney, now would be a good time for his lawyers to get busy preparing a proffer.

8. Prison rape isn’t funny, even if the potential victim is someone you really, really despise. On the other hand, joking about it isn’t as bad as fostering it, which the policies of most of this country’s prison and jail systems do. One nice thing about sending rich criminals away is that it helps generate conservative support for prison reform.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com

16 thoughts on “Random thoughts on the Enron verdicts”

  1. I think that your point (5) is an interesting one, which gets to the core of the nature of punishment for crime.
    Our system has the basic principle that "the punishment should fit the crime," but the only strong form of punishment we currently use is imprisionment. (A fine or community service is generally considered a light punishment.)
    But surely there are plenty of criminals — even those being punished for heinous crimes — who for one reason or another are not dangerous to society. Do we release them, even if it means they endure a significantly lighter punishment than others, whose crimes may have been smaller but whom we do consider dangerous?
    I can't say I know the answer — perhaps the whole notion of "punishment" as a goal of the criminal justice system should be abandoned, in favor of notions like protection of society, rehabilitation of criminals, and restitution of victims. But as long as we do consider punishment to be an important part of why we imprision people, then there will be people we keep locked up solely for that purpose, even though they can do no further harm.

  2. Sending rich people to prison doesn't generate Republican support for prison reform if the rich people end up going to special prisons that are better than the ones most other convicts go to. I don't know if that's happening in this case, but my impression is that it's a common occurrence.
    Of course it might be a good idea to keep nonviolent criminals and violent ones in separate prisons, but shouldn't people convicted of drug possession count as being as nonviolent as those convicted of white collar crimes?

  3. I agree with most of your random thoughts.
    As to point 2, I have to say I don't think the hypothetical stealing "for" shareholders charge would have been as compelling as the actual stealing from shareholders charge was.
    California's policy wasn't really deregulation, wouldn't have been as easily gamed if it had been, and Enron's entanglement with it didn't help Enron's shareholders anyway — it was another instance of stealing "from" them, in your terms.
    http://foi.missouri.edu/usenergypolicies/mystenro

  4. If Lay were one of Clinton's largest contributors, a head of his presidential campaign fundraising efforts and a member of an as-yet secret panel that determined the Administration's energy policy (what a success that has been), what do you think the press coverage might have looked like?

  5. Some questions:
    In point 5 you write: "Thirty-year sentences should be reserved for people who are too dangerous to let out. (And yes, I believe that about blue-collar offenders and drug dealers, too.)"
    So a college kid who fronts the purchase of a few spliffs for his friends is "too dangerous to be let out"? Under the law he is a drug dealer. In fact I've seen people charged with "transportation and delivery" for simply passing a joint to a friend. Such charges are filed regularly, and they stick.
    Why endorse effective life sentences for acts that shouldn't even be crimes?
    You also conclude "Lay and Skilling will likely die in prison."
    What basis is there in reality to believe that? Charles Keating was released from a federal "country club" prison in very few years, after wrecking as many lives as Lay or Skilling. And one of the senators who assisted him in his crimes has been running for president. Why expect Lay and Skilling to be treated any different?
    The only "drastic fate" that awaits Lay and Skilling is that they may have too live a few years in a comfortable dormatory in Lompoc instead of their mansions.

  6. I agree with the poster who pointed out that the many white collar criminals who have actually ended up in country club prisons don't seem to have any salutory effect on republican ideas of sentencing. That's becuase rhetorically they cease to become republicans after their convictions if they have also lost all their money. And its also because they don't suffer enough in their prisons in the first place.
    I have no pity for someone who committs such terrible crimes, crimes that have literally ruined thousands of people and rendered their old ages miserable prisons of poverty. If such a person, having committed their crimes in full maturity, must spend 20 or 50 years in prison and dies there, well, perhaps we would all have been better off if they'd been caught young and locked up for 20-50 years. But I suppose that's a bit sci fi of me.
    aimai

  7. Nobody is apparently unfamiliar with MK's writings on drug crime and punishment. As I understand Mark's position, our current sentencing schema for drug use/drug possession/drug dealing is insane. Given the wrong set of circumstances, people can be given federal life-without-possibilty-of-parole sentences for facilitating a marijuana deal.
    US Attorneys roll up so-called drug syndicates with plea deals that basically amount to a judicial game of hot potato. The guy caught holding the potato (whether or not s/he is at the top of a real drug syndicate) gets it in the figurative neck. When we start releasing violent offenders (not necessarily including all murderers) to jail low-level drug dealers for long terms the system is FUBAR.
    BC

  8. I'm no apologist for Bush or Lay, but truth be told Clinton's FERC (Federal Energy Regulatory Commission) was just as "Market! Market! Market!" as Bush's.

  9. Let's not forget that Bush can pardon both of them at the end of his term. Once the next presidential election is over, and what Bush does no longer has an effect on his party's political fortunes, he will simply pardon both of them. That is the best way to ensure that neither of them roll over on him or Cheney.

  10. Mark Kleiman wrote:
    Thirty-year sentences should be reserved for people who are too dangerous to let out.
    ____________________
    The suggestion here seems to be that the purpose of the criminal justice system is to protect society from likely subsequent bad acts by particular perpetrators.
    Gone from this calculation seems to be any weight given to the usefulness of severe sentences to discourage others from acting in the same way. (Reduce the penalty for murder from decades in prison to four years there and see if you don't get a spike in the activity and the bonus of greater pretrial cooperation with the authorities by the perpetrators.)
    Gone too is the idea that the state asserts itself to be an aggrieved party, administers a punishment and insists "other" victims and their loved ones accept that punishment as sufficient for all. It is replaced with the idea that the victim and others detrimentally affected are due no consideration and have no right to the sense of satisfaction the infliction of punishment would bring them – that when there is murder or robbery or rape the King asserts he is the sole wronged party and, upon reflection, he has no desire to take his revenge. (Victims or their survivors are welcomed, of course, to sue for monetary damages.)
    So I am wondering. The Mendendez brothers exterminated their entire universe of potential victims having killed both their parents. They really, therefore, present no threat of recidivism unless someone else makes them heirs to an estate. On what grounds would the state incarcerate the Menendez brothers for a month or a week according to Mark Kleiman?
    And what if victims of crime decided to harm or kill those who have preyed upon them. Because they would be no more likely than others to be subsequently victimized by criminals, would they be given a pass for their violent actions?

  11. CMike wrote, "Gone too is the idea that the state asserts itself to be an aggrieved party, administers a punishment and insists 'other' victims and their loved ones accept that punishment as sufficient for all."
    I agree.
    Retribution _is_ a reasonable factor in punishment.
    Given the large number of people who were victimized by these two, I don't see anything wrong with life in prison.

  12. Alex R wrote, "…but the only strong form of punishment we currently use is imprisionment. (A fine or community service is generally considered a light punishment.) … I can't say I know the answer — perhaps the whole notion of 'punishment' as a goal of the criminal justice system should be abandoned…"
    Answer is obvious. Increase the fines dramatically.
    Extreme cases of corporate crime should be met with a kind of corporate death penalty (where the perp is the corporation as a whole)—all assets seized by the state.
    In the case of Skilling and Lay, given the destruction they wrought, seems reasonable that they do ten years in the pen, _and in addition_ are stripped of almost all their worldly assets. (And none of this nonsense of getting around the fine via transferring to kin.)

  13. Nobody, try reading those sentences again and not making silly assumptions about Mark's views of drug dealers. Nowhere did he suggestion that they fit into the category "too dangerous to let out".

  14. When considering crime and punishment, we ought to recognize a couple of facts. Fact 1: prison space is limited. Fact 2: incarceration is expensive. Actually, I suppose Fact 1 is corollary to Fact 2. Nationally, per capita costs run in the neighborhood of $25K per prisoner-year, which I guess reflects the fact that we need more guards at Chino (or Lompoc) than at UCLA. Construction at Chino and Lompoc is more expensive than it is at UCLA, too.
    So what?
    We have a limited commodity — prison space. You can't stack them like cordwood, the courts won't allow it. That means that we ought to allocate that space in a rational way. The argument is over what constitutes rational allocation. We can build more prisons (there's plenty of desert in the Southwest …) but the costs to society are incredible. We're talking about Ivy League education costs here, not for four or five years, but for decades.
    Prison space needs to be reserved for those who constitute a real danger to the rest of us. Burglars, robbers, rapists and other sexual predators, murderers all need to see the inside of the fences. Economic criminals like Jeff and Kenny-boy also need to see some time, but the punishment should be primarily economic. Pauperization works for me. Greed motivated the crime, let them see want for the remainder of their lives. Garnish whatever earnings they may have and hand them back a poverty-level allowance each month.
    BC

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