Defending Skilling's sentence

Dave Hoffman belittles the criticism of Jeff Skilling's 24-year sentence ("the outrage level in the blawgosphere is at DEFCON 1"). He seems to have three arguments:

1. There are other equally outrageous sentences, and he lists a random sample. Interestingly, they mostly deal with drugs. He links to a report of a sentence of a "large-scale supplier of both powdered and crack cocaine to dealers in Stockton" who had "two prior convictions for drug trafficking." One of the other sentences listed was pardoned. (Any chances of a pardon for Skilling???)  The others are outrageous. So?

2. "If we think that violence and responsiveness to punishment are the only way to justify long sentences, why not be outraged about such punishments every day?" In other words, those who criticize Skilling's sentence are remiss because we only seem to care about the white collar types. Actually, I've criticized long drug sentences. They are, indeed, outrageous, for some of the same reasons that Skilling's sentence is. I focus on white collar types because (1) that's what my blog is about; and (2) I think there are special problems of criminalizing agency costs.

3. "Skilling isn’t being punished for going to a jury (while others took the plea discount). He’s being punished because the jury disbelieved his testimony." I'm really confused about that one. Because the jury believed his testimony it convicted him of the crime. The question is whether he deserved the sentence for that conviction. Or does Hoffman think that Skilling's sentence is justified by the unindicted count of perjury at his own trial?

In any event, as Tom Kirkendall has said,

Jeff Skilling was not sentenced yesterday in regard to the crime for which he was prosecuted and convicted. Rather, he was sentenced for causing Enron's failure. There is a big difference between those two crimes, and a quasi-life sentence for Skilling fails to distinguish between them.

Bottom line: I really hope these aren't the best justifications for Skilling's sentence.

Comments

[Dave Hoffman]

Larry,

1. The point of the list was to show that sentencing outrageousness goes high and low, while all of the examples folks gave to contrast with Skilling's sentence (Ney, Duke, etc.) were low. It simply isn't true that JS was sentenced to a historically outlier sentence for a federal crime.

2. I'm not criticizing your blog's focus on JS, but I want to draw attention to the possibility that your argument, if accepted, would have significant consequences for other types of sentence, and to (therefore) suggest a research agenda for other folks.

3. The lying point was responsive to the idea (advanced by some) that JS was being punished heavily by virtue of going to trial. The point is that those folks who plea (a) admitted responsibility; and (b) presumably did not lie to a jury. Heavier sentences make sense if you lose the dice roll.

[NickBranch]

Larry,

I posted the following on Dave's site and thought you might like it here as well:

To Lawstudent,

The prosecution asserted that there were two frauds at Enron.

The first was that Mr. Fastow and Mr. Kopper conspired to steal from Enron. Mr. Glisan was a part of this conspiracy through his participation in "Southampton"(named after the subdivision where both Fastow and Kopper lived). All three pled guilty to this action(although Mr. Glisan initially refused to cooperate with the investigation--a stance that apparently changed after he was thrown into solitary confinement. He later negotiated a significant reduction in time served, was transferred to a lower security facility and allowed weekend furloughs). Extensive documentary evidence exists to confirm this conspiracy including computer spreadsheets where Mr. Fastow and Mr. Kopper split up the proceeds, e-mails from Mr.Fastow directing destruction of computers, and a range of false tax filings designed to hide income (including the filings that led to the incarceration of Mr. Fastow's wife).

The second was the "grand conspiracy" to steal from Enron's shareholders. This second conspiracy is not documented and formed the basis of the charges against Mr. Lay and Mr. Skilling. It was this conspiracy that was hotly denied (and after his sentencing, continues to be denied by Mr. Skilling). The existence of this conspiracy relied exclusively on testimony obtained through plea agreements and the strange characterization of an undated, handwritten note by Mr. Fastow supposedly initialed by Mr. Causey, called "Global Galactic"(a note that has been "authenticated" only by Mr. Fastow who supposedly "found" it the week that he was negotiating his plea agreement with the government. The court transcript provides no evidence that Mr. Skilling or Mr. Lay ever heard of this note or had ever heard of the term "Global Galactic". Tellingly, in his cross examination by the government Mr. Skilling was asked not one question about this note).

Fundamentally, outside the Fastow crowd, the government's entire case for this second conspiracy was obtained from individuals who were threatened with long prison sentences unless they signed on to the theory. Amazingly, the transcript confirms that in every one of these cases, the pleaders also confirmed that they were not a part of a conspiracy and that they were not instructed by Mr. Skilling or Mr. Lay to do anything wrong.

In addition, relying on somewhat circular reasoning, the government then went to work on preempting any potentially exculpatory evidence from non-pleading witnesses. In a move that I believe is unprecedented in US white-collar jurisprudence, they named over 100 individuals as "unindicted co-conspirators", effectively signalling, in no uncertain terms, that testimony would result in indictment. No specific evidence of participation was offered. Then, just to make sure that no hole was left unplugged, they refused to publish this list to make sure that ANY potential witness (reasonably) feared that his name was on the list. (As a side benefit, this co-conspirator action allowed heresay evidence to be provided by the Fastow crowd).

No expenditure on legal defense can offset this kind of prosecutorial conduct. Mr. Petrocelli, Mr. Skilling's lawyer is said to have commented that "I'd trade any amount of fees to be able to have the ability to throw witnesses in jail if they didn't say what I wanted them to say".

I repeat, this trial, this verdict, and this sentence stink.

[Chris MacDonald]

Readers of this blog might be interested to read comments on Skilling's sentence from Walt Pavlo, who did 2 years for fraud & money laundering at MCI.
As a former white-collar criminal, Pavlo has some interesting observations about the usefulness of the 24-year sentence:
http://www.businessethics.ca/blog/2006/10/pavlo-on-skilling-exclusive-interview.html