Qwest’s Joe Nacchio, Club Fed, the NSA and “Rub it on your chest”

Here’s a short, interesting article about Qwest’s Joe Nacchio and his release from prison

A couple of takeaways:

Howell's Striped Sweater

 

 

 

 

 

 

 

(1) There is no longer a “Club Fed” for white-collar inmates — if in fact there ever was one.  Deprivation of liberty is still prison; isolation from your family is still painful; and being vulnerable is still scary.

File:National Security Agency.svg

(2) Although it’s possible that the Government prosecuted Nacchio because he refused to turn over Qwest customer information to the NSA, it’s not likely (although it would be a side benefit, if there was already an investigation rolling).

The 10 Greatest Anti-Heroes: #8 "Cool Hand" Luke Jackson

(3) His advice is sound for most businesspeople:

Mr. Nacchio wants bankers, hedge fund analysts and others facing potential prison sentences to know that they are better off cutting a deal to avoid incarceration and the hardship it brings on family members.

His advice for other executives entering prison: listen, don’t talk. Show empathy to others who aren’t as fortunate. Live in the moment.

And forge ahead, despite the setbacks, he said, quoting a saying he learned from other inmates: “Rub it on your chest.”

Here’s the video of the news story:  Nacchio Story Video


Fall Cocktails

Fall Cocktails: The Six Best Whiskey Drinks You’ve Never Heard of  is quite a list.  Personally, I wish to try a

Suburban
“If you could distill carved-oak paneling and club chairs, leather-bound volumes and three-cushion billiard tables, [the Suburban] is what you’d get,” claims Esquire. Named for the Brooklyn Suburban Handicap horse race, this 19th century tipple combines three longshots rarely seen in the winner’s circle — rye, rum, and port. Yet somehow, they just work. A nice dark rum mellows the harsher edges of rye, specifically the “heat,” port subtly plays the role of a sweet vermouth, and a dash or two of bitters rounds out the missing herbal notes. Always a safe bet.

1.5 oz. rye whisky
.5 oz. dark rum
.5 oz. ounce port
1 dash orange bitters
1 dash Angostura bitters


Madoff’s Screw Sculpture, Bill Murray and Rule 403

The fact that Madoff’s Screw Sculpture Is Excluded From Evidence at Trial (tipped off by @WaltPavlo) is amusing to a non-party, reminiscient as it is of Bill Murray’s character (Frank Cross, the Ebenezer Scrooge character) in the movie Scrooged (1988), a remake of “A Christmas Carol.”

 

Frank Cross: We’re gonna need champagne for 250 people, and send the stuff that you send to me. Don’t send the stuff that I send to other people.

There are, however, some serious implications.

The sculpture was recovered from Madoff’s office after his 2008 arrest for masterminding a Ponzi scheme that cost investors about $17 billion in lost principal. Five former Madoff employees are facing trial in federal court in Manhattan for aiding the fraud. U.S. District Judge Laura Taylor Swain yesterday granted a defense request and prohibited the government from showing jurors the sculpture or photographs of it, after defense lawyers complained of the artwork’s “colloquial inference.”

It’s not just the “colloquial inference.”  Under Federal Rule of Evidence 403, the court

may exclude relevant evidence if its probative value is substantially outweighed by a danger of one or more of the following: unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence.

The Advisory Committee notes go on to point out that

“Unfair prejudice” within its context means an undue tendency to suggest decision on an improper basis, commonly, though not necessarily, an emotional one.

An “emotional basis” was almost surely what the sculpture would have provided.


Deferred Prosecutions and Decisions Not To Indict

Two recent articles in @Dealbook are worth noting because of their discussion of what goes into two very important parts of the American enforcement system: deferred prosecution agreements and a prosecutor’s decision to not indict.

File:BigBenAtDusk.jpg

In For a Better Way to Prosecute Corporations, Look Overseas,  Brandon L. Garrett (a professor at University of Virginia School of Law) and David Zaring (an assistant professor of legal studies at the Wharton School of the University of Pennsylvania) discuss the spread abroad of an American idea — the deferred prosecution agreement:

The favored new tool of the corporate prosecutor, the deferred prosecution agreement, is being actively exported to other countries. In these agreements, prosecutors allow large corporations to avoid a criminal prosecution entirely by agreeing to pay a fine and adopt reforms. Five years after the financial crisis, many doubt whether prosecutors have taken business crime seriously enough, and some of the blame is laid on lenient deferred prosecution agreements.

We can learn some lessons about how to better hold corporations accountable for crimes, though, from the way these types of prosecution agreements are now being used across the globe. After passing detailed legislation approving their use, the British government has circulated plans for a potentially more rigorous deferred prosecution agreement program.

One should note, however, that DPAs are not cakewalks for companies, and that they represent a great savings in prosecutorial resources (as well as allowing the Government to declare victory and go home, when it might be otherwise faced with a difficult case of proving criminal intent.

 

Open handcuffs

“Intent” is addressed in On JPMorgan and What Makes a Criminal Case,  by Peter J. Henning, a professor at Wayne State University Law School, focuses on the unreviewability of decisions not to prosecute:

The case of the so-called London Whale presents an interesting contrast in how the government pursues corporate wrongdoing. While two lower-level employees of JPMorgan Chase were formally indicted last week for their role in the credit derivatives trading that caused over $6 billion in losses, the bank itself faced only civil charges that it settled by paying $920 million. No higher level individuals were accused of violations.

The easy explanation, of course, is that the wealthy and powerful avoid their comeuppance while those less fortunate face the wrath of prosecutors. This is a common refrain when the law is enforced against some, but not others who appear to be in the same situation, whether it be mom-and-pop stores accused of food stamp fraud or drug laws used primarily against the urban poor.

The fact is that prosecutors and the police have enormous discretion over whether to bring charges against someone, with a decision not to charge a crime virtually unreviewable by the courts. The American criminal justice system puts enormous faith in those who decide how the criminal law is enforced because prosecutors do not have to disclose what went into their decision not to pursue charges.

. . .

So what standard makes a case criminal rather than civil, and when should individuals be accused of misconduct or allowed to avoid charges? The answer is left up to the prosecutor, who decides whether there is enough evidence and what is the best use of available resources.

There is no realistic prospect of judicial review of a decision not to file charges. In Inmates of Attica Correctional Facility v. Rockefeller, a case arising from the Attica prison riot in 1971 in which federal prosecutors did not file civil rights charges for the death of inmates, the United States Court of Appeals for the Second Circuit found that “the manifold imponderables which enter into the prosecutor’s decision to prosecute or not to prosecute make the choice not readily amenable to judicial supervision.” That means there is no recourse if the prosecutor decides not to pursue a case, unless another office steps in and decides to file charges on its own.

The lack of transparency over a decision not to file charges benefits those who were investigated. If prosecutors had to explain why charges were not filed, such a statement could cause significant harm to a person’s reputation with no readily available means to rebut any claimed misconduct.

Yet it remains disquieting when the same actions result in criminal charges for some but only a civil case for others, and no individuals are held responsible for misconduct at a company. In the end, we are left to trust that prosecutors have made good decisions.

Although it would be interesting to learn, on a record before a judge, why some people and companies are charged and others not, the reputational, personal and economic harm would be enormous.


Crime and T.S. Eliot

Today (September 26th) is the birthday of American-born (but eventually British-subject) poet T.S. Eliot (1888-1965).  He wrote little about crime except Murder in the Cathedral (1935):

Now is my way clear, now is the meaning plain:
Temptation shall not come in this kind again.
The last temptation is the greatest treason:
To do the right deed for the wrong reason.
-Thomas, Part I

And here’s one about a criminal cat, Macavity:

Macavity’s a Mystery Cat: he’s called the Hidden Paw—
For he’s the master criminal who can defy the Law.
He’s the bafflement of Scotland Yard, the Flying Squad’s despair:
For when they reach the scene of crime—Macavity’s not there!

Macavity, Macavity, there’s no one like Macavity,
He’s broken every human law, he breaks the law of gravity.
His powers of levitation would make a fakir stare,
And when you reach the scene of crime—Macavity’s not there!
You may seek him in the basement, you may look up in the air—
But I tell you once and once again, Macavity’s not there!

Macavity’s a ginger cat, he’s very tall and thin;
You would know him if you saw him, for his eyes are sunken in.
His brow is deeply lined with thought, his head is highly domed;
His coat is dusty from neglect, his whiskers are uncombed.
He sways his head from side to side, with movements like a snake;
And when you think he’s half asleep, he’s always wide awake.

Macavity, Macavity, there’s no one like Macavity,
For he’s a fiend in feline shape, a monster of depravity.
You may meet him in a by-street, you may see him in the square—
But when a crime’s discovered, then Macavity’s not there!

He’s outwardly respectable. (They say he cheats at cards.)
And his footprints are not found in any file of Scotland Yard’s
And when the larder’s looted, or the jewel-case is rifled,
Or when the milk is missing, or another Peke’s been stifled,
Or the greenhouse glass is broken, and the trellis past repair
Ay, there’s the wonder of the thing! Macavity’s not there!

And when the Foreign Office find a Treaty’s gone astray,
Or the Admiralty lose some plans and drawings by the way,
There may be a scrap of paper in the hall or on the stair—
But it’s useless to investigate—Macavity’s not there!
And when the loss has been disclosed, the Secret Service say:
It must have been Macavity!’—but he’s a mile away.
You’ll be sure to find him resting, or a-licking of his thumb;
Or engaged in doing complicated long division sums.

Macavity, Macavity, there’s no one like Macavity,
There never was a Cat of such deceitfulness and suavity.
He always has an alibi, and one or two to spare:
At whatever time the deed took place—MACAVITY WASN’T THERE !
And they say that all the Cats whose wicked deeds are widely known
(I might mention Mungojerrie, I might mention Griddlebone)
Are nothing more than agents for the Cat who all the time
Just controls their operations: the Napoleon of Crime!

© T S Eliot. All rights reserved, 82 years ago

 


The Grease Goddess

Helen Carter.jpg

This article has nothing to do with white-collar crime, as best I can tell, but who can argue with the new  Grease Goddess of Athens, Alabama?

When Helen Carter of Elkmont received notification that she is the first “Athena, Grease Goddess” for Saturday’s second annual Athens Grease Festival, she thought the caller was pulling her fried chicken leg.

“I don’t know what to say,” Carter said. “Are you joking with me? That’s pretty dad-gum good.”

Carter worked 25 years as director of the Athens Senior Center.

“She gives Athens the royal treatment when it comes to her volunteering spirit. My idea was to honor someone who, like the Greek version of Athena, loves the City of Athens,” said festival spokeswoman Holly Hollman. “We were looking for someone who gives back to the city by volunteering, being involved in community events and helping make Athens a great place to live.”

 

 


White-collar news stories via White Collar Crime Prof Blog

Good roundup of white-collar news stories from Ellen Podgor and White Collar Crime Prof Blog:

Mark Hamblett & Sara Randazzo, The AmLaw Daily, Ex-Kirkland Partner Sentenced to One Year For Tax  Fraud

George J. Terwilliger III, National Law Journal, Walking a Tightrope in White-Collar Investigations

AP, Las Vegas Sun, Ex-Akamai exec barred for 5 years in SEC case; Bob Van Voris, Bloomberg, Ex-Akamai Executive Settles SEC Suit Over Rajaratnam Tips

Nate Raymond, Reuters, Baltimore Sun, U.S. prosecutor cautions against white-collar sentencing revamp

Jennifer Koons, Main Justice, Former Enron Prosecutor Tapped to Head Criminal Division

Zachery Fagenson, Reuters, Ex-Bolivian anti-corruption official denied bail in Miami extortion case