George V. Higgins and the Archeology of White-Collar Crime

George V. Higgins

George V. Higgins

In popular culture, business-crime is presented cartoon-fashion. In movies, on television or in novels, businesspeople who are corporate targets of government investigations come across as Snidely Whiplashes with French cuffs.  This practice is predictable, its results boring.  Not so with the work of the late Boston-based novelist and one-time Assistant United States Attorney George V. Higgins (1939 – 1999).   From the George V. Higgins Collection at the University of South Carolina:

George V. Higgins (1939-1999) succeeded in nine distinct careers, all of which are documented in his archive.  Armed with two English degrees and a law degree, Higgins became a journalist for the Associated Press, The Boston Globe and The Wall Street Journal, as well as a federal prosecutor, district attorney and defense attorney, novelist, critic, historian and a creative writing professor at Boston University (1988-1999).  He was also a fierce Red Sox loyalist, so much so that he wrote a book on Boston baseball in 1989 titled The Progress of the Seasons: Forty Years of Baseball in Our Town.

 

Here’s a collection of articles about Higgins: the NYT on George v. Higgins

Wonderful Years, Wonderful Years (1988)

Wonderful Years, Wonderful Years (1988)

What distinguishes Higgins, above all else, is voice.  The term is “voice” is both over-used and under-used: over-used, when the critic means something like “tone.”  Under-used, when the meaning conveyed is “narrator.”  With the lawyers, crooks, businessmen and prosecutors of a Higgins novel, “voices” means actual “voices” — the sounds that one immediately recognizes as true, as here from Wonderful Years, Wonderful Years (1988), where a lawyer advises his client:

“‘You take your victim as you find him,'” Morse said.

“What?” Farley said.

“It’s a law thing,” Morse said.  “You run over an eighty-year-old derelict with your car, no living relatives, and kill him.  It’s not gonna cost you anywhere near as much, you hit a thirty-year-old brain surgeon with four kids and a wife and the only injury he suffers is the loss of his right hand.  You didn’t pick your victim right, and so it’s gonna cost you.  Sounds kind of mean, but that is the law.  And the law’s fuckin’ life — so they say.”

The Friends of Eddie Coyle

The Friends of Eddie Coyle (1970)

Doubtless, Higgins can be difficult to read: a torrent of dialogue, and common, barely-linked events.  Higgins’s novels are not thrillers, nor mysteries.  Not only do they lack suspense, some barely have a plot.  The best two in my experience are The Friends of Eddie Coyle (his first one) and Wonderful Years, Wonderful Years.

Higgins was also adept at describing the dynamic of business-crime prosecution, politics and disloyalty.  Here, again from Wonderful Years, Wonderful Years, is a portion of a conversation between Saxon, a criminal-defense lawyer, and Farley, the owner of a Boston paving company and the target of a federal investigation.  (For our younger readers, “Bobby” is Robert F. Kennedy):

“Now,” he said, “you’re telling me, these federal guys might do that?  I must be getting old.  This used to be America.  What a rotten bunch of pricks.”

“Don’t kid yourself,” Saxon said.  “They are a bunch of pricks.  But they’re no worse’n the rotten bunch of pricks that Bobby’s men, and Ike’s appointments, FDR’s and Truman’s, all of those guys were.  They all did the same damned thing.  Suited them to crucify someone because the public’d like it, well, the next sound you hear’ll be the carpenters at work.  War is the extension of diplomacy by other means?  Justice is quite often the extension of politics by prosecution.”

“Well,” Farley said, “guess all I can do now’s hope she [his wife] keeps a good grip on her marbles, this whole shitty thing blows over.”

“That,” Saxon said, “and that nobody else in your little entourage gets cold feet and lets you down.”

“Never happen,” Farley said.  “My people are loyal.”

“Right,” Saxon said.  “That’s what Jesus thought.  ‘Have a piece of bread, Judas.  ‘Nother cup of wine?  Nothing like a little supper with your friends all by your side.'”

The lawyer has his theology wrong — Jesus knew exactly what Judas was about — but that conversation likely happens in law offices somewhere each and every day.


Milk Punch for Christmas Morning (via Garden & Gun)

Milk punch for Christmas morning

Milk punch for Christmas morning

This Martha Foose’s Milk Punch recipe (from Garden & Gun magazine) looks like a fine replacement for eggnog:

“A little cup of old school milk punch will keep the holidays merry and bright

The first time Mississippi chef Martha Hall Foose tasted milk punch, she was at the Chart House in New Orleans, and now the drink is a staple on her holiday menu. Foose, the author of Screen Doors and Sweet Tea and a James Beard Award-winner, may have found the key to surviving the holidays. “We drink milk punch on Christmas morning after the presents are opened,” Foose says. “Then we all get back in our beds with a big glass while brunch is cooking in the oven.”

Made from half-and-half, superfine sugar, vanilla extract, ice cubes, freshly grated nutmeg, and bourbon or brandy, milk punch is a little bit like a traditional eggnog—minus the raw eggs.

If you try out the recipe, just remember two things. First, the freshly grated nutmeg is sprinkled on top of the punch, never in it. Second, just like eggnog, it’s real easy to find yourself two glasses deep in a hurry.”

Milk Punch
Serves 1
1 ½ ounces good bourbon or brandy
2 ounces half-and-half
1 teaspoon superfine sugar
Drop of vanilla extract
Ice cubes
Freshly grated nutmeg

Combine the bourbon, half-and-half, sugar, and vanilla in a cocktail shaker with ice. Shake thoroughly until the mixture is cold and frothy. Strain into a highball glass filled with ice. Top with a grating of nutmeg.

 


Confidentiality and Transparency in Deferred Prosecution Agreements

"Transparency" or "Opacity"?

“Transparency” or “Opacity”?

Here’s a note about.DOJ Transparency In Deferred Prosecution Agreements

Professor Podgor argues:

It is hard to believe that someone would have to file a lawsuit to obtain information about a non-prosecution agreement of a corporation.  One can understand the need to protect individuals from the sting of criminality when an agreement is reached to defer a prosecution or when an individual is being spared a prosecution as an alternative method to rehabilitate that individual.  But corporations are not afforded the same rights as individuals. The government is quick to note that corporations do not have the same rights as individuals when they are trying to obtain corporate documents. 

Fair enough, and “transparency” is supposed to be better than “opacity,” but is the question about NPAs and DPAs really one of “rights”?  Such agreements are the result of horse-trading and power plays.  A company (unlike an individual) may have to worry about private plaintiffs and other follow-on litigation.  Depending on the situation, the confidentiality of the factual basis for the agreement may be the quid pro quo for the company entering into negotiations at all.  In other words, if the collateral damage from disclosure is potentially greater than the cost and risk of litigating, then the company may force the Government to litigate (or cave).

At the Old Bailey

At the Old Bailey

As a white-collar lawyer who like trials, I like that latter option, but I’m not sure it’s in the best interests either of American businesses or efficient investigations and prosecutions.

Here’s the website mentioned in the BLT article:  Brandon L. Garrett and Jon Ashley, Federal Organizational Prosecution Agreements, University of Virginia School of Law, at http://lib.law.virginia.edu/Garrett/prosecution_agreements/home.suphp.


Holiday Punch

Cadet Punch ("Thank you, sir.  May I have another?")

Cadet Punch (“Thank you, sir. May I have another?”)

Garden & Gun magazine has outstanding cocktail recipes.  We are not great ones for punch, here at the White Collar Wire, but in a season of good will, we might try this Garden & Gun Holiday Punch:

Tagging behind the cocktail revival, however, has been a punch revival, spearheaded by the cocktail historian David Wondrich (see his encyclopedic 2010 book, Punch, for the whole shebang) and popularized by bartenders like Slater, whose bar menu features a revolving cast of oldfangled and newfangled punches. “Punch bowls are the original cocktails,” Slater says. This is true: The bowl preceded the glass by more than a century. Peruse some old punch recipes—and by old, I mean antebellum old—and a truth emerges: Punches don’t have to suck. Or involve 7Up.

Consider the Cadet Punch. This is a Slater invention, but its inspiration stretches back to nineteenth-century Savannah, Georgia, where a militia group called the Chatham Artillery concocted a punch that could reasonably be called weaponized. Into a horse bucket went brandy, rum, whiskey, and champagne, along with an oily lemon and sugar mixture. Slater ditched the brandy, rum, bubbles, and horse bucket to produce a simpler, less belligerent blend. The result, he says, tastes something like an old-fashioned—a minimalist punch for whiskey lovers. “It doesn’t hide anything,” Slater says.

Indeed.




Take The Deal or Go To Trial? Exactly.

"I know.  I should've taken the deal."

“I know. I should’ve taken the deal.”

The awful pressure to plead guilty, brought on by the significantly enhanced sentences that the Government often seeks where a defendant asserts his right to a trial, is highlighted in the media in drug cases, as here: Prosecutors Draw Fire for Sentences Called Harsh. For white-collar defendants — businesspeople who may be otherwise wholly unacquainted with the criminal justice system — the combination of mandatory minimums, ardent prosecutors and a public consciousness that prefers to blame for their woes abstractions (“Wall Street” or “the accountants” or “bankers”) rather than individual choices means that going to trial is almost impossible.  Plus, the costs can be prohibitive.

Not Rodin's "Thinker"

Not Rodin’s “Thinker”

Indeed, when a federal judge says in public that the wrong people decide who goes to prison, things have come to a head.  There is a move afoot in Congress to address sentencing, but it’s focused primarily on drugs.  Maybe, though, reform will trickle up to the businessperson’s case.


It’s Only A Fine

(Here, there and everywhere)

(Here, there and everywhere)

One would expect fines In civil and criminal enforcement actions to bear some relationship to both the offensive conduct and the statute that authroizes the fine, but that’s rarely the case.  Rather, they’re the product of strategy, tactics, raw power and solid horse-trading, as outlined by Professor Peter J. Henning: Fines, Without Explaining How They Were Calculated

In particular, Professor Henning notes:

For an individual, it is difficult to resist the broad authority granted to the S.E.C. to impose significant monetary penalties. For companies, the civil penalty is more a matter of how much they are willing to pay because limitations on the amount of a penalty seem to be largely irrelevant to the final settlement.

When JPMorgan paid a $200 million penalty to settle the S.E.C. case related to the London whale trading, it acknowledged violating the books-and-records provisions of the securities laws by not properly reporting the losses in its chief investment office. The bank lost over $6 billion from the transactions, something shareholders had to bear on top of the civil penalty.

It is difficult to see how the penalty relates to the statute authorizing a maximum penalty of $800,000 for each violation, especially when the case did not involve any claim of fraud or reckless conduct. JPMorgan was unwilling to fight the S.E.C., which described only a limited set of violations but still extracted a substantial penalty.

When the government agrees to a settlement imposing civil penalties on a company, the amount appears to have been reached through negotiation without any effort to explain how the payment was calculated. Of course, the beneficiary is often the United States Treasury because some penalties, like the $2 billion for the mortgage securities settlement, go straight to the government’s coffers.

A few more fines before quarter's end?

A few more fines before quarter’s end?

The bounty aspect noted in the last sentence is a strong undercurrent.  Where scalps help the agency budget, there’ll be more scalps.