
America’s Top Prosecutors Used to Go After Top Executives. What Changed? (2017) - tim_sw
https://www.nytimes.com/2017/07/05/books/review/the-chickenshit-club-jesse-eisinger-.html
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joe_the_user
I would really like to see some statistical studies of this stuff. My
impression is prosecutors have always been leery about going after the rich
and powerful but things have indeed gone further that way in the last twenty
years. So measuring exactly how much seems important here.

The thing is, the "regulatory revolving door", where ex-regulators are
appointed to private industry, gives at least a strong proxy measure of
intertwined interests of business and US government. It's always hard to be
sure what a few even important cases mean.

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jopsen
Stats would be nice... It's easy to remember a few top executives being
prosecuted over 50 years, and hard to remember historical cases from the past
10 years.. because they are not historical yet.

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coldtea
> _It 's easy to remember a few top executives being prosecuted over 50 years,
> and hard to remember historical cases from the past 10 years.. because they
> are not historical yet._

That doesn't make sense.

Cases from the past 10 years should be easier to remember, because
"historical" or not (this is a needless distinction here), they are (a) more
recent, (b) more likely to have been written about in the news/social
media/shows/etc one reads than older cases.

The use of "historical" here is a distinction that confuses more than
illuminates. Even if "it's hard to remember historical cases from the past 10
years.. because they are not historical yet", it should be easier to remember
big cases from the past 10 years, period.

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jopsen
Okay, I may have confused myself :)

I think the point was events always looks better at a distance..

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zakum1
One scary side of this is that it appears to have led ordinary people who see
the system as rigged to elect an “anti establishment” president who is even
more zealously rigging the system. American politics needs profound change and
brave new leaders with a new vision.

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kevmo
Senator Sanders is America's best bet.

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radicalbyte
I have experienced living in the UK (first past the post, you vote for a local
rep, gerrymandered districts and all) and The Netherlands (full proportional
representation, you vote for your rep from the full list).

The result is clear: politics in The Netherlands are a factor less toxic than
in the UK. This is because there is actually a chance to choose the party who
represent you. They don't? Small parties are still an option. In the end a
coalition is created and all of the crazy ideas (muslim ban, communism) are
quickly lost in the first round..

So far I've voted for VVD (Republican/Tory), D66 (Democrats/Libdems) and Green
(doesn't exist in UK/US; the one party who get results on climate change).

So basically full proportional representation would be the best single change
you could make in the US and UK systems.

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eru
It would be quite a big change in the rules. And see some of the issues with
Israel's parliament for how naive proportional voting can go wrong. (The
German / New Zealand mixed-member proportional representation system works
reasonably well in practice, but it's somewhat complicated.)

For a smaller change to the rules (but still a big impact), consider approval
voting or range voting.

Range voting works like judging figure skating in the Olympics: every voter
can give scores between eg 0 to 100 to the candidates, the candidate with the
highest average score wins the district.

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ClayShentrup
Score Voting is what it's advocates call it nowadays.

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anoncoward111
They go after the little guy now because typically he or she can't fight back
and is deathly afraid of prison.

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kevmo
Yes. Guaranteed convictions yield inflated statistics, which bureaucrats then
tout as evidence of their value and need for (greater) funding.

Paywalled, but excellent paper on this phenomenon:
[https://scholar.google.com/scholar?hl=en&as_sdt=0%2C10&q=low...](https://scholar.google.com/scholar?hl=en&as_sdt=0%2C10&q=low+hanging+fruit+Harvard+policy+securities+exchange+perverse+incentives+&btnG=#d=gs_qabs&p=&u=%23p%3DVPGFe1uwAlMJ)

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fragsworth
Prosecutors need to be given percentages of the judgments they win for the
U.S. government against corporations.

It doesn't even have to be a big percentage, and it ends the revolving door.
Let our prosecutors make a fortune by ending criminal corporate behavior. As
long as it's decided by a jury, they still won't waste their time with sketchy
cases.

If they retire early, so be it - there will be hundreds of people eager to
fill the vacant positions.

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technofiend
We have plenty of laws borne out of outrage and a desire to punish the guilty.
They usually create even worse outcomes: look no farther than seizure laws
created during the War on Drugs for a perfect example.

Law enforcement can take any asset you have based on an allegation of
criminality: not against you but the item itself! You get to prove the
innocence of the item in court if you hope to reclaim it.

Of course those abusing that law know very well that the defense is far dearer
than the item itself, resulting in your abandoning any claim to the item and
net profit to law enforcement.

Now you want to reward prosecution with more perverse incentives? We used to
say the power to tax was the power to destroy. These days the power to
prosecute is the same, and sort of like I look at every piece of code with the
idea "How will the cyber security red team abuse this?" we need to look at any
potential law for abuse by over zealous prosecution.

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wtallis
Stuff like civil asset forfeiture is a problem because it weakens the due
process requirements. Prosecutors would still be required to get a jury to
convict before they could reap any rewards, so it would be a much harder
system to abuse. (I wouldn't want prosecutors to get a cut from settlements,
because then they could abusively intimidate defendants for profit.)

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morgante
> I wouldn't want prosecutors to get a cut from settlements, because then they
> could abusively intimidate defendants for profit.

So then prosecutors will refuse to ever settle cases, even when settling is
the best choice for all parties except themselves.

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tormeh
Settlements are a problem, though. This would probably be better than what the
US has now.

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grigjd3
Settlements are the result, not the cause. The problem most people face with
the criminal justice system is how expensive it is to have competent
representation. Not a dig at people who work as public defenders, they're just
way overworked and without enough resources to do the job well.

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Animats
"The Chickenshit Club" is a good book. The prosecution team head made the
point that if a white-collar prosecutor isn't losing some cases, they're not
going after the hard ones.

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dralley
9/11 and the Bush admin. All of a sudden all the feds cared about was
terrorism.

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oldgradstudent
This doesn't explain why the Obama administration did not bother persecuting
bank executives.

And there was plenty to persecute then for (e.g. laundering money for drug
cartels).

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rtkwe
Prosecuting someone for a crime like that is tough you have to prove out of
the whole company that the people you're prosecuting actually committed the
crime. That's hard because the nature of corporations is to diffuse
responsibility and decision making.

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mtgx
BS. European countries have prosecuted banking crime just fine.

Plus, we have Eric Holder on the record for saying he wouldn't go after bank
executives because it could "hurt the economy", a reason I rank right up there
with "terrorists attacked us for our freedoms."

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qaq
Hmm care to show high level execs of say HSBC being prosecuted for money
laundering?

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monetus
I suggest reading Matt Taibbi's book The Divide, mentioned in the article, if
you want a bit more context around Eric Holder and Lanny Breuer's involvement
in this. He rests the 'original sin' at the feet of Eric Holder and a memo he
wrote during the Clinton administration, as it outlined the collateral
consequences doctrine embraced by justice department.

It also had the most fascinating account of Fairfax Financial and a group of
traders who shorted the company before trying to destroy it.

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harryh
Matt Taibbi is a crappy journalist that distorts the truth to fit his
narrative. He's entertaining but not trustworthy.

It's worth noting that Fairfax sued the group of traders in that story but the
lawsuit never went anywhere and was eventually dismissed.

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TomMckenny
Citizens United v. FEC is what changed. Essentially all elected officials are
completely dependent on contributions now.

A party, candidate or prosecutor who makes contributors nervous has no chance
of re-election.

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tzs
The effect of Citizens United has become massively overstated. It lifted the
prohibition on corporations (for-profit or nonprofit), labor unions, and other
associations from spending money to communicate on political issues. It didn't
change the rules on contributions to candidates or parties.

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noisy_boy
Isn't that just supporting/opposing the candidate by proxy? If a corporation
creates a PAC favoring issue X which airs ad/buys social media exposure
supporting the candidate who favors issue X, they have in-effect bought
airtime for candidate X without any direct contribution to him/her. In this
day and age, that kind of exposure is as good as paying the candidate.

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cascom
Just a couple of thoughts:

1\. Prosecutors are afraid of losing and protracted court battles with all
avenues of appeals pursued - making all but the slam dunk cases unattractive
to pursue

2\. A great deal of the acts the the public would like top executives to be
prosecuted for when examined objectively typically are mix of moral
shortcomings, Grey areas, and civil (rather than criminal infractions) -
making them easy to try in the court of public opinion and less so in a court
of law.

3\. A lot of prosecutors don’t have the technical support to parse some do the
data/complex aspects of the case - let alone make it digestible for a jury

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onetimemanytime
* >>"Blankfein hired Reid Weingarten, a famous white-collar defense attorney...Weingarten was a friend of Attorney General Eric Holder; his children went to Georgetown Day School with the children of Lanny Breuer, head of the criminal division of the D.O.J. ...Weingarten pestered Breuer, saying, “Close this …case, will ya?” *

Curious: So how much would Blankfein be charged in a case like this? Saved at
least tens of millions in lawyer fees and that's if he was found not guilty.
Maybe his firm is hired to do legal work for Goldman but that can be
problematic. $1 Million if the case dropped + hours worked?

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qaq
I have no doubt this could have happened but what is Weingarten pestered
Breuer, saying, “Close this …case, will ya?” is actually based on? I doubt
this was done publicly. Also I doubt they would have an actual case against
Blankfein GS has very strong legal team I have strong doubts Blankfein would
have acted in a way that would put him personally into harms way.

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dev_dull
If our legal system is working, and there’s adaquate detterances and
incentives, then we should expect these cases to go down with time and
celebrate that fact. I can’t read the article but I’m not sure if they address
that.

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cm2187
I don't think one can really compare Enron with Goldman. Enron was an obvious
case of accounting fraud. Goldman was a more subtle case of miselling. It's
not like of there was any political will and anger to prosecute banks after
2008, but for that you need an actual crime to have been committed. Weak
underwriting standards and over leverage is bad business but not a crime.

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fipple
Eventually the “Second Amendment People” are going to do what the “Chickenshit
Club” refuses to.

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Buldak
I haven't seen much to suggest that this is the sort of issue that animates
second amendment sort of people.

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rurban
What changed? The fish smells from the head. Justice is not independent and as
much corrupt and criminals as politicians, press and law enforcement. As in
every other 3rd world country.

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julienfr112
Has anyone watched Billions_(TV_show) ?

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purplezooey
The fox is guarding the henhouse, that's what changed. Stop voting up these
corrupt right wing people and this will gradually get better. Until then it
will get worse.

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IBM
The SEC will have a great opportunity with Elon Musk.

