September 26, 2006
Fastow gets only six years' imprisonment
I just received the somewhat surprising news that, as detailed in this Wall Street Journal alert and this AP coverage, that "Former Enron Corp. chief financial officer Andrew Fastow was sentenced today in a Houston federal court to six years in prison followed by two years of full-time community service for his role in the crimes committed at the energy giant." Fastow's plea deal capped his sentence at 10 years, and I think most observers expected a sentence near that cap.
I encourage commentators to debate whether the comparable sentences now given to Fastow of Enron and Jamie Olis of Dynegy (details here) is a great example of sentencing consistency or of unwarranted sentencing disparity. Because of all their great coverage of white-collar sentencing, I'm already looking forward to the reactions of Tom Kirkendall and the folks at the White Collar Crime Prof Blog.
September 26, 2006 at 01:51 PM | Permalink
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The more accurate analogy is perhaps the five year sentence imposed on Scott Sullivan in connection with the WorldCom case. Sullivan, like Fastow, served as CFO and cooperated with the Government. And to the extent that that analogy is accurate, the five and six year sentences imposed on Sullivan and Fastow, respectively, don't seem all that disparate.
Posted by: Harlan Protass | Sep 26, 2006 2:03:07 PM
I did not expect leniency to this degree. However, the news reports suggest that even the prosecution conceded that Fastow is truly repentent, and some of his victims testified on his behalf.
After all that, the judge insisted he be taken into custody immediately, a somewhat harsh ending to a comparatively lenient proceeding. Federal defendants who aren't a flight risk are commonly given the opportunity to turn themselves in later.
If you look at the crimes alone, either Jamie Olis is being over-punished, or Andrew Fastow is being under-punished. However, I do agree that cooperation ought to be worth *something* -- otherwise, no one ever would ever have an incentive to cooperate. And cooperation is not only genuinely useful to the government, but it may indicate that the defendant has accepted responsibility for his actions. I do realize that cooperation agreements are open to abuse. This does not mean that they never serve a useful purpose.
People complain that the Federal Government is penalizing defendants for exercising their right to a trial. But how new is this? It was true long before the Guidelines era that someone who copped a plea was probably going to get a lighter sentence.
Posted by: Marc Shepherd | Sep 27, 2006 6:48:29 AM
Fastow is truly repentent.. Wouldn't anyone be after acknowledging and pleading guilty to a massive conspiracy that pocketed him and his family millions in shareholder money? Wouldn't anyone be a little ashamed of themselves in finding great rewards (knocking 98 counts down to 2) by accomodating the government with testimony pointing to everyone above, below and across, most of whom, by the way, did not directly profit (as he did)from the inventive structures that he aggressively pursued as CFO. The bargaining for testimony already happened and it was very successful bargaining. 98 counts became 2 and suddenly, there was an opportunity for a life and family after this. Restitution claims suddenly were significantly reduced and suddenly, there was an opportunity to stay rich after this. Civil plaintiffs became partners with a wink and a reverent testimonial and suddenly, there is true reform.
Seems all in power in this system are willing to pat Fastow on the back and the same people claim that Olis' sentence is not enough. Why? Because he didn't plead guilty and play their game. He didn't pocket any money for himself, wasn't the CFO, his company didn't go bankrupt, he didn't commit any personal crimes of insider trading or the like which would have "encouraged" him to bargain away some charges with accomodating testimony. Yet he was given 24+ years causing him to go to a medium security prison and recently, 9 months after the appellate court said it was too much, it was grudgingly reduced to the same amount of time as Fastow. This is disgusting and yes.. for those who claim it is for the "greater good" of deterrence; it does serve the goal of deterrence- not deterrence of crime but deterrence of trial and asserting one's innocence. Cheap, quick and easy for everyone except the person who is fighting for their innocence. That is not what this country is supposed to be about and it is shameful that most citizens could really care less that that is what this justice system has become.
Posted by: fjo | Oct 4, 2006 11:31:49 PM