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June 7, 2012

"Criminal Affirmance: Going Beyond the Deterrence Paradigm to Examine the Social Meaning of Declining Prosecution of Elite Crime"

The title of this post is the title of this new article authored by Mary Kreiner Ramirez available now via SSRN. Here is the abstract:

Recent financial scandals and the relative paucity of criminal prosecutions against elite actors that benefited from the crisis in response suggest a new reality in the criminal law system: some wrongful actors appear to be above the law and immune from criminal prosecution.  As such, the criminal prosecutorial system affirms much of the wrongdoing giving rise to the crisis.  This leaves the same elites undisturbed at the apex of the financial sector, and creates perverse incentives for any successors.  Their incumbency in power results in massive deadweight losses due to the distorted incentives they now face. Further, this undermines the legitimacy of the rule of law and encourages even more lawlessness among the entire population, as the declination of prosecution advertises the profitability of crime.

These considerations transcend deterrence as well as retribution as a traditional basis for criminal punishment.  Affirmance is far more costly and dangerous with respect to the crimes of powerful elites that control large organizations than can be accounted for under traditional notions of deterrence.  Few limits are placed on a prosecutor’s discretionary decision about whom to prosecute, and many factors against prosecution take hold, especially in resource-intensive white collar crime prosecutions.  This article asserts that prosecutors should not decline prosecution in these circumstances without considering its potential affirmance of crime. Otherwise, the profitability of crime promises massive future losses.

June 7, 2012 at 11:36 AM | Permalink


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This may not be a financial crime, but its a good example of being above the law. Also shows if your connected you get preferred treatment...

Judge Jack Camp comes to mind quickly.. An experienced active federal judge who bought drugs from a hooker and had a loaded gun in the car..Did the deed many times over a prolonged period...

He skirted a gun bump and any enhancements due to his position...

Federal hangs nearly everyone out to dry, this guy is SPECIAL...

When the Feds looked into the cases he presided over during this period, no wrong doing of any kind was found... But yet he supposedly had a mental problem or headaches or whatever when it came to his sentenceing..This was supposedly happened many yrs ago, but yet the troops in his bregade allowed him to continue on the bench.

This is a good example of being above the law...USAO, is that the outfit that prosecuted this....
Everyone just sits back and says, fascianating case...

Posted by: Abe | Jun 7, 2012 1:39:04 PM

When Enron went down, there were no bailouts, bad consequences and punishment for several. When Macondo blew out there were also consequences.

When a small group of CPAs and Lawyers in lower Manhattan blow out the entire economy, they are shielded and some are rewarded with appointments to federal office.

What is more interesting to me is that certain highly productive industrial sectors like energy are villified and punished at the outset and other sectors such as finance with their completely unproductive rent seeking behavior are given a pass. What is it in our cultural psyche that allows the banksters a pass?

Posted by: Jardinero1 | Jun 7, 2012 1:48:14 PM

Glenn Greenwald writes about this very subject in his excellent book:

With Liberty and Justice for Some: How the Law Is Used to Destroy Equality and Protect the Powerful

We do not have a "justice" system in this country. Rather, we have a system in which the rich and powerful generally get to play by different rules and standards. The Obama Administration policy of looking forward and not back, applied to acts of torture and FISA violations by Bush Admin. officials, but not the much less harmful conduct of street-level marijuana dealers; it applied to the Wall Street robber barons who are benefactors of mainstream Republicans and Democrats, but not to those who cultivate and distribute marijuana for medicinal purposes.

Thank goodness for the jury trial right. Were it not for that, precious liberties would be subject removal at the whim of executive officials and bureaucrats, who, above all else, are concerned with projecting and protecting their power.

Posted by: Calif. Capital Defense Counsel | Jun 7, 2012 3:53:40 PM

What is it in our cultural psyche that allows the banksters a pass?

There is a simple answer. Stupidity and incompetence are not crimes. Before they can be prosecuted, there needs to be a law on the books that they violated. Making a monumental error is not a crime in itself, just because many people were hurt.

For the most part, we don’t hesitate to prosecute rich, well-connected people, when we can find a crime with which to charge them. Bernie Ebbers, Jeff Skilling, Bernie Madoff, Ivan Boesky, Michael Milken, and many others, can attest to that.

Some of those guys may even have caught raps that they didn’t deserve. I am not yet convinced that Ebbers deserves to die in prison. Not every terrible thing that happens is the result of an illegal act.

Posted by: Marc Shepherd | Jun 7, 2012 5:18:16 PM

C'mon, Marc. That's what RICO is for...to nail folks who were in the vicinity when terrible things happened.

A significant number of the low-level, white-collar defendants rounded up and imprisoned in the housing market meltdown ultimately were convicted of wire fraud, money laundering, conspiracy and other flimsy, highly derivative, sweeping federal statutes.

Indeed, some of those low-level targets were con artists who deserved prison terms. But others were guilty of little more than doing business as usual in circumstances crafted, fostered and incentivized by bankers and other high-level operators who were never subsequently held accountable.

To the contrary, some of the lenders most responsible for the meltdown were ultimately portrayed by prosecutors as victims of harshly prosecuted underlings who'd been doing the lenders' bidding.

Posted by: John K | Jun 8, 2012 11:23:04 AM

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