Truth, justice and corporate sway

by Nomi Prins

Mark Twain once said: "We have a criminal jury system
which is superior to any in the world; and its
efficiency is only marred by the difficulty of finding
12 men who don’t know anything and can’t read." More
than 130 years later that is still true. But added to
the stipulation is the requirement that the jurors live
under a rock.

In America, the more complicated the crime the less
likely jurors will reach a conviction. If lawyers can
bamboozle them sufficiently, a mistrial is as good as a
victory. This works to the advantage of white collar
criminals in intricate cases, usually those involving
the most money extorted in the most convoluted ways.

Take the second trial of Frank Quattrone, former CSFB
investment banker, which began on April 13 and rested
last Wednesday. His first trial resulted in a hung jury
and a mistrial. In trial number two, prosecutors linked
Quattrone’s IPO churning activities to those of fellow
brokers and stray emails. This increased the case’s
complexity and the likelihood of a similar outcome.

Last month, another high profile corporate criminal
case ended in mistrial. After six months, thousands of
documents and hundreds of hours of court time, Tyco’s
former chief, Dennis Kozlowski, emerged with a smile
and a presidential wave.

The press was as much at fault for that mistrial call
as the 79-year-old juror they vilified for her actions.
It was the Wall Street Journal and New York Post which
crossed conventional journalism lines by exposing her
personal details.

Trying criminal cases requires selecting 12 unbiased
jurors. They have to reach a unanimous decision. They
must also possess as little knowledge about the case as
possible. Finding people who fit the bill is hard the
first time; the second, it requires locating 12 cave
dwellers. All but impossible for a Tyco retrial.
Mistrial details were blasted across every big media
outlet. Gossip about Kozlowski’s $6,000 shower
curtains, $2m parties and mistresses stoked many water
cooler conversations.

In a country fixated with reality shows, involvement in
a highly publicised trial fulfills many people’s desire
for the spotlight. This is incongruous with juror
impartiality. Indeed, after the Tyco mistrial, several
jurors jumped on the bandwagon. One wrote an account
for Time magazine; another awaits a book deal and
others appeared on television.

Meanwhile, the US press waxes oddly optimistic about
corporate criminal justice. After Tyco’s mistrial
announcement, the New York Times ran two back-to-back
stories extolling white collar victories. The reality
is different. Because of the nature of the jury system,
there have been precious few important convictions
arising from actual proceedings.

Mostly, closing complex high profile cases, such as
that against Enron’s former financial chief Andrew
Fastow, has occurred via out of court deals. They were
not litigated. Conversely, two of the biggest scandals
to see courtrooms were declared mistrials. A third,
Adelphia, tried to follow suit.

The cases won in court were straightforward, involving
"simple" actions such as obstruction of justice, not
mountains of documents about how money was moved around
a firm and out to offshore partnerships. That was as
much Martha Stewart’s problem as her poor choice in
confidants.

Change is possible, though few judges want to stretch
boundaries. According to David Graeven and Mike
Tiktinsky, jury selection consultants at Trial
Consulting Behavior, "the most important policy remedy
is treating jurors like adults".

This means prosecutors providing clearer information
and judges imposing stricter time limitations. Jurors
should be allowed to discuss material during the trial,
take notes and ask questions. The most byzantine
accounting cases should be handled like securities
fraud - tried first by judges.

Trying corporate crimes requires significant time for
inadequately informed jurors. That’s why big trials
have ended as a result of technicalities, not
decisions. This works in favor of white collar
criminals and leaves intact the system that enables
their crimes because the system is never on trial. It
provides no-fault emergence from bankruptcy. That’s the
wrong side of justice.

[Nomi Prins is a former banker and the author of Other
People’s Money: The Corporate Mugging of America.]

http://www.guardian.co.uk/business/story/0,3604,1208340,00.html