Tale of Two Criminals
thedailyenron.com
Criminal One: Male, 35. Two kilos of cocaine found in his home. Estimated street value - $65,000. Arrested by the FBI. Immediately charged with federal crimes of possession and trafficking in narcotics. Jailed. Bail set at $1 million. Home, auto and bank accounts seized pending trial. Conviction and long sentences at hard prisons are the rule rather than exception.
Criminal Two: Male, 45. Chief Financial Officer of a major corporation. Company files bankruptcy. Investigators produce proof he was part of a conspiracy to defraud, resulting in investor losses exceeding $1.2 billion. No charges filed. Instead, long civil and criminal investigations begin and drag on for months, even years. Personal assets are neither frozen or seized. Eventual criminal charges are rare, prosecution even rarer, convictions few and hard jail time nearly non-existent.
The US Marshals Service is currently managing more than $1.6 billion in property seized from alleged drug dealers and other criminals. Assets seized include cars, boats, aircraft, residential and commercial properties, cash, jewelry, precious metals, and a host of other items.
When the government decides it wants to send a clear message that crime does not pay, it can and does.
So, why don't they drop the same net over the assets of the current crop of corporate scofflaws? With the exception of the occasional low-level embezzler or lone-wolf scam artist, those accused of multi-million white collar/corporate scams are allowed to maintain possession and control over the booty they accumulated until pulled away from the company till.
Despite all the recent tough talk and chest thumping from the Bush administration and its Department of Justice, even the highest profile examples of corporate malfeasance remain unmolested by federal asset seizure. We need only look to the people who started all this to see what I mean:
Ken Lay, Enron's former Chairman and CEO, has been described by friends as "deeply wounded" by Enron's collapse and the allegations of wrongdoing. But, he apparently heals quickly. The Lays continue to maintain their $7 million unit in the Huntingdon high-rise in exclusive River Oaks. They sold one of the three homes they owned in the posh Pirate's Cove section of Galveston and all three homes they owned in Aspen, Colorado where state laws allow for creditor-seizures. Lay starts his days with an early morning workout, breakfast with his wife and then heads to his office in a building near the Huntingdon where, according to his spokeswoman, he spends his day "reviewing new opportunities." His wife, Linda, spends her days fencing personal items for their homes at her second-hand store, "Jus' Stuff."
- The Rasputin of Enron, Jeffrey Skilling, continues to enjoy life in his $4 million Mediterranean-style mansion in a suburb of Houston. While many of Enron's former employees have lost their homes to foreclosure since Enron's bankruptcy, Skilling's family has experienced no diminution of lifestyle.
- Andy Fastow, the mechanic behind many of Enron's dirty deals, Fastow spends his days coaching his son's baseball team and weekending at the family's $288,000 vacation home near Galveston - located just blocks from one owned by his former boss, Ken Lay. When he tires of that weekend diversion, he visits their second vacation home situated on 68 acres in Norwich, Vermont. Currently the Fastow family is between primary residences and are temporarily slumming it in a $700,000 home on a small lot in Southampton. But, they will soon move into a 12,000-square-foot mansion under construction in River Oaks. It's hard to say what the joint cost him, but the lot alone sold for more than $1 million.
Former Enron workers whose livelihoods and pensions were wiped out can only stand in line with other bilked investors, hoping that pending lawsuits can retrieve scraps of their former savings - scraps that remain under the full control of the very people accused of mugging them in the first place.
When suspected drug dealers are arrested, the feds sweep in and put nearly everything they own in a lockbox, and for good reason. Federal asset seizure deprives suspects of the time and opportunity to liquidate and hide the bounty of their crimes. Courts have upheld the right of the government to seize and hold property suspected of being used in or representing the fruits of criminal activity.
So, Attorney General Ashcroft, what's the hold up? Today's arrest of former Alephia CEO John Rigas was a rare but welcome change of pace. But let's not stop there. Enron's Gang of Three remains loose. Each is in a known location. Between them they have more money than al-Qaeda; they are living well and are "reviewing new opportunities."
We understand it is harder to arrest friends and seize their assets. But, they'll understand it's nothing personal - it's just business.
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Public Opinion Turning Against the White House
While the American public continues to support the Bush administration's handling of foreign policy, there has been a sudden and pronounced shift in its mood on domestic issues, particularly the administration's handling of the economy.
A new Wall Street Journal/NBC News poll (see below) released this morning shows that 46% of voters now believe the Bush administration is not doing enough to rein in corporate abuses. Fully half of those polled said that having so many Bush administration officials with previous ties to large corporations is a bad thing. Only 41% felt positively about it.
Both the President's and Vice President's behavior while working as corporate executives is also weighing on voters minds. Forty percent of those polled said the two men need to be more forthcoming about their own business deals, while another 31% said they did not know enough yet to make a decision.
With just four months until the next round of Congressional races, the poll had some disturbing news for Republican candidates. The traditional view that Republican's were better for business than Democrats has begun to shift in the wake of the rash of boardroom scandals. A growing number of those polled now worry that Republicans close ties to business make it unlikely they can deal effectively with the current crisis. By a margin of 46% to 39%, respondents said that President Bush was more concerned about the interests of large corporations than those of average Americans.
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Quote of the Day
"This vast agglomeration of monied influence is what has made George W. Bush both a rich man and a potential president. Knowing how he became what he is, it's difficult to imagine Bush cleansing the soiled helm of democracy. He professes a compassionate conservatism, but his true ideology, the record suggests, is crony capitalism."
-Joe Conason, Harper's, Feb. 2000. |
