My spouse, Mary Kreiner Ramirez, recently posted an important law review article that every lawyer, law student and citizen should read, about a new lawlessness taking hold in our society that is yet another symptom of life in a crony capitalism state or our corporatocracy. Entitled Criminal Affirmance: Going Beyond the Deterrence Paradigm to Examine the Social Meaning of Declining Prosecution of Elite Crime, here is the abstract:
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.
Prof. Ramirez persuasively argues that pursuing elite crime vindicates far more weighty interests than mere street crime entails. Elite crime simply garners more attention than a typical grand theft auto or possession of marijuana. By definition elites hold more power than street criminals, meaning their continued incumbency at the apex of our financial system promises more harm than the continued freedom of, say, a shop lifter. As such, traditional notions of deterrence fail to account for the unique compulsion in favor of punishing elite crime.
The party line here from the administration is: "We’ve found that much of the conduct that led to the financial crisis was unethical and irresponsible, but we also have discovered that some of this behavior, while morally reprehensible, may not necessarily have been criminal." Yet, Goldman Sachs settled securities fraud claims with the SEC for $550 million--the largest securities fraud settlement in the SEC's history. Other banks also paid hundreds of millions to settle securities fraud charges brought by the SEC. Angelo Mozilo paid a settlement of $67 million (the most ever by an officer of a pubic firm) to the SEC for his role in securities fraud at Countrywide. The DOJ could have pressed criminal charges of securities fraud in any of these cases, and allowed a jury to determine if criminal securities fraud had occurred.
DOJ declined to prosecute.
This historic run of lawlessness at the heart of our economy means that for first time ever in our history a class of individuals stands immune to criminal sanctions.