Wall Street Journal Law Blog Asks Are Sentences Meted Out for White Collar Felons Too Long and I Answer Their Blog
Twenty-five years for WorldCom’s Bernie Ebbers. Twenty-four years, four months for Enron’s Jeff Skilling. Twenty years for Adelphia’s Timothy Rigas. Twelve years for CA’s Sanjay Kumar. 8 1/3-to-25 years for Tyco’s Dennis Kozlowski. Six years for Enron’s Andrew Fastow. Five years for WorldCom’s Scott Sullivan.
His commentary was based on an article posted in the Sentencing Law and Commentary blog entitled “The realities of mass US incarceration” which is based on a report by National Council on Crime and Delinquency entitled “US Rates of Incarceration: A Global Perceptive" by Peter Hartney.
The report specified that:
- The US incarcerates the largest number of people in the world.
- The incarceration rate in the US is four times the world average.
- Some individual US states imprison up to six times as many people as do nations of comparable population.
- The US imprisons the most women in the world.
- Crime rates do not account for incarceration rates.
- The US has less than 5% of the world’s population but over 23% of the world's incarcerated people.
Peter Lattman asks his readers the following question:
Law Blog Question of the Day: Is our criminal justice system broken? And specifically in the white-collar realm, are the sentences recently meted to the above individuals too harsh?
I posted the following response on his blog which was followed by some very passionate and sometimes personal debate:
The sentences given to recent white collar felons are not too harsh. White collar crime while not a violent crime can be more brutal to society in its consequences. White collar crime inflicts a collective harm on society far beyond the companies affected.
White collar crime adversely affects the integrity and reliability of financial information which is the main pillar of our great capitalist free market economic system. When the financial markets lose faith in the integrity and reliability of financial information the costs of capital and debt increases and the collective market capitalization of all companies are adversely affected. As a result our national wealth is diminished and pensions, 401 k plans, and life insurance policies lose value. The collective reduction of wealth further erodes tax collections to our government.
Employees lose their jobs and are often faced with the future stigma of having worked for a company affected by massive fraud. Creditors do not get paid and often must lay off employees.
The long prison sentences often given to white collar criminals while serving the purpose of imposing responsibility and accountability for felons does not materially prevent white collar crime. No crimes in progress are stopped and no current criminals find morality after learning about the long sentences given to convicted felons.
To prevent and reduce white collar crime we require strong legislation like Sarbanes-Oxley and strong internal controls reviewed by adequately educated, trained, experienced, and skilled independent external auditors. Companies require effective oversight from independent audit committees composed of members adequately suited to perform their responsibilities and not members who are appointed for “window dressing” purposes. Such audit committee members must not be permitted to hold stock or stock options in companies where they serve on such audit committees. We must require strengthened standards of education and capabilities of those board members who are permitted to serve on audit committees.
Our society is coming to the realization of the collective harshness of white collar crime in the long prison sentences imposed on convicted felons. It must now take appropriate steps to prevent white collar crime from happening. We must eliminate the opportunity to commit white collar crime.
Sam E. Antar (former Crazy Eddie CFO & ex-felon)
I suggest that you read the rest of the comments that followed from other readers.