A month or more ago, I finally got around to reading a remarkable book by a friend and regular reader, Harvey Silverglate, called Three Felonies a Day. It's a very disturbing look at the federal criminal justice system, based upon quite a few different cases, including some of the highest-profile ones of the last few decades, including Michael Millken, Martha Stewart, and former Alabama governor Don Siegelman. Harvey is a defense attorney himself, and an earlier book, co-authored with historian Alan Kors (whom I also know slightly) went into some aspects of the current insanity in academia. I did not agree with all of the book, but a great deal of it was profoundly disturbing.
Harvey's first and perhaps most important point takes us back into the English common law tradition that was the foundation of colonial law and is still, according to him, behind most of our state law. That tradition, he says, firmly established that it is impossible to commit a serious crime without pretty clearly knowing that one is doing so. And that, he says, is exactly what many people who run afoul of the federal justice system do not know. Laws on bribery, mail and wire fraud, possession of pornography, and making false statements to authorities are so broad and so vague that federal prosecutors can decide that relatively normal political behavior is criminal. One of the first cases he mentions involved Theodore Anzalone, a Boston city official whom Republican prosecutor William Weld--eventually to be the governor of Massachusetts--indicted in the early 1980s in an effort to destroy the career of long-time Boston mayor Kevin White. Anzalone was accused by a convicted extortionist named Collatos of having participated in extortion himself, but charge eventually collapsed at trial after Collatos repeatedly offered Anzalone a change in his (Collatos's) testimony if Anzalone would pay him a bribe. (Silverglate and some of his associates listened in on one of their meetings.) He was also accused of laundering money that went into a brokerage account in the name of White's wife and mother--money whose source was never determined at all. In a story that was repeated several times throughout the book, Anzalone was convicted at trial of the money laundering charge because the judge bought, and built upon, the prosecution's theory of the case. Years later an appeals court reversed the conviction, but not before the scandal had driven White out of politics. The case was similar in some respects to that of former Providence Mayor Buddy Cianci, which I have discussed here. The Feds could never prove that Cianci had taken a bribe--although he had certainly abused the power of his office for petty personal reasons--but they managed to get a RICO conviction by arguing that he was the head of a criminal enterprise, the City of Providence, based upon bribes received by a close aide.
The problem to which the book returns again and again is that many defendants, unlike Anzalone, do not have the stomach or the resources to go through a trial, much less an appeal, and therefore plead guilty. Some high profile defendants like Michael Millken may also have plead guilty because the government threatened to go after family members of theirs as well. ( I would have appreciated more detail about the charges against Millken.) Harvey does go into much more detail about Enron, suggesting that its leading executives, including Jeffrey Skilling, were wrongly convicted because their corporate reports, although somewhat obtuse and relying on key footnotes, did contain enough information for investors to realize that the company was in extremely deep trouble. He is even more scathing about the prosecution of the accounting firm Arthur Anderson, which worked for Enron. The prosecution destroyed the firm, but the Supreme Court eventually threw it out. The Sarabanes-Oxley law, passed to prevent Enron-type abuses in the future, has created new problems, because prosecutors have used it to charge firms with obstruction of justice because they routinely destroyed documents that the government later took an interest in.
The Martha Stewart case was another very tricky one. It began when Samuel Waksal, the CEO of a biotech firm called ImClone systems, unloaded a great deal of his own stock in the company because the FDA had told him they were about to disapprove the company's new drug. (Why the FDA informs companies in advance of the public announcement I certainly do not know.) Waksal's broker, Peter Bacanovic, was Stewart's broker too. He told Stewart what Waksal had done and she unloaded her shares as well. According to the author, that was not clearly insider trading on Stewart's part, because she did not work for the company. It's not even clear, indeed, that Bacanovic did anything more serious than violating his company's rules. I personally think that Bacanovic and Stewart should certainly have been liable for a conspiracy to take advantage of privileged information, but in fact they weren't charged with insider trading, but merely with making false statements to federal agents in the course of the initial investigation. Silverglate argues that in fact, it would have been very difficult for the government to have convicted Stewart of insider trading, but they did convict her on the false statements charge.
Many people, myself, were shocked when Karl Rove an Alberto Gonzales were caught trying to remove US Attorneys who refused to target Democratic officials. That kind of scandal turns out to have been more serious than I knew. Don Siegelman, the only Democrat who could win a statewide election in Alabama, was convicted and given a long sentence for accepting half a million dollars to help pay for a failed campaign to establish a state lottery. All he did in return was to appoint the donor to a state board that supervised hospitals--a position which the donor had already held, and which did not receive any compensation. Silverglate hoped that a federal appeals court would throw the conviction out when he wrote his book, but that is not what happened, and Siegelman remains in jail. Another questionable prosecution put an end to the political career of a prominent Florida Democrat.
There is a great deal more in this book. The feds have also found several ways to call attorney-client privilege into question. The overarching point of it, which is very convincing, is that many areas of federal law are vague, and that prosecutors like the latitude that it gives them. Now that we are five years into the financial crisis with hardly a single major conviction, it is somewhat counterintuitive to think that the federal criminal justice system is out of control, but this indeed seems to be the case. The book deserves to be widely read, especially by those in a position to do something about the problems it points out.