You're all guilty!

By PETER KADZIS  |  September 28, 2009

With respect to my book, it's true that a lot of the cases I lay out are white-collar cases. Not all of them ? I have cases of political radicals, I have cases of Muslims under investigation or indictment for giving aid and comfort to so-called terrorist groups when they really haven't done any such thing. I have a radical professor from the world of art and academics who was caught up in the terrorism investigation that was absolutely ludicrous, and yet it nearly wrecked his life. I have a lot in the book about the harassment of the New York Times, particularly when the Times disclosed the government's warrantless wiretap program on its front pages. Nobody would call the New York Times a right-wing rag, and so, in fact, the book is, to use Fox's phrase, fair and balanced. The book crosses political barriers.

But what about Arthur Andersen?
In the wake of the Enron collapse, many people were after as many scalps as they could collect. Enron's accountant, Arthur Andersen, was a prime target. The fact that the firm had broken no laws did not stop federal prosecutors. The feds took advantage of vagueness and ambiguity in the law and concocted a book to throw at Arthur Andersen, assuming the firm would cave and settle for a plea bargain. Arthur Andersen did not settle. They fought tooth and nail, and were ultimately vindicated. The problem was that Arthur Andersen was destroyed in the process. Integrity is key for an accounting firm. By the time Arthur Andersen was exonerated, its business was in ruins. The Feds may have lost the battle, but they won the war.

When the government went after KPMG, that firm just folded and played the plea-bargain game. If the federal government can ruin a pillar of the financial community such as Arthur Andersen, and cow another giant, KPMG, into submission, what hope does an individual or a small unpopular political cause have when faced with federal prosecution?

Let's talk about one of the high-profile white-collar cases, Wall Street financier Michael Milken.
Michael Milken [who was indicted in 1989 on 98 counts of racketeering and securities fraud for his role in junk-bond trading] is one of the most wrongfully demonized white-collar defendants in all of the decades that I have been practicing law. His lawyers knew that he did not commit a crime, but the pressure on him was so enormous and, by the way, not only on him, but on his family. This should be a real shocker to anybody: his brother Lowell was held as a hostage.

Lowell was indicted along with Michael. They offered Michael a deal he could not refuse. And that was, if he would plead guilty they would let his kid brother go. Now, I call that hostage-taking. I believe that it's a crime. It's extortion, and it should not be allowed in any civilized legal system anywhere, particularly in the United States under our constitution. And yet that plea bargain went through. A judge in the US District Court in Manhattan allowed it, and the government indeed kept its end of the bargain.

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