I got this from Al Krebs' newsfeed.
CREED OF GREED: STRANGE SENSE OF MISSING TARGETS PERSISTS DESPITE RECENT CORPORATE CONVICTIONS AND JAIL SENTENCES
NICHOLAS E. HOLLIS, AGRIBUSINESS COUNCIL: Last week's long awaited indictment of former Enron chairman Kenneth L. Lay in Houston prompted new waves of indignation and calls for "justice" across a country fed up with stories of unpunished white collar criminals and practitioners of the "Creed of Greed". But even as the righteous trumpets sounded, and another drum-roll began for the legal, processed march likely to result in more Enron convictions and jail sentences --- a strange sense of missing the target persists.
You can count on high profile headlines, and great mudslinging when Lay's trial starts up --- but ask any white collar crime expert - if he/she believe Enron prosecutions will act as a deterrent for other, more shrouded (and serious) corporate felonies (i.e. price fixing, racketeering, extortion, money laundering) --- and you will quickly realize a deep level of skepticism and cynicism, even dismay.
One need only compare how the the feds handled the investigation/prosecution of Archer Daniels Midland (and its top brass, including then chairman Dwayne O. Andreas) and Enron --- to see why.
In the ADM pricefixing case, indictments came after more than four years with prosecutors provided extensive video and audio tapes by a top inside executive (Mark Whitacre) --- ADM top brass were caught red-handed in white collar's "most capital crime" --- with hundreds of millions stolen from farmers and consumers widewide through a sophisticated scheme using phony trade associations to rig feed/food ingredient prices through an ADM led cartel.
But instead of working the time tested prosecutorial technique of pressuring lower level executives caught in the snares to provide info/roll against the bosses -in exchange for lighter sentences --- in the ADM case, the DOJ and its lawyers watched as Andreas was able to force a re-direction of the entire case -targetting the DOJ's prime informant --- while simultaneously buying complete immunity (even from questioning) for himself and his top lieutenant, James Randall in exchange for agreeing to pay a $100 million fine using shareholder funds.
Later, it was learned that part of this deal included a USDA pledge-arranged by then Ag secretary Dan Glickman* --- enabling ADM to avoid debarment and maintain its government contracts, (including highly lucrative ethanol subsidies). DOJ officials who outlined this plea agreement failed to mention the USDA portion to the Federal judge (October 1996).
Aside from vice chairman Mick Andreas (the chairman's son) and corn division president Terrence Wilson who were convicted and received three year sentences, and fines, few others received any serious time for price-fixing .
But Mark Whitacre --- the ADM executive, who risked his life to provide insider tapes which virtually made the government case against ADM --- and which reportedly, featured discussions involving Andreas and Randall --- received nearly ten years without chance of parole, and was ordered to repay millions to ADM --- guaranteeing him a lifetime albatross around his neck. Whitacre is still serving time --- and his numerous, well-supported appeals for clemency and pardon have been sidestepped.
In the Enron case --- albeit with its differences --- this would be equivalent to the accounting whistleblower who warned Ken Lay about fraud- being singled out for a targetted federal prosecution while many of the top "perps" of real crimes --- got to walk.
Few will shed any tears for Enron's brigands. Their excesses, frauds and carefully constructed pyramid schemes, caused terrible damages to thousands of innocent people. Yet compared to the Supermark-up to the World - still run by the most successful crime family in America's corporate history --- the Ken Lay crowd are small time players.
Enron was big, but as a corporation, it's inflated earnings and fabricated divisions were bogus. When the whistle blew, it collapsed like a sand castle at the beach. But in the ADM case, it was the government itself (and the Clinton Administration) which nearly went belly up. Key resignations were rife in Janet Reno's Justice Department --- and the FBI became demoralized, having to watch a strong case dissolving under orchestrated legal and political attack.
The net had caught the "big fish", but politics and pay-outs at the top enabled him to swim free. It was practically "business as usual" at ADM following the plea agreement. Just recently, in a holdover action from this mammoth price-fixing scandal , ADM agreed to pay $400 million to settle a civil case on high fructose corn syrup --- a byproduct of ethanol production which is substituted liberally for higher priced sugar in literally hundreds of drinks and snacks found in supermarkets across the country --- a key factor in the obesity crisis.
So next time you hear a commentator chortling about bringing Enron's bad actors to bar of justice --- ask them to consider the corporate predators who still roam the countryside, wrecking coops,subjugating farmers and jeopardizing the fragile integrity of the nation's agro-food system. Ken Lay et. al. may really be just a distraction --- like Vaudeville theater, or the modern equivalent of the bloody spectacles which once thrilled Roman crowds at the Coliseum.
And you may be certain the Pied Piper of Decatur will be enjoying every bit of the show from his box seat high over the screaming throng.
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Michael Perelman Economics Department California State University michael at ecst.csuchico.edu Chico, CA 95929 530-898-5321 fax 530-898-5901
