U.S. reins in prosecutors on white-collar crime cases

White-collar crime could become more difficult to prosecute under new guidelines the Justice Department issued today.

The department has been under pressure from the U.S. Chamber of Commerce and Congress to rein in some tactics that critics say gave the government an unfair advantage in pressing cases against companies.

Bloomberg News reports:

The changes bar the government from demanding that companies turn over confidential legal materials to win leniency in plea deals. The revisions also prevent prosecutors from penalizing companies that pay attorney fees for employees under investigation.

The shift is a victory for the U.S. Chamber of Commerce, the American Bar Assn. and other groups that have spent more than three years arguing that the Justice Department tactics violated employees’ constitutional rights and gave prosecutors unfair leverage to force settlements with companies.

The new rules are the latest departure for a department that once said tough tactics were vital to combat corporate fraud after the collapse of Enron Corp. and WorldCom Inc. The agency previously eased its business fraud guidelines in December 2006.

Read the full story here.

What would you bet that the next corporate-scandal wave will be followed by a new rush to give prosecutors more weapons to take on white-collar offenders?

The pendulum always swings too far, in both directions.

Photo: Former WorldCom Inc. Chairman Bernie Ebbers, now serving a 25-year prison sentence for leading a massive accounting fraud at the onetime telecom giant.  Rogelio Solis / Associated Press

Comments

[Raymond]

I guess Justice has forgotten how lawyers, business owners and S&Ls conspired to loot the thrifts in the '80s. With Enron fresh in our memories, how is it possible to make this kind of retreat? The American Bar Association should hang its head in shame. If the professionals didn't maintain a higher standard of practice than has been shown in these instances, how are we to expect that the less scrupulous of its members will be honest now?
Here is yet another example of the government surrendering to the litigious avalanche that follows in the wake of these crimes.

[Charlie]

Ebbers was convicted only of defrauding a few major corporations that were smart enough to sign guarantees with him. That was only the tip of the iceberg. Ebbers defrauded thousands of small investors out of their entire life savings not just in Mississippi but all across the nation. Stock investors had no recourse as it is always a risk to invest in the stock market. He also defrauded thousands more by 'slamming' rerouting net access thru MCI to his lines thru Canada and Europe.

The fraud he was convicted with was about 12 billion but the actual losses were closer to 200 billion.

Nearly all these funds were channeled to the Mississippi Baptist Convention of which his wife was President. For all practical purposes these monies went to the Mississippi Ku Klux Klan or to persons who share their ideology.

His 25 year sentence was just a slap on the wrist compared to all the people who suffered at the hands of Bernie Ebbers.

[Maggie%20Knowles]

Here's another issue that Barack Obama addresses. He says that our country will get back to following THE RULE OF LAW, and will also get rid of the lobbyists from BIG PHARMA, BIG OIL, BIG WALL ST who are currently writing our laws. I'm voting for Barack Obama because he offers the change we need. YES WE CAN!

[yonnahere]

Nice just in time to set the stage to save the bankers from all their misdeeds and to the taxpayers once again will bear the brunt of saving bank assets again. And you wonder why our schools and infrasturcture is third world class. Just lovely . . .