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July 07, 2006

Massive white collar crime and the death penalty

Here's a question for people who deny that the modern American death penalty is a violation of the Eighth Amendment prohibition against cruel and unusual punishment.

Suppose that the State of Texas passed a law to make truly massive Enron-level corporate fraud punishable by death. Could that law be constitutional? Or would executing property criminals be considered cruel and unusual punishment?

Executing Enron executives may sound extreme, but lets consider for a moment the true scale of the wrongdoing by Ken Lay and his cronies at Enron. I would argue that if you support the death penalty at all, you should support capital punishment for the top-level Enron execs.

I don't support the death penalty, but if I did, Kenny Boy would have been first in line. Ken Lay did far more harm than the average murderer, or even the average terrorist. He left thousands of people destitute, including workers whose pensions evaporated and students whose college savings disappeared. How many people will die in poverty because of Lay? How many students lost the opportunity to go to college because of the Enron swindle? How many lives were shortened because the innocent employees of Enron and Arthur Andersen lost their jobs and health benefits?

On the larger scale, Lay's crimes also undermined trust in the stock market. His influence peddling damaged the integrity of American government. Enron money helped the Republicans take the White House. It's not for nothing that Kenny Boy got to sleep in the Lincoln Bedroom.

Let's not forget that Enron inflicted deliberate power outages in order to extort money from the energy consumers of California. Did anyone die as a result? If you kill someone in the process of holding up a liquor store in a death-penalty state, you're liable to be executed for your crime, even if you didn't intend to kill the victim.

If the severity of the punishment is supposed to be proportionate to the severity of the crime, Ken Lay did enough harm for capital sentence, several times over.

In practice, applying the concept of felony murder wouldn't work for massive white collar crime because there's too much diffusion of responsibility. Unless the state were prepared to execute a very large number of equally complicit people, it would be unfair to single Ken Lay out for death because a pedestrian got run over during an illegal power outage, or because a patient on a respirator died when the power went off during one of Enron's extortion attempts.

However, I don't see why people who already support the death penalty for "the worst of the worst" shouldn't include truly massive and unremediable white collar frauds as among the worst possible offenses.

My purpose here isn't to argue for the expansion of the death penalty. In fact, I'm an abolitionist. However, I'm curious about the implications the concept of evolving standards of decency for reviving capital punishment for extremely harmful property crimes.

Most contemporary Americans have a strong intuition that capital punishment should be reserved for cold-blooded killers. The idea that the state might execute someone for a theft or a swindle, no matter how large, strikes them as barbaric. Punishing petty theft by death is a classic example of a punishment that might have been acceptable to the community in its day, but which has become cruel and unusual in light of our evolving standards.

So, the question for discussion is this: If you deny that the death penalty in America today is cruel and unusual, what would you say about the right of a state to expand the death penalty to include those convicted of massive property crimes that caused extreme harms to large numbers of individuals and to society as a whole?


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» Fish out of Water: Are we doomed? from Internal Monologue
But because the number of people affected by an artificially caused blackout or pension fund evaporation is so great, far beyond the ability of our tribal minds to really grasp, the actual harm to society from the financial crime is probably far grea... [Read More]

» Fish out of Water: Are we doomed? from Internal Monologue
But because the number of people affected by an artificially caused blackout or pension fund evaporation is so great, far beyond the ability of our tribal minds to really grasp, the actual harm to society from the financial crime is probably far grea... [Read More]


It seems to me that the death penalty would be a much greater deterrent to white-collar criminals than it is to those committing today's capital offenses. They would only have to believe it could happen to them.

As a matter of justice, letting the punishment fit the crime, I think you'rew correct.

Well put. I don't speak ill of the dead, but we can apply this model to many other Enron executives than Ken Lay. Those transcripts that the blog you linked to refers to, though the blog doesn't transcribe this part, contained the following exchange among the Enron employees:

Employee 1: "We fuck California out of a million dollars a month."
Employee 2: "Again, without the language?"
Employee 1: "Well, we arbitrage them out of a million dollars a month."

Since then, I've spoken to friends in terms of "mother-arbitrageurs" and "cluster-arbitrages." What a cluster-arbitrage!

The vile acts of the Enron executives, amounting to grand theft, impoverishing many individuals and ripping off countless businesses, would indeed be well worthy of lengthy jail sentences, and if they led to death (and if one believed in the death penalty for deaths caused in the commission of a crime with no mitigating circumstances, though I don't believe in the death penalty), would indeed be worthy of the death penalty. However, as you have probably surmised, it would not be applied. Why?

A while back, when you pointed out a hypocritical position someone was taking on George W. Bush, I replied: "Don't you realize that George W. Bush is a conservative man in a business suit?" Crimes are prosecuted with a weather eye to politics (not just political parties, but on the general public's level of approbation or opprobrium for a certain type of person). Wealthy executives would not be prosecuted, for the sole reason that they appear more palatable than a crack dealer.

I'm against the death penalty for a different reason than most other abolitionists use. For me it has nothing to do with "cruel an unusual punishment." I simply don't believe in giving the government that kind of power over people. All governmental powers are invariably abused to one extent or another, and people have been wrongfully executed way too many times. Given that the current administration sees no problem with its unlawful detention of prisoners at Gitmo, it can hardly be expected to respect the lives of those they have incarcerated.

Keeping to the topic at hand, I couldn't agree with you more, Lindsay. When I was in college I had to write a paper for a criminology class, the topic of which I could choose. I chose the topic of white collar crime and how it does as much if not more damage to our society than most of the crimes measured by the Uniform Crime Report. One of my proposals was that massive fraud and corruption that hurts the lives of untold numbers (such as the Enron case) should result in a life sentence for the perpetrators, just like murderers. A true life sentence, i.e., the only way they're leaving prison is in a hearse. However, if states continue using capital punishment then I think it should follow that white collar criminals like Ken Lay or Jeff Skilling should be sitting on death row. As well as Barry Manilow and everyone in Air Supply. Their songs are crimes against humanity.

I'm not certain that your argument will sway anyone.

My prediction is that supporters of the death penalty will answer "Great, lets kill Skilling and Lay ... God's already done half for us."

In the old criminal code of the Soviet Union, the maximum penalty for murder was 15 years; you could get death for currency speculation on a big scale. There was some guy operating a handbag factory in Georgia about the end of the Brezhnev period who got executed for making a couple million bucks (and no doubt for not making the right connections).

On the whole though, perhaps blood should be paid for in blood, and money in money?

This whole death penalty thing really doesn't work for modern financial crime. If we want to be atavistic (and I don't), it does work for murder, rape, and the like. Not for a big con man like Lay or Delay, etc. They may deserve it just as much as the mugger who kills his victim, but the punishment doesn't fit the crime.

In Byzantine days, high-ranking miscreants (or deposed Emperors) used to be blinded, have their nose and ears cut off, and be sent into exile. Lesser creatures coud be executed at the drop of a hat.

I'm just throwing out some questions here.

You forgot the part about where candidate Bush was flying around in Enron's corporate jet, campaigning for president, while, at the same time, Enron was shipping regulated electricity out of California and back in as unregulated electricity to swindle California customers.

Errh! A sharp short shock to the seat!?

If I was OK with the death penalty I'd apply it first to political corruption (the Dukestir would fry for sure) on the theory that it is equivalent to treason. I'd fry anyone involved in slavery (including de facto slavery like debt peonage), and I'd fry them twice for slavery involving forced prostitution. Corporate crime comes fairly far down the list for me, even the really big stuff. Life in prison seems like plenty to me for someone like Lay or Skilling. I would include a corporate death penalty for companies involved, in which the company is shut down, all assets forfeit, major players sent to prison, and the members of the board (if they have failed to provide a high standard of oversight) forbidden to engage in any commercial activity except direct sale of their physical labor. A few corporate board members mowing lawns would ratchet up oversight to a degree that would effectively shut down corporate crime.


Your argument is completely rational, but will never convince anyone, because it relies on strict consequentialist intuitions. You are measuring wrongdoing straightforwardly in the amount of harm it causes. This is, sadly, not how most people measure wrong. Typical notions of wrongdoing come from a hodge podge of instictive reactions of disgust, rules that have been internalized to the point that they are applied deontologically, and some thought of harm and consequences.

People who are used to reasoning strictly in terms of consequences are already oppsed to the death penalty, since it has been shown to have no deterrant effect.

Stealing money or other property is not worthy of the death penalty. Property can be replaced. Besides some have heard the cliche "property is theft", so what's the big deal about stealing what's already been stolen?

But speaking seriously, I feel that the death penalty is appropriate in cases of murder or in my opinion for rape.

But since you're open in theory to new thought, lets establish the Death Penalty for printing classified information relating to security. Artie Sulzberger in the electric chair would provide a fine example for future leakers and leakers' friends, and would make for a fine cover photo for the NY Post.

Thank you Mr Phantom, for posting the most ridiculous possible reason for the death penalty! Printing classified information related to security! All Cabinet officers, and all their sub-Cabinet officers in State, Defense, Homeland Security, Justice, and a few other Departments and Offices would be dead now. Would that make you feel better?


Well, this could be one issue on which both the left and right can agree! The motion is passed?

Phantom, what if, as Lindsay mentioned, their theft of money and/or property leads, for instance, to customers, even one customer, dying? And if that does not deserve the death penalty, do you then agree that a store-robber who ends up causing someone's death because of the robbery, though not as a murder, also does not deserve the death penalty? If not, why not?

"So, the question for discussion is this: If you deny that the death penalty in America today is cruel and unusual, what would you say about the right of a state to expand the death penalty to include those convicted of massive property crimes that caused extreme harms to large numbers of individuals and to society as a whole?"

Sounds good to me. "Cruel and unusual" is whatever society decides it is, and that society also decides what crimes should and should not be punishable by death, and the manner in which that death should be obtained.


I'm still waiting for a cogent response as to why it's okay for Bush to give information about our surveillance techniques to terrorists but not the NYT. Until then I'll assume that you think the President committed a capital crime (with all its attendant consequences) by betraying the same "secrets" that the Times did.


That might go against the wishes of the community or the legislature or logic, to make say manslaughter punishable by the Death Penalty. It would make manslaughter and murder the same, which they are not supposed to be.

The Death Penalty should be reserved for the most heinous offenses, such as Murder, Rape, and aiding and abetting in the release of classified information pertaining to security.

Thank you Phantom.

>the wishes of the community

>"Cruel and unusual" is whatever society decides it is,


John Lucid

What Bush said is not identical to or as detailed as what the NY Times splashed on Page One of the paper. Bush should take advantage of more opportunities to be quiet, but so should Artie Sulzberger.

That's why I want Artie sent to the chair, kicking and screaming like Jimmy Cagney.

better than the death penalty would be a return to the code duello. that way if a ken lay or skilling or even a karl rove were to do their reprehensible business someone would be able to send their seconds to present a time and place for single combat. choice of weapons to the challenged party. it would have a double plus good effect of creating tort reform out of whole cloth. reporters print bad stuff about your wife? go jackson on 'em. ex-treasury secretary piss you off? do a burr. i doubt cheney is capable of shooting anyone on purpose so snow's safe.

I'm against imposing death as a state sanctioned punishment. I work in a field where we argue whether someone deserves death or LWOP. In any event, there's a difference between mega-grand-theft and cannibalism for kicks.

To me, mega-graft is way worse than cannibalism for kicks. Stealing from millions of people to fund corrupt politics while undermining public confidence in the banking system, the stock market, and democracy is a Big Problem.

Mega-graft threatens our way of life. It undermines democracy and the egalitarian ideals upon which this society was founded. Every mega-grafter is, by definition, a serial criminal. These criminals enjoy a veneer of respectability that a decent society has to challenge.

I'm not saying that society should kill anyone for the sake of keeping up appearances. However, if we were going to kill some criminals in order to make a point about who's the most dangerous and reprehensible, I would argue that we should start with the corporate criminals. You don't need big state-sponsored theater to remind everyone how contemptible murderers and rapists are.


As Greenwald so ably points out:
There is not a single sentence in the Times banking report that could even arguably "help the terrorists." (snip) But reports on US monitoring of SWIFT transactions have been out there for some time. The information was fairly well known by terrorism financing experts back in 2002.
To say that the NYT story helps terrorists is to say that George Bush has also helped the terrorists, which is the point I am trying to make. Ergo, if NYT writers are criminals for writing this article then Bush is guilty of the same thing.
What I wouldn't give to see Bush, Cheney, Rumsfeld, Rice, et al all dragged kicking and screaming like Jimmy Cagney before the World Court to face charges of crimes against humanity. I don't want to see him fry or hang; sitting behind bars for the rest of his wasted life would be good enough for me.

Back on topic:
As far as corporate crime is concerened, I think a true life sentence would be equally effective in deterrence as capital punishment would. Speaking just for myself, I'd prefer death to life imprisonment. The constant fear of rape alone would make me suicidal. I have a feeling that many corporate criminals feel similarly. That is one more reason for me to oppose the death penalty, at least when it comes to corporate crime.

To be completely forthcoming on this issue, I do feel (let me repeat, FEEL, but do not think my feelings should dictate policy) that some prisoners deserve to die. The ones who know they'll never get out and kill other prisoners or guards are the ones of whom I'm thinking that deserve death, mainly to protect other prisoners and the guards. However, those prisoners are a relatively small portion of the total US inmate population. I believe they should be held in 'supermax' prisons to minimize the risk to others.

But let's face it: Almost our whole penal code and penal system suck. Our incarceration rate is deplorable, mainly because of our draconian drug laws. That's a whole other topic, so I'll leave it at that.

Mega-graft is close to mega-success, and, theoretically, mega-GNP and mega-tax-income. Murder is close to nothing good. The idea is that to punish corporate crime harshly (and especially with the death penalty) would be to discourage corporate risk-taking, whereas to punish murder with death doesn't threaten any other important societal interests. Personally, I think the death penalty is wrong for about 50 reasons, but that's the idea.

You might be right. (Remember I'm opposed to the Death Penalty.) But I believe Victim Impact penalty phase evidence is bullshit. It shouldn't be about whether your victim(s) was wealthy, well-liked, pious, or numerous. Instead, why did you kill and how dangerous are you. People are swindled everyday. If you let them live we give you a "you get to live coupon." Then we decide where you live, and for how long.

Killing - above all should be discouraged. Kill & we move on to culpability. In 2002 the Court ruled the US Constitution prohibits the execution of mentally retarded persons b/c of their diminished capacities to understand and process information, to learn from experience, to reason, and to control impulses. GOOD!

Next Roper v. Simmons, the execution of juvenile offenders is cruel and unusual punishment b/c juveniles are less culpable than adults (They lack maturity & have an underdeveloped sense of responsibility, They are more vulnerable to negative influences & outside pressure, and their character is not well formed.) Good.

As far as culpability: I agree that corporate criminals are hideous creatures that hurt far more than the run of the mill serial killer. But our society is more concerned with violence than greed. Some might argue our society is powered by greed.

Anyways, I'm confident I've missed the point of your post completely. Sorry.

The death penalty would make a great deal more sense applied to white collar crime, because it might actually have some deterrent value.

I've interviewed scores of inmates in the California penal system (including a couple of murderers), and one thing they all share is a fundamental inability to reason out the consequences of their actions. The idea that any of them could possibly think about consequences far enough in advance that a non-trivial probability of execution ten years down the line would change their behavior is several steps beyond ludicrous. (Granted, most of the guys I talked to also happened to be developmentally disabled...but still, the principle holds true for most or nearly all inmates.)

White collar criminals, on the other hand, are nothing if not planners. Make the risk greater than the reward, and they will alter their behavior accordingly.

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