Legal Commentary

The human cost of the criminalization of business

By Tom Kirkendall

In the news and public relations business, Friday afternoon is a good time to float news that someone involved doesn?t want many folks to notice. News tends to die over the weekend. Monday brings new news. Friday?s news is already old.

This past Friday?s news along those lines was that Joseph Cassano and other former American International Group executives involved in the AIG meltdown that almost brought the world?s financial system to its knees would not be subjected to criminal prosecution.

Inasmuch as the same thing that happened to Enron in late 2001 happened to AIG in late 2008 (as I predicted it could happen in 2005), it?s not particularly surprising that the federal government would like the news that it has elected not to pursue criminal charges against former AIG executives to die over the weekend news cycle. I mean, really. Other than acknowledging the randomness of the criminalization of business lottery, how could anyone rationalize the government?s decision not to prosecute AIG executives, on one hand, with the government?s brutal treatment of business executives involved in Enron-related business, on the other?

Well, some would say at least the government finally got the decision right in regard to the AIG executives. Better late than never, right? Cassano and the other AIG executives are still subject to multiple civil class action lawsuits in which the responsibility for AIG?s meltdown will be allocated among all of the multiple parties involved. That?s the way this type of thing should be handled, right?

Well, yes, except that all of the mainstream media reports that I read about the government?s decision not to prosecute the AIG executives failed to mention that multiple business executives who did nothing other than be involved in transactions with AIG have already had their careers ruined and their lives uprooted by dubious criminal prosecutions.

Why weren?t these men and their families spared the trauma of facing the brute force of a federal criminal prosecution and a prolonged prison sentence? Likewise, why were these men forced to endure the incalculable human cost of the government?s criminalization-of-business policy?

Meanwhile, the human cost or that dubious policy continues to mount.

This past week, Joe Hirko, the former Enron Broadband executive who copped a plea bargain in the face of a draconian trial penalty, was visited by his wife Kathleen in the California prison where he is serving his sentence. During her visit, Mrs. Hirko was stricken by either a heart attack or stroke and died, leaving her husband, three children and four grandchildren to pick up the pieces of their lives. Unlike the news about the government?s decision not to prosecute the AIG executives, Kathleen Hirko?s tragic death did not even register a blip on the mainstream media?s radar screen.

I wonder how much the past seven years of prosecutorial hell that the Hirko family endured contributed to Kathleen Hirko?s death? And what beneficial public purpose did the infliction of that hell achieve?

A truly civil society would find a better way.

Full post as published by Houston's Clear Thinkers on May 24, 2010 (boomark / email).