"Let justice run down like water, and righteousness like a mighty stream.” [Dave Crater says he thought of those words from the Prophet Amos when a reader of this website wrote that while he may be right in asserting the innocence of Joe Nacchio, he went too far in making the same claim for Bernie Ebbers of Worldcom. Here is Crater's rebuttal. - Editor] The recent white-collar legal lynching that brought down innocent former Qwest Communications CEO Joe Nacchio is only the latest in a string of hostile anti-business rampages conducted by America’s attorneys, judges, and bureaucratic regulators in the wake of the 2001 stock market collapse.
That market collapse brought the Nasdaq composite from over 4500 in the spring of 2000 to under 1500 by the end of 2002 – a loss of over two-thirds of the market’s peak value. This market-wide collapse in the New Economy destroyed billions in stockholder wealth.
There was not a single CEO, accountant, or consultant in America responsible either for this collapse, or for its effects on his or her individual company.
Yet seeing the legal and political opportunity of a lifetime, attorneys, judges, and regulators have waged a full-scale legal assault on prominent members of the American business class over the last five years, positioning themselves in the process as saviors of the public trust and of the nation’s retirement savings against greedy corporate thugs.
The greedy thugs are not in the business community. The greedy thugs are in posh government and law firm offices across the nation.
Like recently and justly disgraced Durham County (NC) District Attorney, Mike Nifong, these greedy thugs have abused their legal and moral authority in order to build ambitious careers for themselves in law, media, and government and to re-distribute the wealth of their victims to people who have no moral right to it. Among the chief offenders is now-governor of the state of New York, Democrat Eliot Spitzer, who between his election as state Attorney General in 1998 and his 2006 election as governor, conducted an arbitrary reign of leftist terror on Wall Street unlike any the nation has ever seen.
The description by the president of the U.S. Chamber of Commerce, Thomas Donohue, of Spitzer’s brazen power-abuse aptly describes the attitude of ambitious prosecuting attorneys everywhere (http://www.iht.com/articles/2005/01/05/business/spitzer.php): "Spitzer's approach is to walk in and say, 'we're going to make a deal, and you're going to pay $600 million to the state, and you're going to get rid of this person and that person, and if you don't do it by tonight, we're going to indict the company,"' Donohue said. "It is the most egregious and unacceptable form of intimidation we've seen in this country in modern times."
Colorado U.S. Attorney Troy Eid – a Republican, showing the intimidation and leftist propaganda justifying the intimidation are a bi-partisan affair – proudly pronounced a few weeks ago that the conviction of Joe Nacchio was the largest for insider trading in the nation’s history. (Mr. Eid was clearly abreast of the current state of the fierce competition transpiring among the nation’s prosecuting attorneys to bring in the largest conviction.) The prosecution and conviction of Bernard J. Ebbers, founder and former CEO of MCI-Worldcom, was the largest fraud and conspiracy conviction in history in terms of the prison sentence it secured. Mr. Ebbers is now serving 25 years in the Oakdale Federal Prison in Oakdale, Louisiana.
Like Mr. Nacchio, Mr. Ebbers was a business phenomenon. And like Mr. Nacchio, Mr. Ebbers is an innocent man.
The son of a traveling Canadian salesman, Ebbers worked as a milkman while bouncing between the University of Alberta, Calvin College, and finally Mississippi College. Ebbers joined a few others to, in the best tradition of American risk-taking entrepreneurship, found Long Distance Discount Services, Inc. in 1983. By 1995, the company had acquired 60 other companies and had changed its name to Worldcom. At his peak in 1999, Ebbers had gone from being the son of a traveling salesman and running college milk routes to being worth $1.4 billion and being listed at number 174 on the Forbes 400.
To many of the nation’s attorneys and judges, and to many in the public, such unbelievable evidence of America’s promise is no longer something to be celebrated. It is something to be abhorred, and its chief incarnations villains to be prosecuted and legally pillaged whenever the political opportunity arises.
Not helping, of course, is the slide, rapid throughout the 20th century, toward a welfare state that arbitrarily, inconsistently, and ever-increasingly regulates every aspect of American business and glorifies the government bureaucrat who produces nothing. Accounting regulations are a constantly-changing circus that increasingly diverges from financial reality and that, when violated in either substantive or cosmetic fashion, calls down in the name of “Accounting irregularities! Control the businessman!”, even more oppressive, arbitrary and wealth-destroying folly such as the Sarbanes-Oxley act of 2002.
And as this folly progresses to greater and greater heights, the integrity and virtue of a government bureaucrat or attorney is only questioned if he files the most absurd rape charges against innocent college lacrosse players who weren’t even at the scene of the crime, or if he carries on a pugnacious rampage on Wall Street against anything with a white collar. And even in the latter case, he still can become governor.
Also not helping things is the long antipathy of America’s legal system toward the historic Christian religion. Attorneys and judges are, by and large, secularists, and many of them aggressively so. Businessmen, on the other hand, earning their wealth by actually producing things and wealth for other people – as opposed to sopping and legally plundering their millions from productive people – tend to believe in God and show it with their lives.
These are both generalizations, of course, carrying obvious exceptions. But this is one of those obvious things that is true but not really worth saying. The generalizations are accurate, and Ebbers at the time of his prosecution was a member of Easthaven Baptist Church in Brookhaven, Mississippi, regularly teaching Sunday school and attending Sunday morning worship. When the allegations against him were first brought to light, Ebbers addressed the congregation and, like Joe Nacchio, Charles Keating, Martha Stewart, and a host of other business victims of recent legal outrages, insisted on his innocence. “I just want you to know you aren’t going to church with a crook,” he said. “No one will find me to have knowingly committed fraud."
Well-said. Ebbers said “knowingly” because he knows how this game is played. Keating, who also demonstrated classic religious sensibility in using his wealth to donate millions to Mother Theresa, was convicted in 1992 of committing fraud unknowingly – an impossible crime. The conviction was overturned by the 9th Circuit Court of Appeals, which informed the lower judge, none other than Lance Ito of O.J. Simpson fame, that fraud requires intent. But only after Keating had done four and a half years of hard time.
Another important strategy of the game is to threaten and intimidate with potential charges in an attempt to get the victim to admit guilt. If the victim does “confess,” send him/her to prison, levy heavy fines, and hold a press conference pronouncing to the world that justice has been done. If the victim does not admit guilt, try to get the victim to make some statement that can be turned into a charge of lying to regulators. Then drop the original charges (Martha Stewart) or greatly reduce them (Ebbers), and make the main force of your prosecution that they – horror of horrors – lied to you in an effort to avoid your witch hunt. And bump up the sentence to show them the mistake they made in not admitting their guilt in the first place.
Stewart was originally hit with charges of insider trading in ImClone stock. She was convicted on zero counts of insider trading, but on four counts of lying to investigators and obstructing “justice.” Ebbers was originally hit with a 15-count indictment. Those charges were then dropped and replaced with one count each of fraud and conspiracy and seven counts of making false statements about the original counts.
Keating’s conviction was overturned and Stewart, not seeing the point in fighting with legal agents who don’t care about justice, did 6 months voluntarily, paid fines, and acquiesced to regulation of her business involvement so she could be done with it. Ebbers was not so fortunate. He received a sentence, affirmed by the 2nd Circuit Court of Appeals, that, in the words of the judge who wrote for the court, was “longer than the sentences routinely imposed by many states for violent crimes, including murder." A law-abiding Southern Baptist, Ebbers drove himself to prison.
There is no other name for this but moral and legal corruption. The people who have perpetrated it are themselves criminals. In addition to destroying the lives of innocent people whose only crime was being a wealthy executive at the time of a stock market collapse, it is transforming America from a nation of wealthy entrepreneurs in big skyscrapers and country clubs into a nation of wealthy attorneys and bureaucrats in big skyscrapers and country clubs. We are a wealthy nation, and unless we want to be a poor nation, that wealth must be possessed by wealthy people.
The only question is whether we will be a nation that resents having that wealth in the hands of people who have made many others wealthy by creating jobs and producing things large numbers of people want and need – and who cannot control when the entire economy tanks – or whether we will be a nation of institutionalized envy that presumes the wealthy businessman guilty until proven innocent and uses the power of its legal system to plunder the most productive and re-distribute their wealth to everyone else every time the market crashes.
The verse from the Old Testament prophet at the top is no mere rhetorical device. It is a reminder that a God exists who cares about justice, knowledge of Whom prevents the poles of our minds from becoming reversed and the resulting moral current that powers our lives from running backward. When the current runs backward, we call the guilty innocent and the innocent guilty. But there is a Day coming soon when the poles will be restored, and justice will flow down like water and righteousness like a mighty stream. In that hour, if not before, naked legal ambition and self-serving public prosecutions that use the power of the state to condemn the innocent will no longer play in the court of public opinion. For the court of public opinion will no longer be one governed by stock market losses, the vagaries of economic fortune, and widespread cultural envy. It will be governed by justice, and by the people in this life who stood for it and who contended for the innocent – even the rich innocent – in their hour of trouble.
Which side will you be on?