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CNN Live At Daybreak

'Legal Brief'

Aired July 29, 2002 - 06:14   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Want to turn our attention now to our "Legal Brief" segment, news from around the nation's courts.

Joining us to talk about possible indictments this week for WorldCom execs and other legal issues is Kendall Coffey, CNN legal analyst -- good morning.

KENDALL COFFEY: Good morning -- Carol.

COSTELLO: Hey, WorldCom execs may be criminally charged today and of course, defense attorneys are already saying it's a witch hunt, is it?

COFFEY: Well people should be howling. If there is a concern about a howling mob with $120 billion in shareholder value lost from WorldCom, the impact on pension funds, savings, investors is devastating. And while there's obviously a concern on the part of the defense community that there is a prosecution rush to judgment, the reality is that they're not looking to put innocent people in the paddy wagon. What they're looking for are high-impact, high- visibility cases that are relatively clear cut and simple to make so that they can restore some sense of public confidence and also send a message to every corporate boardroom in America.

COSTELLO: But you've got to admit, it's a pretty good defense.

COFFEY: Well of course they're going to be talking about it. And of course there's going to be we're scapegoats, we're victims. But what they're going to be trying to do from a prosecution standpoint is look at what are the simplest kind of cases that we can bring right now. Arthur Andersen document shredding; ImClone, somebody dumps a lot of stock maybe minutes before a negative announcement is about to be made about a company's products; those are the easiest, quickest cases to bring.

Something like Enron may be very complicated...

COSTELLO: Oh yes, let me interrupt you for just a second and talk about Enron, the company that was criminally charged and no one went to jail. I mean might all of these news cases coming to court end up the same way?

COFFEY: Well Enron hasn't been charged yet. Arthur Andersen was, of course, charged... COSTELLO: Oh I'm sorry, I take that back.

COFFEY: ... on document shredding. But with Enron, what you may see is a longer investigation going down all the paper trails. In the meanwhile, Adelphia's founder is basically splashed across the headlines of America on what the government says amounts to basically a raiding the piggy bank. So they're trying to get maximum impact quickly while other cases such as Enron may take months and months to develop.

COSTELLO: Do you really think though that Enron officials will go to jail, will be convicted since it is so very complicated?

COFFEY: Well these cases are complicated, but given the public climate right now, it's going to be easier than ever to bring corporate executives, even in fairly tedious paper intensive cases, to justice. And if people are convicted, they are going to get hammered with maximum time given the climate right now and given the need to really send a message that no one will forget.

COSTELLO: Let's talk about the climate right now. Do you think that will last?

COFFEY: Well I think it's going to be for the foreseeable future because people's confidence in the market and sort of our titans of industry have been shaken as they haven't been in decades. So there is going to have to be something fundamental that is done and it begins with high-level prosecutions and it's got to include some basic reform. You never solve a problem this serious with crime, punishment and prosecution alone. You've got to look at the underlying system and make some basic changes there as well.

COSTELLO: Well our government is supposedly hard at work at doing that.

Kendall Coffey, thank you very much for joining this morning. We appreciate it.

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