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American Morning
Congress Raising Limits for CEO Sentencing
Aired July 17, 2002 - 07:40 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.
PAULA ZAHN, CNN ANCHOR: Now back to the issue of punishing corporate crooks. Yesterday, the House followed the lead of the Senate, overwhelmingly passing a bill that carries new criminal penalties for business fraud.
Joining us now to talk more about the price for some white-collar crime and a pause in the kidnapping and murder trial of David Westerfield, CNN legal analyst Jeffrey Toobin. He has it all for us this morning.
JEFFREY TOOBIN, CNN LEGAL ANALYST: Got it all.
ZAHN: So let's talk about this House bill.
TOOBIN: OK.
ZAHN: If you actually convict a CEO, does that really mean they are going to sit in prison longer than they used to?
TOOBIN: There is this amazing bidding war going on in Congress now. The Senate increased the penalties from a maximum of 5 years to a maximum of 10 years. The House said, Oh, no, that's not good enough. We are going to make the maximum penalty 20 years and create another crime where the maximum penalty is 25 years. And the irony is none of this is ever going to matter to the sentencing of any of these CEOs if any of them are even prosecuted.
ZAHN: So, wait, wait, wait. So you are telling me they are going through this charade to look good?
TOOBIN: This is classic political theater, because the way white-collar crime is sentenced in this country is according to federal sentencing guidelines, which have not been changed at all. And white-collar crime almost invariably is sentenced under five years, and that's how people get sentenced in this country, if they are convicted at all as white-collar criminals.
ZAHN: So the reality is once this bill comes out of conference, whether there is 5 years or 10 years or 20 years, it makes no difference at all...
TOOBIN: Almost...
ZAHN: ... unless you change the federal sentencing guidelines? TOOBIN: The guidelines, and the core issue with white-collar crime is the issue of proving criminal intent. That's why there are so few white-collar crime prosecutions. That's why you haven't seen Ken Lay prosecuted, Andrew Fastow, Jeffrey Skilling, the three guys who ran Enron. They have not been prosecuted, because prosecutors have not yet figured out a way to prove criminal intent.
ZAHN: All right. So if you were to read between the lines of that "Wall Street Journal" article suggesting CEOs really do not want to put their signatures to these financial statements, you are telling me they shouldn't be scared of anything.
TOOBIN: Well, they might be scared of some civil liability, and they certainly don't want to be criticized. They don't want to have their books audited by the SEC. But it is very tough to prove that these executives intended to violate the law.
Every time you have a white-collar crime prosecution, the defense gets up and says, look, we checked with the board, we told all of these other executives. If we had criminal intent, if we were intending to violate the law, why would we have done all of this? And juries have a hard time convicting in these cases. So it's not that prosecutors don't want to bring these cases. They are tough to win.
ZAHN: Is there anything on the horizon that's going to change that?
TOOBIN: Well, I think what may change is how juries look at them. Juries may --you know, jurors live in the real world. They see what's going on, and they may be less tolerant of explanations that, oh, we were just operating in good faith, we were trying to do our best. And they may just convict more easily, but it is tough to bring these cases.
Remember the Anderson obstruction of justice case. That was supposed to be a slam-dunk. The jury was out for two weeks. They almost got away. That just shows how tough it is to bring these cases.
ZAHN: So I guess what I am trying to understand is Congress goes through these many hours of heated debate, and we don't know what this bill is going to look like in the end...
TOOBIN: Right.
ZAHN: ... you are telling me there is nothing in there that's actually going to make anybody sit in jail longer if they are convicted.
TOOBIN: You know, I mean, I try...
ZAHN: So what do they need to add to the bill to make that happen?
TOOBIN: I try not to be too cynical about this, but I think, you know, when it comes to sentencing policy, you know, politicians get up and say, we're going to increase penalties 5 years, 10 years, 20 years, and no one ever does the follow-up to see if anyone is ever actually sentenced to that long, because they are not. It's really just theater.
ZAHN: That's why you're with us to help us better understand this stuff. Out to San Diego...
TOOBIN: Yes.
ZAHN: ... a big delay in the Westerfield trial. Now, to be perfectly fair to the judge, when he took this case, he explained that he was going to be celebrating his anniversary in the middle of the trial, and guess what, prepaid tickets for a little...
TOOBIN: He has got -- he has prepaid tickets, and...
ZAHN: ... cruise, right?
TOOBIN: ... for a cruise apparently. And it's 11 days. There he is. And he's a very good judge. I was out in the courtroom not too long ago, and he -- you know, he is a good-natured guy, very sort of relaxed. The jury likes him a lot. But you know, it is certainly odd in this high-profile case...
ZAHN: Odd.
TOOBIN: ... 11 days, this isn't just a few days off. There has been an 11-day gap in testimony. The testimony doesn't start until next Monday in the middle of the defense case.
ZAHN: With a non-sequestered jury.
TOOBIN: With a non-sequestered jury.
ZAHN: So what is the impact of a long break like that on these jurors?
TOOBIN: You know, I wish I could tell you clearly what the answer is. I don't know. It is just odd. It's a complex case. There is a lot of DNA evidence involved.
ZAHN: Walk us through some of that as briefly as you can...
TOOBIN: Well...
ZAHN: ... what the jury was left with before they went on the king (ph) vacation.
TOOBIN: The key evidence against Westerfield is the blood of the victim on -- in his trailer home. How did that blood get here? Hair fibers of Danielle in his home. That kind of -- that's the evidence that is by far the most important evidence in the case.
ZAHN: Plus there was testimony of a former girlfriend. There were all these questions raised about the lifestyle of the parents. TOOBIN: Right, the lifestyle of the parents, which I mean, a lot of people think it's just a sideshow as a way to try to put the parents on trial. The DNA evidence, the hair and fiber evidence, if he gets convicted, that's what's going to convict him.
ZAHN: More legal skirmishing going on among the Williams' clans- members, half brothers...
TOOBIN: Poor Ted.
ZAHN: ... brothers and daughters and -- so what's the deal here?
TOOBIN: Well...
ZAHN: His will stated that he should be cremated. So now the executor of the will comes out and said, oh, right before he died, he said he wanted to be frozen.
TOOBIN: Boy, you know, I think this is a very clear legal issue. If I have a will and it says, I want my assets divided in half between my two kids, and the executor says, no, no, no, he told me he wants it all to go to his son, Adam. Well, the will is what controls. This is why we have wills, so you can decide what you want to do. I think the cremation -- if he says he wants to be cremated, I think he has to be cremated.
ZAHN: So where do you see this ending up and going?
TOOBIN: Well, I think -- I think the daughter who is going to go to court and say, you know, honor Ted's intent, cremate him, is going to triumph over the two kids apparently who want him frozen, as he his now.
ZAHN: When we listen to you, you're a very wise man, we just want to remind our audience you are the one that about an hour before the Johnny Walker plea deal was signed...
TOOBIN: That's right.
ZAHN: ... predicted that.
TOOBIN: Thank you for not mentioning my predictions in the Michael Skakel case, too.
ZAHN: Well, no, we did -- we forget about those lousy predictions. We tend to herald the good ones, Jeffrey.
TOOBIN: OK.
ZAHN: Thank you -- good of you to drop by.
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