March 31, 2006

A big scandal may be emerging out of government misconduct in prosecuting corporate misconduct. Recent indications include comments by a federal judge in a hearing on criminal charges against KPMG defendants, and a looming Fifth Circuit opinion in the Enron Nigerian Barge case. The former involves government pressure on corporate defendants to sacrifice their employees as the price of staying in business. The latter involves keeping possible witnesses under threat of indictment so they can't testify for defendants. Now that business has been on trial for four years, maybe it's the prosecutors' turn.