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The Enron Task Force's dirty little secret

A motion in an Enron-related criminal case exposes a dirty secret of the Enron Task Force that the mainstream media does not want to talk about.

The Lay-Skilling forfeiture motion

The Enron Task Force filed its forfeiture motion yesterday in the criminal case against former key Enron executives Ken Lay and Jeff Skilling. Inasmuch as the Task Force seeks more than the net worth of both men combined, it will be interesting to count how many attorneys from various parts of the Enron litigation landscape will descend upon the courthouse in Houston to compete with the Task Force's claim to Lay and Skilling's remaining assets. More on the motion and a download site for a copy of it are here.

Explaining corporate agency costs

In this TCS Daily column, Stephen Bainbridge lucidly explains corporate agency costs and why shareholders deserve protection from theft, but not from risk-taking.

The Great Waste

Following up on Larry Ribstein's earlier post regarding the Kimberly Strassel/Opinion Journal interview of former AIG chairman Maurice "Hank" Greenberg, this post examines the enormous costs attributable to the increasing trend of government to criminalize bad business judgments in the context of the Greenberg interview and the ongoing Lay-Skilling trial. By the way, for those without time or the inclination to keep up with the Lay-Skilling trial on a daily basis, I have been posting weekly summaries of the trial each Friday, which can be reviewed here.

Jumpin' Joe Jamail

Christine Hurt over at Conglomerate points to this William Childs provided-video of an expert witness deposition that provides a glimpse into the well-known (at least in Houston legal circles) combative style of famed Houston plaintiffs lawyer, Joe Jamail.

This clip is a good example of why I require two video cameras during important depositions, one to videotape the deponent and the other to videotape the attorney asking the questions. Taking a video deposition in that manner allows you to provide to the jury or judge at trial a far more interesting video of each participant in the deposition rather than the typically-boring video of only the deponent. As the particularly contentious deposition in the above-linked video proceeded, it appears that about a half-dozen cameras would have been preferable.

The unraveling Nigerian Barge case

Last week, Larry Ribstein noted the Fifth Circuit Court of Appeals' extraordinary post-oral argument order commanding the release from prison of William Fuhs, the former Merrill Lynch executive who was convicted along with three of his Merrill colleagues of conspiring to assist Enron in improperly accounting for an asset sale in the so-called "Nigerian Barge case." This week, the other three Merrill Lynch executives are seeking release from prison pending disposition of their appeals.

The Nigerian Barge case is a case study in the dubious nature of regulating business through criminalization of ordinary business transactions and the appalling cost of that policy when four business executives get caught in the cross-fire of the government's demonization of a criminal target such as Enron. As Professor Ribstein and Henry G. Manne have pointed out many times in their writings, the use of criminal law as an in terrorem regulatory weapon is a reign of force that is contrary to the rule of law and is usually far more costly to society than the alleged evils that are the target of the prosecution.

Department of Coercion

One of the common subjects covered on my humble blog over the past couple of years has been the increasing regulation of business through criminalization of risk-taking. Accordingly, it's appropriate that my first post on this more esteemed forum should reference John Hasnas' superb WSJ ($) op-ed and my further thoughts on the perverse effects that a company's "cooperation" with the Department of Justice has on the company's sacrificial lamb-employees who are served up in the course of the company hedging the risk of an Arthur Andersen meltdown. I appreciate Ted Frank's kind invitation to contribute to this fine forum, and I pledge to uphold the high standards of this excellent resource.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.