A number of years back, I was working as a researcher at a pharmaceutical company, one that was still hobbling its way to hoped greatness at the time, but which has, subsequently, actually fulfilled those aspirations. During my tenure at this company, we hired someone to be our on-staff laywer. I’ll call him Arthur. Arthur was a smart, Ivy educated guy with a little New York City aggro. He was also a nice guy and a card player. And because this company was still small enough that the head of legal would dain to hobnob with someone with research, Arthur and I got to know each other a series of not-infrequent after work poker games. You really couldn’t dislike Arthur. He’d call it the way he saw it, but because he was smart and clever, that was a good thing. It was probably also a good thing for the company--who originally poached him from a big law firm who’d we’d been paying to work for us.
One day, several years after Arthur had joined the company, I came in to some heated gossip: Arthur was gone, and was being indicted by the SEC. I sat around shocked. Arthur had always seemed a straight up guy to me, and in those six-beer-2am moments when loose lips sometimes sink ships, I’d never witnessed Arthur break his corporate vows. So the idea that he was doing something nefarious seemed pretty unbelievable.
Over the following weeks, more of the story eventually became known. It turned out that Arthur apparently liked to gamble in the stock market more than we knew, and had overextended himself. When the markets turned against him, he found himself on the receiving end of imperative margin calls. Unfortunately for Arthur, instead of accepting his fate and allowing his positions to get closed out, he exercised some options in our company to generate funds to meet those obligations. That wouldn’t necessarily have been a bad idea, but it was a bad idea for Arthur---who was an officer of the company and who was aware that some material information was soon to be released. In other words, it was technically illegal for Arthur to exercise those options. But he did, possibly assuming that the material information was of a nature that wouldn’t really have much effect on the stock price (it didn’t).
But rules are rules, and eventually the SEC discovered what Arthur had done. Even though Arthur could (legitimately) argue that by exercising his options he actually lost money (the stock continued to increase in value over the near term after he sold them), it didn’t change the fact that he very traceably broke the rules.
Now, this is where you’d expect for someone like Arhur--smart, no criminal record, cooperated with the SEC when confronted, and with no actual ill-gotten gains--would plead, get a slap on the wrist and maybe a suspension, and all would go their (possibly not so much initially) merry way. But these weren’t normal times. The SEC, fresh off a series of defeats in high profile cases involving actual criminals and actual ill gotten gains, were looking for a scapegoat to introduce to the world as “see, we got our man!” chum. And Andrew turned out to be easy pickin’s at the very wrong time. He wound up in prison for a year and a day, and lost his license to practice law.
The point here is not to throw a pity party for Andrew. He did, after all, knowingly break the law. But I was reminded of Andrew’s case when the news broke today that Lois Lerner, embattled former head of Exempt Organizations at the IRS, was resigning. You’ll recall that Ms. Lerner was accused of taking part in a politically-motivated organized attempt to deny associations affiliated with the “Tea Party” movement from obtaining tax exempt status. Ms. Lerner claimed innocence, She didn't deny that it happened--that is not in dispute among pretty much anyone now--but she claimed it was the work of some rogue individuals in the Cincinnati office and that no one higher on the totem pole knew until after the fact. However, when that convenient story started to fall apart, and Ms. Lerner was recalled to Congress for sworn testimony, she plead the FIfth to avoid self-incrimination. Since then, a gathering storm of hard-copy documentation suggests strongly (if not irrefutably) that her initial testimony and declarations of innocence cannot be true. Yet, despite all this, and despite the fact that if true, this constitutes a heinous crime--a use of the IRS to stifle political opposition--Ms. Lerner has not lost one day’s pay, has not been fired, and by resigning, she will get to collect her very appreciable pension and benefits. All this, despite the fact that she still has not testified under oath before Congress since pleading self incrimination. Nor has a single person anywhere in the IRS organization been fired over this matter.
Most likely, by resigning, Ms. Lerner has started the process by which this matter will evaporate. Although one would like to imagine that a serious investigation will continue and that Ms. Lerner will--if found guilty--eventually be sent to prison for a long time (along with her co-conspirators) and stripped of her benefits, recent history provides no reason for optimism. It’s not a far cry to believe that Ms. Lerner knows where some of the bodies are buried, and if she were pursued in earnest, some even bigger fish would fry. Watergate excepted, scandals that big are usually too broadly toxic for anyone to touch. People just resign and they fade away.
It would be a nice change of pace to see an outcry from the voters loud enough that the corrupt and complacent on Capitol Hill would feel the need to change the typical outcome. But voters these days are shockingly immune from outrage, even on a topic so nuclear as having the intrusive and all powerful IRS play political favorites.
Which brings me back to my former colleague Arthur. Arthur did a stupid thing that inarguably didn’t hurt anyone, and he went to prison for it. He went to prison because he wasn’t connected, and because he was easy pickings for a governmental arm too incompetent and corrupt to prosecute the actual do-baders. If you can’t prosecute the bad actors who are barely hiding in plain sight, you’ll take Arthur. It will look like you aren’t inefficient and corrupt that way.
SImilarly, Congress will most like let Lois Lerner walk, and she'll take her government pension and other benefits, and probably find a richly rewarding job sponsored by a like-minded political operative whose only regret is that she got caught. Congress will eventually try to spin this as a win: They forced Ms. Lerner out, beers all around, job well done, go home for recess. Maybe one or two inconsequential peons who know nothing, or at least know enough to keep their mouths shut, will be reassigned or dismissed as a bit of Kabuki theatre. And life will go on with the House of happy idiots.
There is “justice” for those who are politically connected. And there is justice for everyone else.
Comments
Post a Comment
Keep on topic!