No charges have yet been brought against former Enron chairman Ken Lay who was a close friend of President Bush and a major Republican campaign contributor, while Martha Stewart, who is a major Democratic contributor, faces up to 20 years in prison for lying to a federal investigator. [includes transcript]
The Bush presidency has been marked by war. The invasion and occupation of Afghanistan and Iraq and now the apparent overthrow of Jean-Bertrand Aristide in Haiti. But these three years have also been marked by rampant corporate crime. Enron, Tyco, Adelphia, WorldCom have all become household names. The Bush administration has said that it is a priority of the president to crack down on corporate crime. But most of the CEOs and corporate officials responsible for the collapse of huge companies and the loss of thousands of jobs walk the streets with no criminal charges and no jail sentences hanging over their heads.
No charges, for instance, have been brought against Ken Lay, who was chairman of Enron when its $9 billion collapse in 2001 ended the jobs of more than 5,000 workers and decimated the retirement savings of millions of investors. Lay is a close friend of Bush and a major Republican campaign contributor. In fact, Lay was one of his closest advisers, one of his "pioneers," raising hundreds of thousands of dollars for Bush's campaign. After Enron collapsed, Kenny Boy--as Bush referred to his friend--became Mr. Lay.
Instead, the poster-child for this new crack-down on corporate crime is Martha Stewart. She is facing up to 20 years in prison after a jury found her guilty on all charges last week for covering up her sale of ImClone stock just before the price plummeted. Quite the opposite of Lay, who is deeply tied to the Republicans, especially the Bushes, Martha Stewart is a major contributor to the Democrats. She has given more than $150,000 in political contributions--all of it to the Democrats. This according to United Press International.
The Stewart decision was frontpage news across the country. Headlines screamed "Martha Stewart convicted on all counts in stock-trading trial." But what many people don't know is that the government did not charge Stewart with insider trading. In addition, the judge threw out the most serious charge in the case - securities fraud. So what was Martha Stewart guilty of? - Basically, of lying to a federal investigator. The law, which lawyers usually call 1001, for the section of the federal code that contains it, prohibits lying to any federal agent, even by a person who is not under oath and even by a person who has committed no other crime.
Harvey Silverglate, a criminal defense and civil liberties attorney based in Cambridge, Mass.
Elaine Lafferty, Editor-in-Chief of Ms. Magazine.
Bethany McLean, co-author of "Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron." She is also a staff writer for Fortune magazine.
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