In literature, Inspector Javert of Les Misérables is the epitome of the overreaching persecutor who obsesses over driving his prey into oblivion. Today’s notice of the Justice Department’s solicitousness of Credit Suisse executives shows the attorney general to be the opposite of Javert. Eric Holder is quoted saying: “This case shows that no financial institution, no matter its size of global reach, is above the law.” But undercutting Holder’s assessment, Credit Suisse’s CEO Brady Dougan was quoted in The New York Times as saying the punishment ($2.6 billion dollars) would not do much damage to his company, nor cause much impact on its business. Credit Suisse’s clients have been reassured that all is well, Dougan said. Next day, its stock value rose 1 percent.
{mosads}So a very substantial fine for a major international financial crime, aiding broad-scale tax evasion, is justice? An adequate deterrent? No executives, board members, or officers were made accountable. Nor was the company forced to make public the names of their U.S. clients (20,000, according to a Wall Street Journal article) who used the company to defraud our tax system. The Swiss government protected the sanctity of its privacy laws, in effect making Swiss banks complicit in these now-determined-to-be criminal ventures, though they were not charged either.
Despite reports that the company’s compliance program was inadequate and that its cooperation in Justice’s investigation was lackluster, no executives were charged, imprisoned, or even fined! It was, one law professor stated to The Wall Street Journal, “a red carpet, cushioned landing.” The bigger they are, the softer they fall! Solicitousness of major “white collar” wrongdoing like this sends a message to the financial community — but it is a questionable one.
One reads regularly of cases of theft of hundreds or thousands of dollars where the individual culprits did serious prison time, and couldn’t say, as Credit Suisse’s chief did, “no damage to me.” Some lower-level Credit Suisse employees were indicted, taking the fall and allowing the managers to continue to conduct business. If Mafia moguls had committed a comparable financial fraud, they’d have been perp-walked and sentenced to serious time in prison.
Isn’t there some middle ground between Javert’s excessive pursuits and the Justice Department’s solicitousness? The Supreme Court holds that corporations are people, but the executive branch treats corporations as fictions, in effect immunizing people from personal responsibility.
Ronald Goldfarb, a prosecutor of organized crime cases in the Kennedy Justice Department, is an attorney and author in Washington. Contact him at rlglawlit@gmail.com.