L A S T W O R D

Criminalizing Success

The recent Supreme Court ruling in Arthur Andersen should be a message to wannabe celebrity prosecutors and anti-business activists to end their crusade to criminalize legitimate free enterprise activity. But as with any ideologically-driven jihad, politics and personal ambition will likely overwhelm such a call for rational thinking. Despite the Arthur Andersen decision, honest business owners, their employees, and their shareholders will unfortunately continue to pay the price for overzealous prosecution.

Just like everyone else in America, businesses want a legal system that is accountable, fair and predictable. But fundamental due process has become an alien concept in today’s “anything goes” law enforcement environment. The legal gauntlet begins with a mind-numbing and often ambiguous collection of 3,000 federal criminal laws. Add to that over 11,000 regulations which can be applied civilly or criminally. On top of that, add the laws and regulations of 50 states, plus countless plaintiffs’ lawyers eager to pile on with multi-million dollar lawsuits. Any misstep, even as innocuous as failing to file paperwork, could, at the whim of unelected bureaucrats, result in anything from an administrative fine to a destructive criminal action.

Because of the conduct of a few corrupt executives, we now have a poisonous, politicized atmosphere where the competition for headlines has eroded prosecutorial discretion. Absurdly high sentences, virtually limitless subpoenas, and threats of exclusion from government contracts – a death sentence for many companies – force most targets, despite their innocence, to “cooperate.” Cooperation regularly includes a compelled waiver of basic protections like the attorney-client privilege. Previously protected information is then made available to plaintiffs’ lawyers, whose suits intensify the pressure on companies to cut a deal.

The application or mere threat of such overwhelming power pressures most enforcement targets into settling. As a result, prosecutors routinely escape judicial oversight, inspiring them to pursue outrageously novel theories which criminalize legal business practices. Does government appreciate the devastating ramifications of branding an entire company “criminal”? Andersen may have finally prevailed in court, but its 28,000 innocent former employees got nothing but pink slips. And fear of overzealous prosecution discourages talented, honest people from serving as directors or managers; chills the creation of new enterprises; and deters entrepreneurial risk-taking.

At the Washington Legal Foundation, wealth, prosperity, and job creation aren’t dirty or illegal words. We have long called for a national debate on the costs ofcriminalizing free enterprise. Such a debate should include targeted businesses, who must stand up and oppose our government when it overreaches. And we hope the ACLU and other activists set aside their long-standing disdain for profit and join the fight for business civil liberties. They must realize that when government engages in such conduct against a business, it is only one small step away from doing the same against individuals.

Posted: Friday, August 19, 2005 12:00:00 AM. Modified: Thursday, September 01, 2005 3:23:19 PM.

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