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U.S. too hard on white-collar criminals

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Scott Jagow: There’ve been plenty of corporate scandals in this country: Enron, Worldcom, HealthSouth — the list is long. In Britain last week, we had the NatWest Three. Three Businessmen who pled guilty to wire fraud. It was related to the Enron scandal. A U.S. Federal court threw the book at the NatWest Three, and many in Britain aren’t happy about it. Commentator David Frum has these thoughts.

David Frum: You’ve probably never heard of the NatWest Three. Travel to Britain, though, and the three — David Bermingham, Giles Darby and Gary Mulgreware — constitute one of the most important irritants in the U.S.-U.K. relationship. Last month, these British businessmen pled guilty to one count each in a complicated corporate fraud case. They will be sentenced shortly.

In American eyes, justice has been done. After all, The NatWest Three are accused of pocketing more than $7 million as their reward for helping senior Enron executives steal more than $12 million. But in Britain, the three look much more like victims of overbearing prosecutors and bloodthirsty laws.

Prosecutors threatened the three with sentences of up to 35 years — longer than most murderers serve in Britain. First charged in 2002, the NatWest Three have lived more than five years under house arrest in Texas, before trial. Which is why the guilty pleas are seen in Britain not as proof of guilt, but as the surrender of exhausted men.

I’m not suggesting that the NatWest Three are innocent, but their case raises a larger issue. America punishes so-called white-collar crimes much more severely than any other nation, and much more severely than we did two decades ago.

It’s partly a political attempt to balance harsh penalties for violent crime. At the same time, American courts and prosecutors constantly seek to extend the reach of American criminal and tort law to companies around the world.

There are times when American lawyers care about international opinion. The United States Supreme Court cited foreign disapproval as partial grounds for a 2005 opinion forbidding the execution of under-18 killers.

So, question: If international disapproval matters in death penalty cases, why not for the rest of the U.S. legal system, beginning with white-collar crime cases that treat a five-year house arrest as just an appetizer before the real punishment begins?

Jagow: David Frum was a speechwriter for President Bush. He’s now a resident scholar at the American Enterprise Institute. In Los Angeles, I’m Scott Jagow. Thanks for listening and enjoy your day.

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