So what does this mean for ex-Enron Corp. Chairman Kenneth L. Lay and CEO Jeffrey K. Skilling, former WorldCom Inc. CEO Bernard J. Ebbers, and the rest of the onetime celebrity executives scheduled to face juries? In the short term, they're likely to enjoy greater leverage in battles against federal prosecutors. (Both Lay and Ebbers say they did nothing wrong). But longer-term, other execs could suffer if Congress rewrites the Sentencing Guidelines to punish unpopular business criminals more harshly than the old system did.
The federal sentencing rules, which went into effect in 1987, were intended to ensure that similar crimes received similar punishments. But in the Booker and Fanfan cases -- which had been widely anticipated because of a similar decision last year concerning state sentencing guidelines -- the high court held the federal regime violated the Sixth Amendment guarantee of the right to trial by jury. That's because the guidelines often require judges to make factual determinations about issues that aren't presented to jurors, such as whether the defendant displayed remorse or played a leadership role in a particular criminal conspiracy. Writing for one of the two majority opinions, Justice Stephen G. Breyer called on Congress to fix the legal problems identified by the Supreme Court. "The ball now lies in Congress's court," he wrote.
His words warmed the hearts of many criminal defense lawyers -- and their clients. Under the old guidelines, punishments were largely set in stone. If a prosecutor pushed for a stiff jail sentence, accused criminals had little hope of leniency from judges.LESS LEVERAGE?
Because sentencing guidelines are now just advisory, however, jurists will have far greater power to set jail time. That means criminal defendants may feel empowered to take tougher negotiating stances in plea-bargain talks. "The Justice Dept. has been using the guidelines to induce pleas. If the guidelines are advisory, that leverage is markedly diminished," says Frank O. Bowman, a former federal prosecutor who now teaches at the Indiana University School of Law.
White-collar criminals who are unable to reach pre-trial plea deals and are subsequently convicted by juries are also likely to benefit. That's because the sentencing guidelines list a series of factors that can either increase or decrease a prison term. For businesspeople, the most important ones are the amount of money involved in the fraud, the extent of their supervisory and fiduciary responsibilities, and the vulnerability of the victims. The main mitigating factor is whether they cooperated with investigators.
In most white-collar cases, aggravating factors tend to outweigh mitigating factors, leading to harsher penalties under the old rules. "Because business cases involve so much money -- much more than, say, a drugstore robbery -- the sentencing guidelines have not been a happy development for corporate defendants," says Joel Seligman, a corporate law specialist and dean of the School of Law at Washington University in St. Louis.
Still, the call to rewrite the guidelines is likely to be taken seriously by Congress. Lawmakers face pressure from prosecutors, victims' rights groups, and consumer watchdogs to restore a legal version of the old regime. "In the post-Enron world, things can only get worse for corporate defendants" in Congress, says Houston criminal defense lawyer Philip H. Hilder. So it may be premature for corporate defendants to pop the champagne. By Lorraine Woellert in Washington and Mike France in New York