F1 boss Ecclestone pays to end bribery trial

[Simon_Jester]

It serves to end those cases that could go either way, where the prosecution is not sure they can get a conviction but sure enough to try for one. (Maybe no faith is a bit too strong of a term, "no faith in the certainty of a conviction" would be a better clarification). As such, it only exists for a very narrow subset of cases. I can say that this has worked for close to forty years so I see no reason to change it. This system saves time and money.

There's an institutional danger, in my opinion, that if this is done enough it effectively defangs our ability to prosecute for corruption.

Powerful, rich, successful men (it's nearly always men in corruption scandals) are very much inclined to avoid prison. Fear of going to prison is a powerful motivator, fear of having to write a check is, I would argue, not such a motivator because they already have more money than any human can really need or make effective personal use of anyway. Having four mansions is not significantly less of a reward than having five mansions, in the eye of someone who sees living in a mansion as a sign of their success and worthiness as a human being.

So suppose some almost incomprehensibly vast thing like the subprime mortgage lending bubble or the LIBOR scandal blows up, with costs measured in the hundreds of billions or even trillions of dollars throughout the entire world economy. In a case like this we can't even begin to estimate how many people were affected (or financially ruined) as a result... and nobody goes to jail.

I would argue that an outcome like that encourages powerful and wealthy men to become scofflaws, because there is simply nothing that is realistically going to happen to them which they would actually be afraid of. It's most blatant in the modern financial sector, mind you, but it's an issue elsewhere.

[Thanas]

I would say that such scandals with no jailtime happens mostly in the USA, whereas managers are regularly sent to jail in Germany or at the very least face lengthy trials.

[Simon_Jester]

Well, I'm basically saying that it's worth considering the US situation a cautionary tale. A big part of what went wrong with the US system of punishing white-collar corruption is that federal prosecutors for the Department of Justice got too conservative in deciding when it would prosecute, and when it would be willing to settle.

As a working hypothesis we can infer that the leadership is corrupt, useless, or both. But the large dollar values of the settlements secured against lawbreakers allows them to represent these settlements as 'victories' to the press: "wow, we settled out of court with that giant bank for a billion dollars! And that money will go straight back to the customers who suffered fraud!"

The problem is that the actual fraud suffered was on the order of tens of billions, and that since nobody from the bank went to jail, there really isn't a lot of incentive to stop anyone from doing it again if they're willing to risk the possibility that someone will, a few years from now, be annoyed enough by their fraud to confiscate 10% or less of their gross receipts on the deal.

So this is a real and possible failure mode for a system of prosecutors. Having become accustomed to seeking settlements with powerful, wealthy white collar criminals who might well win in court because their crimes are complex and whose defense attorneys are skillful, the prosecutors may forget the salutary power of actually sending such men to jail 'to encourage the others.'

In the extreme case (like the US) this can result in a situation where the super-elite can commit almost any level of monstrous fraud or treachery and receive no personal punishment from the state whatsoever. While ordinary criminals who cause a thousandth as much damage, or in some cases even a millionth, or in some cases who are just accused of doing such damage... They end up in prison. Because they lack the resources to defend themselves so well that their penalties are reduced to "pay a fine that has no real effect except to make your bank account slightly less incomprehensibly huge."

I didn't mean to say it has happened yet in Germany specifically. But it's a real concern, especially for people who already understand the US system and its faults.

[Thanas]

Good thing the justice systems are not comparable then.

[Simon_Jester]

Hopefully.

The question then is, what is it that makes this a failure mode in the US system?

Is the danger coming from the existence of a specific agency or organization or process in the US judiciary? If so, then clearly the German system can make itself immune by being structured differently?

Or is it the danger that the state itself may, as a matter of policy, grow too fond of letting defendants buy their way out of a trial? If so, the precise details of who makes that decision and how it is made may matter less.

It's reasonable to worry that one sets a bad precedent by allowing super-rich people to buy their way out of trials, regardless of details- because we already know that can be a slippery slope, seeing as how the US judiciary is at the bottom of it and wasn't at the bottom a few decades ago.

[Thanas]

You have prosecutors and judges who have to win reelection and juries composed of dumb hicks. Those are the biggest problems. Solve these and the quality of the US justice system would be increased a lot. There are plenty of things that are really good in the US system (forensic science for example is probably second to none) but all those great developments don't help if the top is rotten and procedure is a joke.

isn't it funny how suddenly the prostitution scandal of Spitzer broke after he announced he would go after wall street and hedge funds?

[Simon_Jester]

Federal prosecutors working for the Department of Justice don't have to win reelection.

And for these purposes they are the top and the rot arguably spreads from the Attorney General and the president who appoints him- and their failure/reluctance to take an adversarial stance toward major lawbreakers, in country where the model of justice is explicitly adversarial. Obama might have been doing this because he felt/feels that Wall Street can do more for his reelection chances than getting tough on them could; I truly don't know.

Chaos and idiocy at the state level are certainly a factor, as we see with the Spitzer case.