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  • Criminalizing Our Way out of the Crisis

    If you’re a member of Congress, it’s tough to vote or even argue against any bill that has harsher criminal offenses or penalties. No legislator wants to give his reelection opponent the opportunity to label him as being “soft on crime.”

    Two bills scheduled to be considered by the Senate Judiciary Committee today – the Public Corruption Prosecution Improvements Act and the Fraud Enforcement and Recovery Act (FERA) – have titles that make them sound salutary and even necessary. Such misleading labeling makes it even more difficult for committee members to vote against these bills’ unwarranted criminalization.

    That’s why the Heritage Foundation joined with the National Association of Criminal Defense Lawyers (NACDL) to send two letters to both the Democrats and the Republicans on the Senate Judiciary Committee criticizing the new criminalization in both bills.

    The letter on the Public Corruption act points out that the bill would expand one of the broadest and most ill-defined federal criminal laws – Congress’s controversial “honest services” branch of the federal mail and wire fraud statutes. This law has already been used, for example, to prosecute and convict Georgia Thompson, a Wisconsin state civil servant whose federal “crime” was to fail to apply each and every detail of state administrative rules on procurement. Instead, Georgia awarded a contract to – horror of horrors – the lowest bidder. She had no financial interest in the bidder and received nothing of value in return. The government argued that Georgia’s decision to go with the lowest bidder made her supervisors look better and thus increased her job security. In other words, she did a good job. But the government construed this as evidence against her

    The letter on the Fraud Enforcement act points out that it is based on the faulty premise that criminal conduct caused the subprime mortgage meltdown and criminal prosecution can solve it. This act, too, would expand the exceedingly broad federal fraud offenses and try to increase penalties. The vociferous allegations by some members of Congress that criminality was a major cause of the financial crisis are generally unfounded. Rather than engaging in knee-jerk criminalization, Congress’s time would be far better spent investigating and understanding the economic and public policy causes of the subprime mortgage meltdown.

    Posted in Legal [slideshow_deploy]

    3 Responses to Criminalizing Our Way out of the Crisis

    1. Phil, NC says:

      If it passes perhaps many of those in political office will find themselves in crimminal courts with defense lawyers.

    2. Spiritof76, New Hamp says:

      US Congress writing the Fraud Enforcement Act is like Al Capone writing police codes. US Congress in general, Barney Frank and Chris Dodd in particular are to blame for the sub-prime bubble create through Freddie and Fannie. Community Reinvestment Act and its vigorous and obnoxious enforcement by the Clinton administration are the underpinning to the mortgage and housing crisis.

      We must have an independent prosecutor and/or commission (devoid of political hacks) probe the destruction caused by CRA and bring criminal charges against those aided and abetted the crisis.

    3. Pingback: The Unlimited Prosecution Act Goes on Trial | The Foundry: Conservative Policy News.

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