Interview: Judge Jed Rakoff on guilty pleas, corporate accountability, and legal reform
This interview accompanies a story about Judge Jed Rakoff’s new book, “Why the Innocent Plead Guilty and the Guilty Go Free.” It has been edited for length and clarity.
What are the top takeaways from this book?
The main takeaway is that there are a number of very serious problems with our legal system in the United States, most especially the criminal-justice system. But they’re all fixable. They cannot be fixed, however, without an appreciation by the general public of just how serious these problems are.
Let’s start with why the innocent plead guilty. You lay a lot of this at the feet of plea bargaining. I was struck by these statistics you included about how before World War II, trials were much more common. How did we get here?
This is one of several unfortunate results of laws that were passed in the 1970s, ’80s, and ’90s, with bipartisan support, in reaction to the rising crime rates of that period. The problem was, it was a considerable overreaction — and in particular, the laws that were passed imposed harsh and frequently mandatory sentences for a very large number of crimes. The result was, someone who might have gone to trial in the past, guilty or innocent, now recognized that the best thing that could be done was to minimize his risk by pleading guilty to a lesser offense.
So if you were facing, for example, 20, 30, 40 years mandatory if you were convicted, even if you were innocent, it might be perfectly rational for you to say to yourself, “Well, there’s no guarantee I’ll be acquitted, and the government is offering me a five-year mandatory plea bargain, and I’d just rather not take the risk of going to jail for 40 years where the judge won’t have any way to reduce it. I’d rather take the five years even though, of course, I know in my heart that I’m innocent.”
Today, a lot of people talk about how America is overpoliced and overincarcerated, but not many talk about how America is underjudged, as you argue. Do you think we should have fewer cops and more judges?
I don’t know about fewer cops, but certainly more judges. Because what happens, particularly in state court, where most of the criminal cases are, is that the judge cannot give meaningful attention to a guilty plea, which is usually the main role the judge is now playing in the system.
Here are the statistics: In the state courts of the United States, the average time for a guilty-plea allocution is 13 minutes. Of those 13 minutes, at least five, or more commonly 10, are spent advising the defendant of the rights he’s giving up, like his right to a jury trial and his right to confront the witnesses against him and so forth — rights that are in the Constitution. And after the judge has elicited that, yes, he’s willing to waive all those rights, the judge then has a few minutes, at best, to probe as to why he’s pleading guilty.
It’s just not realistic, at that stage, with the huge volume of cases that most judges have, to expect that instead of three minutes, they’d spend three hours probing what the facts of the case are. And even then, at that late stage, it would be hard for a judge who knows nothing about the case until the guilty plea to really probe deeply.
Now let’s talk about why the guilty go free. You describe how prosecutors have shifted from charges against executives to charges against corporations themselves. What’s wrong with this scenario?
A corporation never commits a crime. It’s only people within the corporations, the human beings, who make the decision to commit criminal misconduct. I’ve never really seen the moral force of going after a corporation for criminal misconduct. I think there’s abundant evidence that the best deterrent for white-collar crime is sending the miscreants to jail, whereas in the case of a corporation, of course all you can do is impose monetary sanctions and make some compliance measures.
Less important, but not unimportant: When you go after just the corporation and impose a fine, you are actually punishing the shareholders who pay the fine, and nine cases out of 10, they had absolutely nothing to do with it. It’s a very perverse result. It came about for a lot of reasons, but I think the most important reason is a question of resources. It’s a lot easier, particularly under federal law, to bring a case against a corporation than it is to bring a case against a high-level individual.
What about at the state level? I’ve heard that, at least in New York, it’s harder to charge white-collar cases — prosecutors have called for state laws to be reformed — and that the penalties tend to be lighter.
I disagree with all of that. The greatest prosecutor of white-collar crime in our lifetimes was Robert Morgenthau. When he was US attorney, he founded the first securities-fraud prosecution unit and aggressively went after high-level executives who had gone after major white-collar financial frauds. When he became district attorney, he didn’t change. There were significant white-collar prosecutions brought, like the BCCI case.
The Southern District had turned the case down. Morgenthau, who had a very good nose for this kind of thing, thought there was a case to be made, and he made it. So it is not, in my view, a function of the law in these jurisdictions, or anything else. It’s a function of leadership. And as for the sentences, all the studies indicate that you don’t need a lengthy sentence to achieve a major deterrent effect in white-collar crime. These are people who their whole self-image is not being behind bars. If they wind up in prison, or they read about someone else spending time in prison, that’s their worst nightmare. It doesn’t have to be 20 years.
I’m also curious what you think of the notion, encapsulated in the title of Jesse Eisinger’s book “The Chickenshit Club,” that many prosecutors are simply too afraid to take a case to trial and lose. Is that a bigger factor in why executives don’t get charged?
I’m a huge admirer of Jesse Eisinger, but he and I don’t fully agree on this. At the assistant US attorney level, there is, if anything, a desire to bring a high-visibility case. It will help make your career. Where greater impediments have been imposed has been at the very highest levels in central justice.
I think there were a variety of reasons why that happened, but one of the reasons, which Jesse discusses in his book — very accurately — is that the Department of Justice received a lot of bad publicity in two cases in particular. One was the Arthur Andersen case, where they got reversed in the Supreme Court, and the other was the Bear Stearns case, where they lost the trial in Brooklyn early in the period right after the financial crisis began. I think that was an unfortunate overreaction.
The general story that was placed on the Arthur Andersen case was, “Oh, they were forced out of business, and yet in the end, they were proved innocent.” That’s completely false. They were not found innocent by the Supreme Court. The Supreme Court found that the charge given by the judge had gone too far. Had they not been out of business, they would have received a new trial. And they were out of business because their participation at Enron was just the latest in a whole series of involvement in financial fraud. Nevertheless, certain people were able to put a spin on Arthur Andersen that gave people in the higher echelons of the Justice Department some fears.
With respect to Bear Stearns, all the people I know who watched that trial thought it was badly tried by the government. In those cases, the government will lose. But if you are not willing to take an occasional loss, you’re never going to be successful at prosecuting white-collar crime, because these are not easy cases. They have the best lawyers on the other side. The issue is always questions of intent, which is inherently subjective. A percentage of these are going to be lost, but if you make that the reason for not prosecuting the cases, it’s basically open season.
I’ve heard you say that the increasing trend toward specialties in the legal profession has made it harder for people to hire a lawyer. So many normal people are self-represented, especially once you get outside of cities with robust legal aid and right-to-counsel laws. Can you talk about this a little?
A lot of this goes back 30 or 40 years, when the major companies in the United States became concerned, and rightly so, that their legal bills were an ever-greater percentage of their budget. So what’s a sensible company going to do? They’re going to find ways to cut that bill. So what do they do? They brought the routine stuff in-house.
I think the first major company to go that route was General Electric, under its very great general counsel Ben Heineman. By the time he left, there were something like 500 lawyers, and there are even more now. So the big firms that had traditionally relied on the everyday work to make money now had to find a new way to make money, so they became more specialized. So you had a change in most of the major law firms in the United States to ever-greater specialization.
Lawyers are — I’m sorry to say — a cartel, from an economist’s perspective, with high barriers to entry, who are increasingly focused on making their money through high charges for highly specialized services. This carries over to all aspects of the profession. The average partner in all the firms in the United States, big and small, now charges $500 an hour. Now, maybe you can pay that, but I can’t, and neither can most folks.
Twenty or 30 years ago, in family court and housing court, which are the two courts that most everyday folks get involved with, it used to be that well over 90% of people were represented by lawyers. Now, in some housing courts and some family courts in some of the states, less than 10% are represented by a lawyer. The results speak for themselves, but there have been studies of this. Where you are represented by a lawyer, you do much, much better than when you’re representing yourself.
Services like LegalZoom exist for situations outside of the courtroom, but I think a solution that would include courtroom situations would be to have the legal equivalent of a nurse practitioner. Someone who would go to law school for maybe six months, instead of three years — and when I mentioned this to my brother, who’s a law professor, he threw his hands up in horror — and then would be maybe apprenticed for another six months or so, and then would do basic stuff. Could they represent a high-level executive in a complicated securities matter? No. But that guy doesn’t need this kind of representation.
What do you think about proposals to scrap or radically overhaul the bar exam?
You know, I don’t have a strong feeling about this, because it’s been so long since I took the bar exam. My recollection of the bar exam is that it’s mostly a memory test. There are parts that are national, but I can’t answer that question.
You propose a lot of reforms in this book. You also look abroad, for instance, at the UK barristers who switch off between prosecuting and defending cases. Your suggestion that magistrates get involved in plea bargaining, as they do in Florida and Connecticut, reminded me of how magistrates have roles in criminal investigations in Italy. Is the judiciary eager to take up these ideas?
I have not heard about it, and that’s been a major disappointment to me. If you have no judicial involvement in the plea-bargaining process, what you’re saying is judges will have no involvement in 96% of cases in the federal criminal system, and that seems to me to be crazy.
What I propose — and as you say, it’s really an elaboration of things that have been successful in Connecticut and somewhat in Florida — would be that a junior judge, who would not be the judge who would be trying the case, would meet with each side separately. He’d then explore with them: “What’s this case all about? Why haven’t these avenues been pursued? Why haven’t you pursued those other avenues?” On the defense side, he might be saying, “Have you hired an investigator? If your guy can’t afford it, you know, at least in the federal system, you can get money for that. If you have an alibi defense, why aren’t you out there looking for witnesses?”
That’d be the preliminary discussion, and it would serve, I think, to sensitize both sides to potential weaknesses. Then you’d meet with them three to four weeks later, and then the junior judge would express his recommendation. It’d be nonbinding, but I’d be willing to wager that because it’s coming from a neutral party, the suggestion would be followed in a great many cases. And the result would be a much fairer, more neutral, judicially overseen plea-bargain process than we have now.
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