Re[2]: Enron & culpability (was: Dear John Hall)

John Hall
Thu, 24 Jan 2002 16:27:59 -0800

Perfectly willing.

You seem to have missed the qualification.  "If you can't know, with a
normal effort ..."

In other parts of the post I also mentioned 'willful blindness'.

Later on you seem confused by the point that things revolve around what
someone knows or can be expected to know.  That concept isn't easy, but it
is essential to deal with certain Epistemological problems.

In a further explanation of my 'ex post facto' comment, consider whether a
particular trail revolves around one of two different questions.  "Did the
defendant do X, which is against the law." or "Everyone agrees X happened,
but was it against the law?"  If you really can't determine before the start
of the trial that something will be found to be illegal, then you are in
effect engaging in 'ex post facto law'.

The real question is this: are you disagreeing that in America today there
are significant cases where it isn't just difficult, but IMPOSSIBLE, to
determine that something is against the law before a verdict has been
reached and a precedent set?

We can expect normal people to know that killing your wife is against the

We cannot expect normal people to know that they can be convicted for
filling in a wetland when they put fill on their own land, and that land was
bone dry when they put the fill in was rarely even damp; especially if they
are the very first person to be prosecuted under an innovative definition of

Mr. Chen should have been convicted of 2nd degree murder.  The question
isn't whether he did know, it is whether he didn't know and should have
known.  He should have known.

I did not state that defrauding people was not bad and punishable.

The insurance scam worked like this.  Perp creates a publicly tradeable
company worth nothing, but it has a 'market cap'.  It became tradeable
because the person gave away enough stock to enough different people.  All
such gifts were clearly labled 'this is currently worthless and will
probably always be worthless'.  Finally, Perp effectively prevented anyone
from buying or selling the stock (no fraud yet).  Next, Perp rents stock to
an insurance company for use in its state capital requirements.  These
agreements *customarily* state that if the insurance company gets in trouble
they can sell the stock and use the proceeds.  This one *did not*.  By
signing it, the insurance company (not the Perp) was thus misrepresenting
its assets to the state.  Insurance company goes bankrupt.  State looks for
assets to cover insurance claims, finds the creative contract, and puts Perp
in jail for fraud.  What he did was slimy, and that convicted him.  But it
still sounds to me like his plan was legal and the person who should have
gone to jail for fraud was the insurance company directors that singed the
funny 'rent' contract.  Mind you, the Perp *deserved* jail.  I'm just not
sure they got him fair and square.

No, conspiracies are usually quite obvious to all who participate in them.

I blame the accountants and lawyers because they have a far higher burden,
being experts in the law and rules, in knowing what is and isn't kosher.  If
I go to a lawyer and say 'is this legal?', and they say 'yes', then in most
cases that *should* be a shield.  *PROVIDED* I didn't go shopping for the
one incompetent or dishonest lawyer I could find who would give me the
answer I wanted.

-----Original Message-----
From: carey []

Lets see how likely you are to follow this train when it comes to
physical versus merely financial crimes.

JH> Otherwise, you simply criminalize failure.  If you can't know, with a
JH> effort, that your actions will be considered illegal then you should
JH> be convicted.  Otherwise, you are effectively prosecuting people with
JH> post facto' laws and regulations.

How is it that if I do something illegal (maybe I don't CALL it
illegal, but hey, its illegal under the law) that its ex post facto?
The law is not after the fact, the law has existed.  I just chose, for
whatever reason not to follow it.  This line of logic, if followed to
the end, would mean that anyone and everyone could get off because
they could argue that they just didnt' 'know' that their actions were

Incidentally, what do you feel about this?

If you don't think/know that say, killing your wife (which may be
culturally condoned ) is illegal in the states, should you be

JH>  That is not a rule of law; that is a rule
JH> of tyranny.  [Note: My standards for convicting someone goes down if the
JH> evidence suggests that they were intentionally trying to circumvent the
JH> spirit of the law and turn the law into a pretzel.  Even then I can get
JH> queasy.  There was a WSJ story about someone who found such a loophole
JH> went out of their way to make sure no 'normal' people were exposed to
JH> (It involved renting stock to an insurance company.  Did you know that
JH> be done?)

I'm a little confused at this.. WHy is renting stock to an insurance
company bad but defrauding people (or at least tipping the scales in
away that LOOKS /appears to be fraud) not?

JH>  He was convicted anyway.  He thought he was convicted unfairly.  I
JH> had mixed feelings on it.]

JH> A conspiracy that does not seem such when it was done is not a

Welp, in that case, there is no such thing as a conspiracy.
COnspiracies are only called that by folks on the outside.  While it
might be a 'plan' or a 'goal'  I have yet to see criminals actively
call their ideas, scrupulous or not, conspiracies.

JH> Such a person lacks a 'guilty mind'.  The only honest way to get around
JH> is in cases where 'even an idiot' should have seen that it was against
JH> law.

FIrst you say that one must 'know' what they do is wrong, and then you
turn around and say if it can be measured against a standard (albiet a
low one) of an idiot knowing such a thing is wrong.  I'M confused here
John.  Make up yer mind.

JH> The primary people who should be in the dock on the partnerships are the
JH> lawyers and accountants who gave them the stamp of approval.

THat's BS.  Lay, et al., had to know, given the amount of knowledge
and understanding that allowed them to get to the place that they were
at, that what they were doing was at least a little wrong.  I'm not
saying everything, but shit. If you're going to blame the lawyers and
accountants, why don't you go ahead and just blame all the interested
parties involved?

JH> -----Original Message-----
JH> From: []On Behalf Of
JH> Turpin
JH> Sent: Wednesday, January 23, 2002 4:53 PM
JH> To:
JH> Subject: Enron & culpability (was: Dear John Hall)

JH> John Hall writes:
>>People sometimes assume conspiracy when incompetence is a better
>>explanation. However, shredding documents is obstruction of justice (at
>>least) and leaves a dark suspicion of criminal intent.

JH> Fooling others and fooling yourself often go hand in
JH> hand. The lines between preacher, conman, and entrepeneur
JH> often are hard to see when the action is on. Most people
JH> in these roles drink their own koolaid as well as selling
JH> it to others, and realize that putting on a good show is
JH> part of what they do. "Criminal intent" is and should be
JH> a relatively low bar. You have to understand what you did.
JH> You don't have to know that it was against the law, you
JH> might have believed that it was all going to work out,
JH> and you might have acted in good faith to all parties
JH> involved. A conspiracy need not seem such when it was
JH> done, and may overlap quite a bit with incompetence, hope,
JH> putting too many balls into the air, and rolling the dice
JH> once too often.

JH> If laws were broken in the Enron fiasco, I will shed no
JH> tears for those who are jailed. The law is there in part
JH> to point out the lines, even if they were unknown or murky
JH> or seemingly irrelevant when the deeds were done.

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Best regards,