The Fastows, Martha Stewart and her broker, Peter Bacanovic, need not suffer degradation in a dank prison cell. Their victims need not remain victims. And society need not waste its precious resources imprisoning people who are no menace to their neighbors. We don't need to build more prisons; we need white-collar criminals to repay their debt to society -- literally.
He thus proposes the following system for dealing with white collar crime:
When Andrew Fastow pleaded guilty early this year, he agreed to surrender $23.8 million in cash and property, including vacation homes in Vermont and Galveston, Texas. That's a start. He and those who shared in his crime should be apportioned the part of the losses for which a court deems them responsible, including an extra 10 percent to compensate for the unearned return on the victims' money, and an additional fine to compensate the government if the perpetrator did not cooperate in the investigation of the crime.
The perpetrators should then spend as long as it takes, up to the rest of their lives if necessary, to repay that debt. Andrew Fastow may be a criminal but he is also a financially savvy corporate executive. Surely his vast talents can be put to some good use for some company somewhere. A court could give him an allowance (based on a percentage of his income so that he would always have an incentive to increase his earnings), with the lion's share (say, 90 percent) devoted to a restitution fund.
Excuse me? Since when is restitution the sole - or even primary - purpose of punishment? As Weinrich acknowledges:
Fastow and others concealed billions of dollars in debt in off-the-books partnerships. The crime wiped out $68 billion in market value, destroyed at least 5,600 jobs and vaporized workers' retirement savings.
Given the vast harm Fastow did, why aren't retribution and deterrence relevant to setting his punishment? As Robert Barley, no liberal weenie, observed of Fastow et al.: "The law doesn't pretend to prevent all crime, but functions through deterrence, including throwing criminals in jail."
