Image: (l to r) Paul Manafort, Bernie Madoff, Michael Cohen (Images are in the Public Domain)
On March 7, 2019, U. S. District Judge T. S. Ellis sentenced political operative Paul Manafort to just shy of four years in prison for five counts of tax fraud, two counts of bank fraud and one count of failing to disclose foreign bank accounts. The judge spoke at length about the unfairness of the federal sentencing guidelines, given Manafort’s “otherwise blameless life.” So instead of 19 1/2 to 24 years, Manafort received not quite 4 years.
Michael Cohen pleaded guilty to various financial crimes including tax violations, lying to a bank and buying the silence of women who claimed that they once had affairs with future president Trump. He was sentenced to three years in prison.
Only one high ranking investment banker went to prison for his part in the financial crisis of 2008, Kareem Sarageldin of Credit Suisse. He pleaded guilty to conspiring to falsify the books and records of Credit Suisse, which caused the bank to take a $2.65 billion write-down of its 2007 year-end financial results, contributing to the destabilizing of U.S. financial markets. For his crimes, Judge Hellerstein sentenced him to 30 months in prison, to two years of supervised release, forfeiture in the amount of $1 million, a $150,000 fine, and a $100 special assessment.
Thomas Zenle, one of Manafort’s lawyers, said “Tax evasion is by no means jaywalking. But it’s not narcotics trafficking.” That appears to be the logic behind much of our legal system when it comes to white collar crime.
Business crimes are hard to describe, hard to understand, and their effects are often diffused across many, many victims. Narcotics trafficking is easy to understand: bad man sells drugs.
In the case of Bernie Madoff, who was sentenced for white collar crimes ten years ago this month, it was simpler: he defrauded people via a Ponzi scheme. The people and institutions he stole from were high-profile and easy to identify. For pleading guilty to this easy-to-understand bit of criminality, he was sentenced to 150 years in prison.
Still, I am struck by the slap-on-the-wrist received by most white collar criminals, and especially by the dismissive language employed by Judge Ellis and Thomas Zenle. There is a sense in which even our judges and the officers of the court seem to think that white collar crimes are less serious than, say, robbing a 7-11 or dealing drugs.
Jewish tradition does not agree with this assessment of business crime. Torah is specific on this point:
You shall not falsify measures of length, weight, or capacity. You shall have an honest balance, an honest weight, an honest ephah [dry measure], and an honest hin [liquid measure] .
Leviticus 19:35-36
And:
When you sell anything to your neighbor or buy anything from your neighbor, you shall not deceive one another .
Leviticus 25:14
The rabbis built and built on these topics, filling entire volumes of Talmud with discussions about standards for business dealings. Rules were very specific: a deal involving price gouging was rendered null and void, for example.
If you will heed the Lord diligently, doing what is right in His eyes’ (Exodus 15:26) – this refers to business dealings. This teaches us that whoever trades in good faith. it is accounted to him as though he had observed the entire Torah”.
Mekhilta, ( Vayassa, ed. Lauterbach, vol. 2, p. 96 )
Jewish tradition is not American law. Still I wish we could take white collar crime more seriously in this country. The cavalier attitudes put forth in the words of Judge Ellis and Thomas Zenle belie the real damage that financial crimes inflict. Savings are destroyed, lives are ruined, people’s health is affected. These are not victimless crimes, and while it is certainly true that a drug dealer ruins lives, he does not have Wall Street as the distribution system for the misery he inflicts.
Moreover, if more well-dressed white men who had led “otherwise blameless lives” were to see prison as somewhere they might end up, perhaps white America would care more about others who have been incarcerated, however justly.
The inequality of punishment for white collar crimes vs. ‘street crime’ all comes down to perception, as in the aphorism: “If one is poor and commits a misdemeanor or street crime, he/she is called ‘crazy’. If one is wealthy and commits ‘white collar’ crimes/misdemeanors, he/she is called ‘eccentric’. Words, often so casually applied, have such power as to change our perception of reality!
I think there is also an element of racism in there: the very words “white collar” suggests “nice” “clean” “white” wrongdoers.
And class. “It all depends on whose ox is being gored,” I think.