David Safavian exonerated: another political prosecution bites the dust

What a difference two years and appellate review make! Today, the D.C. Circuit Court Appeals exonerated David Safavian, former General Services Administration Chief of Staff, overturning all of his June 2006Abramoff convictions for making false statements and obstruction of justice in connection with the Abramoff scandal.

The convictions were reversed, in part, because the trial judge inexplicably allowed prosecutors to fabricate a non-existent duty of “full disclosure” which the jury then applied to convict Safavian. In other words, prosecutors just made up the law on the spot to produce their desired outcome and the judge went along with the scam. Prosecutors have a penchant for this kind of thing, as I have pointed out in connection with Jeff Skilling’s appeal. Given the stakes involved, it’s a mystery why trial judges don’t do a better job of punishing them for it.

Almost exactly two years ago, on June 21, 2006, in goofy cloak-and-dagger reportage (including the above pic of Abramoff) prematurely headlined “Safavian Lied in Abramhoff Scandal,” Washington Post reporter Jeffrey H. Birnbaum crowed: Continue reading

Jeff Skilling is innocent

SkillingWhat do Enron and Bear Stearns have in common? If you’re a Bear Stearns exec, you’d better hope the answer is “not much.” At least you won’t have to litigate in Houston. New York’s a bigger, better melting pot when it comes to judges and juries. Prosecutors and governors? Don’t change the subject!

Today, a colleague wrote: “Do you think Skilling is innocent including of the insider trading charge?” Here’s my relatively off-the-cuff answer, understanding that a few months ago I did a presentation on the subject of “honest services fraud,” the legal theory on which Skilling was presumably sent to jail. For some accounting professionals and jilted investors — who want to believe that there’s only one true “net income” for any company in a given year and that someone must be at fault any time a stock “goes south” — this won’t go down easy. I feel confident, however, that fairness will eventually trump emotion. Continue reading