The Chickenshit Club

May 15, 2017
Fierce indictment of a parallel-universe judicial system that punishes the poor but increasingly lets the rich walk away from the wreckage of their crimes.In the early 2000s, writes Pulitzer Prize-winning ProPublica senior reporter Eisinger, the dot-com bubble burst "revealed a corporate book-cooking pandemic" that sent numerous corporate officers from Qwest, Enron, Adelphia, and other corporations straight to prison. Later in the decade, the crash that brought the world economy close to the brink of depression saw no prison terms for the top bankers who speculated their ways into disaster--even though Federal Reserve chair Ben Bernanke quietly observed that it would have sent a useful message to the financial community. Eisinger's account picks up speed with the Enron investigation, which went after individuals as much as corporations themselves. The government's prosecutorial strategy has since changed, rarely concentrating on single players and instead preferring not prosecution but settlement, a strategy that, writes the author, "corrodes the rule of law" and encourages criminal behavior. Eisinger identifies a few figures who have balked at going along to get along, such as a New York circuit judge who "broke with zombified judicial tradition...[and] refused to sign off on a settlement that he regarded as a sham," a radicalization produced by the very financial crisis that other courts were trying to sweep under the rug. A few other players come in for damnation with faint praise, such as recently fired U.S. attorney Preet Bharara, who "might castigate corporate culture in a speech, but...was busting insider traders at hedge funds, a different beast altogether." Eisinger's overarching message is that a toothless regulatory and judicial regime cannot but produce--well, chickenshit results, such as the sentencing of a West Virginia mining CEO to a single year in prison for negligence that resulted in the deaths of 29 miners. Good fuel for the fire for those who decry the rise of corporate power, a rise unlikely to be altered by the current administration.

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June 1, 2017

Pulitzer Prize-winning ProPublica senior reporter Eisinger's book is a plea for change. Lamenting the failure of the federal government to pursue the villains of the financial crisis as they did with Enron and the Arthur Andersen accounting firm that enabled them, Eisinger organizes this book chronologically, starting in 2003 with a celebration of the Enron Task Force investigation. The problem since then, Eisinger asserts, has been attorney turnover, Department of Justice (DOJ) lack of will, and later losses in the U.S. Supreme Court. The DOJ has become weak and now prefers civil settlements, the author says. His book does an excellent job of documenting the rise of the sophisticated defense bar and the claimed decline of the DOJ. However, while the work presents corporate defenses to prosecution, it is clear where the author's sympathies lie. The inside accounts of the Securities and Exchange Commission and DOJ cases discussed come from disillusioned government attorneys and a prominent federal trial judge. As pointed out in James Eisenstein's 1978 classic Counsel for the United States, federal prosecutors act at the behest of their political masters. VERDICT For politics and law audiences.--Harry Charles, St. Louis

Copyright 2017 Library Journal, LLC Used with permission.

Starred review from August 7, 2017
Pulitzer Prize–winning reporter Eisinger, who writes for ProPublica, provides a convincing answer to one of the main questions left lingering from the 2008 financial crisis: with so much evidence of intentional fraud, why were no top bankers charged? The book opens with a 2002 speech that James Comey, then U.S. Attorney for the Southern District, gave to his staff in which he derisively referred to those who had never had a trial end unsuccessfully as members of “the chickenshit club”—too scared to pursue valid but risky prosecutions. Eisinger maintains that derogatory designation could be applied more broadly to the entire Justice Department itself. He provides an accessible background to the current situation, starting with the 1929 crash and the development of the term “white collar crime” shortly thereafter, through to the growth of and aggressive posture adopted by the SEC in the 1970s. Since the 2008 financial crisis, he notes, the Justice Department has moved away from charging individuals to settling out of court with corporations. Eisinger attributes this risk aversion to several factors, including the fear—misguided, he argues—that indictments could cause collateral consequences, such as company-wide layoffs. Many readers will agree with Eisinger’s conclusion that corporate officers now “possess the ability to commit crimes with impunity”—and that that immunity is both a symptom of a broken justice system and a threat to American democracy. Agent: Chris Calhoun, Chris Calhoun Agency.

Starred review from June 1, 2017
Enron. Arthur Andersen. AIG. Goldman Sachs. KPMG. The lengthy list of Wall Street and corporate entities that have been immersed in one type of scandal after another over the past quarter century is as much an indictment of the growing ranks of the country's ethically challenged CEOs as it is a referendum on how ineffectual the Justice Department is in prosecuting their crimes. Following the financial crisis of 2008, the phrase too big to fail quickly morphed into too big to jail as deals were cut, sentences reduced, and cases tossed out. It wasn't always this way. When former FBI director James Comey was a U.S. attorney for the Southern District of Manhattan, he exhorted his colleagues to zealously pursue such cases. Failure to do so, he said, would put them in the chickenshit club. Soon, however, due to political pressure, social pushback, and economic realities, prosecutorial successes became nearly impossible to achieve, and former Justice Department superstars ended up as charter members in Comey's so-called club. Pulitzer Prizewinning journalist Eisinger does a masterful job of assembling this riveting dossier of the legal scholars, jurists, and elected officials who played a role in turning the U.S. into a nation in which white-collar criminals are celebrated for their cunning instead of incarcerated for their offenses.(Reprinted with permission of Booklist, copyright 2017, American Library Association.)