One has to wonder from the USSC arguments the other day.
Legal experts said the Biden administration was "on the ropes" in Tuesday’s oral arguments at the Supreme Court in a case questioning whether a Jan. 6 rioter can be charged with a federal "obstruction" crime, which carries implications for former President Trump.
On Tuesday, Jeffrey Green, lawyer for Joseph Fischer – who is one of more than 300 people charged by the Justice Department with "obstruction of an official proceeding" in the Jan. 6, 2021, riot at the Capitol – argued that the federal statute shouldn’t apply and that it had only ever been applied to evidence-tampering cases.
Biden's DOJ has "repurposed" the SarBox law, in short, to bring the most-serious of felony charges in the Jan 6 cases, and has won many convictions on those charges. They also form the basis of the most-serious charges against Trump himself.
What's also interesting is that in 2019 the OLC issued an opinion -- which was never "formally" put into practice -- that the law didn't apply in this sort of situation at all. I was unaware of that but the case process that led to the Supremes hearing the case has brought that into the forefront.
SarBox was passed in the wake of the 2000 tech crash and Enron specifically to provide serious criminal penalties for evidence destruction in a corporate context. As I've repeatedly noted lawsuits are not a deterring factor when aimed at corporations because the company pays them and thus there is little you can do to the actual directors and officers. While theoretically piercing the corporate shield is possible there are myriad ways for very wealthy people to evade accountability even if you succeed.
Sarbox's particular target was corporate officer and/or board-level interference with auditors who are supposed to prevent such chicanery from going unchallenged. Imposing hard, felony criminal penalties on directors and officers, particularly CEOs and CFOs, would have provided a meaningful check and balance in that going to prison sucks no matter how rich you are, and its arguably worse the more money you have for obvious reasons (its hard to enjoy that mansion, Lambo or Bizjet when you're behind bars.)
The irony is that prior to Jan 6th only a handful of cases have ever been brought against corporate officers, despite many instances of accounting chicanery. Indeed the entire 08 market blow-up was arguably over precisely that -- various executives asserting that their "books were clean" and "all was well" while they knew they were making loans that were unsound and in fact the borrowers were committing fraud in their income statements, yet the securitizers were lending the money and selling the paper on to customers anyway. I will remind you that unlike the S&L crash where a huge number of banking executives went to prison in the wake of 2008 nobody did, despite several instances of publicly-disclosed hard proof of financial frauds -- such as backdating deposits to avoid violating reserve requirements.
One line of questioning I did not hear was why the Government should be able to ignore thousands of such cases including when they're documented in the open press over the space of two decades and then, come a convenient political target, "repurpose" said law and throw a few hundred ordinary citizens in prison for it.
Yet that, I would argue, is precisely the root of the issue here, just as it is in many other contexts. Indeed you can successfully argue that the Kavanaugh hearing disruptions, which were an official proceeding and undertaken specifically to disrupt or prevent his confirmation with what were later (in at least one case) proved to be a false predicate, has at least the same nexus to this law as do the January 6th events.
A nation that is allegedly governed by laws cannot tolerate those laws being used in this fashion -- where they are molded, scripted and enforced only against those of specific political persuasion while those of other political persuasions are left alone. SarBox was, as I argued at the time, perhaps not a bad law but it was an unnecessary law in that fraud is a criminal offense already and thus the question turns on being willing to bring the charges, not whether the conduct is a crime in the first place -- and the last 20 years have proved that the Government didn't really "mean it" in that it has almost-never been used when accounting tricks and other similar games are discovered.
I'm very interested in reading the opinion that comes from this case -- should the Supremes toss this "creative interpretation" depending on its scope it could in fact void a huge number of existing convictions. The Court is generally rather uninterested in doing that sort of thing, and as such I don't really expect that outcome, but even a more-nuanced decision might well stuff, to some extent, that Genie back in the bottle.
We'll see.