The government finally dropped its prosecution of Nigerian Barge defendant James A. Brown. Here’s part of the WSJ story by John Emshwiller:
At the 2004 trial, prosecutors alleged that Enron’s sale of an interest in three power-producing barges, located off the coast of Nigeria, to Merrill was a sham that allowed the energy company to illegally book a profit. Prosecutors said the deal wasn’t legitimate because Enron had promised to take Merrill out of the deal within six months at a predetermined profit. This guarantee meant that Merrill was never at risk, so Enron couldn’t legally treat the deal as a sale. The four Merrill defendants, who went to prison in 2005, maintained they did nothing illegal.
The barge case was widely viewed as an effort by the government to send a message to the financial community about acceptable and unacceptable conduct in helping major corporations structure their finances. It was also viewed as an early test case for the Justice Department’s Enron Task Force, which eventually secured more than a dozen guilty pleas from former Enron officials. Its work culminated in the 2006 fraud and conspiracy convictions of former Enron chairman Kenneth Lay and former president Jeffrey Skilling. Mr. Lay died shortly after of heart-related problems and Mr. Skilling is still appealing his conviction and 24-year prison sentence.
There was, in fact, never much to this overheated case other than a frenzy to hang everybody connected with Enron. The evidence of the buyback agreement at the heart of the prosecution’s case was flimsy at best, as was its “honest services” theory, which the Supreme Court recently rejected in the Skilling and Black cases. The Fifth Circuit overturned the defendants’ fraud and conspiracy convictions in 2006 after they had spent a year in jail.
The government, however, hasn’t let go of Brown, whose perjury and obstruction convictions continued to stand. And Brown has alleged prosecutorial misconduct for withholding exculpatory evidence. As recently as last Friday, the government sought a continuance while Brown appealed his remaining charges.
Emshwiller concludes:
Mr. Brown’s attorneys vehemently opposed a continuance. In a filing, they said they had recently contacted key government witnesses from the 2004 trial, who told them they hadn’t heard from the government—in one case for years. Such lack of preparation “suggests that the government has been using the court to run an outrageous ‘bluff’….for the improper purpose of continuing to harass and persecute Brown and threaten his liberty,” the filing said.
The WSJ Law Blog comments: “On Wednesday, the whole thing went poof, much like Enron.” The government had no comment.
I’ve been covering this abortive prosecution along with the rest of the Enron miscarriage of justice for five years. But rather than citing my posts, it’s more fitting to link to Tom Kirkendall, who has been all over this case. For example, four years ago Tom excerpts the Fifth Circuit’s opinion in this case and concludes by describing the Nigerian Barge case as “based on resentment and scapegoating, not on justice or any reasonable concept of prosecutorial discretion. * * *If you don’t believe me, just ask Jim and Nancy Brown.”
It was fitting Emshwiller got today’s byline, because his career-making award-winning journalism (2002 Gerald Loeb award for beat reporting), capped with a book, started the “whole thing” that “went poof.” Too bad for Brown he can’t get his life back, and for Tom that there’s no Loeb award for unmaking scandals.
Update: Here’s Tom Kirkendall’s post on the above events, with some important links.