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The Sacramento Bee

Shroud of Immunity
Should Lay's Death Foil Restitution?

October 25, 2006

In May, a jury convicted Enron executives Jeffrey Skilling and Ken Lay on multiple counts of fraud and conspiracy. On Monday, U.S. District Court Judge Simeon Lake sentenced Skilling to 24 years and four months in prison and ordered him to pay $45 million in restitution.

But Lay died suddenly in July. Punishment, of course, becomes moot when a defendant dies -- "this side of the grave at any rate," as a jurist wrly noted in a 1984 case. But it stands to reason that the conviction should remain on Lay's record and the proceeds of his fraud be recovered as restitution.

That's not what happened, however. Judge Lake, relying on what dissenters called a "novel judicial creation" in a 2004 case, dismissed Lay's conviction on the basis that he died before he could appeal his conviction. Everything associated with Lay's case is extinguished, as if he had never been convicted or even charged.

With one stroke, Judge Lake has made it nearly impossible to recover the ill-gotten gains from Lay's fraud. His ruling erases restitution from the criminal case. Equally important, it hampers efforts by the Securities and Exchange Commission and plaintiffs in civil suits to take action against Lay's estate because they no longer can point to Lay's conviction -- or even his indictment. Basically, they have to prove the whole case all over again.

What happens to the records of those convicted of burglary, drug possession, murder or sexual assault if they die before they can appeal their cases? The answer seems to vary from jurisdiction to jurisdiction. But if a person dies after a conviction, it makes sense that the status quo at the time of death should stand, or at least continue to be acknowledged as a fact.

To erase the conviction can only erode confidence in the criminal justice system. It is a slap in the face of all those who participated in the trial and who saw the case proved "beyond a reasonable doubt" at that level.

It is well-settled doctrine that once a defendant is dead, punishment no longer is justified. But death does not and should not affect restitution. The goal there is not to punish, but to remove tainted money obtained unlawfully and to use it to restore victims' losses. As a 2001 court wrote, "To absolve the estate from refunding the fruits of the wrongdoing would grant an undeserved windfall."

Sen. Dianne Feinstein, a member of the Senate Judiciary Committee, has called on the Justice Department to appeal Judge Lake's decision, to preserve the "hard-fought right to obtain restitution." Feinstein also plans to introduce legislation when Congress returns after the November election to fix the problem.

The Justice Department should appeal this decision and Congress should fix the law so this doesn't happen again. Justice is not served by erasing a conviction just because a man dies before he can appeal his case.

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