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Before the financial crisis of 2008 and the rampant public perception that fraud was at the heart of it, Enron was the most notorious case of corporate wrongdoing the world  had ever seen, and Sam Buell had a front-row seat. As a federal prosecutor on the government’s Enron Task Force, Buell led the investigation that resulted in the indictment of Enron’s chief executive, Jeffrey Skilling, and tried the case against the company’s accountants, Arthur Andersen.

Buell, the Bernard M. Fishman Professor of Law, is now one of the nation’s leading scholars of white-collar crime, writing recently on such issues as the conceptual structure of white-collar offenses, the problem of behaviors that evolve to avoid legal control, and the treatment of corporations and white-collar offenders in the  criminal justice system. In his new book, Capital Offenses: Business Crime and Punishment in America’s Corporate Age (W.W.  Norton & Co. 2016), he undertakes an overview of his field for a general audience. He recently talked to Duke Law Magazine about the troubling persistence of corporate malfeasance and what can be done to combat it.

DUKE LAW MAGAZINE: Why do we continue to go through these cycles of scandal?

SAM BUELL: I think one of the more controversial things that I say  in the book is that it’s possible that the fixation on criminal justice is actually in a strange way redounding to the benefit of corporate management in the sense that it displaces conversation about more extensive and perhaps more costly and more uncomfortable forms of regulation. Over the last couple of decades, after each one of these rounds of scandal, we have extensive conversations about regulatory change, which result in some change but maybe not as much as proponents of stronger regulation would like or ask for. Yet during that whole time, it’s hard to find a single example where industry has succeeded or even tried very hard to get Congress to cut back on either the scope or the severity of white-collar criminal laws.

DLM: Is the government’s recent pursuit of corporate crime a good and sustainable practice?

SB: I see it as kind of a gap-filler and perhaps evidence that regulation isn’t working in the way that it ordinarily used to or would be expected to. By definition, every time you have some fiasco erupt, it looks like a failure of regulation. If regulation had been effective, this wouldn’t have happened, right? So I think prosecutors see themselves as problem-solvers and they try to step in and do something about that. The whole thing has developed a little bit organically. It’s a ground-up kind of process that’s driven by prosecutors and the way they think. And Congress has allowed it to continue.

I was talking to my students about how influential the defense bar has been in this whole story. The deferred prosecution agreement has its origins in the early 1990s in a case in the Southern District of New York involving a financial services company. Mary Jo White [who now heads the SEC] was the U.S. Attorney at the time. The government had told this company that they really needed a conviction in the case, it was serious enough that there was going to have to be some kind of a guilty plea or they were going to get indicted. And the company said, ‘We can’t have that — we’re out of business if that happens. What do we do?’ Some creative lawyers on the defense side, former prosecutors, said, ‘What about the deferred prosecution we used to offer lower-level drug defendants, where we’d file the charges but then we’d put them on probation and if they passed regular drug tests for a year and didn’t get in trouble with the law, then the case would be dismissed?’ Each side gets a little something. So it was the defense lawyers who initially drafted that agreement and sent it over to the government. And then that template started getting used over again in the Southern District and then [became widely used elsewhere]. It’s become very controversial.

So it’s the defense bar that’s been as influential as prosecutors in terms of setting expectations of what companies will agree to, what they won’t agree to, what should go in these agreements, what shouldn’t, and of course most of these defense lawyers are former prosecutors. It’s an interesting story about an organic development of a quasi-regulatory system that was created by a subset of the legal profession, without any legislation, without any court involvement to speak of

DLM: Do you find yourself defending prosecutors in this debate?

SB: I am skeptical of explanations that are grounded in either a story about incompetence or a story about regulatory capture. Having been in the Justice Department, having seen intimately for many years how things work there, knowing the kind of people who go into those jobs and what motivates them, it’s very hard for me to think that people are sitting around being lazy, and even harder to think that they’re somehow influenced by industry. Justice Department prosecutors don’t have the same kind relationship with industry that regulators in the other agencies do. They’re not beholden to any particular industry.

I get frustrated not just with public perceptions but also with perceptions of journalists who cover it a fair amount and don’t, I think, have a full enough appreciation for how difficult it is to win a case at trial and the gap between what we think happened versus what you can prove in a courtroom. When prosecutors don’t bring a case, it doesn’t mean they’re approving of the behavior. They just don’t like to lose. Now I think there’s a legitimate debate to be had about whether prosecutors are too risk-averse. But the professional rule is that they’re not supposed to bring a charge unless they believe they have proof beyond a reasonable doubt. In other words, a jury will convict.

I think that part of the frustration in the wake of the financial crisis was people wanted there to be more trials because at least there would have been a more public airing of some of this stuff. And I agree with that. I wish there was more of a public airing. There are other forums for that, such as civil cases, but of course they settle so you don’t get trials out of those for the most part. Another forum is congressional hearings, which used to offer a more serious, deeper investigation than they do now. They were for the purpose of outing the facts, and we’d learn from them. Prosecutors are not in the business — and shouldn’t be — of indicting people just so we can have trials.

DLM: If criminal prosecution is not the answer to corporate misconduct, what is?

SB: I go back to first principles here: If we’ve lost control of the large corporation in some sense, should we be thinking about the basic rules for how corporations are structured and what the obligations of managers are? In case after case we’ve seen even the best-intentioned corporate executives unable to prevent serious crimes that cause extensive harm. I think about the conversation we had in this country at the turn of the last century, when we first had to deal with harmful by-products of large-scale corporate activities and got regulation and antitrust law and the ideas that the market’s not perfect and size can be a problem. That’s the kind of conversation that we as a society need to be having now. It perhaps re-conceives our relationship to the corporation or questions it in a more fundamental way.

Think about the conversation we had about breaking up the banks after the financial crisis and our decision not to do that. That might have been a mistake not to scale down that industry in some way that would make it more manageable to both regulators and bank executives. We’ve seen the banks with a whole series of misconduct scandals since the financial crisis in spite of the fact that they were nearly put out of business, severely sanctioned, had extensive management changes, massive economic losses, and yet still, they don’t seem to be able to get themselves under control.