Inside stories: Do corporate criminals really serve their time?

Conrad Black's jail sentence sounds like a lot. But how many high-profile white-collar crooks in the US actually spend long periods of time in proper prisons? Stephen Foley investigates
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The Independent US

"A bore, but quite endurable." That is how Conrad Black, the disgraced newspaper baron, is publicly styling his imminent incarceration at the pleasure of the US Federal Bureau of Prisons.

But as the peer sped off with his wife and daughter from a Chicago courthouse earlier this week, after learning his sentence will be six and a half years, only they really know whether he is genuinely that relaxed about the reality of life behind bars.

Black has been ordered to report to a federal jail on 3 March. The delay is less a courtesy to the Blacks, who get to have a final family holiday season together and a chance to get their affairs in order, than a convenience for the US prison system, which is overcrowded, understaffed and needs to time to find a suitable bunk for its new charge.

Black is hoping to be sent to the federal correctional institution in Coleman, Florida, 50 miles out of Orlando and at least in the same state as his beloved Palm Beach mansion, which wife Barbara Amiel can use as a base for visiting. However, there are no guarantees. Worryingly, the jail says it is in urgent need of prison officers. (Undercover reporters can apply via the website.)

Black is right in one sense. The routines of prison life are certain to be monotonous. The 6am wake-up calls, the regimented mealtimes, the insistence on lights out, the tedious, menial work assigned to prisoners for between 12 cents and 40 cents an hour all are sure to be grindingly dull for a man who, not so long ago, could flit as the mood took him between the House of Lords, his Toronto business offices, and the cocktail parties of the New York billionaire set.

But for the highest profile white-collar criminals inside the US prison system, it is the sheer loss of control that is the hardest thing to adjust to. These are executives whose word was law inside their empires, who planned and strategised and calculated to achieve precisely the outcome they wanted for themselves and their companies.

It is perhaps for that reason that so many executive criminals seem to throw themselves into teaching other inmates, a rewarding way of guiding others, whether it is instructing them in maths, in Spanish, or even in yoga (Martha Stewart's option).

Lawyers say that most of the white-collar criminals who go to trial can also be found, at least in the early months of their sentence, poring over legal documents and looking forward to visits from their lawyers as much as from their spouses. "Working on an appeal, it is the equivalent of digging an escape tunnel," said one veteran defence lawyer.

In the US justice system, you get pretty much what it says on the tin. There is no parole in the federal system. With "good time" a reward for keeping one's nose out of trouble Black could perhaps be out in 69 months, at the age of 69, but a prisoner can expect to serve at the very least 85 per cent of his sentence. Little humiliations continue even after release: a mandatory drug test for felons, routine checks by a probation officer, perhaps an electronic ankle bracelet for months.

It is no wonder that white-collar criminals with connections abroad put so much of their legal resources into trying to get out of the US. David Radler, Black's business partner of 37 years, agreed to plead guilty and help prosecutors, tempted in large measure by a promise that he should serve his agreed 29-month sentence in Canada, where he can expect to be out in barely a year. The three British bankers known as the NatWest Three fought extradition to the US for several years, and have also agreed to a plea bargain in return for being shipped home soon.

Meanwhile, Kobi Alexander, a technology company boss accused of manipulating his share options, fled the US entirely. He has been living proudly in Namibia since last year with his family, enrolling his children in local schools and pouring money into philanthropic causes to impress his new hosts, who have no extradition treaty with the US.

Mr Alexander is cocking a snook at the US Department of Justice, whose pursuit of white- collar crime has intensified in the past decade. As much as justice being done, it is keen that justice is being seen to be done, and white-collar criminals sometimes suffer indignities others may not, such as the "perp walk" where they are walked through a public place in handcuffs so the media can get a good photo.

The US attorneys' office can scramble its media advisers and have a press conference up and running within an hour of a verdict. Businessmen, they calculate, are worried as much about their reputations as they are about their liberty. In prison, they have much time to chew over what they have lost.

MILKEN, MICHAEL

Sentenced to 10 years in jail; released after serving two

When Conrad Black told Radio 4's Today programme last month "I'll be back", he cited Michael Milken as an example of someone who picked up his public life after a stint in a minimum security jail. Milken was "the junk-bond king", an Eighties financial titan whose financial innovations sparked some of the most vicious takeover battles of the era. But in 1989 he was indicted for securities fraud, spent 22 months in a federal prison, a further month in a halfway house and then one more under house arrest. These days, after surviving prostate cancer, he has devoted much of his $2bn (980m) fortune, which remained intact, to medical causes. His attempt to lobby for a pardon from former president Bill Clinton failed, however.

SKILLING, JEFF

Jailed for 24 years. One year into sentence in low-security prison

Enron was the mother of all corporate frauds, and Jeffrey Skilling was its mastermind. Once the chief executive of the seventh largest company in the US, now he is prisoner No 29296-179 at the low-security federal jail outside the Minnesota farm town of Waseca (population 10,000). He had requested a jail in the sunnier climes of North Carolina, but the Bureau of Prisons refused. Now one year into his 24 years and four months sentence, Skilling is whiling away the time learning Spanish and teaching it to others. Inevitably, for a man who protests he was wrongfully convicted, he is also preparing papers for his appeal.

LAY, KENNETH

Convicted of Enron fraud but died without going to jail

Kenneth Lay's death robbed the US government of its final, cathartic photo-op in its pursuit of wrongdoing at Enron. Instead of a humiliating drive through prison gates, the former chairman died at his holiday home in Aspen, Colorado, after a heart attack. Yet Lay's case shows that even convictions need not wipe out the last jot of a business reputation. After the verdicts, President George Bush, for whom Lay had been a loyal fundraiser and informal adviser (he called him Kenny Boy), described him as a good guy, and former president George Bush Snr was among the great and good of Houston, Texas, who turned out for Lay's memorial service. Lay's convictions were erased from the record because he died pending an appeal.

POTTER, NIGEL

Served half of three-year prison sentence in US jail; finished it in open prison in UK and at home

Nigel Potter was stripped of all his belongings and led in handcuffs to a place called "the hole", where he spent the first two weeks of his prison term in solitary confinement. The former chief executive of Wembley plc, who was convicted of "conspiring to bribe a former Rhode Island House Speaker", told a newspaper: "They hit really hard, right at the beginning, as a tactic to show they are in charge... They treat you as they would the worst person at risk of harming yourself or a guard or another inmate. It's a great test of one's mental skills." Potter served the first portion of his sentence in an open compound at a Pennsylvania prison complex, sharing a 9ft by 8ft cell with two others, before being sent back to Britain in May to serve the second half of his three-year term. After spending three months at Ford Open Prison in West Sussex he has been allowed to live at home, where he wears a tag and is under curfew.

EBBERS, BERNARD

Serving 25 years for accounting fraud in Louisiana jail

On his last night of freedom, in jeans and chomping a cigar, Bernie Ebbers chased an Associated Press photographer off his front porch. The length of his prison sentence 25 years for accounting fraud meant the Bureau of Prisons decided he was not eligible for a minimum-security "prison camp". So instead, on the morning of 26 September last year, he drove himself to Oakdale Federal Correctional Institution in Louisiana in his Mercedes. He will be eligible for release in 2028, when he is 85 years old. Visiting times are limited to weekends and holidays, with prison officers keeping an close eye on inmates and their guests. Ebbers has to submit to a search at the end of each visit.

STEWART, MARTHA

Served five months in minimum-security prison in West Virginia

It is as if she had never been away. Martha Stewart is back on TV, bringing her brand of interior design, cooking tips and style etiquette to a daytime audience and launching range after range of new Martha-branded merchandise. It is a money-spinning media and magazine empire that looked in doubt when an insider-trading conviction secured her five months at Alderson women's prison camp in West Virginia. Nicknamed Camp Cupcake, the minimum-security jail has no fences and inmates are given wide latitude, although Stewart was forced to work as a cleaner. She said she would much rather be doing such chores at home, complained about the food and came out raring to restart her media career.

KOZLOWSKI, DENNIS

Two years into sentence of at least eight and a half years

When he was boss of the engineering conglomerate Tyco, Dennis Kozlowski got his kicks from lavish company-funded purchases of art, antiques and luxury furnishings including a $6,000 shower curtain. These days, he finds enjoyment in teaching maths to fellow inmates at the mid-state correctional facility in Marcy, New York. "That's been enjoyable, when you begin with a student and they're having difficulties with math or division and having that breakthrough, when they realise they can now multiply and divide and go on to word problems," he told a teelevision interviewer last month. "It's been the most worthwhile thing I personally feel I can be doing here."

NATWEST THREE

Facing three years in jail after plea bargain; Likely to serve some of their sentence in UK

In trying to echo miscarriages of justice past, the British bankers David Bermingham, Gary Mulgrew and Giles Darby were styled the "NatWest Three" while they fought in vain against extradition to the US on Enron-related fraud charges. As aliens in the American legal system, they argued that they would be strip-searched on arrival, handcuffed and paraded in prison garb before a judge, before languishing in the cramped cells of a Texas remand centre for the year it would take to plan their case. In the end, it did not turn out quite like that. With political pressure perhaps having been applied behind the scenes, the trio were allowed to set up in their own apartments in Houston, but were electronically tagged, which inconvenienced their playing football during their bail. They changed their pleas to guilty last month and will be transferred to serve some of their eventual sentence in the UK.

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