[Congressional Record Volume 152, Number 129 (Wednesday, November 15, 2006)]
[Senate]
[Pages S10971-S10973]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. FEINSTEIN (for herself and Mr. Sessions):
  S. 4055. A bill to address the effect of the death of a defendant in 
Federal criminal proceedings; to the Committee on the Judiciary.
  Mrs. FEINSTEIN. Mr. President, today I am pleased to introduce the 
``Preserving Crime Victims' Restitution Act of 2006.'' The Act would 
clarify the rule of law and procedures that should be applied when a 
criminal defendant, such as former Enron CEO Kenneth Lay, dies after he 
has been

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duly convicted, but before his appeals are final.
  I am pleased that Senator Sessions is joining me as a cosponsor in 
introducing this bill. We have worked closely with the Department of 
Justice in crafting this legislation, and have used much of DOJ's 
transmitted language. DOJ fully supports the principles contained in 
this bill, and has indicated its support for this bill's efforts to fix 
this problem now to ensure that, despite a defendant's death, hard-won 
convictions are preserved and restitution remains available for the 
victims of crime.
  This bill that I introduce today would do the following: Establish 
that, if a defendant dies after being convicted of a Federal offense, 
his conviction will not be vacated. Instead, the court will be directed 
to issue a statement stating that the defendant was convicted (either 
by a guilty plea or a verdict finding him guilty) but then died before 
his case or appeal was final.
  It would codify the current rule that no further punishments can be 
imposed on a person who is convicted if they die before a sentence is 
imposed or they have an opportunity to appeal their conviction.
  It would clarify that, unlike punishment, all other relief, such as 
restitution to the victims, that could have been sought against a 
convicted defendant can continue to be pursued and collected after the 
defendant's death.
  It would establish a process to ensure that after a person dies, a 
representative of his estate can stand in the shoes of the defendant 
and challenge or appeal his conviction if they want, and can also 
secure a lawyer--either on their own or by having one appointed, and
  If the Government had filed a criminal forfeiture action--in which it 
had sought to reach the defendant's assets that were linked to his 
crimes--the Government would get an extra 2 years after the defendant's 
death to file a parallel civil forfeiture lawsuit so that it could try 
to recover those same assets in a different, and traditionally-accepted 
manner.
  The need for this legislation was vividly demonstrated last month. On 
October 17, 2006, U.S. District Judge Sim Lake, of the Southern 
District of Texas, wiped clean the criminal record of Enron founder 
Kenneth Lay, even after a jury and judge had unanimously found him 
guilty of 10 criminal charges, including securities fraud, wire fraud 
involving false and misleading statements, bank fraud and conspiracy.
  That decision was not based on an error in the trial or any 
suggestion of unfairness in the proceedings. Instead, it was simply 
based on the fact that Mr. Lay died before his conviction had been 
affirmed on appeal, under a common law rule known as ``abatement.''
  In other words, this order essentially means that Mr. Lay is 
``convicted but not guilty''--``innocent by reason of his death.''
  Judge Lake granted this dismissal even in the face of DOJ Enron Task 
Force filings, which noted how Mr. Lay's conviction ``provided the 
basis for the likely disgorgement of fraud proceeds totaling tens of 
millions of dollars.'' In other words, the dismissal means that 
millions dollars, that the jury found were obtained by Mr. Lay 
illegally, will now remain untouched in the Lay estate. And everyone 
agrees that former Enron employees and shareholders will now find it 
much harder to lay claim to these ill-gotten gains held by Mr. Lay's 
estate, because they will be unable to point to his criminal conviction 
as proof of his wrongdoing.
  I do not fault Judge Lake for issuing this order. He made it clear 
that he was simply following the binding precedent issued in 2004 by 
the full U.S. Court of Appeals for the 5th Circuit, in a case called 
United States v. Estate of Parsons.
  But as I noted in a letter I wrote to Attorney General Gonzales on 
October 20, 2006, the Fifth Circuit's Parsons decision goes far beyond 
the traditional rule of law in this area. While the common-law doctrine 
of abatement has historically wiped out ``punishments'' following a 
criminal defendant's death, the Supreme Court has never held that it 
must also wipe out a victim's right to other forms of relief such as 
restitution, which simply compensate third parties who were injured by 
criminal misconduct.
  As the six dissenters in Parsons noted, the majority's `` `finality 
rationale' is a completely novel judicial creation which has not been 
embraced or even suggested by . . . other courts.'' The Third and 
Fourth Circuits, for example, have expressly refused to take this 
position, and upheld a restitution order after a criminal defendant's 
death.
  The Parsons decision was remarkable in several other respects, 
including the fact that (as the dissenters noted), its new rule of law 
was apparently inspired by a single law review article. That academic 
piece boldly claimed that a criminal defendant's right of appeal is 
``evolving into a constitutional right,'' and suggested that a 
conviction untested by appellate review is unreliable and illegitimate. 
This notion runs contrary to the traditional rule applied in virtually 
every other context--where a jury's findings are typically respected 
under the law.
  Of course a defendant is presumed innocent at the outset of his case. 
After a jury has deliberated and unanimously issued a formal finding of 
guilt, however, that presumption of innocence no longer stands.
  The Parsons ``finality'' rationale raises the absurd possibility that 
even a defendant who fully admitted his wrongdoing and pleaded guilty, 
but who then died while an appeal of his sentence was pending, could 
have his entire criminal conviction erased. In fact, this has already 
occurred, in the 1994 case of United States v. Pogue, where the D.C. 
Circuit ordered the dismissal of a conviction of a defendant whose 
appeal was pending--even though the docketing statement had said that 
the defendant intended to challenge only his sentence, and not his 
underlying conviction.
  I have urged the Attorney General to continue to fight for Enron 
victims by appealing Judge Lake's dismissal to the Supreme Court. 
There, he should ask for a resolution of this split in the law between 
these Circuits, so that he can try to get the Parsons rule overturned. 
Unfortunately, the Justice Department has been noncommittal--it refuses 
to say if it will appeal the Ken Lay dismissal or not, even with the 
filing deadline fast approaching.
  In the meantime, rather than remaining silent on this issue, and 
hoping that the Attorney General will appeal the Lay case as he should, 
I believe the time has come for Congress to take action.
  While I have no desire for our Government to punish a criminal 
defendant who dies, the calculation should be different when we are 
determining how to make up for harm suffered by other individuals.
  There is surely a legal and moral basis for not punishing the dead. 
But there is also, more importantly, a legal and moral basis for 
defending the living. The legislation that I introduce today codifies 
that distinction.
  This legislation offers a fair solution and orderly process in the 
event that a criminal defendant dies prior to his final appeal.
  Enron's collapse in 2001 wiped out thousands of jobs, more than $60 
billion in market value, and more than $2 billion in pension plans. 
When America's seventh largest company crumbled into bankruptcy after 
its accounting tricks could no longer hide its billions in debt, 
countless former Enron employees and shareholders lost their entire 
life savings after investing in Enron's 401(k) plan.
  Many of these Enron victims have been following closely the years of 
preparation by the Enron Task Force, and the four-month jury trial and 
separate one-week bench trial, hoping to finally recover some 
restitution in this criminal case. And despite Mr. Lay's vigorous 
efforts to avoid being held accountable for his actions, a conviction 
was finally secured.
  Yet now these people have essentially been victimized again. They 
will be forced to start all over in their efforts to get back some 
portion of the pension funds on which they expected to subsist, and the 
other hard-earned assets that will remain beyond their reach, despite 
the unanimous, hard-fought verdicts finding Mr. Lay guilty of all ten 
counts with which he had been charged.
  The time has come for Congress to end this injustice--hopefully, by 
acting quickly enough to assist these Enron victims, but in any event 
in a way that

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will prevent this type of injustice from ever happening again in the 
future.
  I urge my colleagues to support this legislation.

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