Book Report – The Chickenshit Club by Jesse Eisinger

Ever wake up in the middle of the night, startled, sweating, and on the brink of lunacy, wondering why on earth no executives who helped cause our recent global recession have done even one day of jail time? Well kids, Jesse Eisinger has answers to that question and more in his 2017 corker, The Chickenshit Club. He ends Chapter One with a tone-setting summary of how white collar crime is fostered on Wall Street, using a gone-and-long-forgotten name: Arthur Anderson. Turns out holding accountable Enron’s crooked advisory firm – so central in gaming the system by delivering both consulting and auditing services – for the energy giant’s 2001 collapse came with an unintended consequence: backlash in the court of public opinion. For as upset as the citizenry was with Enron’s now very dead CEO Ken Lay (long live others), CFO Jeffrey Skilling, and the whole lot of other complicit C-suite vermin, it didn’t really want to see Anderson fold in on its 26,000+ employees; alas, fold it did, putting all those lower-rung suckers out of work, creating an outcry that made your government gun shy – nay, chickenshit – in addressing subsequent corporate chicanery, a strategic shift made according to this alarming book “without any strategy or plan.” Politics. Swell.

“Since 2001,” Eisinger tells us, “more than 250 federal prosecutions have involved large corporations” but what almost always result are negotiated deals, not indictments. Over the past 17 years we’ve seen the era of something called DPAs, or deferred prosecution agreements. Some bank, tech firm, or drug maker gets investigated, chests are beaten, threats made, teeth gnashed, lots of sound and fury signifying nothing because in the end a fine tantamount to a speeding ticket is issued, paid and often – wait for it – written off.  To fat cats at Bank of America, Google, or Pfizer, such penalties are a mere nuisance, the cost of doing business. These are insignificant punishments through which neither fault is admitted nor behavior changed. The result is the corrosion of the rule of law affording top executives “the ability to commit crimes with impunity.” Prosecutors fearful of losing cases and careers – collectively the book’s namesake crew – throw away their shot to try these law-flouting companies and executives, short-cutting their way directly to the lazy threat-and-fine maneuver, enjoying the publicity that results from such half-baked justice all the way into lucrative private practice partnerships.

Well-written as it is, this is not the easiest tome to navigate; at 330+ pages, it includes countless examples of the wayward nature of institutions too big to fail (run by those apparently too big to jail, whatever that means). It also can double as a how-to manual for dodgy behavior: use cute internal code and know when to avoid email entirely (LTL = let’s talk live) and you too can plausibly deny your way through Loophole Twister (growing nose… red!). Make sure you’ve lined up a lackey or two to take the fall and you’re practically home free. It’s just gross. And don’t look for many solutions herein, either. Brilliant an ideas generator as he surely is, Eisinger sees his role as completing Step 1 of a Susan Scott-inspired fierce conversation: Name the Issue. That he has. What we’re left with is the rationale that defaulting to fines – even ones as seemingly large as Wells Fargo’s recent $1B one – is somehow the answer. The author concludes this as a tragic matter symptomatic of a cultural rot. Hard to argue with any of that.