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Regan claims that he had no damning evidence against Drexel, and was convinced that he had done nothing wrong, so he refused to cut a deal. The Justice Department was irritated, to put it mildly. Far from having the IRS handle this as a regular tax case, or even as a criminal tax case, Justice brought the full force of the controversial racketeering statute, RICO, to bear. All this over a relatively small number of tax dollars.
Why had the defense's expert witnesses not been allowed to testify? "You don't seem to understand," one of the Government's team told me. "We didn't decide the witnesses couldn't testify; the judge did. There was a judge in this trial! There was a jury!"
Yet while many trial watchers were expecting the lengthy jail terms and huge fines and forfeitures that the Government sought, the judge seemed to be saying by his sentence that the U.S. Attorneys had gone a bit wild. (He gave Regan six months instead of three, he said, because he thought Regan lied on the witness stand.) So the judge wasn't totally buying the Government's case.
The jurors I interviewed seemed less than rock solid in their conviction too. "I don't feel what they did was jailworthy," one juror told me. Said another: "I felt bad about this whole thing, to tell you the truth. I don't feel like we did the right thing." Yet, oddly, one could argue things actually did work out about right:
-- The Government may have been right to take this terrible RICO blunderbuss and use it to scare the living daylights out of Wall Street, because Wall Street's level of greed and immorality in the '80s had reached a cyclical peak.
-- The judge was wise to pass a light sentence because, well, how bad is what Regan, et al, were charged with -- really?
-- And Regan's defense team was certainly right to decry the Government's use of RICO. Even the Justice Department seems to agree it shouldn't be used this way again. At best, you might say it was sort of like bombing Hiroshima. The Government was looking for something dramatic to end the war, but it was of questionable morality.
None of this can be much consolation to Regan, who, even if guilty, has suffered more, all told, than his alleged crimes would seem to warrant. But at least the news is not all bad. He's still rich, and my New York City audit went fine.
FOOTNOTE: *The official reason? I had forgotten to sign one of the returns.