What happens to the lives of the innocent when prosecutors abuse their power to further their careers or cater to political expediency? Think of the Duke lacrosse fiasco, which shattered the lives of many innocent young men. Or the corruption case against former Alaska Senator Ted Stevens, overturned by a judge who concluded he had never seen such mishandling and misconduct. Or the prosecution of the former Arthur Andersen, found guilty of obstruction of justice in its audit of Enron. The criminal charges were subsequently reversed long after it had dissolved, its 85,000 employees dispersed, testament to the institutional pressures and the personal ambition of prosecutors, with the civil liberties of individuals and the rights of corporations compromised.

Henry Fischer, founder and president of the largest independent homebuilding company in the Cincinnati region and one of the 100 largest in the country, knows first hand. In May 2006, with TV crews tipped off by federal prosecutors on-hand, police helicopters swooped down from the early morning sky, buzzing construction sites in Northern Kentucky overseen by Fischer Homes. Swat teams arrested Hispanic-looking workers. Armed agents targeted Fischer superintendents, handcuffing them at dawn at their homes in front of friends and family and dragging them off to jail. According to media reports, the federal government had engineered an undercover sting operation that had caught Fischer Homes employing illegal aliens.

Six Fischer associates were eventually charged with harboring illegal aliens. Each faced a $250,000 fine and 25 years in jail. The company was threatened with a felony indictment and charges under RICO, the racketeering laws designed to go after organized criminals, that would have ruined Fischer Homes and cost the jobs of 500 associates and thousands more subcontracted workers. With a gun at its head, founder, Henry Fischer was offered a deal: plead guilty, pay $1 million fine and admit to a felony and your workers will be off the hook. At the same time, prosecutors were threatening the accused workers, hoping they would turn against the company—in effect perjure themselves—to avoid prosecution. Remarkably, with little to gain personally and much to lose, they stood with Mr. Fischer.

Thus began a three-year nightmare for Mr. Fischer and hundreds and workers, friends, and business associates of Fischer Homes. The prosecutor’s facts were wrong, but that was small solace when facing the enormous power of the justice system, which often depends on extracting plea deals, sometimes even from the innocent–and often from supposedly deep-pocketed businesses.

Despite facing public humiliation and possible financial ruin, Mr. Fischer gambled his entire company, spending millions of dollars—far more than the $1 million fine and guilty plea the government demanded—to fight the strong-arm tactics of politically driven prosecutorial antagonists.  And he prevailed, as the charges against his workers were dismissed. “I just couldn’t bring myself to write that check when we did nothing wrong,” he said.

The Fischer Homes case is a striking example of the politics of prosecution—how and why the government targets individuals and corporations, sometimes recklessly, often taking an enormous human toll in the process. Often, there is not even an intention by the government of going to trial. Instead, prosecutors have perfected a more powerful tactic: exploiting the threat of business losses and the manipulation of the media to force capitulation.

At what point does the potential public benefits of vigorous prosecution outweigh the actual harm when fundamental legal protections are suspended? Most people find it difficult to hold much sympathy for corporations, often forgetting that we depend on a dynamic, competitive economy for its welfare. The victims of over-zealous prosecutors and ambitious government agencies are often workers and their families, including many small and medium sized business owners who have played by the rules and yet now find themselves targets—businessmen like Henry Fischer. As Mr. Fischer writes, “I hope nothing like this happens to you.”

Jon Entine is a visiting fellow at AEI.

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