Yet the tragedy in her story touches me.
Elizabeth ("Betsy") Monrad had it all. She had the bachelor's from Wellesley and the master's from the Sloan School at MIT. She was the CFO of TIAA-CREF, one of the nation's conservative financial institutions. In 1999, she had received an insurance executive of the year award. She was married to another successful financial professional. They have two kids. She taught fourth-grade Sunday school.
She sat on the board of the local day school.
One day, Betsy learned that the federal authorities were investigating her and other executives from a prior job for alleged criminal conduct. She negotiated a severance from her TIAA-CREF job.
Eventually, Betsy came to trial. The trial dealt with a transaction between an AIG affiliate and General Reinsurance. The allegations were that Betsy and others had conspired to book a transaction that looked as if it used reinsurance to reduce
the AIG affiliate's risk of insurance losses, when a side agreement restored the risk to the AIG affiliate. This form of transaction, termed derogatorily as "financial reinsurance" (as opposed to reinsurance which cedes risk), is
a major problem when it distorts the financial condition of an insurer.
Betsy Monrad was found guilty. In the space of a few years, she went from a successful insurance executive to a convicted felon. The case has a few interesting wrinkles, and perhaps her lawyers will have some success on appeal.
The underlying transaction does not reflect well on the defendants, but as with many things, federal criminal work can involve some complexities. Nothing is done in a criminal trial until the appeals are done.
I read articles today that the judge has just valued the loss that the crime cost investors at half a billion dollars. This is significant, because although criminal law is not my field (and this should not be read as legal advice), federal sentencing guidelines in financial crimes make a lot of hay out of
the size of the loss. A half billion dollar loss ups the criminal sentencing ante into that chilling word: decades.
Federal sentences are odd things. While in many states, good conduct credits
result in people only serving a fraction of the sentences, federal credits are not as liberal.
I've written before with my concerns about what happened at AIG, both in this matter and in connection with the credit default swaps. The way that General Re and AIG handled the transaction in issue does not give me a warm feeling about either company.
Yet this morning I am not thinking in terms of crime and punishment. It's not that I'm soft on crime. I support the indictment and conviction of people who commit wrongful acts. I get resentful when a fellow can steal a grand or two of stuff in Newark and go to prison, while people steal millions in Connecticut or Wall Street and get golden parachutes.
Today, though, I'm thinking of a woman only a few years my senior, who had a lot of positive achievements and luxuries of situation. She had gone to the right schools, climbed the right corporate ladders, and through hard work achieved the right resume.
Then, whether she is guilty of a crime or not, she erred. She erred in a way that changed her life. She was the CFO of a company that booked a financial transaction that one might term "sham".
I am pleased that the law applies even to executives of insurance companies. I am pleased there are rules for everyone.
Yet I take no pleasure in the thought that Betsy Monrad's choices may net her
the loss of more than ten years of her freedom.
I heard a wise man once, commenting about a man who surely deserved prison for a few things he had done, say something that stuck with me:
"Have you ever been to a prison? Horrible place. Lots of people deserve to go there. But there's no pleasure in putting anyone in there".
This dawntime I am thinking of Elizabeth Monrad, and poor choices, and personal tragedies, and what happens to families. It's not lost on me that I should think this about a lot of people in prison less fortunate than Elizabeth Monrad. I see my own limitations in the way her story catches my eye--a kind of narrow-mindedness of empathy.
The phrase about how much is expected of those to whom much is given comes to my mind. However, another religious text, about visiting even those in prison comes to my mind.
We're all swept up in this tragic episode of amazing wonder called life. Some of us make horrible mistakes. All any of us can do is to try to show as much compassion as we can. I don't know Ms. Monrad, and I'm not sure I sympathize with what she did (or did not do)--to put it mildly. Yet I wish her, somehow, strength and courage, grace and comfort. It's not that I condone or approve. I just know that when the sun melts the wax on someone's wings, the fall into the ocean can be frightening.
October 16, 2011 supplement
I just read that on August 1, 2011, the Second Circuit Court of Appeals reversed the judgment on appeal, and remanded for a new trial. The court found errors in the admission of some evidence, and an error in a jury instruction.