Nacchio's Sentence Affected by the Ex Post Facto Clause

This entry is the third in the Nacchio Sentencing Series and answers the following question:

3. Why are the 1998 Federal Sentencing Guidelines being used rather than the current guidelines?

In Question 1 of the federal sentencing guidelines series, I stated that Judge Nottingham would not use the current federal sentencing guidelines in effect at the time Nacchio is sentence, but rather the guidelines in effect when Nacchio sold his Qwest stock (Counts 24 through 42) in the second quarter of 2001. In particular, I made the following statement:

Under the current guidelines, Nacchio could expect a sentence in the range of 10 to 12.5 years. These current guidelines ratcheted the range higher for acts committed after November 2001 and later after Sarbanes-Oxley was enacted. However, since the guidelines at the time of Nacchio’s trades will give him a lower range of almost 6 to 7.25 years, Nottingham will apply the 1998 Federal Sentencing Guidelines.

To understand my prediction, one must understand U.S. constitutional law. The applicable statute (18 U.S.C. § 3553) provides that the court should apply the Guidelines Manual in effect on the date the defendant is sentenced (for Nacchio, July 27^th, 2007) unless the court determines that doing so would violate the ex post facto clause in Article I, § 9 of the United States Constitution. Thus, if Nottingham determines that the current federal sentencing guideline would violate this constitutional clause, he would use the federal sentencing guideline of 1998 which was in effect at the time of the illegal insider trades.

An “ ex post facto” law or retroactive law is simply a law that retroactively makes an act criminal even though at the time the act was committed, it was legal. An ex post facto law (Latin for “something done afterward”) is immoral and fundamentally unfair because citizens should know two things when they commit a particular act—(1) whether it is illegal, and (2) if illegal, the extent of the penalty the government can impose. Consequently, an existing criminal statute that is amended to increase its penalty would violate the ex post facto clause if the increased penalty was applied retroactively to an act occurring before the criminal statute was so amended.

The sentence of Jeffrey Skilling provides an excellent example. Had Skilling been sentenced using the current federal guidelines at the time of his sentencing, his “offense level” would have been as high as 59, or 16 levels higher than that required under the guidelines at the time of his crimes. Consequently, the retroactive effect of the current guidelines would have resulted in sentence of “life” imprisonment. However, the court correctly ruled that the current guidelines and its sentencing table, if applied, would constitute an ex post facto law and thus applied the guidelines in place at the time of his crimes and sentenced him to 24 years.

Similarly, since Nacchio’s aggravating factor of the amount of gains he realized due to the Qwest stock sales resulting in guilty verdicts was higher using the current federal guidelines (22 offense levels rather than the 17 levels using the guidelines in effect during the relevant trades), Nottingham should ignore the range of punishment under the current guidelines 10 to 12.5 years in favor of almost 6 to 7.25 years in prison using the earlier guidelines for all purposes.