It's rather interesting how this has evolved. Governmental agencies (IRS, FBI, Police, FAA, FCC, etc) have an enormous amount of power to "catch the bad guy". Unfortunately, as one might expect, there are times when mistakes are made, and a "good guy" is falsely accused, and sometimes prosecuted, fined, and/or imprisoned. When time goes by and it comes to light that a mistake in fact was made, there is no penalty to the authorities. This is a very bad system, as by its nature, it encourages action but does not encourage accuracy. This is like trying to guide a child by rewarding them for good behavior, but doing absolutely nothing for bad behavior. That is a model that simply does not work.
There was a case highlighted recently on "Penn & Teller's Bullshit" regarding a man who was arrested, tried repeatedly, and harassed for years by an overly zealous District Attorney. He is confined to a wheelchair, and in constant pain as the result of an automobile accident. This is a life which is miserable enough, but then he was targeted as a possible illegal drug seller, with his own prescription drugs as the contraband. His doctor prescribed his pain medication, and he had on-hand a 30 day supply. This was apparently over some "limit" and so he must be a drug trafficker. His house was placed under surveillance and even though no evidence was found supporting the theory that he might be reselling drugs, the DA decided to go ahead and arrest him. Police burst into his house, terrifying his family, searched the premises, and hauled him off. After spending some time in jail, his case was tried and he was found not guilty. The DA wasn't willing to let it go at that (although he'd already been subjected to a lot of indignity, expense, and inconvenience for no good reason), and so he filed an appeal. The case was tried several more times over the following years, and the poor guy's family just couldn't move on. The DA apparently stated to him that "I can do this indefinitely". What?? Why does this jerk still have a job? This is not serving the public interest in any way, and should not be tolerated. The trouble is, this wonderful DA has no reason NOT to behave this way. He has nothing to loose!
How is this at all acceptable? If there were penalties for such mistakes, then this sort of abuse would not be allowed to continue. In addition, the DA would be motivated to be really SURE about the case before escalating it to arrest and prosecution. As it stands now, there is no such motivation. Lives can be ruined, and the DA can simply shrug and say "oh gee, I was wrong".
The IRS is another agency which historically has a bad reputation for similar actions, and for wielding seemingly limitless power. Sure, they need to be able to find tax-dodgers and prosecute them, but they have no reason to be careful at all. If the IRS decides to audit an individual or company, that person/company must comply with the audit, expending time, money, and effort for as long as the IRS agent wants to keep digging. When it turns out that there was no merit to the audit, the agent walks away. There is no reimbursement for the time and expense caused by the fruitless audit. So, there is no reason (other than resource limitations on the IRS side) not to fire off audit after audit, in the hopes that one or two will actually end up with some money being made for the IRS coffers. Who cares how many innocent people are damaged in the meantime?
The FAA can suspend a Pilot's license any time they like, and drag the individual through an investigation. Sometimes this is a good thing, and the "bad guy" gets busted, but all too many times the person is not guilty of any transgression, and is sent on their way. For a hobbyist pilot, this isn't too horrible as not being able to fly is just inconvenient and dealing with the whole procedure is a pain. However, for the professional pilot, this means no income for the duration of the suspension. This can be devastating to a person's family finances, and so care should be taken. Because there is no penalty for a mistake, care is frequently not taken, and families are forced into bankruptcy as a result. Here are two interesting cases.
How about people who are sent to prison for a crime they did not commit, only to be exonerated many years later? James Bain from florida served 35 years. Oops, sorry about that, James. They are released and expected to go on with their lives, but their lives have been ruined. Where's the compensation?
I could go on and on in this vein, but I don't believe that is necessary. If stiff penalties were levied against these agencies automatically in the result of a mistake, including compensation for the victims, then they would be more inclined to be very sure of their facts before "getting the bad guy". Why do I say automatically? Most individuals do not have the available resources (time, money, etc) to file suit in these cases, and let's face it, most of the time they simply aren't going to win. When these incidents occur, the poor folks who have this happen to them frequently have no money left over for a suit when all is said and done. Some attorneys might take such a case with the promise of a percentage of the settlement, but since the odds of successfully winning a case against the "powers that be" are low to begin with, this isn't a workable solution either.