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Gotta say, there's really no mystery here.  Prosecutor had physical evidence to convict and a lousy witness.  That's the end of it.  They offered deal, charges reduced, defense countered, time served.  Prosecution's motivation is always questioned, but the answer rarely fits conspiratorial theories.  The reality is that they don't push cases (hard) without evidence to back.  That's not to say they may not win, but they feel that they have the goods, as it were.  As to the issue: of course the M's lower, middle and upper mgmt. knew, of course the upper mgmt. was told, and of course they reacted to a story in a newspaper and heads are rolling.
My thoughts:  Give the kid a chance to right the ship.  But, Baker did his job and I applaud him for it.