Just because you don't like the fact that an Imperial can earn his way back up in another's eyes after a demotion doesn't mean demotion 'isn't [effective enough] punishment'.

It is, however, a valid point that the cabalmates in question may be too easily impressed into spending their hard-earned donations and 24 hour promotion period on repromoting their hero range allies. Personally I think 2-4 days is punishment enough for breaking Imperial Law if it's only the first or second infraction. Around the third or fourth you should consider anathemaing people because then you're dealing with a fool, ICly.

I've promoted people back that the Imms have demoted, but given that neither Twist nor Enlilth were watching my High Priestess half the time, it's probably not a good yardstick for what you can get away with these days.

You lose powers from demotion. There is no way to pick and choose what powers you lose from Village for instance. If you want Anathema to be the rule rather than the exception, you probably need a lobotomy. Goodies, especially noobs, walk a far wider line than Imperials and are far less likely to be punished for less-than-good actions whether by cabal leaders (impossible to police) or the Imms (difficult to track all the information involved unless you're good-align coddling Baerinika)