Back in 2013, Rolling Stone journalist Matt Taibbi wrote an article criticizing the Obama administration’s lax attitude towards corporate crime:
This isn't brain surgery. You know what an effective deterrent to crime is? Jail! And do you know what kind of criminal penalty actually makes people think twice about committing crimes the next time? The kind that actually comes out of some individual's pocket, not fines that come out of the corporate kitty.
That was four years ago. Let's see if there's any news to report. Indeed!
The FBI just arrested “Oliver Schmidt, who led Volkswagen’s regulatory compliance office in the United States from 2014 to March 2015,” charged with “conspiracy to defraud the United States … marking an escalation of the criminal investigation into the automaker’s diesel emissions cheating scandal.”
Testimony starts today in the racketeering trial of the former New England Compounding Center president, Barry Caden, who is “charged with second-degree murder” for causing a “national meningitis outbreak that killed 64 people and sickened hundreds more."
But then again, there’s this old thing: "Corporate nonprosecution agreements dropped dramatically in 2016 from the previous year, but the government is still offering deals to penitent white-collar defendants, according to a recent study by Gibson, Dunn & Crutcher." And that drop seems like a bit of an anomaly as, “The use of [nonprosecution agreements (NPAs) and deferred prosecution agreements (DPAs)] has proliferated across the country.” F. Joseph Warin, chair of the litigation department at corporate law firm Gibson Dunn, said, “On balance is what we're seeing is this vehicle has become an alternative to a plea of guilty for businesses that are in a regulated industry.”
Finally, no story would be complete these days without guessing how the Trump administration might handle things - in this case, corporate criminals. Mr. Warin at Gibson Dunn doesn’t imagine much will change, noting:
While there's no guarantee that such agreements will continue under the administration of President-elect Donald Trump, there's also no reason to believe that they won't, Warin said. "There's not a track record," he said of the incoming Trump administration. "And one of the things we do know is the people on the transition teams, these are serious professionals that were in the Justice Department before and they would respect the precedent."
Oh, I think Mr. Warin is surely underestimating his good fortune. For example, according to a new Public Citizen report, “U.S. Sen. Jeff Sessions’ (R-Ala.) failure to combat corporate crime and wrongdoing as [Alabama Attorney General between 1995 and 1997] casts serious doubt on whether Trump’s attorney general nominee would be tough on corporate crime if confirmed.” PC describes some of his record:
- When campaigning for attorney general in 1994, Sessions reportedly received $20,000 from the vice chairman of Morrison’s Inc., a corporation he declined to prosecute when in his previous role as U.S. attorney. Morrison’s was a government contractor that had been violating its contract by diluting meat it provided for meals for senior citizens with vegetable protein. The U.S. attorney’s office later told federal officials that racketeering charges could have been brought against Morrison’s.
- Sessions botched an alleged fraud case his office brought in 1995 against Tieco, an Alabama industrial equipment company. The judge handling the case found pervasive wrongdoing by the attorney general’s office and dismissed the charges due to the misconduct.
And there’s plenty more. I’m afraid that we may soon long for the days of criticizing an Obama administration “get-tough” policy that never really was.