Public Citizen News
By Rhoda Feng
Corporate impunity swelled to record levels during President Trump’s final year in office, a new Public Citizen report has found. The number of federal prosecutions of corporate criminals fell to just 94 in 2020 – the lowest on record since the government started tracking corporate prosecution statistics in 1996 – while corporate leniency agreements increased to 45, the highest in Trump’s four years.
The report covers the government’s 2020 fiscal year and is based on an analysis of federal corporate prosecution data from the U.S. Sentencing Commission and the Corporate Prosecution Registry, a joint project of Duke University and the University of Virginia that tracks criminal enforcement actions against corporations.
“As profit-maximizing, risk-calculating organizations, big corporations are highly responsive to incentives and punishments,” said Robert Weissman, president of Public Citizen. “If corporations know they can commit crimes and – if caught – be required to do little more than promise not to violate the law in the future, it is a virtual certainty they will break the law regularly and routinely.”
Because of the simultaneous trends of declining corporate prosecutions and increasing corporate leniency agreements (i.e., deferred prosecution agreements and non-prosecution agreements), the agreements made up nearly one-third (32%) of all resolutions of federal cases against corporations accused of crimes. This is the highest the percentage has ever been since 1996, when prosecutors entered leniency agreements with corporate criminals only about 1% of the time. Corporate prosecutions have fallen by two-thirds from the peak of 296 in 2000. The previous record low was 2018, when 99 corporations were prosecuted. The decline in prosecutions means that only 94 corporations either pled or were found guilty of crimes in 2020,
Corporations whose egregious wrongdoing was settled via leniency agreements with the Justice Department instead of prosecution include:
- Chipotle, a national restaurant chain whose food safety violations sickened over 1,000 customers;
- Novartis, a pharmaceutical corporation whose subsidiaries broke antitrust and anti-corruption laws;
- HSBC, a London-based multinational megabank whose Swiss subsidiary helped wealthy U.S. citizens evade tax obligations for a decade (this is HSBC’s third leniency agreement from the U.S. Department of Justice [DOJ] since 2012);
- JPMorgan Chase, a New York-based multinational megabank whose precious metals traders engaged in fraudulent activity over eight years (this is JPMorgan’s fourth leniency agreement from the DOJ in less than 10 years);
- Monsanto, a Bayer-owned agrichemical corporation that improperly stored hazardous pesticide waste; and
- Wells Fargo, whose executives over more than a decade pushed impossible sales goals on thousands of employees, who faced discipline or firing for not meeting goals, resulting in predatory and fraudulent sales practices that victimized millions of customers.
“Trump’s DOJ is infamous for pursuing a cruel ‘tough on crime’ approach to immigrants and low-level offenders,” said Rick Claypool, a Public Citizen research director. “It also should be infamous for letting corporate criminals off the hook. President Biden’s DOJ should ramp up enforcement to show that corporate criminals are not above the law.”
Restoring Corporate Criminal Accountability
Under Trump, Deputy Attorney General Rod Rosenstein allegedly told prosecutors to bring immigration cases against families with young children – the “zero tolerance” anti-immigration policy that resulted in federal agents separating thousands immigrant children from their parents, hundreds of which were never reunited. Attorney General William Barr reportedly told prosecutors to consider bringing criminal sedition charges against Black Lives Matter protestors – and reportedly considered prosecuting Seattle’s mayor for resisting harsh enforcement against protests.
The DOJ’s cruelty to low-level offenders looks even worse when juxtaposed with its leniency to corporate offenders. Senior DOJ officials ordered staff investigators and prosecutors to stand down in criminal cases against Walmart for opioid dispensation violations, Monsanto for illegally storing hazardous waste, Royal Bank of Scotland for its role in the 2008 financial crisis, and Caterpillar for tax evasion, and reduced a civil penalty against British bank Barclays for its role in the financial crisis by billions.
“This lenience toward the biggest multinational corporations sends the unmistakable message that the powerful are above the law,” said Weissman. “It is not, as Trump likes to say, ‘law and order.’ It is two-tiered justice. If we want corporations to follow the law, then it’s past time to do away with deferred and non-prosecution agreements.”
Public Citizen advocates a number of additional progressive reforms to hold corporate criminals accountable. The Biden administration has already started rolling back some of the Trump DOJ’s worst enforcement policies. For example, Biden’s acting chief of DOJ’s Environment and Natural Resources Division (ENRD) rescinded the Trump ENRD chief’s enforcement policies, which, if kept in place, would have brought additional burdens to prosecuting corporate polluters.
To make sure that corporate criminals are brought to justice, here are a few Trump DOJ policies Biden and Garland should rescind:
- Preemptively rewarding corporate criminals with ways to avoid prosecution;
- Reducing corporate penalties by eliminating payments to third parties that help right corporate wrongs; and
- Limiting the DOJ’s power to bring charges against corporations that defraud the government.
Additionally, there are policy reforms the Biden administration should implement to strengthen the DOJ’s ability to hold corporate criminals accountable. These include:
- Reassert the prioritization of holding individuals accountable in corporate cases;
- Release an annual DOJ report and public database on corporate crime;
- End the practice of negotiating leniency agreements with corporations;
- Corporations that plead or are found guilty should be automatically debarred from government contracts; and
- End “Too Big to Jail” by breaking up criminal corporations and monopolies.
In order to serve and protect the public, the Department of Justice must engage in robust reforms to protect Americans from corporate criminals and assert that no one is above the law – not even the biggest businesses or most well-connected executives.