Lack of Prosecution, Soft Punishments Lead to Repeated Corporate Law Breaking

Corporate Prosecutions Have Plummeted While Lenience Agreements and Repeat Offenses Have Surged in Recent Years

WASHINGTON, D.C. – Corporations keep breaking the law, and the U.S. Department of Justice (DOJ) keeps refusing to prosecute them. The DOJ’s chronic refusal to bring criminal prosecutions against big banks, big pharma and other big businesses that violate the law has led to a failure to deter repeat offenders, a new Public Citizen report has found.

Instead of prosecuting corporations, the DOJ starting in the early 2000s has increasingly relied on agreements that prosecutors and corporate defense attorneys negotiate behind closed doors to keep corporations – usually the largest – out of the criminal justice system.

Under President Donald Trump – the supposedly “tough on crime” president – corporate prosecutions have plummeted to the lowest level in more than 20 years. Corporate lenience agreements – deferred prosecution agreements (DPAs) and nonprosecution agreements (NPAs) – however, are on the rise again. The DOJ under President Barack Obama also made an extraordinary number of these deals with corporate wrongdoers and was strongly criticized for its lenience to corporations by congressional Democrats as well as Republicans.

Among the report’s key findings:

  • The DOJ has brought subsequent federal criminal enforcement actions – in many cases four or more times – against 38 corporations after the corporations entered a DPA or NPA. These corporations’ 78 NPAs and DPAs make up 15% of the 535 agreements the DOJ entered since 1992.
  • Out of the 38 repeat offender corporations Public Citizen identified, 36 are major corporations that are on or have appeared on the Forbes Global 2000 list of the world’s largest publicly traded corporations. Three of the corporations have held the top slot as the largest corporation in the world: JPMorgan Chase, General Electric and HSBC.
  • Half of these repeat offenders are banks or financial corporations, and the majority of those are headquartered internationally.
  • Most of these repeat offender corporations (63%) received at least one additional DPA or NPA after already having received a prior DPA or NPA, and most have pleaded guilty to subsequent crimes (66%).
  • Out of the more than 500 NPAs and DPAs the Justice Department has entered with corporations, on only seven occasions – about 1% of the time – has the department held a corporation accountable for breaking its promise not to break the law in the future.
  • The reason so few corporations are held accountable for breaches may be because the DOJ is not consistently enforcing against breaches. While the agreements generally forbid corporations from committing further crimes, about a third of repeat offender corporations (12 out of 38) were subject to subsequent federal criminal enforcement before the expiration of a previous NPA or DPA. Another fourth (nine out of 38) had criminal enforcement actions brought against them within one and a half years of release from their previous NPA or DPA.

The report provides detailed descriptions of each alleged violation and enforcement action. Particularly egregious instances of corporations receiving multiple deferred and nonprosecution agreements are provided, including for repeat offenders such as Bristol Myers-Squibb, Deutsche Bank, HSBC, JPMorgan Chase and Las Vegas Sands.

“If the Justice Department wants to deter corporate crime, it must stop bending over backward to protect corporations and start enforcing the law,” said Rick Claypool, a Public Citizen research director and author of the report. “Our country is facing an unprecedented corporate crime wave. To stop it, we must prosecute corporate criminals.”

“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. If we want corporations to follow the law, then it’s past time to do away with deferred and nonprosecution agreements.”

Read the full report.