The Time for Corporate Accountability Is Now
Public Citizen News / March-April 2022
By Rick Claypool
This article appeared in the March/April 2022 edition of Public Citizen News. Download the full edition here.
Year one of the Biden administration saw tremendous momentum for accountability for corporate lawbreakers.
The Biden administration jettisoned Trump policies that protected corporate wrongdoers. Nominees committed combatting corporate crime were confirmed, and the agencies under the new nominees announced new policies to enhance corporate oversight.
Public Citizen research documented that Trump’s last year in office saw corporate crime enforcement plummet. Corporate prosecutions fell to a quarter-century low while Justice Department agreements that help corporations avoid prosecution were used more than ever.
Deputy Attorney General Lisa Monaco, a member of the second in command in Biden’s DOJ under Attorney General Merrick Garland, in the fall announced what she described as “the first steps” toward a strengthened approach to corporate enforcement. Monaco pledged in particular to focus the department’s prosecutorial efforts on repeat offenders. In the following months, country’s top law enforcement agency did just that.
Since then, however, disappointing enforcement numbers and policy decisions have complicated the narrative of Biden’s DOJ prioritizing the fight against corporate wrongdoers.
- A report by PEER (Public Employees for Environmental Responsibility) found that criminal anti-pollution enforcement has not rebounded since Trump left office – and that criminal referrals for prosecution from the EPA actually fell further in 2021. Meanwhile, polluter-friendly Senate Republicans like Sens. Bill Cassidy (R-La.) and Cynthia Lummis (R-Wyo.) are blocking the confirmation of Biden’s top environmental law enforcement nominees.
- The DOJ’s fraud section also reported a decline in corporate enforcement actions. The section reported just eight corporate resolutions in 2021, down from 13 in 2020.
- Top prosecutor vacancies across the Justice Department’s U.S. Attorney’s Offices remain – leaving those offices in the hands of holdovers and career staff, who may be less likely to embrace policy shifts like Monaco’s corporate crime crackdown.
- Calls by Public Citizen and other advocates for Attorney General Merrick Garland to release the DOJ’s corporate crime enforcement data remain unanswered.
- The DOJ blocked an effort by plane crash victims to reopen the agreement the department inked in the final days of the Trump administration with Boeing to resolve the case regarding the 737 Max crashes, which killed 346 people. In so doing, the DOJ claimed the family members of those who died in the crashes do not meet the technical legal definition of “crime victims” – and so are denied the right to confer with the department about the case.
But there are signs things may be getting back on track.
In March, Attorney General Garland gave a speech on prosecuting corporate crime. “As a prosecutor, defense attorney and judge, I have also seen the Justice Department’s interest in prosecuting corporate crime wax and wane over time,” he told the audience of white-collar defense attorneys. “Today it is waxing again.”
Garland described the DOJ’s corporate crime enforcement efforts as ramping up – noting that the DOJ’s Antitrust Division “is now trying or preparing to try 18 indicted cases against 10 companies and 42 individuals, including 8 current or former CEOs or company presidents” and the environmental division “currently trying or preparing to try 11 indicted cases against 11 companies and 34 individuals – including 14 current or former company executives – for a wide range of criminal environmental offenses.”
This is good news for how corporate oversight under Biden is progressing in year two of the administration.
The need to crack down on corporate wrongdoing is clear. A Harvard Business School analysis recently concluded that major firms are engaging in misconduct at least twice a week. The annual cost of corporate and white-collar crime to Americans is estimated at between $300 billion and $800 billion a year, while street crime – which receives disproportionate news coverage – costs only a fraction of that, about $16 billion.
Combating corporate crime is popular. A recent poll by Data for Progress and the Revolving Door Project found that 70% of Republicans, 70% of independents and 70% of Democrats want the Biden administration to do more to fight corporate crime.
These poll results make sense. Consumers don’t want to be ripped off. Workers don’t want to be exploited. Honest businesses don’t want to compete with companies that get ahead by cheating. And no one wants to live on a planet poisoned by corporate pollution.
The public is ready to stand up to corporate abuse – and looks to the officials who oversee enforcement agencies to ensure that the powerful are held accountable. (Follow along with how corporate enforcement evolves in year two of the Biden administration at bigbusinessblotter.substack.com).