Statement of Robert Weissman, President, Public Citizen
Note: On Wednesday, the U.S. Department of Justice issued a memo containing new rules designed to hold corporate executives accountable for wrongdoing by their companies.
It would have been nice if the Department of Justice had evinced any interest in prosecuting corporate executive wrongdoers after the 2008 financial crash and ensuing Great Recession (and even better if the agency had prosecuted wrongdoing before it led to the crash).
The Great Recession threw millions out of work and millions of families out of their homes. It cost the economy $13 trillion in lost output and destroyed $9 trillion in home equity, according to the Government Accountability Office. The perpetrators got off scot-free, at least when it comes to criminal liability – not because the law didn’t allow for criminal prosecution, but because the DOJ, shamefully and inexcusably, chose not to act, against either corporations or executives.
The new DOJ guidelines on individual accountability for corporate wrongdoing express principles and stipulate practices that should have guided DOJ all along. We’ll have to wait and see whether this memo will make any difference in DOJ’s actual willingness to prosecute corporate criminals.
For effective deterrence and accountability, it is vital that the department prosecute both corporations and responsible individuals. The new memo must not become a vehicle by which companies can offer up lower-level managers and ensure an escape from criminal liability for top executives and the companies themselves.
The memo amounts to a striking admission that the DOJ’s policy on Wall Street corporate crime has been completely ineffective. The real test going forward will be if the agency can put this policy into action and enforce it aggressively.