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Corporations keep breaking the law due to declining federal prosecutions

Corporations keep breaking the law, and the U.S. Department of Justice keeps refusing to prosecute them, a Public Citizen report finds. The DOJ’s continued 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, according to the report.

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.

“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.”

Under President Donald Trump – who said he would be a “tough on crime” president – corporate prosecutions have plummeted to the lowest level in more than 20 years. Corporate lenience agreements – deferred prosecution and nonprosecution agreements – however, are on the rise again. The DOJ under President Barack Obama also made a large number of these deals with corporate wrongdoers and was criticized for its lenience to corporations by congressional Democrats as well as Republicans, Claypool said.

Among the report’s findings:

  • The DOJ later brought federal criminal enforcement actions – in many cases four or more times – against 38 corporations after they entered a deferred prosecution or nonprosecution agreement. These corporations’ 78 nonprosecution and deferred prosecution agreements make up 15 percent 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 percent, received at least one additional deferred prosecution or nonprosecution agreement after already having received a prior deferred prosecution or nonprosecution agreement, and most have pleaded guilty to crimes that occurred later, 66 percent.
  • Out of the more than 500 nonprosecution and deferred prosecution agreements the Justice Department has entered with corporations, on only seven occasions – about 1 percent 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 isn’t 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 federal criminal enforcement again before the expiration of a previous nonprosecution or deferred prosecution agreement. Another fourth, nine out of 38, had criminal enforcement actions brought against them within one and a half years of release from their previous nonprosecution or deferred prosecution agreement.

The report describes alleged violations and enforcement actions. The worst examples 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.

 “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 the nation wants corporations to follow the law, then it’s past time to do away with deferred and nonprosecution agreements, Weissman said.

Major corporations that are reportedly currently under criminal investigation by the DOJ include:

  • Boeing, over the certification of the Boeing 737 Max, the model of plane that crashed in Indonesia and Ethiopia, killing 346.
  • Deutsche Bank, over alleged anti-money laundering failures, including whistleblower allegations about suspicious transactions by White House adviser and President Trump’s son-in-law Jared Kushner.
  • Facebook, over its arrangements to share user data with other major technology companies.
  • Fiat Chrysler Automobiles, over alleged bribery payments and labor law violations.
  • Ford Motor Company, over its emissions-certification process.
  • Goldman Sachs, over its involvement with the international 1MDB Malaysian corruption scheme, and for which DOJ staff reportedly are seeking to prosecute the company.
  • Huawei, for allegedly stealing T-Mobile trade secrets.
  • Johnson & Johnson, for allegedly making misleading statements about asbestos in its talcum power products.
  • Poultry processors including Tyson Foods, Perdue Farms, Koch Foods, and Sanderson Farms over an alleged price fixing conspiracy.
  • Purdue Pharma, over allegations including the OxyContin maker’s alleged failure to report doctors that overprescribed its opioids.
  • Uber, over an investigation into an alleged coverup of a 2016 data breach that exposed passengers’ and drivers’ personal information.

Corporations that have already resolved criminal investigations with a deferred or nonprosecution agreement in 2019 include Walmart, Merrill Lynch, and opioid manufacturers Insys Therapeutics and Rochester Drug Cooperative.


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