Despite the Biden administration’s promises to be tougher on corporate crime than its pro-business predecessor, a new report released Monday shows that corporate lawsuits hit an all-time high in 2021, continuing a decline that s accelerated under former President Donald Trump.
Citing data from the US Sentencing Commission and the Corporate Prosecution Registry, consumer advocacy group Public Citizen notes in its analysis that only 90 companies pleaded guilty or were found guilty of federal crimes last year, even as the Department of Justice, led by Attorney General Merrick Garland – announced policies aimed at bolstering enforcement efforts against white-collar crime.
The previous record was 94 corporate lawsuits in 2020, down from a high of 296 in 2000.
“The Biden DOJ’s policy move away from Trump’s soft approach on corporate crime suggests enforcement against corporate violators should ramp up, but the 2021 numbers don’t reflect those changes,” Rick Claypool, research director for Public Citizen and author of the new report, said in a statement.
“To deter corporate monopolies, polluters, fraudsters and abusers in the workplace, the DOJ must pursue tough prosecutions,” Claypool added. “It’s the only way to show big business that the cost of crime outweighs any perceived benefit of profit-driven breaking the law… Garland must prioritize prosecuting these cases, and President Biden and Congress must provide the DOJ with the resources to do the job.”
Public Citizen also found that the Justice Department’s use of so-called corporate clemency agreements as an alternative to criminal prosecution of companies that break the law remains “extraordinarily high” under Biden.
According to Public Citizen, these agreements accounted for 26% of all federal cases closed against companies in 2021, down from 32% in 2020, but a massive increase from 1996, when federal prosecutors reached clemency agreements. with businesses only 1% of the time. .
“The rationale for the DOJ’s use of these corporate agreements is that they facilitate corporate compliance with the law,” the report notes. “The empirical evidence shows, however, that companies that benefit from leniency agreements instead of facing prosecution are not deterred from repeat offending.”
Public Citizen points out that Biden’s Justice Department has taken a number of promising steps to crack down on corporate crime, an effort wildly popular among American voters.
“Two weeks after Inauguration Day, Biden’s DOJ reversed Trump-era policies aimed at weakening law enforcement against polluting businesses,” Public Citizen observed. “In October 2021, Deputy Attorney General Lisa Monaco announced changes to DOJ enforcement policies, including increasing penalties for repeat corporate offenders, expanding the number of individuals who can be involved in corporate investigations and leading a team of FBI agents tasked specifically with targeting white collar crime.”
But the administration’s efforts to step up enforcement have been hampered by a number of factors, including vacancies for U.S. attorneys and reluctance from Republican members of Congress.
“Major prosecutorial vacancies leave offices in the hands of leftovers and career staff, who may be less likely to embrace policy changes,” Public Citizen noted. Polluter-friendly Senate Republicans like Sens. Bill Cassidy (R-La.) and Cynthia Lummis (R-Wyo.), meanwhile, are blocking confirmation of Biden’s top environmental law enforcement nominees. “
“The Trump administration’s corporate crime enforcement policies have a lingering effect on the Biden administration’s enforcement numbers,” the group warned. “Letting corporate crime go unpunished and unpunished is not an option. Rampant corporate crime means Americans are at increased risk of being victimized by companies that put the pursuit of profit above the law and confidence in the American justice system, which so often brings the harshest consequences to the most helpless defendants, is undermined.”
“Barriers or no barriers,” the report adds, “the DOJ must zealously pursue its new policies with the resources at its disposal.”
Public Citizen’s report comes weeks after an analysis by the Revolving Door Project (RDP) found that the Biden administration “has seized at least 24 opportunities to prosecute corporate crimes or begin drafting new regulations to prohibit heinous corporate practices” but “missed 48 opportunities.”
“Private equity moguls who defrauded the Paycheck Protection Program (PPP) have so far been granted a free pass while prosecutors pursue small-scale schemes,” RDP said. “The Environmental Protection Agency referred the least number of pollution crimes to the Department of Justice for prosecution.”
“And while the administration continued to investigate Meta’s Facebook and Alphabet’s Google for antitrust violations,” the watchdog group added, it “took no action against the myriad other crimes.” white-collar behavior allegedly committed by these titans of Big Tech, such as the auction – rigging, insider trading, and lying to investors and Congress.”
