A wave of deals between prosecutors and companies in the last few months of the Trump administration suggests executives are bracing for more lawsuits against companies under Joe Biden, after the number has dropped precipitously in the past four years.
Criminal cases against corporations have grown from 1690 under George W Bush’s administration to 1418 under Barack Obama to about 383 in the four years of the Trump administration, according to a college white-collar crime database of Law from Duke University and the University of Virginia. . That figure will increase, however, as final cases are added to the database, which is only up-to-date until the fall of last year.
Analysts have said that while the Trump administration has launched relatively few high-profile cases against companies, the situation may be about to change now that Joe Biden has taken over the presidency. JPMorgan Chase, Ticketmaster, and more recently Boeing and Deutsche Bank all settled cases with prosecutors in the dying days of the Trump administration.
“A business moving into the dying days of an administration must think there is a benefit in not waiting,” said Brandon Garrett, professor of law at Duke University who oversees the database. and is the author of the book. Too big for the prison.
There would likely be “some rebound” in lawsuits against companies and their executives under the Biden administration, said John Coffee Jr, professor at Columbia Law School and author of Corporate crime and punishment.
Mr. Biden chooses the judge of the Federal Court of Appeal Merrick garland as his candidate to head the Ministry of Justice as Attorney General.
Mr Coffee said Mr Garland, a former federal prosecutor, would be likely to attempt to implement the Yates memo – a policy document that prioritizes the prosecution of company executives over companies – and reduce the use of deferred prosecution agreements, agreements such as those of Boeing, German Bank and JPMorgan Chase signed that helps businesses avoid a criminal record.
The number of guilty pleas has declined as agreements such as Boeing’s to defer prosecutions – or not to prosecute at all – have steadily increased over the past two decades under the Republican and Democratic administrations, according to the Base. data.
With the so-called “DPA” and “NPA”, there is no criminal conviction if a business meets the standards set by prosecutors. Critics say the trend is for companies to avoid the greater transparency and accountability that comes with a plea deal, which is made in court and overseen by a judge. Companies also avoid a criminal conviction, which means that they will not necessarily be bound in future civil litigation to the facts they admit.
“It is troubling that the most powerful companies are able to keep cases out of court when individuals are not,” said Garrett.
Trials are relatively rare, with most cases being resolved before reaching a judge or jury. Deferral and non-prosecution agreements have gone from about 3% of cases in Mr. Bush’s first four years to 20% of cases under Mr. Trump’s administration. Meanwhile, guilty pleas have declined over the same period, from 86% of cases to 53%.
The DPAs and NPAs came into force following lawsuits against Enron and Arthur Andersen in 2005/2006 as a way to avoid collateral damage, such as the thousands of jobs lost as a result of the post collapse – Conviction of Andersen. They also aimed to ease the burden on American assistant lawyers, outnumbered by the legal armies of their opponents. The Justice Department viewed them as “important middle ground” between seeking a conviction or refusing to prosecute altogether.
As their use grew, critics questioned the extent to which the agreements limited corporate abuse. The Boeing deal, announced this month, has sparked particular anger.
In the case of Boeing, the aerospace manufacturer admitted deceptive aviation regulators certifying the safety of the 737 Max. Two of the jets then crashed, killing 346 people. Under its deferred prosecution agreement, prosecutors agreed to drop the fraud charge in three years if the company paid $ 2.5 billion and complied with certain requirements.
Senator Richard Blumenthal called the settlement a “disgrace” which allowed the company and senior executives “to escape individual responsibility by paying a symbolic fine.”
“I hope the DoJ can explain to families why this weak settlement exists,” said Peter DeFazio, Democratic Congressman from Oregon. “Because from where I’m sitting, this attempt to change corporate behavior is pathetic.
The Boeing deal “represents one of the weakest deferred prosecution deals I’ve seen, and I think they’re all unhappy,” Coffee said.
Boeing declined to comment.
A Boeing DPA provision exonerating senior management from liability for fault in the company was unusual, the two experts say, and there is not much in the deal to indicate how prosecutors arrived at this conclusion. The agreement states that in the absence of senior executives involved, no independent monitor is required.
As long as prosecutors avoid plea deals for DPAs and NPAs, which are not overseen by a court, “they will reflect the priorities of the attorney general and the administration,” Garrett said.
“If people don’t like the fact that corporate prosecution priorities vary depending on who is responsible, they should be pushing for legislation. . . or more involvement of judges, ”he added.