Thursday, July 26, 2018

Public Citizen Report: Trump is soft on corporate crime and wrongdoing

By R. Jason Howard, J.D.

Public Citizen, a national non-profit organization, has issued a report in partnership with the Corporate Research Project of Good Jobs First, on Corporate Impunity, which highlights the Trump administration’s softening stance on enforcement policies that protect Americans from corporations that break the law.

Softening stance. The report, titled: Corporate Impunity “Tough on Crime” Trump Is Weak on Corporate Crime and Wrongdoing, presents evidence of the administration’s drastic reductions in corporate penalties imposed. The report found that in 11 of 12 agencies led by a Trump administration official for most of 2017, total monetary penalties imposed on corporate violators were reduced across the board with the notable exception of the Treasury Department’s Office of Foreign Asset Control. That office is responsible for blocking corporations from doing business with sanctioned countries, businesses, and individuals, and the change in penalty sums rose by 465 percent.

Penalties issued by the Department of Justice against corporate offenders fell by 90 percent. Civil penalties by the EPA fell by more than 94 percent. Similarly, the Aviation Consumer Protection Division, Consumer Product Safety Commission, Federal Trade Commission, and Securities and Exchange Commission all saw declines in the total number of enforcement actions brought against corporate wrongdoers.

An article titled: ‘Law and Order’ Trump Is Soft on Corporate Crime and Wrongdoing, notes that the DOJ has: 
  • Allowed corporations that engage in illegal bribery abroad to completely avoid prosecution. As long as they meet certain DOJ conditions, corporations that violate the Foreign Corrupt Practices Act never have to enter a plea, and their penalties are reduced by 50 percent. 
  • Reduced corporate penalties by eliminating payments to third parties that help right corporate wrongs. In the past, corporate settlements often included payments to nonprofit organizations that repair corporate harms. For example, a penalty against Harley Davidson for alleged emissions cheating violations was reduced by $3 million because the funds would have gone to the American Lung Association. 
  • Reduced corporate penalties by limiting how much a single corporate violation can trigger penalties from multiple enforcement agencies. The policy led to a bank accused of anti-money laundering deficiencies seeing its penalty reduced by $50 million. 
  • Limited the DOJ’s power to bring charges against corporations that defraud the government. Former Associate Attorney General Rachel Brand instructed DOJ lawyers to stop citing noncompliance with “guidance documents” as evidence that a violation has been committed. Guidance documents are interpretations of regulations that federal agencies provide to the industries they oversee to facilitate compliance. This change severely restricts the DOJ’s power to bring cases against corporations, especially for False Claims Act violations of defrauding the government. Brand’s former employer, the U.S. Chamber of Commerce, celebrated the policy memo. Brand resigned shortly after releasing the memo to take the top legal post at Walmart. 
The article concludes by noting that the impact of these policies is “predictable,” in that, “the longer they are in place, the fewer corporate criminals and wrongdoers will be held accountable.” Public Citizen recognizes that “corporate crimes and wrongdoing cause real harm to Americans who are ripped off by banks, poisoned by polluters, deceived by drug makers and have their data stolen and exploited by tech monopolies,” and it seeks to “amplify these concerns and ensure that corporations that put profits over people are held accountable.”