Author: bgarrett

Corporate Immigration Enforcement

Yesterday, the Wash. Post reported on a decline in corporate immigration enforcement, citing to the Duke / UVA Registry.

“Prosecuting corporations, as opposed to individual workers or managers, for immigration-related offenses was also relatively rare during the Obama administration, but it has slowed further under the Trump administration, according to a database maintained by Duke University and the University of Virginia and data reviewed by The Washington Post.

The Corporate Prosecution Registry tracks cases in which companies, rather than individuals, are charged with violating federal law, and it includes cases resolved with plea agreements as well as deferred and non-prosecution agreements.”

“There were at least 88 such cases against companies for immigration violations between 2009 and 2016 during the Obama administration and at least five companies prosecuted for immigration violations since Trump took office in 2017, according to the data on corporate prosecutions and a review of news releases from U.S. Immigration and Customs Enforcement.”

Declining Corporate Prosecutions

A new article, forthcoming in the American Criminal Law Review, develops new data from the last two years of the Duke / UVA Corporate Crime Registry. It is now available on SSRN here. A description of the findings:

Two years into the Trump Administration, newly collected data allows one to assess what impact a series of new policies have had on corporate enforcement.  To provide a snapshot comparison, in its last 20 months, the Obama Administration levied $14.15 billion in total corporate penalties—with 71 financial institutions and 34 public companies prosecuted.  During the Trump Administration, corporate penalties declined.  During its first 20 months, there were $3.4 billion in total penalties, with 17 financial institutions and 13 public companies prosecuted.  These trends build over time—in each year, blockbuster cases come and go, creating swings in fines.  However, consistent with these data, this Article describes changes in written policy, practice, and informal statements from the Department of Justice that have cumulatively softened the federal approach to corporate criminals. 

This figure illustrates the changes in corporate penalties:

Corporate Criminal Penalties, 2001-2018

This Article also describes continuity between administrations.  A rise in corporate declinations, for example, represents a continuation of Obama Administration policy. A decline in use of corporate monitors similarly reflects prior policy. The steady and low level of individual charging in corporate cases, reflects an ongoing lack of success of efforts to prioritize individual prosecutions, exemplified by the 2015 “Yates Memo.”  The figure below illustrates these findings:

Individual Prosecutions Accompanying Deferred and Non-prosecution agreements, 2001-2018

That policy, like others, has now been formally relaxed. This series of DOJ corporate prosecution policy changes have been accompanied by important institutional shifts.  For example, high-level vacancies within the DOJ and other enforcement agencies may compromise ability to coordinate resolution of complex cases.  This Article concludes by proposing structural changes, such as an independent corporate enforcement functions, to enhance capacity and prevent pendulum shifts in the administration of enforcement.  

Ending Too Big to Jail Act

This week, Sen. Elizabeth Warren re-introduced an “Ending Too Big to Jail Act.” Portions of the legislation deal with new resources for corporate criminal investigations at the Department of Justice. For a discussion of the legislation, and my comments on the need for resources to bring highly complex corporate investigations, see this story at Vox. That coverage discusses examples concerning settlements with large corporations post-financial crisis – and we encourage readers to browse this Registry to learn more about such settlements!

Beyond Hard Time

Read more here, for an op-ed in The New Republic on what the disparate reactions to Manafort’s sentence and California’s death penalty ban reveal about our criminal justice system:

For many years, the justice system has allowed serious corporate corruption to go unpunished, banks to be prosecuted repeatedly for the same crimes, and corporations and executives to get deferred prosecutions and below-the-guideline sentencing. This system of pronounced judicial leniency has created a punishment model for many corporate offenders that I call “too big to jail”—and in recent years, matters have gotten worse. Even within this already skewed and top-heavy system, I have documented declining corporate penalties under the Trump administration. Ending “too big to jail,” however, doesn’t mean passing tougher sentences for white-collar crimes. After all, Congress has created plenty of tough new white-collar offenses since the 2001 Enron scandal—and, for the most part, these new tools have sat on the shelf untouched by prosecutors.

Instead of enacting more draconian sentences, we must invest in white-collar law enforcement the same way we invest in other measures to protect public safety. Consider this: the Internal Revenue Service has had its budget cut over the past decade to the point where audits have decreased by 42 percent and the number of tax fraud cases the agency brings has been cut by nearly 25 percent. Under such lax enforcement, tax fraud schemes—of the very sort repeatedly carried out by Paul Manafort—are able to thrive…

The way out of the double standard we apply to punishment is to reject the notion that true justice inheres in strictly hewing to a one-size-fits-all model of criminal sentencing. 

Duke/UVA Registry Data in the N.Y.Times

Read more here about how the New York Times calculated enforcement numbers during the first twenty months of the Trump Administration. They explain:

“The Times asked the Legal Data Lab at the University of Virginia School of Law and Duke Law School, which maintains a registry of corporate criminal prosecutions, to analyze all such cases filed in the first 20 months of the Trump administration and compare them with those filed in the first and last 20 months of the Obama White House. The analysis reflects sums paid to federal prosecutions, whether in fines, restitution or forfeiture. It does not reflect sums paid to civil regulators or state or foreign enforcers.”

DPAs and Eisinger’s “The Chickenshit Club”

A recent New Yorker book review, of Jesse Eisinger’s new book, “The Chickenshit Club,” asks why didnt prosecutors target more executives after the financial crisis.  Eisinger argues in a fascinating and readable book that it was a culture and policy shift among federal white-collar prosecutors.  The review describes the rise of deferred prosecution agreements, documented on this Registry: “From 2002 to 2016, the Department of Justice entered into more than four hundred of these arrangements.” While the New Yorker did not, Eisinger himself carefully cites to that figure (419 such settlements as of his writing, from 2002 through fall 2016, as compared with 18 in the preceding ten years) from data collected as part of this Registry.  Eisinger also notes an analysis of deferred and non-prosecution agreements, and whether employees were prosecuted, as well as examples from the Registry of corporations that have settled multiple criminal prosecutions in recent years.  The book review concludes: “What had once been described as a badge of ignominy that could put a company out of business was now just a bit of unpleasantness: a passing hassle, like a parking ticket.”  Now, I suspect the review did not mean to suggest that companies should be put out of business, but rather that the right individuals should be held accountable – and that companies should be held more seriously accountable.  Far more can be said about what the terms of those agreements that settle corporate prosecutions look like – and whether they are effective.  Moreover, the same questions exist not just in cases involving banks, but also all sorts of other types of corporations. However, Eisinger’s book (and the brief book review) raise provocative and important questions about priorities when prosecuting white-collar crime.

The HSBC Monitor’s Report

The Second Circuit Court of Appeals yesterday ruled that the district judge, John Gleeson had incorrectly ruled in early 2016 that the thousand-page report of the independent monitor in the HSBC deferred prosecution agreement should be disclosed to the public.  I had written an amicus brief in favor of public disclosure of the report, in redacted form, for reasons including that there is a strong public interest in learning more about corporate prosecution agreements and their implementation.  The HSBC deferred prosecution agreement is itself available on the Registry.  As I separately describe in an article in progress discussing the public interest in corporate settlements, I view the Speedy Trial Act as supporting judicial review of the approval and implementation of deferred prosecution agreements with corporations.  The Second Circuit panel discussed the views in my amicus brief and directly disagreed.  The panel emphasized that monitorships are themselves not part of a judicial process, requiring judicial intervention, and justifying treatment of the monitorship-related documents as judicial documents that must be disclosed under the First Amendment.  That said, the Second Circuit did not rule out that such documents could become relevant to litigation.  This Registry does not to date include monitors reports and obtaining information about the monitorships accompanying corporate prosecution agreements, while available on docket sheets for cases that result in convictions, is often quite difficult in cases resolved through deferred prosecution agreements.  The Second Circuit also noted that FOIA litigation might provide another avenue for the public to learn more about reports in these important corporate criminal cases.  FOIA litigation may test that question in the future and it would not revolve around the question whether the documents satisfy a First Amendment standard.

The Registry Launch

On June 5, the Washington Post True Crime blog described our newly launched Corporate Crime Registry.  Tom Jackman writes:

“Crimes committed by corporations are often overlooked or undercovered by the news media. Though the dollar amounts and number of victims can be astronomical, corporate crimes — including areas such as securities fraud, money laundering and bribery — can be complicated, drawn-out matters which get lost in the daily blur of street crime and terrorism. But the need to hold large companies accountable remains, and a new way to understand and contextualize those crimes launches today — a vast database of corporate prosecutions dating back to 1992, showing how the government did, or didn’t, resolve criminal cases with fines, prison terms or, sometimes, nothing.”

He adds:

“There are more than 3,000 convictions of corporations and out-of-court prosecution deals with corporations, and it’s an immense, highly useful database all in one place. There are also a number of fascinating Justice Department internal documents, including memos from various attorneys general providing guidance on prosecuting businesses, and the U.S. attorneys’ manual on Principles of Federal Prosecution of Business Organizations. All of these are public documents, but never before gathered in one place as a resource for academics, lawyers, journalists and the public. Documents and dockets mined from the federal court database PACER as well as news releases and other records are available for immediate review.”

UVA Law described the new Registry here.  And the Oxford Business Law Blog ran a short description here.

Introducing the Corporate Prosecution Registry

For almost a decade, we have been gathering data on corporate prosecutions.  Those efforts have resulted now in the creation of The Corporate Prosecution Registry, a project of the University of Virginia School of Law. The goal of this Registry is to provide comprehensive and up-to-date information on federal organizational prosecutions in the United States, so that we can better understand how corporate prosecutions are brought and resolved.  For some time now we have been gathering detailed information about federal organizational prosecution since 2000, as well as deferred and non-prosecution agreements with organizations since 1990.

Thousands of those plea agreements and deferred prosecution agreements and non-prosecution agreements with corporations have been available on our UVA resource websites for years now.  We have been thrilled to see lawyers, regulators, judges and researchers put that material to use.  Our goal in revamping the websites to create a single Registry was to provide a more powerful tool to analyze corporate crime enforcement.  What can this tool do?

Each of these corporate prosecutions can now be sorted across a spectrum of characteristics.  You can pull the cases with just certain types of crimes: just the foreign bribery cases or just the cases involving securities fraud or just the cases involving the environment.  Or you can pull just certain types of resolutions, and study just the non-prosecution agreements or just the plea agreements.  Or you can look at cases with fines of a certain size.  Or just corporate prosecutions involving firms from a certain county.  You can look at just the public companies that have been prosecuted.

All of this data is also available for download as a spreadsheet.  All of the information contained on this Registry is publicly available.  We gathered information, with the help of many talented research assistants over the years, from federal docket sheets, press releases, prosecutor’s offices, as well as from FOIA requests.  Our goal is to provide accurate, timely, and accessible information for policymakers, researchers and litigators alike.  We hope you make use of and enjoy this new tool.  And if you uncover errors or find cases that we should have included, or have suggestions for new functions that we could add—please let us know.

This Registry was a long time in coming but it remains a work in progress.  We will continue to update it and we hope to continue to improve it. Because the plea agreements on this Registry are primarily obtained through searches of federal docket sheets, these data are typically about six months out of date.  We are currently still locating additional 2016 guilty pleas finalized with organizations, although we are well into 2017.  It is a constantly ongoing process.

The Registry was created by Professor Brandon Garrett (bgarrett@virginia.edu) and Jon Ashley (jaa6c@virginia.edu). We welcome any questions or feedback about the contents or features of this website. Please tell us if you notice any errors or can add information about a case, or if you have information about a case that is missing from the Registry.  Please cite to this resource collection as: Brandon L. Garrett and Jon Ashley, Corporate Prosecutions Registry, University of Virginia School of Law, at http://lib.law.virginia.edu/Garrett/corporate-prosecution-registry/