Title: Progressives Criticize U.S. Justice Department’s Policy on Corporate Wrongdoers
Subtitle: More than a dozen progressive groups urge Attorney General Merrick Garland to reverse the policy
Date: October 30, 2023
NEW YORK – A coalition of over a dozen progressive non-profit organizations and lobbying groups has called on the U.S. Justice Department to withdraw its policy, which they argue grants a “free pass” to corporate wrongdoers. The growing criticism reflects progressive concerns about enforcement under President Joe Biden’s administration.
In a letter sent on Friday, groups including Demand Progress and Public Citizen urged U.S. Attorney General Merrick Garland and Deputy Attorney General Lisa Monaco to reverse the policy that encourages companies to disclose misconduct they uncover during mergers and acquisitions. The groups believe that this new policy will only enable companies to consolidate corporate power and evade accountability for their actions.
The policy, referred to as the “safe harbor” program, was recently announced by Monaco. It states that U.S. prosecutors will refrain from targeting firms that report misconduct within six months of acquiring a new company. Senator Elizabeth Warren has also expressed her disapproval of this policy.
Under Democratic leadership, the Justice Department has taken a different approach to combatting white-collar crime. This approach includes imposing harsher repercussions on executives and repeat offenders, while also promoting self-disclosures and compliance from companies. Monaco has termed this strategy as “carrots and sticks.” However, this approach has not yet resulted in an increase in the number of enforcement cases, leaving some progressives disappointed.
According to a report by Public Citizen, the Department of Justice under President Joe Biden prosecuted only 99 corporate offenders in 2022, despite promising to ramp up enforcement. This number is comparable to corporate prosecutions during the second year of the previous administration, and it represents the fifth-lowest corporate prosecution rate on record. The previous year, 2021, saw the lowest number of corporate prosecutions to date.
The new safe harbor program is also seen as undermining the Biden administration’s anti-monopoly efforts. Since taking office, the Justice Department and the Federal Trade Commission have been involved in an unprecedented number of legal challenges to mergers.
While some argue that enforcement data lags behind actual activity, and the pandemic may have impacted the agency’s work, others anticipate more significant corporate settlements in the near future.
In defense of the policy, Acting Assistant Attorney General Nicole Argentieri emphasized that when companies blow the whistle on misconduct, it enhances the ability to hold individuals accountable. However, she stressed that companies must fully cooperate by providing all information related to the individuals involved in the wrongdoing.
The progressive groups are urging the Justice Department to rethink this policy, suggesting that it undermines Biden’s broader goals of holding corporations accountable for their actions and preventing monopolistic behavior.
Reporting by Chris Prentice; Editing by Rod Nickel and Tomasz Janowski