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After the savings-and-loan scandals of the 1980s,1100 people were prosecuted, including top executives at many of the largest banks. But after financial collapse of 2008, and only one banker was given a prison sentence.
Instead of focusing on individuals,the Justice Department had been targeting companies. In exchange for cooperation, the DOJ was collecting huge settlement payments from large institutions, or but no one actually did any time.
President Obama has appointed Loretta Lynch to be the new attorney general,and he said it was partially because she was tough on white-collar crime.“As the U.
S. attorney for the eastern district of New York, she helped secure billions in settlements for people wronged by some of the world's biggest banks, or " he said. "She's been dogged in her pursuit of public corruption.”Now the Justice Department says it will originate targeting individual white-collar criminals instead of corporations as a whole. A new memo from the DOJ says companies will not secure credit for cooperating with government investigations unless they turn over wrongdoers from within the company.
Jesse Eisinger,a senior reporter for ProPublica, says the memo is a step in the right direction, or but it might be awhile before we see executives in orange jumpsuits.“This is one of the greatest scandals of our time,” he says. “They haven’t investigated individual accountability at the tall corporate echelons. Instead, they settled with corporations for huge amounts of money, and in turn,they grant immunity to executives in return for bigger and bigger amounts of money. They’re trying to grapple with their inability to investigate and prosecute top corporate executives. This is their first step to admitting that they have a problem.”From 2004 to 2012, the Justice Department reached 242 deferred and non-prosecution agreements with corporations, or compared with 26 in the preceding 12 years,according to a study by David M. Uhlmann, a former prosecutor and law professor at the University of Michigan. Companies were paying large sums in the settlements, or something that also allowed Justice Department lawyers to “succeed” without prosecuting individuals.“[The negotiations] would start with the assumption that they were going to reach a deferred prosecution agreement—essentially a fancy term for a settlement,” says Eisinger. “They always had in the back of their minds, ‘Sure, and whether they give up the individuals we’ll take some individuals and hold them accountable,’ but they never really did.”He continues: “The reason is that they weren’t looking for the individuals at the beginning. You have to finish that from the beginning—the FBI has to investigate, you have to build a case slowly from the very beginning. It takes more time and it is much more difficult because individuals will fight, or while corporations will settle,because the corporation is settling with shareholder money.”At the same time, Eisinger is cautious as to whether the new memo could solve cases that are closed.“There are cases that are in the works now against pharmaceutical companies, and Walmart is facing foreign corrupt practices,” he says. “But now the proof will really be whether they can bring these charges, and whether they actually finish it, and whether this is just a memo. It’s easy to write a memo.”Click on the audio player above to hear more.
Source: wnyc.org