Scanlon Introduces Corporate Crime Legislation

Congresswoman Mary Gay Scanlon (D-Pennsylvania) has introduction legislation to strengthen federal enforcement against corporate crime, increase transparency and accountability at the Department of Justice, and address the widespread perception that powerful corporations and white-collar offenders operate under a separate, more lenient, set of rules than the rest of the criminal justice system.

The legislation comes amid a decades-long decline in corporate prosecutions, which have reached a 40-year low, and growing concern over the Department of Justice’s increasing reliance on deferred prosecution agreements and non-prosecution agreements to resolve major corporate crimes. 

The Corporate Prosecution Reform Act would reform the Department of Justice’s use of deferred prosecution agreements and non-prosecution agreements in corporate crime cases. These negotiated agreements have allowed billion-dollar offenses to be resolved by a contract between the prosecution and the accused with little judicial oversight or public scrutiny.

These agreements frequently allow corporations to avoid criminal prosecution in exchange for fines, compliance measures, or other negotiated terms. 

Scanlon said that the Corporate Prosecution Reform Act would ensure corporate deferred prosecution agreements are being used for their intended purpose, by preventing their use for serious crimes – such as those resulting in death or serious bodily injury – or with repeat offenders.

The legislation would require judicial review of corporate deferred prosecution agreements to prevent lenient agreements, ensure the terms of the agreement achieve their stated purpose, and deter future offenses. It would prohibit the use of non prosecution agreements to settle corporate criminal cases.

And it would create a new Office of Corporate Enforcement at the Department to oversee compliance and monitoring of agreements and require the Department of Justice to establish standardized guidance governing the use of these agreements 

The Department of Justice Integrity Act would address the revolving door between federal prosecutors and white-collar defense practices by establishing a one-year cooling-off period prohibiting prosecutors who worked on corporate prosecutions or deferred prosecution agreements from representing corporations in federal criminal matters. 

Scanlon said that the revolving door between federal prosecutors and white-collar defense practices is a common aspect of the legal profession, but often creates a gray area in conflicts of interest. After leaving government service, prosecutors are highly sought after by law firms for their experience and their connections to the Department of Justice. In many cases, former prosecutors then specialize in representing the exact same corporate clients that they once prosecuted.

“The American people are tired of seeing corporations buy their way out of accountability, or get just a slap on the wrist,” said Congresswoman Scanlon. “From the 2008 financial crisis, to the opioid epidemic, Americans have watched executives and corporations engage in serious misconduct that destroyed lives, wiped out family savings, and undermined public trust – in exchange for nominal settlements instead of meaningful accountability. And now, the Trump administration has openly politicized enforcement decisions, rewarding well-connected allies and donors with dropped investigations, pardons, and preferential treatment. My bills are about restoring fairness, transparency, and integrity to our justice system.”

“No one should be above the law – not wealthy executives or politically-connected corporations that hire the ‘right’ lobbyist or law firm,” Scanlon said. “If working people are expected to follow the law and face consequences when they break it, corporations should be held to the same standard.”

“Corporate criminals inflict widespread harms on Americans, from fraud and rip-offs to criminally unsafe workplaces and dangerous consumer products. But, despite the egregious illegal misconduct of Big Business, the U.S. Department of Justice has repeatedly failed victims of corporate crime by refusing to prosecute corporate lawbreakers,” said Rick Claypool, Research Director at Public Citizen. “ The Corporate Prosecution Reform Act would ensure that corporations that commit serious crimes are actually prosecuted for their offenses. The DOJ Integrity Act would shut the revolving door on federal prosecutors who switch sides to lend legal support to the corporate lawbreakers they worked on cases against. Together, they represent tremendous progress toward a justice system that prioritizes protecting the public from corporate lawlessness.” 

“The Justice Department’s granting of Non-Prosecution Agreements (NPAs) and Deferred Prosecution Agreements (DPAs) to giant corporations has further perpetuated a two-tiered justice system benefiting corporate criminals at the expense of their victims,” said Ralph Nader. “The Corporate Prosecution Reform Act (CPRA) has the potential to help rebalance the scales of justice and deter the corporate lawlessness that plagues our country.”