By Eric Tucker
Associated Press
WASHINGTON (AP) — The Justice Department has issued new guidance to its prosecutors, aimed at encouraging more white-collar criminal and civil cases against corporate executives.
The new policies come amid persistent criticism that the Justice Department, even while negotiating multi-billion-dollar settlements with large banks, has not been aggressive enough in prosecuting individuals for financial misconduct — including after the mortgage crisis that devastated the U.S. economy.
The directives were outlined in a memo issued to Justice Department attorneys and to the FBI. Deputy Attorney General Sally Quillian Yates was expected to lay out the policy changes in a speech this week at New York University’s law school.
Though it’s not clear whether the new policies will actually result in additional prosecutions, they are intended to address concerns that the department could be doing more to hold individual, high-level executives accountable for corporate fraud.
“Regardless of how challenging it may be to make a case against individuals in a corporate fraud case, it’s our responsibility at the Department of Justice to overcome these challenges and do everything we can to develop the evidence and bring these cases,” Yates will say in her speech, according to excerpts provided by the Justice Department. “The public expects and demands this accountability. Americans should never believe, even incorrectly, that one’s criminal activity will go unpunished simply because it was committed on behalf of a corporation.”
The new guidance, which emerged from a Justice Department working group, includes some new measures as well as others that are regarded as best practices already used by some federal prosecutors.
It mandates that corporations turn over evidence of wrongdoing against individuals if they want credit for cooperating with the government, and says prosecutors should get as much information as possible about executives before finishing up their corporate investigation.
In addition, the department is directing its civil and criminal lawyers to work together in all corporate matters, and says corporate investigations must begin with a focus on individuals. The Justice Department will also generally not agree during corporate settlements to protect individuals from either criminal or civil liability.
“Our mission here is not to recover the largest amount of money from the greatest number of corporations; our job is to seek accountability from those who break our laws and victimize our citizens. It’s the only way to truly deter corporate wrongdoing,” Yates will say.
The guidance, issued a few months into the tenure of Attorney General Loretta Lynch, appears aimed at turning the page from some of the criticism that dogged her predecessor, Eric Holder,
in the aftermath of the largest economic meltdown since the Great Depression. Public advocacy groups and other watchdogs expressed frustration that the Justice Department did not do more to hold individual executives to account for the mortgage crisis, though Holder sought to assuage those concerns in the last two years with a series of multi-billion-dollar settlements with Citigroup, JPMorgan Chase and Bank of America.
The department’s signature criminal case against a financial institution in the last year or so— an $8.9 billion penalty against French bank BNP Paribas for sanctions violations — did not result in criminal charges against individual executives.
Holder and other Justice Department officials have often spoken about the challenges in prosecuting large corporations and their executives.
The memo issued to prosecutors concedes those challenges, including in cases involving millions of pages of documents and where high-level executives are insulated from day-to-day activities. But, Yates said, individual accountability can deter future crimes, ensure that the right person is punished and promote “the public’s confidence in our justice system.”
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