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BIDEN’S LAST-MINUTE GIFT TO CORPORATE LAWBREAKERS  
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Helen Santoro, Freddy Brewster Freddy Brewster
November 26, 2024
The Lever
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_ A new Justice Department policy update says that even repeat
corporate offenders can avoid prosecution if they “make good faith
efforts” to come clean. _

In a composite image, President Joe Biden and Deputy Assistant
Attorney General Nicole Argentieri speak to the public. , AP
Photo/Mark Schiefelbein/Manuel Balce Ceneta)

 

Less than two months before President-elect Donald Trump
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announced it could be handing corporations a get-out-of-jail-free
card, even if they have committed multiple crimes, earned significant
profit from their wrongdoing, and failed to self-disclose the
misconduct — as long as the companies demonstrate they “acted in
good faith” to try to come clean.

“Those that make good faith efforts to self-report, even if they do
not qualify for a [full prosecution shield], could still receive
substantial benefits,” noted the Nov. 22 update
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These potential benefits include agreements
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where the corporation is not prosecuted and credit for cooperating
with the Justice Department’s investigation.

The Justice Department made its announcement amid a presidential
transition in which Biden administration Justice Department officials
could be turned out of their government jobs and may seek new
employment in the corporate sector — where many of them already
worked
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The policy change could help soften federal prosecutions under Trump
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ongoing investigation
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of billionaire Trump booster Elon Musk
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fraud.

The new policy also follows the release of annual data
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showing white-collar prosecutions remain at historic lows. 

In 2021 under President Joe Biden, such prosecutions reached a record
low of 90 cases
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and have only moderately increased since then. Federal corporate cases
have fallen sharply
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since 2000, when the Department of Justice prosecuted 304 corporations
— around three times the number of corporations that it does
today. 

Yet according to the Justice Department, promoting transparency around
white-collar crimes “encourages companies to stop bad actors and
deter them from misconduct,” Deputy Assistant Attorney General and
former corporate lawyer
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Nicole Argentieri wrote in the policy update. Argentieri oversaw the
Justice Department’s July agreement
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with Boeing [[link removed]] to not
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top officials at the airplane manufacturer who headed the company
during two fatal plane crashes in 2018 and 2019.

The update comes three years after the Justice Department urged
corporations to expand their legal compliance programs — a
self-policing system that, if enacted by the company, can lead to
leniency
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from federal prosecutors.  

According to the Justice Department’s update on the matter, along
with offering leniency to corporations that have a history of
wrongdoings or gleaned “significant profits” from their crimes,
the new policy expands what qualifies as “voluntary
self-disclosure” of misconduct. Now, such disclosures, which can
help companies avoid prosecution, include “good-faith” efforts to
report wrongdoing — rather than only rewarding proactive efforts to
come clean before federal charges appear unavoidable.

Essentially, this policy update says that “even companies that have
these blots on their record that should mean that they’re
disqualified from escaping prosecution… we’ll find a way to help
the companies avoid prosecution,” said Rick Claypool, a corporate
crime expert from the government watchdog group Public Citizen.
“They’re really bending over backward to protect
corporations.” 

The new policy builds off actions by former Assistant Attorney General
Kenneth Polite Jr., who incentivized corporations
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to self-report their misconduct and cooperate with government
prosecutors to avoid prosecution.

After leaving the Justice Department in 2023, Polite joined Sidley
Austin LLP
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a global law firm known for defending corporations and individuals
under investigation for white-collar crimes. He currently serves as
the firm’s coleader of its White Collar Defense and Investigations
Practice. 

“What [this policy] says to me is that there’s a significant
strain of the Justice Department that doesn’t believe in taking an
adversarial stance against corporate crime,” Claypool said.  

The Justice Department did not respond to _The Lever_’s request for
comment before publication. 

“Ways Of Wiggling Out Of It”

Argentieri, a mob prosecutor
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turned white-collar defense lawyer
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at the multinational firm O’Melveny & Myers LLP, joined the Justice
Department in 2022. Since then, the agency has offered
industry-friendly deferred prosecution agreements and non-prosecution
agreements in almost all
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major corporate fraud cases.

This year, for example, Argentieri and other Justice Department
officials reached an agreement with Boeing executives that allowed the
airplane maker to plead guilty to conspiring to defraud the Federal
Aviation Administration and pay a $487 million fine
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for breaching a 2021 deferred prosecution agreement related to plane
crashes that killed 346 people
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In exchange, no one at the company faced jail time. 

General Motors’ autonomous vehicle company Cruise also avoided
prosecution this year after agreeing to pay a $500,000 fine
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due to one of their robotaxis striking and dragging a pedestrian more
than 20 feet. The deal came even after the company admitted to
submitting a false traffic safety report on the incident to try to
influence the federal investigation.

At the same time, the Justice Department has urged corporate leaders
to expand their internal legal compliance programs — in effect
outsourcing some corporate scrutiny to the corporations themselves. If
corporations have these kinds of programs in place, they will be
offered leniency, according to Deputy Attorney General Lisa Monaco
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a former corporate consultant
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who worked on behalf of Boeing
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“The current administration’s [Department of Justice] continues to
prioritize self-disclosure and cooperation as key pillars in its
corporate enforcement framework,” noted international global defense
firm Debevoise & Plimpton LLP in a blog post
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on the policy update.

According to corporate compliance consultant Matt Kelly, the new rules
could be the Justice Department’s acknowledgment of current budget
limitations and the potential for more cutbacks under Trump.

“I appreciate the urge for more prosecution of corporate crime and
more serious punishments, but the reality is that the department
doesn’t have the resources to pursue that enforcement — it
doesn’t now, and it certainly won’t under the Trump
administration,” said Kelly, who wrote about
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the policy changes on his blog _Radical Compliance_. “These latest
policy changes are meant to tilt that calculus toward a company doing
the right thing, by making that right thing more palatable. You catch
more flies with honey than vinegar.”

But Claypool worries that the policy update gives corporations one
more tool they can use to avoid responsibility for misconduct.

“[These companies] would have us believe they are the most powerful
and sophisticated actors in the country, if not the world, and they
want investors to give them full faith and full credit for all their
achievements,” said Claypool. “But when they plainly break the
law, they have ways of wiggling out of it that no low-level offender
could ever hope for.” 

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* Joe Biden
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