In a move that can only mean a presidential election campaign is upon us, the Justice Department said it is finally going to pursue individual white-collar criminals.
As the New York Times reported, the Justice Department “issued new policies on Wednesday that prioritize the prosecution of individual employees – not just their companies – and put pressure on corporations to turn over evidence against their executives.” The policies are contained in a memo written by Deputy Attorney General Sally Q. Yates. They will be discussed in greater detail today at the New York University Program on Corporate Compliance and Enforcement.
Pardon my cynicism, but after so much failure to prosecute, I remain doubtful that much if anything has changed. The onus is on the Justice Department to show that it’s serious by way of actions, not words in a memo.
After the most target-rich environment for white-collar prosecution ever, the nation’s top prosecutors have suddenly realized that “Hey, crimes! We should do something about that!” By what must be the sheerest of coincidences, almost all statutes of limitation on the oodles of white-collar misdeeds committed during the financial crisis have expired.
As I observed several years ago, “The greatest triumph of the banking industry wasn’t ATMs or even depositing a check via the camera of your mobile phone. It was convincing Treasury and Justice Department officials that prosecuting bankers for their crimes would destabilize the global economy.”
It has been my steadfast view that this simple explanation is why no one of any consequence was prosecuted for the many obvious and easily pursued crimes of the era. It hasn’t been much of a mystery, and there haven’t been any plausible explanations offered that withstood even the slightest scrutiny. The evidence of criminality was clear and overwhelming. But instead of prosecutions and trials, we watched as the Justice Department under former Attorney General Eric Holder decided that certain financial institutions were too big to jail, and that prosecuting senior executives would damage the financial system.
Understand what this meant: The nation’s top prosecutor failed to perform his official duties because he was worried about the theoretical economic harm caused by going after top financial managers. The alternative explanation is that he was grossly incompetent.