As President Biden's approval rating slumps and inflation surges to the highest level in 30 years, the White House needs a new boogeyman to try and distract the people from the terrible job the Dems are doing managing the country. And since the DoJ has already launched crackdowns on Big Tech and Big Pharma (well, sort of), it looks like Attorney General Merrick Garland is preparing to take corporate America - specifically, banks - to the woodshed, with an emphasis on repeat offenders.
In an interview with the FT, John Carlin, a senior DoJ official who will be leading the crackdown, issued the following warning to corporations: "you'll see cases in the weeks to come" involving "some of the largest corporations" in the US.
Specifically, the Biden DoJ will be going after companies that have violated the terms of deferred prosecution agreements, which dismiss or delay criminal charges for a period of time to allow a given corporate offender to prove that it has "reformed" its behavior.
Across the corporate space, we can think of one industry in particular that has benefited from these types of agreements...Wall Street.
Whether it's Goldman Sachs helping Malaysia's then-leader steal billions from his own people to create a political slush fund, along with a bevy of ultra-luxury items - yachts, jewelry, the film "The Wolf of Wall Street" etc - or Deutsche Bank racking up billions in fines for its recidivist behavior (it got to the point to where the SEC finally decided to make DB's CEO personally liable for the bank's future bad behavior, which is extremely uncommon in the US), banks have shown time and time again that when they break US laws, the response from regulators is rarely more than a slap on the wrist.
Carlin, who is Garland's principal associate deputy AG, said the crackdown is part of Biden's Admin's pledge to take a tougher line on "corporate malfeasance" compared with the "laissez-faire" stance of the Trump Administration.
According to the FT, corporate crime prosecutions brought by the DoJ dropped to its lowest level in 25 years in 2020, according to research from Syracuse University.
White-collar criminals be warned, Carlin said. There's a new sheriff in town.
"There are going to be serious consequences," Carlin warned. “You should expect in the days, months, years to come an unprecedented focus by this attorney-general on corporate accountability," he said, referring to Merrick Garland, the US government’s top lawyer. He added: "Now is the time to get the house in order, focus on compliance, because there [are] going to be tough enforcement actions coming out of the department if you do not do so."
Last month, Carlin's boss at the DoJ said prosecutors would work to hold individuals accountable for "corporate malfeasance".
Last month Lisa Monaco, deputy attorney-general and Carlin’s superior, announced sweeping changes to the justice department’s corporate enforcement policies, such as taking into account historical misconduct during company investigations. Monaco also signalled that the DoJ would encourage the appointment of independent monitors - outside individuals appointed by the authorities to ensure that companies were adhering to deferred prosecution agreements. During the Trump administration, monitors were deemed unnecessary in many instances where DPAs were imposed. The deputy attorney-general said businesses seeking leniency in exchange for co-operating with authorities must also identify all individuals linked to misconduct - irrespective of their seniority.
We're certainly curious to see who Biden's first corporate scapegoat will be. The trick is to find someone powerful enough to impress the NYT editorial board...but not a Jamie or Larry - you know, one of the CEOs who's actually responsible for running the country.