Wanted: A Corporate Crimebuster at DOJ

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Department of Justice

Photo by John Taylor via Flickr

With Bill Barr’s much-anticipated resignation as Attorney General, all eyes are now turned to whom President-elect Joe Biden will pick to lead the Department of Justice (DOJ).

It is an agency that many believe is in serious need of a reset, after Barr’s two-year run of submission and subservience to an administration run amok.

Sally Yates

Former Acting Attorney General Sally Yates. Photo by Michael Berlanger via Flickr

One of the top contenders for the job appears to be DOJ veteran Sally Yates. She previously held the agency’s number-two spot as Deputy Attorney General under former President Barack Obama. She even served as Acting Attorney General under Donald Trump, only to be fired within weeks after several tangles with the then-new president, including refusing to defend his controversial Muslim travel ban.

Yates, now in private practice in Atlanta, would be the antithesis to Barr.

Selecting her would send a strong signal that the new administration is poised to take a very different approach to enforcement of the law and administration of justice.

Neither of us knows Yates personally or has any financial or political ties with her; but as attorneys with experience in representing whistleblowers and combating corporate fraud, we believe that with Yates at the helm, the DOJ will be proactive in the fight against corporate crime.

There will be more robust enforcement for sure. But more markedly, it would mean going after not just the company, but also the individuals behind the misconduct.

We can count on this from a Yates-run Justice Department because that is precisely what she pushed for when she was Deputy Attorney General under Obama. In what is commonly referred to as the Yates Memo, she laid the groundwork for a ramped-up agency effort to hold accountable the individual wrongdoers.

According to Yates, it is the best way to deter future misbehavior, incentivize corporate change, and promote public confidence that the government knows and cares where to draw the line between fair and foul corporate play.

Outside the C-Suite, there has long been broad support for this kind of tough-on-corporate crime enforcement tack. Especially since the Great Recession, where there had been plenty of hefty fines and penalties for corporate malfeasance, but not a lot of heat on the corporate titans who made it (or at least allowed it to) happen.

Monetary fines as a cost of doing business had become the modern-day big-business mantra for so much of Corporate America, with no real risk of individual accountability.

That kind of mentality seems only to have gotten worse under Barr’s not-so-watchful eye.

DOJ’s highly trumpeted settlement last month of the Purdue Pharma OxyContin scandal is a powerful case in point. It is as remarkable for what it accomplished as for what it wholly ignored.  For Purdue’s major contribution to the opioid crisis and the “national tragedy of addictions and deaths” that followed, the company agreed to pay more than $8 billion in criminal and civil penalties.

It is the largest amount ever imposed against Big-Pharma, forcing the company’s ultimate demise.

What is not part of this resolution, however, is any meaningful retribution against the individuals who instigated and directed these massive crimes. Not even against the Sackler family, who aggressively pushed their company’s blockbuster painkiller while apparently misrepresenting to the public how addictive it truly was.

Sure, they are on the hook for $225 million of the settlement amount. But no jail time. No criminal charges. No individual accountability. Just a tiny dent in the family’s multi-billion- dollar fortune.

This certainly is not the enforcement approach Yates has previously put forward. Nor is it one we would expect her to pursue if she inherits the DOJ mantle. Just how far she would go is the open question.

Max Voldman

Max Voldman

Her previous rein in Washington did not last long enough to see her professed crusade against corporate crime fully take hold. Though all indications were that her DOJ was beginning to place individual transgressors directly in the crosshairs of a more determined enforcement strategy, one that included jail time for the most worthy of offenders.

This targeting of individuals was perhaps most pronounced with DOJ’s policing under the False Claims Act, the government’s primary tool to combat fraud against the government. In the lead up to and immediate aftermath of the Yates Memo, DOJ sent packing a surfeit of scofflaws up and down the corporate ladder.

And they were not just token sentences. The DOJ sent most of these malefactors away for years. This new-found enforcement rigor, of course, fell by the wayside over the last four years with a “Law and Order” Administration that tended to apply neither inside the corporate boardroom.

Gordon Schnell

Gordon Schnell

Which brings us back to the reason why we need a Sally Yates to resurrect this agency brought to the brink of disrepute. She would be fierce, independent, place country before politics, and redirect a DOJ that has in many ways strayed far from its intended course.

It would not only send a shudder through the corporate boardrooms. It would make clear there would be no cow-towing from our country’s top law enforcement agency to any kind of higher authority and the business or other self-interests it might ultimately seek to serve.

Gordon Schnell and Max Voldman are attorneys with Constantine Cannon, specializing in representing whistleblowers and the government in fighting corporate fraud under the False Claims Act.

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