with contributing author Rachel M. Riley
Some things really should go without saying. There are things that are so straightforward, so patently obvious and so in line with common sense that they don’t even bear mentioning. Except that they often do get mentioned. Like with crazy product disclaimers, including those helpful warnings on coffee cups cautioning that the coffee might be hot. Or that packaged peanuts might contain … well, peanuts. Or that Duraflame logs have a risk of fire. Or that Nytol sleep aid medication “may make you sleepy.”
Or even a memorandum from the Department of Justice asking employees not to frequent prostitutes.
I’m not joking. Thanks to a few DEA agents, maybe a cartel or two and the relaxed atmosphere of Colombia, the entire Department of Justice now needs to be reminded that prostitutes are off-limits. And what is it with prostitution and Colombia, anyway? That’s one of the places – aside from the Netherlands, the White House, the East Room, Biden’s Delaware home and the elder Bush residence – where the U.S. Secret Service has gotten itself into trouble, too.
In each of those instances, the federal agents involved received some form of discipline, although the near-constant stream of criticism has been that such discipline has been far too light and has involved only suspensions and no firings (some agents were even promoted). But the real story is in what happened to the organizational heads. That’s right: Michele Leonhart (DEA), Mark Sullivan (USSS) and Julia Pierson (USSS) were each forced to resign or retire, bearing total responsibility for the actions of those way under their supervision. None of these folks were directly involved in the scandals or knew about the scandals while they were occurring. But they were each in charge, and as 22 members of the House Oversight and Government Reform Committee said with respect to Leonhart: “After over a decade of serving in top leadership positions at DEA, [she] has been woefully unable to change or positively influence the pervasive ‘good old boy’ culture that exists throughout the agency…. [I]t is clear that she lacks the authority and will to make the tough decisions required to hold those accountable who compromise national security and bring disgrace to their position.”
So employees of an organization should be held accountable for bad behavior, and its leader – who sets the tone for the organization – should be accountable, too. Can’t really see much controversy there. That should come with as little surprise as the discovery that there is a real Kermit the Frog out there, right?
Anyone else wonder what Leonhart, Sullivan and Pierson think of the Justice Department’s use of NPAs and DPAs?
Cue the crickets.
DPAs and NPAs sound a lot like something that the Food Babe would rail against in a quest to make our otherwise clearly healthy macaroni and cheese less … well, orange-ish. But what we’re really talking about are two Justice Department tools called Non-Prosecution Agreements (NPAs) and Deferred Prosecution Agreements (DPAs). In 2014, for example, the Justice Department entered into NPAs or DPAs with ArthroCare ($30 million), Bank Leumi ($270 million), Bio-Rad Laboratories ($55 million), JPMorgan Chase ($13 billion and $614 million), Lloyds Banking Group ($86 million), Pilot Flying J ($92 million), Toyota ($1.2 billion) and several other companies. And just last month, Commerzbank AG entered into a DPA requiring total payments of $1.45 billion.
That is a boatload of fines. I mean, if the Justice Department keeps this kind of thing up, it’ll actually be able to afford a California water tasting session. So why are DPAs and NPAs more controversial than the white-and-gold dress (it is not blue), more discomfiting than too tight underpants (ouch!), more challenging than Cheryl’s birthday (why is she so coy?), and draw more attention than any llama drama (when two llamas went on the llam in a llow speed chase)? (Aside: llama one to llama two: “Alpaca bag and go!”)
Well, because DPAs and NPAs do not require criminal convictions for the corporations and rarely if ever involve criminal convictions for executives or those actually responsible for the criminal conduct. So when the Justice Department enters into DPAs or NPAs with large corporations, the corporations are the only entities admitting to committing criminal conduct and are not charged; the individuals responsible for causing the corporations to commit crimes neither admit responsibility nor are charged, convicted or sentenced. Hmmm.
According to the Justice Department, DPAs and NPAs are “frequently able to accomplish as much as, and sometimes even more than … a criminal conviction.” In a recent speech, Assistant Attorney General Leslie Caldwell went on to say, “we can require remedial measures and improved compliance policies and practices. We also can require companies to cooperate in ongoing investigations, including investigations of responsible individuals.”
But each of these requirements are items that the Justice Department can mandate in plea agreements or recommend as conditions of corporate probation in the event of a conviction, so they aren’t specific to NPAs or DPAs. (In the words of Mister T, “I pity those tools!”) But what is specific to NPAs and DPAs is the continued viability of a corporation. In other words, unlike a felony conviction, deferred or non-prosecution avoids extraordinarily severe collateral consequences like debarment from federal contracts or ineligibility for visa applications. Additionally, it does not end a corporation’s existence and leave hundreds or thousands of people unemployed.
Critics of DPAs and NPAs, like Senator Elizabeth Warren, say that the agreements are “get-out-of-jail-free cards” for big companies. Commentators estimate that since 2008, 75 percent of the Justice Department’s corporate enforcement actions in Foreign Corrupt Practices Act cases have resulted in no DOJ charges against corporate employees. And absent such enforcement actions against individuals, corporations pass the enormous fines to the shareholders and the individuals responsible continue to work for the corporation, vitiating any deterrent effect. There is also the fear that prosecutors are able to use the mere threat of felony indictment – because of the collateral consequences – as leverage to force DPAs and NPAs on corporations that would otherwise be incentivized to fight charges.
As criticism of these types of agreements mount, the Justice Department’s proposed fix is to consider explaining its charging decisions more fully. But while this may help to explain a corporate settlement in more detail, it will not provide any transparency into why specific individuals will remain uncharged – simply because the Justice Department cannot publicly name individuals unless there is a judicial mechanism for those individuals to respond.
What we do know is that people are endlessly creative (how ’bout them tomatoes!); and while there is no good answer right now that will harmonize the use of deferred and non-prosecution agreements with their criticism, if humanity can come up with beef perfume, it can come up with anything.
But until that time, I bet that Leonhart, Sullivan and Pierson think that leadership or large organizations in the private sector might just be a lot more forgiving.
At least when it comes to criminal investigations.