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Trumped-up justice: New report shows corporate crime going unpunished under Trump

As enforcement against corporate criminals plummets, "law and order" is an excuse for targeting immigrants


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Rick Claypool
August 14, 2018 11:00AM (UTC)

The horrors of the Trump administration’s “zero-tolerance” enforcement policies against immigrants have been widely reported but certainly bear repeating. There is the eponymous “zero-tolerance” Department of Justice policy that instructs U.S. attorneys to prosecute first-time border crossers. The workplace raids by Immigration and Customs Enforcement that terrorize entire communities. The thousands of children who were separated from their parents as a result of the accelerated enforcement, hundreds of whom remain separated in spite of a court order requiring the administration to reunite families by July 26. It's a grotesque parody of a legal system these children endure, with toddlers as young as three forced to attend deportation proceedings alone.

Among the reasons the Trump administration gives for these brutal policies is that they are necessary for “restoring law and order” and “making America safe again.” But the law and order the president seeks to restore does not seem to apply to violations committed by the corporate class, and the threats that America must be made “safe” from apparently do not include pollution, rip-offs and recklessness unleashed by deregulated corporate greed. Enforcement against corporate criminals and regulatory violations, a new Public Citizen report finds, has dramatically plummeted since Trump took office.

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Public Citizen found that in 11 out of 12 agencies led by a Trump administration official for most of 2017, the dollar amount of penalties imposed on corporate violators dropped, in most cases by more than 50 percent.

At the DOJ, corporate penalties dropped 90 percent; at the Environmental Protection Agency (EPA), penalty amounts against all violators dropped by 94 percent.

Even those who did not expect robust corporate enforcement from President Donald Trump are shocked. When legendary academic and political dissident Noam Chomsky mentioned the report on Democracy Now!, he said the rollback in corporate enforcement the report revealed was so drastic, it was “almost comical”.

How can we make sense of this law enforcement disparity? Consider the two categories of people Trump surrounds himself with.

One category is the far-right ideologues, white nationalists and ultraconservative militants. It’s the Breitbart and Alex Jones wing of the Republican party. It includes anti-immigration ideologues like Stephen Miller and his former boss, Attorney General Jeff Sessions, and recklessly hawkish figures like John Bolton. It includes infamous but erstwhile advisers like Steve Bannon and Sebastian Gorka.

These are the self-identified “deplorables,” and they seem to take delight in the way they alarm Democrats and moderate conservatives alike.

We have them to thank for this xenophobic and prejudiced “zero-tolerance” immigration policy.

The second category is the corporate class, which consists of billionaires and CEOs. During Trump’s first year in office alone, he had triple the number of CEO meetings as Obama had over the course of seven years. Trump, a corporate executive himself, and the executives and former executives in his immediate circle include Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross, former adviser Carl Icahn, and intimate allies such as Las Vegas Sands’ Sheldon Adelson, Dow Chemical’s Andrew Liveris and Blackstone’s Stephen Schwarzman.

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Compared to the deplorables, they are sometimes portrayed as a positive influence on Trump. Some executives aligned with this camp, such as JPMorgan Chase CEO Jamie Dimon, have criticized Trump’s zero-tolerance approach to immigration.

We also have them to thank for the tax scam legislation that, while dribbling nary a trickle-down to working Americans, has spawned “eye-popping” multimillion-dollar payouts for the C-suite set.

These influences seem to have forged a demented law enforcement doctrine of treating immigrants like “animals” that “infest our country” — and corporations like people.

The result feels at once deeply offensive and disturbingly inevitable.

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Consider further effects of “zero tolerance” immigration enforcement:

During Trump’s first year in office, Immigration and Customs Enforcement (ICE), the federal agency primarily responsible for arresting and deporting undocumented immigrants, increased arrests 30 percent, up to 143,470 in 2017 from 110,104 in 2016.

The focus of enforcement efforts has shifted away from prioritizing undocumented immigrants who have a criminal record toward prosecuting immigrants who have been in the U.S. the longest, worsening the backlog of immigration cases.

To address the backlog, Sessions’ DOJ has set new quotas requiring immigration judges to complete 700 cases a year – a policy immigration lawyers say encourages judges to rubber stamp deportation orders instead of taking the time to hear necessary evidence.

Sessions even has revised the language that DOJ attorneys are instructed to use, who are to maximize their dehumanization by calling them “illegal aliens,” not undocumented immigrants.

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READ MORE: Did left-wing Hillary hate put Trump in the White House? A toxic question with bad answers

Federal prosecutors in U.S. border states are now so preoccupied with immigration prosecutions that prosecutions unrelated to immigration made up just 6 percent of all prosecutions in these border states in June 2018, found Syracuse University’s independent TRAC research organization.

Trump later backpedaled on his “animals” epithet by claiming, in the face of accusations of racism, that he was referring only to violent MS-13 gang members. But look at who the administration is “taking out of the country at a level and at a rate that’s never happened before:” undocumented immigrants who have no criminal record. These immigrants are being arrested at an increased rate, averaging 4,143 arrests per month compared to Obama’s average of 1,703 per month. Not violent criminals. Not gang members. Not “bad hombres.”

Now compare this to how the Trump-Sessions DOJ treats corporate offenders.

Enforcement policies introduced since Trump took office include:

  • Allowing corporations that engage in illegal bribery abroad to completely avoid prosecution. So long as they meet certain DOJ conditions, corporations that violate the Foreign Corrupt Practices Act (FCPA) can avoid prosecution and see their penalties reduced by 50 percent. The approach is intended to be especially lenient on first-time offenders. Dun & Bradstreet, a data and analytics firm whose Chinese subsidiary employees engaged in bribery, was the first corporation to receive a declination letter – that is, an agreement not to prosecute – under the new policy.
  • Reducing corporate penalties by eliminating payments to third parties that help right corporate wrongs. The practical result: British bank Barclays, by credible estimates, paid less than half of what it might have in penalties for securities violations that fueled the financial crisis, because the Trump-era settlement did not require the bank to fund consumer relief. Similarly, Trump’s DOJ reduced Harley Davidson’s penalty for alleged emissions cheating violations by $3 million because the funds would have gone to a third party: the American Lung Association.
  • Reducing corporate penalties by limiting how much a single corporate violation can trigger penalties from multiple enforcement agencies. Deputy Attorney General Rod Rosenstein characterizes these instances as “piling on.” The policy led to a recent enforcement matter involving the DOJ, the IRS, ICE and the Office of the Comptroller of the Currency reducing penalties for a bank accused of anti-money laundering deficiencies by $50 million, according to Rosenstein.
  • Limiting the DOJ’s power to bring charges against corporations that defraud the government. Former Associate Attorney General Rachel Brand instructed DOJ lawyers to stop citing noncompliance with “guidance documents” as evidence that a violation has been committed – a change that severely restricts the agency’s power to bring cases against corporations, especially for False Claims Act violations. Brand’s former employer, the U.S. Chamber of Commerce, celebrated the policy memo. Brand resigned shortly after releasing the memo to take the top legal post at Walmart.
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Right-wing judge and rejected Supreme Court nominee Robert Bork even wrote an op-ed in The Washington Examiner praising the Trump DOJ’s leniency toward corporate bad actors, saying, “With the advent of a new administration, DOJ has embraced a spirit in which compliance is becoming more of a cooperative venture with the private sector, reserving hard-nosed prosecutions for actual wrongdoers. This new spirit can be seen in many actions.”

Meanwhile, under Trump, agencies that are supposed to protect the public from corporate recklessness and wrongdoing, from the EPA to the U.S. Consumer Financial Protection Bureau (CFPB), are following the DOJ’s lead, going out of their way to protect corporate offenders.

The longer these policies are in place, the fewer corporate criminals will be held accountable. But we don’t have to wait to see their effects. Public Citizen’s research finds that of the 20 largest civil enforcement cases completed over the past three years, only one was completed under Trump. Meanwhile, another Syracuse University study finds that the DOJ is prosecuting fewer white-collar criminals than it has in 20 years.

Rosenstein goes out of his way to reassure audiences of corporate lawyers that corporate offenders that “cooperate” have little to fear from federal prosecutors. A close reading of the language he uses to describe corporate violations is revealing. Consider the following excerpt from the May 9, 2018 speech in which the new policy against “piling on” was announced:

We are aggressively pursuing the crimes that pose imminent danger to the American people. They include terrorism, gang violence, drug trafficking, child exploitation, elder abuse and human smuggling.

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Fortunately, we have sufficient resources to enhance our commitment to our new enforcement priorities without detracting from our commitment to prosecute other violations, including white-collar crime.

Here, even Rosenstein makes the distinction between classes of crime that are differently prioritized – there are those that pose “imminent danger” and there are “other violations.” Despite the threats posed to Americans’ lives and livelihoods by catastrophic corporate violations such as those that triggered the BP oil spill disaster in the Gulf and the Wall Street wrongdoing that sparked the 2008 financial crisis, corporate and white collar crime is squarely in the “other” category.

Rosenstein continues:

White-collar crime undermines the rule of law, defrauds victims, and disrupts the marketplace. Our goal is to deter crime, and we can only do that by holding accountable the perpetrators who cheat in an effort to gain a competitive advantage.

Effective crime prevention requires strong relationships among enforcement authorities and law-abiding businesses. Our Department is committed to reinforcing its relationships with good corporate citizens.

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The way Rosenstein tells the story, individuals are solely responsible for corporate crime, and the corporations themselves, “good corporate citizens” are victims. Rosenstein goes on to criticize penalties on the corporations themselves as “diffuse” and says they “do not necessarily directly deter individual wrongdoers.” There is no room in Rosenstein’s story for corporations that are systemic violators or for penalties to be imposed on both the company and an individual.

No matter what Rosenstein says, the corporations whose crimes poison the air we breathe and the water we drink, that exploit us at work and charge us rip-off prices as consumers, and whose greed and recklessness rigs and ransacks our economy, are not “good corporate citizens.”

But a legal system that refers to them as such is one that treats immigrants like “animals” and corporations like people.

Whether or not they’re willing to admit it, the message from the Trump-Sessions Justice Department is clear: If you look like the president, or if your crimes were committed in the pursuit of profit, they might cut you a deal.

But if you’re an undocumented immigrant, Trump and Sessions have made it clear what you can expect: zero tolerance.

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Rick Claypool

Rick Claypool is a research director Public Citizen’s president’s office. His work focuses on the ways corporate power distorts democracy in the U.S.

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