May 1, 2018
The Honorable Jeff Sessions
U.S. Department of Justice
Robert F. Kennedy Building
950 Pennsylvania Ave., N.W.
Washington, D.C. 20530
Re: Corporate Crime Database and Annual Report
Dear Attorney General Sessions:
The U.S. Department of Justice (DOJ) has been clear about the dangers posed by corporate crime.
In its strategic plan for fiscal years 2014-18, the DOJ states that economic crimes present “very severe threats to the United States’ economy” and that the “explosion of financial fraud over the past few years has threatened the Nation’s financial stability.”
To put the gravity of these threats in context, the DOJ has recognized that “threats to the U.S. economic system must be addressed with the same seriousness and sense of purpose that guide efforts to protect the safety of the Nation.”
In similar terms, the DOJ calls health care fraud “one of the most destructive and widespread national challenges facing our country.”
In April 2017, you told a group of compliance officers meeting in Washington, D.C., “We will enforce the law. We’re not going to back down to powerful forces, big companies or powerful economic interests.”
To properly face these major threats, it is important that the DOJ have more specific and timely ways to measure the incidence and severity of corporate crime, to determine whether its efforts against them are successful or not, and the many ways they might be improved.
Currently, the DOJ does not compile comprehensive data on corporate crime. This is a notable oversight.
It is as if the Department of Education had no measures for how well our children learn, or if the U.S. Department of Agriculture had no idea of how much wheat or corn our farmers grow.
The failure to measure can lead to sloppy thinking, bad decisions and entrenched neglect.
We urge the DOJ to equip itself with the power afforded by measurement and data analysis.
For street crime, the FBI oversees the Uniform Crime Reporting (UCR) Program, which tracks data from over 18,000 local and state law enforcement agencies.
The DOJ should launch a parallel program for corporate crime and law-breaking, including but not limited to antitrust and price-fixing, environmental crimes, financial crimes, overseas bribery, health care fraud, trade violations, labor and employment-related violations (discrimination and occupational injuries and deaths), consumer fraud and damage to consumer health and safety, and corporate tax fraud onshore and offshore.
A pittance invested here will go a long way toward promoting more lawful corporate behavior and the critical public support the DOJ needs for adequate enforcement budgets and stronger laws.
The DOJ should produce and maintain a corporate crime database. This is an elemental form of accountability. Street criminals have rap sheets — corporate law-breakers ought to have them, too. This could help to deter and punish such crime in many ways.
For example, prosecutors, regulators and judges could use the database to identify recidivist violators and to assess appropriate sanctions. Procurement officials could use a corporate crime database to identify corporations that fail to meet the “responsible contractor” standard in the Federal Acquisition Regulation.
In addition, by making the database available online to the public for free, it would benefit countless journalists, criminologists and other scholars, investors, and others interested in crime in the suites.
At a minimum, the corporate crime database should:
- Be searchable by parent company, major subsidiaries, corporate official name, industry, type of crime, city, state, and date of crime.
- Contain individual company data, including the number of civil, administrative and criminal enforcement actions brought against corporate defendants by government agencies involving a felony charge, misdemeanor, or civil charge where potential fines may be $1,000 or more.
- Specify the agency bringing each charge, the charge, the name of the company charged (including the ultimate parent company), and the outcome of the action if any, including plea agreements, consent decrees, findings of innocence, convictions, and fines and other penalties.
The “Corporate Crime Database Act” (H.R. 6545 in 111th Congress, H.R. 323 in 112th Congress) was introduced in 2010 to require the DOJ to establish and maintain such a database, and to make it available to the public via the Internet.
Such proposals have been made by advocates for many years.
The DOJ should also issue an annual report on corporate crime.
At a minimum, the report should provide an estimate of the total annual cost of corporate crime in the United States.
It should include not only costs of crimes committed by individuals against businesses and investors (white-collar crime), but also the costs that corporate crime imposes on the rest of society, including the resulting deaths, injuries and property damage. In addition, millions of Americans lost their jobs, due to the financial crisis of 2008-9, which was caused by mortgage fraud and reckless speculative Wall Street gambling. Imagine Americans lost trillions of dollars because of financial sector greed and lawlessness.
The report should present an analysis of trends in corporate crime and an explanation of the relative effectiveness of various conventional sanctions, and the potential of new sanctions.
While the UCR Program does measure certain forms of white-collar crime, it is far from a thorough treatment of corporate crime.
The DOJ’s annual corporate crime report should also tally data about prosecutions and compile agency enforcement data, including budgets, descriptions, staff, and status of investigations. The report should also address the issue of unenforced noncompliance.
The report should include the number of cases referred to U.S. attorneys for prosecution each year by the FBI or other federal and state agencies, as well as the status and ultimate disposition (i.e., how many referrals were prosecuted; how many prosecuted were found guilty; how many settled with deferred and non-prosecution agreements; the magnitude and kind of penalties involved; how many cases settled).
It should also compile agency enforcement data, including the number, description, and status of investigations initiated by federal agencies (including the DOJ and Department of Labor as well as the EPA, SEC, IRS, OSHA, CPSC, FDA, FRA, FAA, NHTSA and FTC).
More than one-third of a century has elapsed since the DOJ issued a thorough analysis of corporate crime in America (“Illegal Corporate Behavior”, October 1979).
We are well into the 21st century, and non-governmental unofficial databases on corporate crime have been created to partially fill the void.
The University of Virginia Law School has pulled together its Corporate Prosecution Registry. The Corporate Research Project has its Violation Tracker. But there is still no comprehensive official federal database of corporate crime in America.
Given your recognition of the tremendous costs of corporate crime to Americans, their household wealth and our economy, the DOJ must resolutely employ these most elementary tools of analysis and accountability without further delay.
We would like to meet with you to discuss these matters as well as broader consensus subjects relating to corporate crime, fraud and abuse that annually are costing many human casualties and hundreds of billions of dollars to taxpayers and to private-sector consumers, workers, and small businesses. According to a 2015 report by the Centers for Medicare and Medicaid Services, there had been an estimated $60 billion in annual fraud and abuse just on Medicare the year before.
Edward M. Robertson Professor of Law
University of Maryland Carey Law School
Good Jobs First
Corporate Research Project of Good Jobs First
Price Professor of Public Interest Law
University of San Diego School of Law.
Interim Director of Political and Business Policy