The Justice Department is now prioritizing the prosecution of individual white collar criminals rather than the corporations they work for, according to a report in the New York Times.
The new policy, which was announced in a memo circulated to staff on Wednesday, is a reaction to criticism that too few individuals responsible for the 2008 financial crisis have been punished for the harm they brought to American citizens and the economy.
“Corporations can only commit crimes through flesh-and-blood people,” Sally Q. Yates, the deputy attorney general and the author of the memo, told the Times. “It’s only fair that the people who are responsible for committing those crimes be held accountable. The public needs to have confidence that there is one system of justice and it applies equally regardless of whether that crime occurs on a street corner or in a boardroom.”
According to the report, “The Justice Department often targets companies themselves and turns its eyes toward individuals only after negotiating a corporate settlement. In many cases, that means the offending employees go unpunished.” The policy change would require officials to go after individuals from the beginning, and offer the corporations they work for incentives to hand over incriminating information.
Last year, ProPublica published an investigation into why only one top Wall Street banker went to jail for his crimes. One explanation is a cultural shift at Justice in the 1980s and 1990s which left the DOJ preferring to go after corporations because they were bigger prizes than lone executives, and because some kind of victory, usually in the form of a settlement or deferred prosecution agreement, was easier to achieve. This policy change could reverse that cultural shift, but it may be too late to punish the individuals most responsible for the worst financial crisis in three generations.