The priorities of the Barr Justice Department came to light with the revelation that it is rushing to schedule a series of federal prisoner executions before the Trump Administration comes to an end in January. DOJ is exhibiting a lot less urgency about meting out penalties for corporate defendants.
Four years ago at this time, the Obama Justice Department used its final weeks to negotiate an extraordinary wave of settlements with big business, collecting more than $30 billion in fines and settlements. During a period of 10 days, there were four 10-figure settlements: Deutsche Bank’s $7.2 billion toxic securities case; Credit Suisse’s $5.3 billion case in the same category; Volkswagen’s $4.3 billion case relating to emissions fraud; and Takata’s $1 billion case relating to defective airbag inflators.
Since this year’s election results became clear, there have been no billion-dollar resolutions announced by DOJ.
The rush to settle was based at least in part on concern that the incoming Trump Administration would downplay the prosecution of corporate offenses as part of the assault on government regulation. That concern turned out to be valid, though not to the extent many observers expected. Prosecutions and regulatory enforcement have declined in some areas but have not disappeared.
One Major Settlement
Since this year’s election results became clear, there have been no billion-dollar resolutions announced by DOJ. During this time the only significant announcement was one involving a $135 million settlement of a foreign bribery case against Vitol, the secretive European commodity trading company.
While Barr is not yet using the lame-duck period to resolve cases, DOJ was showing some prosecutorial vigor in a few areas even before the election. One of these is the enforcement of the Foreign Corrupt Practices Act (FCPA). Even though Trump himself has reportedly sought to strike down the law, claiming it is unfair to U.S. companies, the Justice Department has gone on bringing cases.
The Vitol action is one of five FCPA settlements DOJ has announced during the past few months. These follow about 20 others since Trump took office. There are a few things to note about these cases. First, the corporate defendant, while paying a penalty, was almost always offered a way to avoid a guilty plea, usually through a deferred prosecution or non-prosecution agreement.
The second significant feature of Trump’s FCPA cases is that most of them were brought against corporations headquartered outside the United States. Trump’s criticism of the law may have prompted DOJ to focus more on foreign culprits, perhaps using FCPA as a surreptitious trade weapon. When DOJ pursued a case against the very American company Walmart, the department was accused of going easy on the giant retailer in the settlement negotiations.
Occasionally, even Barr’s DOJ has had to get tough with a U.S. company in an FCPA case. That happened in October, when Goldman Sachs had to pay more than $2 billion to resolve its culpability in the notorious 1Malaysia Development Bhd. (1MDB) case, which also involved prosecutors from other countries such as the United Kingdom and Singapore.
Assuming he does not get fired for refusing to go along with Trump’s election fraud delusion, Barr still has some time to end his tenure in a blaze of corporate settlements. It would be a better legacy than a brazen misuse of the death penalty by a lame duck attorney general.