You may not have noticed, but companies are paying more in fines.
The federal Crime Victims Fund, which collects federal criminal fines from people and corporations, raked in a record amount -- $2.7 billion -- in its most recent fiscal year, Reuters reports. At the end of the year, it held more than $8 billion.
Two prominent banks have had to pay up recently. The U.S., U.K. and Switzerland fined UBS a total of $1.5 billion on Wednesday on charges that it had rigged Libor and Euribor, two benchmark lending rates. And HSBC recently agreed to pay the U.S. $1.9 billion to settle charges that it failed to prevent money laundering. Banks aren't the only ones guilty of corporate malfeasance though. The health care company GlaxoSmithKline agreed to pay the U.S. government $3 billion in July on fraud charges.
Even in the wake of the financial crisis, the Obama administration still has been reluctant to pursue full-blown court cases with corporations or send executives to jail, stoking the ire of critics. "The Justice Department referred to the UBS rate-rigging as an 'epic' scandal. But, as yet, there has been nothing epic in the department’s response," The New York Times' editorial board wrote on Friday.
For their part, Justice Department officials defended their general stance, arguing that criminalizing big banks could cause another financial crisis.
"In the world today of large institutions where much of the financial world is based on confidence, one of the things we want to ensure as we come forward to a right resolution is to ensure that counterparties don't flee an institution, that jobs are not lost, that there is not some world economic event that is disproportionate to the resolution we want," Lanny Breuer, an assistant attorney general at the Justice Department, said on Wednesday, according to The Financial Times.
But this reluctance to give banks more than a wrist-slap encourages bad behavior, ex-TARP watchdog Neil Barofsky has said. "It's essentially telling the executives in these institutions crime pays," he told CNN earlier this month.
(Hat tip: ThinkProgress.)