{"slice_names":["facebook_like","facebook","twitter","linkedin","email","comments"],"slice_params":{"facebook_like":[],"facebook":{"share_amount":"137"},"twitter":{"short_url":"http:\/\/huff.to\/13DAMYw","tweet_text":"Decade-Old Holder Memo Helped Pave The Way For 'Too Big To Jail'","views_amount":"31"},"linkedin":{"linkedin_amount":"2"},"email":{"emails_amount":"18","emails_title":"Eric Holder's 1999 Memo Helped Set The Stage For 'Too Big To Jail'","emails_text":"In a 1999 memo entitled \u201cBringing Criminal Charges Against Corporations,\u201d<\/a> written when he was deputy U.S. attorney general, Eric Holder argued that government officials could take into account \u201ccollateral consequences\" when prosecuting corporate crimes.\r\n\r\nThat memo has<\/a> resurfaced<\/a> at a time when Holder, now U.S. attorney general, faces increasing criticism for the Department of Justice's reluctance to bring charges against white-collar criminals. \r\n\r\n\u201cThere\u2019s all kinds of problems with the applications of this policy which began with the Holder memo and got more formalized,\u201d said John Coffee, a law professor at Columbia University and an expert in white-collar crime. \u201cYou are going to send a message that we don\u2019t really care significantly about misconduct within those institutions.\u201d \r\n\r\nAlthough it brought only a modest change in the way prosecutors evaluate whether to bring criminal charges against corporations, Holder's memo laid the groundwork for subsequent policies<\/a> that allowed for more leeway when going after large firms, Coffee said.\r\n\r\nAdora Andy Jenkins, a Justice Department spokeswoman, wrote in an email to The Huffington Post that under Holder's leadership, \"this Justice Department has stood firm in our approach that no person and no corporation is above the law.\" \r\n\r\nIn 1999, Holder highlighted the possibility of deferred prosecution<\/a> -- an arrangement now common in the wake of the financial crisis -- whereby prosecutors essentially give defendants amnesty in exchange for paying a fine, enacting reforms and cooperating with investigators. But later officials published further memos, turning the option into more of a recommendation, Coffee said. \r\n\r\nHe said the policy was strengthened in response to the Arthur Andersen scandal<\/a> of the early 2000s. After the government brought criminal charges against the consulting firm, the company failed, causing 28,000 workers <\/a> -- many of whom likely had no role in any wrongdoing -- to lose their jobs. A court later overturned the charges. \r\n\r\nHolder told the Wall Street Journal in 2006<\/a> that he drafted the memo in response to complaints that there seemed to be no uniform rules for deciding whether to bring charges in corporate cases.\r\n\r\n\"[I] didn\u2019t expect these issues would become as big as they were,\" Holder told the WSJ at the time. Indeed, they've only grown larger in the seven years since that interview, as the financial crisis wreaked havoc on the U.S. economy. \r\n\r\nThe government has yet to prosecute any big banks or major executives for their role in the meltdown, and critics have derided Holder and his Justice Department for using the collateral damage argument as an excuse for not doing enough to hold those institutions accountable. The DOJ came under fire last year after declining to prosecute HSBC for years of money laundering violations<\/a>, saying that to do so would bring too much damage to the global economy. \r\n\r\n\u201cThe government just backed down,\u201d Coffee said of that case. \u201cThere were reasons in 2008 to say maybe we shouldn\u2019t indict any bank we can because it will just add to the systemic risk. But we were in 2012 to 2013 with HSBC -- that risk wasn\u2019t there and we weren\u2019t dealing with something that was relating to the activities that produced the 2008 crisis.\u201d\r\n\r\nYet in addition to the HSBC deal, Sen. Elizabeth Warren (D-Mass.) and others<\/a> have criticized Holder for statements he made<\/a> to senators -- and later walked back<\/a> -- indicating that he thought big banks had gotten too large to prosecute. \r\n\r\nSome have defended Holder\u2019s position<\/a>, arguing that if big banks were criminally indicted for wrongdoing they wouldn\u2019t survive punishment, and ordinary workers who had nothing to do with the banks\u2019 actions would suffer as a result, as in the Arthur Andersen case. Others have noted that it\u2019s difficult<\/a> for the Justice Department and other agencies to take on big banks until lawmakers do something to prevent such institutions from becoming \"too big to fail.\"\r\n\r\nJenkins, the DOJ spokeswoman, said that while prosecutors weigh many factors, such as potential harm to shareholders or employees, such considerations are not definite bars to prosecuting corporate crimes. Collateral consequences \"will not prevent the Justice Department from continuing to be aggressive and creative in pursuing prosecutions and seeking penalties in appropriate cases as we have been doing,\" she said.\r\n\r\nJennifer Arlen, a professor of law at New York University, argues that the 1999 Holder memo<\/a> in fact provides a valuable tool to prosecutors, since it incentivizes companies to launch internal investigations and turn over information that may help bring charges against the individuals responsible, something firms were hesitant to do before. \r\n\r\n\u201cWhat the Holder memo did was announce publicly and officially that the focus of corporate enforcement should be on individual convictions, on getting the individuals responsible,\u201d Arlen told HuffPost. \u201cThe only way we can deter corporate crime is to get firms to help deter it themselves.\u201d\r\n\r\nThe public should be concerned, she said, only when the government either doesn\u2019t prosecute companies in cases where it\u2019s clear the firms are covering up wrongdoing, or in cases where officials enter into a deferred-prosecution agreement but do nothing to follow up or ultimately prosecute those responsible.\r\n\r\nShe pointed to the Walmart bribery scandal<\/a> -- in which top-level Walmart officials were aware of wrongdoing but did little to stop it -- as a possible test case for the government policy.\r\n\r\n\u201cA lot of people are treating it as if we\u2019re letting corporations off,\u201d Arlen said. \u201cPeople are right to be concerned that corporate crimes are happening and not enough people are being held criminally responsible, but they\u2019re focusing on the wrong problem. Our focus should be on making sure that those responsible for the crime are prosecuted.\u201d \r\n\r\nCoffee also noted that there's nothing in the Holder memo to indicate that those responsible for corporate wrongdoing should be let off the hook. \r\n\r\n\"Whatever you think about the policy about indicting corporations, the original memo never said that you shouldn't indict [corporate] officers,\" he said. "},"comments":{"comments_amount":"396"}}}