CORPORATE CRIME REPORTER
Eliason
Says Shift to Deferred Prosecution Agreements Unduly Favors Corporations
22 Corporate Crime Reporter 38(12), October 6, 2008
The shift in policy over the past couple of years away from convicting corporate
criminals and toward entering into deferred and non prosecution agreements unduly
favors corporations.
That’s the take of Randall Eliason, an adjunct professor at both the American University College of Law and the George Washington University Law School.
“You want prosecutors to have discretion so they do not charge the corporation in every case,” Eliason told Corporate Crime Reporter last week. “But now we seem to have a policy where we are not charging the corporation in any case. There has go to be a middle ground. There are going to be some cases where the overall behavior of the company, and the events overall, do merit a corporate indictment. We seemed to have moved now to a policy where it’s almost off the table.”
Prosecutors and defense attorneys often cite the case of Arthur Andersen to justify the move away from convicting corporate criminals. Andersen was charged, convicted, went out of business, and its conviction was later overturned by the U.S. Supreme Court.
“But we have to remember that Andersen was not the norm,” Eliason said. “Many corporations have been indicted and convicted in the past and are still going strong. Andersen was an extreme case. The charges went directly at the heart of Andersen’s business. The lesson drawn from that shouldn’t be – we can’t ever indict a company, because we will drive it out of business.”
“Instead of indicting and trying criminal cases now, we are cutting deals with corporate defendants and imposing lesser sanctions,” he said.
“And that not only alters the nature of the criminal process, but it sends a message to companies and executives – you can buy your way out of criminal liability. You can do whatever you think you need or want to do, and if you get caught, you will be able to cut a deal and buy your way out any potential criminal sanctions. And that is a bad message to be sending. It undercuts the deterrent force of the criminal law.”
“It’s hard to spin a federal indictment,” Eliason said.
Eliason said that there might be legitimate corporate crime cases growing out of the ongoing financial industry meltdown. But he worries that companies that deserve to be criminally prosecuted won’t be.
“Any number of scenarios are possible. Part of my concern is that if past history is any guide, no matter what is uncovered, we are not going to see any companies punished,” he said.
Eliason says that whole debate over waiver of corporate privilege strikes him as “a little artificial.”
“As long as a company can waive the privilege voluntarily, you are always going to have some companies that will waive because they want to be seen as being fully cooperative,” Eliason said.
“Whether or not the prosecutor specifically asks for it, that pressure is certainly going to be there in the background. Companies have always done this in the past. They ask – don’t we need to do this as well in order to be seen as fully cooperative? So, it doesn’t seem to me that the proposed legislation or the new guidelines make all that much difference. It does restrict prosecutors from demanding waiver as a routine matter. And that’s probably a good thing. But I don’t think that in the end that it matters all that much because as long as corporations can voluntarily waive the privilege, then some will want to do that to be seen as cooperative.”
[For a complete transcript of the Interview with Randall Eliason, see 22 Corporate Crime Reporter 38(12), October 6, 2008, print edition only.]
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