Brandon Garrett on How Prosecutors Compromise With Corporations

Prosecutions of corporations are highly compromised.

“Too big to jail” is a slogan for that concern.

But it’s really a family of concerns.


Companies get alternatives to prosecutions.

They may not get prosecuted at all.

In the biggest corporate crime cases, there often are no convictions.

Their employees may go free.

Even if they do settle criminal cases and get penalized, the penalties may be slap on the wrist type penalties.

Then there is the concern that reforms don’t meaningfully change anything at these big companies.

That’s the take of Brandon Garrett.

Garrett is a professor at the University of Virginia School of Law.

And he’s just out with his new book — Too Big to Jail: How Prosecutors Compromise with Corporations (Harvard University Press, 2014.)

“There are a lot of ways that a company can be let off easy,” Garrett told Corporate Crime Reporter in an interview last week. “With an individual criminal, we know what being let off easy looks like. They may not get much jail time or they may not get any at all. Companies can only be punished with fines and with reforms or by prosecuting the individuals that work for them. There are a number of ways to punish a company. The concern is that none of those ways are being taken seriously enough.”

Prior to 2003, the Justice Department shifted policy from convictions to deferred and non prosecution agreements for corporations.

“What we have seen over the last decade is that deferred and non prosecution agreements with public companies outpace convictions,” Garrett said.

“The change started in 2003, maybe not coincidentally, since that was the year that the Thompson memo was released. Prior to that, convictions of public companies were the main way of resolving the cases. In 2003, you start seeing deferred and non prosecutions becoming the most common resolution.”

Garrett says we should move back to corporate convictions and probation.

“Probation is a very good model,” Garrett says. “It is routine in environmental cases for a company to plead guilty and be put on probation. A monitor is appointed to report to the court and to the probation office. There is no special office of corporate probation. That might be a great thing to create. Have staff people who are skilled at supervising corporate compliance. Without that, the probation officer’s role will be somewhat limited. And that’s not a problem if the judge just appoints a specialist to do investigations and make sure the company isn’t committing new crimes and make sure the company is complying with special conditions of probation and then reporting to both the probation officer and the court.”

“The alternative approach that we see in these deferred and non prosecution agreements largely consists of a monitor or just the company itself reporting to the prosecutors. And then the prosecutors alone are deciding whether the company has complied or not.”

“Almost without exception the prosecutors conclude that the company has done fine and the agreement is ended.”

“Having a judge involved, having an independent outsider involved provides much more assurance that the compliance is meaningful. And particularly with recidivist companies, having those extra protections in place could actually strengthen corporate prosecutions. It is something that could benefit prosecutors.”

“So, I’m not sure why they have been so allergic to judicial review. It is also something that could benefit companies. If you have a monitor that isn’t doing good work, or who is charging too much, you can go to the judge.”

“Having a judge involved is a useful thing all around. Corporate plea agreements could provide for more accountability, but also more fairness for companies.”

(For the complete q/a format transcript of the Interview with Brandon Garrett, see page 28 Corporate Crime Reporter 42(10), November 3, 2014, print edition only.)

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