David Burnham on the Drop in Corporate Crime Prosecutions

The government’s criminal prosecution of corporate violators has declined substantially in the last decade, falling by almost one third (29%) between 2004 and 2014.


That’s according to a report released last week by the Transactional Records Access Clearinghouse (TRAC).

The report was based on internal Justice Department records obtained by TRAC as the result of a 17-year litigation effort under the Freedom of Information Act (FOIA)

The records cited in the report documenting the decline in the prosecution and conviction of corporations for a decade or more were drawn from two large data systems — one maintained by the Department of Justice and the second by a unit of the federal courts, the U.S. Sentencing Commission.

The Justice Department database is known as the Legal Information Office Network System (LIONS).

While Justice Department officials often proclaim that they are getting tough on white collar and corporate crime, the TRAC report found that the government in many ways seems to be moving in a different direction, with the Justice Department’s own data providing strong evidence about the extraordinarily small and declining number of corporate prosecutions.

Records from the U.S. Sentencing Commission show similar trends on convictions to those revealed by the Justice Department.

And while the TRAC report found that the number of prosecutions were declining, the report also found that the number of referrals from federal agencies were increasing.

According to the report, in FY 2004, there were 6.3 times more referrals for corporate crime than prosecutions.

But by FY 2014 the difference between the two measures had grown and there were 9.2 times more referrals than prosecutions.

“The officially stated goals of most organizations in the United States are ambitious and high minded,” the report concludes. “So two central questions can fairly be asked: is the agency in question achieving its stated objectives and if not, why not? The Justice Department’s own records make it clear that when it comes to criminal enforcement against corporate violators the agency is falling far short of its goals. What is far harder to determine is why. To resolve that second question would require a well-functioning and principled oversight system operated by the administration itself, Congress, the news media, public interest groups and others — all under pressure from an informed public. But given the current national mood, this clearly is a tall order.”

Burnham and TRAC have been pounding the Justice Department for years to release the complete LIONS database — including names of corporate defendants.

But isn’t LIONS a public database?

“In theory it is,” Burnham told Corporate Crime Reporter in an interview last week. “The law says it is. But it took us nearly twenty years to get the Justice Department to provide it to us. We now get it on a monthly basis — a very timely basis. It took four lawsuits. We were represented by Public Citizen. With Tom Susman at Ropes & Gray — we are now getting Civil Division information on a monthly basis.”

“Every single referral that is made is included in this LIONS database — from the minute it is made. The U.S. Attorney describes what the agency recommended, what was the lead charge, what was the program category. Was it declined or not declined? And if it goes forward, what happens to it.”

“The Justice Department seriously violated the Freedom of Information Act. FOIA says that government records are public unless there is some special exemption. They just denied our request — until we sued them.”

Burnham says that TRAC might be on the verge of a breakthrough — to get the names of the corporate defendants in the LIONS database.

“The Justice Department lawyer has told Scott Nelson at Public Citizen that sometime early next year we should get this information,” Burnham said.

“But it was an oral communication. Nothing was set in concrete. From years of experience with the Justice Department, they do not follow the law. It’s hard to explain how unlawful they are with regard to FOIA. Cops hate to be looked at. They fight you tooth and nail.”

“We have forced them, with the help of Public Citizen and Ropes & Gray, to disclose. But why don’t they disclose without being sued?”

[For the complete q/a format Interview with David Burnham, 29 Corporate Crime Reporter 40(13), October 19, 2015, print edition only.]

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