On March 3, Attorney General Merrick Garland recommitted the Justice Department to a new focus on white-collar and corporate crime in a speech to the American Bar Association. “As a prosecutor, defense attorney and judge, I have also seen the Justice Department’s interest in prosecuting corporate crime wax and wane over time,” Garland said. “Today it is waxing again.”
One should hope so, since the administration’s efforts so far leave much to be desired. The Revolving Door Project has been tracking the Biden administration’s efforts to investigate and prosecute corporate crime since the end of 2021 as part of our “Corporate Crackdown Project.” Today, we are releasing data on both the efforts the administration has taken and the opportunities the administration has passed on to investigate and prosecute corporate malfeasance.
We find that the administration has taken at least 24 opportunities to either prosecute corporate crime or begin writing new regulations to ban heinous corporate practices. However, the administration has missed 48 such opportunities. This poor success rate isn’t solely the administration’s fault — the blame is shared with Republican Senators eager to sabotage a Democratic president, and the Democratic Senate leadership enabling them.
And to be sure, the administration has a grinding task in front of them: the federal government’s capacity to bring elites to justice has collapsed over the past two decades, thanks to funding cuts, deprioritization, and white-shoe lawyers’ incentives against prosecuting their potential future clients.
Biden’s team has taken positive steps, like mass investigations of shipping warehouses misclassifying workers and bringing the first enforcement actions against coal ash pollution since 2015. But the administration has also done little to publicize or celebrate these efforts. Most press coverage has been confined to industry-focused specialized outlets, and key administration messengers haven’t talked up these enforcement actions at all.
Even worse, the administration has declined to take the more impactful actions waiting at their fingertips. Private equity moguls who defrauded the Paycheck Protection Program (PPP) have gotten a free pass so far while prosecutors pursue small-ball schemes. The Environmental Protection Agency referred the fewest-ever pollution crimes to the Justice Department for prosecution. And while the administration has continued investigating Meta’s Facebook and Alphabet’s Google for antitrust violations, they haven’t taken any action against the slew of other white-collar crimes allegedly committed by these Big Tech titans, like bid-rigging, insider trading, and lying to investors and Congress.
We hope that the administration is currently investigating at least some of the cases and just hasn’t made their work public yet. But the overall 1:2 ratio of opportunities taken to opportunities missed should cause circumspection within both the administration and Congress.
And Congress does bear a large portion of the blame here. It’s effectively ensuring that the administration enters the fight against corporate crime with two hands tied behind its back, by underfunding key administrative agencies and blockading confirmation of highly qualified nominees to lead them. Those blockades, however, are only possible because Democrats allow them.
Under the current interpretation of Senate rules negotiated by Majority Leader Chuck Schumer and Minority Leader Mitch McConnell, Biden nominees require a vote from their relevant oversight committees to even be brought onto the Senate floor for confirmation. Those committees need a quorum to hold a vote. Since the Senate is evenly divided, this requires at least one Republican to turn up to the committee room to advance a nominee.
This has allowed unscrupulous Republicans to deliberately sabotage the federal government’s enforcement capabilities by literally not showing up for work. Last month, Republicans deliberately avoided committee hearings to advance nominees to the Federal Reserve in the middle of an inflation spike — including the Vice Chair for Supervision, point person for writing rules to prevent plutocratic dealings with big banks.
Starving the government of resources to investigate oligarchs does these Republicans no favors with their constituents: a Data For Progress poll found extraordinary net support across partisan lines for increasing funding of government agencies that investigate corporate crime, and that 70% of Republicans agreed that the administration should be doing more to hold corporations accountable when they break the law.
But of course, the Republicans skipping out on their jobs don’t care about their constituents’ needs. They care about serving the corporations who refill their campaign coffers, and for whom they will inevitably lobby for once they leave office.
There’s no reason, though, that Schumer has to grant McConnell and his ilk the power to hold these blockades. The Senate rules are written so that all committee members have a chance to weigh in on a nominee. But Schumer and his majority can easily interpret the rules to say that deliberately avoiding hearings as a protest action is how obstructive members have chosen to make their voices heard. Thus, quorum can be achieved with only half of the members present. Essentially, Schumer can say that deliberately avoiding hearings is an elaborate and showy way of a member voting “abstain” — which is what it is, after all.
If Congress at last confirmed Biden’s Fed nominees, they could get to work shoring up Biden’s financial sanctions against Russian oligarchs, protecting American banks from imminent cybersecurity threats, and consider methods of mitigating the inflation crisis Republicans claim Biden is doing nothing about.
Similarly, the Biden EPA’s unacceptably low number of pollution cases reflects the fact that Biden’s nominee to lead EPA’s enforcement work, David Uhlmann, has been blocked by Wyoming Senator Cynthia Lummis. Lummis is incensed that Uhlmann might (gasp!) clean up some of the coal haze in her state’s air. Senate Democrats shouldn’t legitimize Lummis’ cruelty toward her own constituents’ health, and should use their full powers to help advance Uhlmann.
Of course, appointing the right people is only one piece of the problem. Investigations like the FinCEN Files show how horribly overworked and understaffed enforcement agencies can’t keep up with today’s flood of complex white-collar crimes. This has enabled the system of kleptocracy which Biden now seeks to strike back against, at least regarding Russian oligarchs.
Funding white-collar enforcement agencies is enormously popular across partisan lines, but it won’t be well-liked by the oligarchs, foreign and domestic, who underwrite so many of our politicians. But if the Democratic Party leaders, from Schumer to Biden to Nancy Pelosi, lack the courage to take this on, then why are they in charge?
There was a lot of talk at the end of the Trump years about Democrats having learned to play hardballl. Senate insiders claimed if they retook the Senate, they wouldn’t roll over and pretend their Republican colleagues were acting in good faith when they weren’t. Then the Democrats won Congress, and all of that talk disappeared.
A Congress unwilling even to stand up the infrastructure of the government for fear of appearing partisan is not a Congress deserving of the public’s trust or respect. The prize for an ounce of backbone would be a government able to implement the president’s agenda, including picking popular fights with unpopular corporate villains, which will benefit Democrats electorally and the country economically and politically. There is a great deal which Biden needs to do to finally stem the white-collar crime crisis he agrees exists. He can’t do any of it until Congress both confirms his nominees and provides them with the funding and resources they need.
PHOTO CREDIT: “Photo of the US Capitol Building after the sun has set” by Jackson Lanier is licensed under CC-AS-A 4.0.