Corporate Crackdown

The Editorial Board disapproves of Littlejohn for political reasons.

This week’s newsletter highlights three litmus tests of the Biden administration’s commitment to holding the wealthy and powerful accountable to the public interest within their dwindling time in office. 

Joe Biden must commute the sentence of Charles Littlejohn, the IRS whistleblower who leaked Donald Trump’s tax records, before Trump can get revenge.

You can make your voice heard at freecharleslittlejohn.com.

“He broke the law, but in light of the good that came from his actions in exposing the full scale of tax injustice in America, he certainly did not deserve a sentence six times higher than what guidelines recommended.”

As the Democratic Party apparatus’s post-election reflections continue this week, they would do well to consider this basic question: Was it smart to run a campaign hinging on your opponent’s blatant corruption and white-collar criminal status, despite the failure of the Biden administration to take tangible steps to address the harms perpetrated by corporations and the wealthy during their time in office?

Some Notes on Centrists Blaming Everyone but Themselves

We reviewed efforts at five agencies (DOL, NLRB, SEC, CFPB, and FTC) toward using existing enforcement powers to crack down on corporate wrongdoing, highlighting successful enforcement actions with real impact on our daily lives. Over the past four years, these critical (if not always public-facing) executive branch agencies have made significant strides toward reversing the deregulatory efforts of the Trump administration, while pushing protections for workers and consumers further. 

Under Director Rohit Chopra, the Consumer Financial Protection Bureau has facilitated a resurgence in consumer relief won through enforcement actions relative to the Trump years, which were marked by lax enforcement (see the chart below from the CFPB). This increase in relief came amidst industry-driven challenges to the agency’s constitutionality. The case stifled some potential action, but the agency’s enforcement actions have rebounded since the Supreme Court rejected the challenges to its existence.   

Under the Biden administration, the Securities Exchange Commission (SEC) achieved record levels of enforcement. It recovered record sums from imposing penalties, had a high count of enforcement actions, and significant numbers of white collar criminals were disbarred from executive board seats. The SEC has secured these accomplishments through effective litigation, emphatic rulemaking, and rigorous enforcement of the law.

The Department of Labor (DoL) has been prolific in using its rulemaking abilities to protect workers and increase wages while using its investigative and enforcement authority to hold bad corporate actors accountable. This list is not meant to be comprehensive, but highlights major victories in increasing overtime pay, addressing misclassification of employees as independent contractors, and cracking down on widespread illegal use of child labor. 

Lina Khan and the Federal Trade Commission have been the target of endless Wall Street Journal hit pieces and antagonistic lobbying from billionaires hoping to cut short Khan’s tenure at the helm of the consumer protection agency. This is not a coincidence. Under Khan’s leadership, the small agency has punched well above its weight by writing cogent rules  to protect consumers, blocking anticompetitive mergers, and bringing enforcement actions to punish illegal corporate practices.