We Need to Throw More Criminal Businesspeople in Jail

White-collar crime is barely prosecuted in the United States. It’s time for that to change.

Donald Trump speaks during a briefing at the White House on August 13, 2020 in Washington, DC. (Tasos Katopodis / Getty Images)

Donald Trump loves tweeting the words “law and order,” fully committed to the idea that communicating to his base with racist dog whistles at the volume of a jet engine is the best way to win reelection.

Unsurprisingly, his cries of “law and order” don’t apply to criminals from his own social strata. The Trump administration has been a boon to white-collar criminals whose lawbreaking is basically being ignored by its Justice Department. The data is staggering.

Prosecutions over the first three years of Donald Trump’s term, when compared with Barack Obama’s last twenty months in office, are down between 26 and 30 percent. Taking into account the Obama Justice Department saw sharp declines in white-collar prosecutions after 2010, the Trump administration’s inaction is staggering.

It’s not just prosecutions that are in decline. Corporate fines have fallen 76 percent over the same period. Additionally, IRS criminal investigations dropped 36 percent between 2015 and 2019.

After the 2008 financial crisis, the total lack of criminal accountability for those who crashed the economy was one of the chief complaints about the Obama Justice Department. Even Ted Kaufman, who was Joe Biden’s Senate chief of staff for two decades, was appointed to replace him in the Senate, and currently heads his transition team, was vocal about his criticisms, writing in 2013, “‘Have we really gotten to the point where we are afraid to prosecute a Wall Street executive for stealing millions while we send some teenager who steals $20 from the corner store to prison?” He continued, “The fact is, the behavior of some on Wall Street led directly to millions of Americans losing their jobs or their houses. We must do all we can to make sure this doesn’t happen again.”

Kaufman was particularly incensed with the DOJ’s Criminal Division leader Lanny Breuer’s explanation that “In reaching every charging decision, we must take into account the effect of an indictment on innocent employees and shareholders, just as we must take into account the nature of the crimes committed and the pervasiveness of the misconduct.”

Now in 2020 it is clear that corporate criminals are hard at work looting this country, and in the Trump Justice Department, they don’t even need the get-out-of-jail-free card of being too big to jail. His justice department seems intent on doing nothing.

Writing in the New Republic, former financial fraud prosecutor Ankush Khardori listed the problems he has seen in the Trump Justice Department: “Relative disinterest in real-world fraud; an obliviousness to the sophistication of criminals who many see as nuisances but who are in fact wreaking widespread havoc; and high-level ineptitude by previously low-level prosecutors who somehow managed to rise quickly in recent years. Together, these trends point to the precarious state of our white-collar criminal enforcement program under the Trump administration.”

When your boss is a financial criminal, how likely are you to want to put financial criminals in prison?

Joe Biden on the other hand should heed the advice of his friend and former chief of staff. Cracking down on white-collar crime is the right thing to do both morally and legally. The political argument for increased white-collar crime prosecutions is even stronger.

While tens of millions remain out of work, and millions lose their health care, housing, and don’t know where their next meal will come from, wealthy corporations and individuals profited immensely from the generous corporate bailouts, that they often were not entitled to.

After talking a big game of prosecuting those who improperly took Paycheck Protection Program loans, the Trump administration decided to give safe harbor to those who simply returned the ill-gotten money — no questions asked. But PPP is just one example of the unscrupulous corporate behavior that has made headlines lately.

The brazenness of the insider trading surrounding the now “paused” government loan to Kodak that resulted in a bonanza for those with nonpublic knowledge was only surprising to those who believe anyone will face actual criminal accountability for their actions. On the day before the loan was announced, eight times as many shares in the company were traded than on an average day. The stock price gained as much as 500 percent after the loan was made public.

This is exactly the type of behavior insider trading laws were designed to prevent. Furthermore, the company’s CEO and a board member purchased thousands of shares while the company was negotiating the loan with the federal government.

There is a deep understanding that there are two different worlds of justice. One for the wealthy and well-connected, and one for the poor and marginalized. So while we denounce the reactionary rhetoric of “law and order,” we must push the next administration to the pursuit of the criminals, Trump included, who have been allowed to run amuck. It is true that the regular, legal sort of exploitation that is commonplace in the United States is an outrage in and of itself. But the billionaire looting that has taken place during this pandemic has gone to new extremes. Making it clear that it will have consequences is an important political act that can help us secure more expansive social rights in the future.

As Ted Kaufman put it, “Criminal prosecutions are not just about punishing the guilty. They also send a message that we as a society will not allow similar misconduct in the future.”