Sen. Warren calls out corporate crime before Iowa caucuses

The Office of Sen. Elizabeth Warren (D-MA) released a scathing report on Friday entitled, “Rigged Justice: How Weak Enforcement Lets Corporate Offenders Off Easy”, highlighting a list of “criminal and civil cases in 2015 in which the federal government failed to require meaningful accountability from either large corporations or their executives involved in wrongdoing.”

Specifically, the report describes 20 scenarios of corporate misconduct, out of which only one executive ended up being convicted: Massey Energy CEO Donald Blankenship, whose company violated safety codes 2,400 times in 2009, before the Upper Big Branch coal dust explosion in West Virginia killed 29 miners in 2010.

Blankenship was convicted on one misdemeanor count in December 2015, and faces up to one year in prison when he is sentenced in the spring.

These twenty cases are not the only examples of prosecutorial timidity when dealing with well-financed corporate defendants,” the report pointed out. “Instead, they illustrate patterns across a range of areas from financial crimes to personal injury to environmental disasters.”

The Massey case is an example of weak federal laws, according to Warren. But the issue which the Massachusetts senator focused on more in her New York Times op-ed follow-up was federal enforcement of corporate crime laws.

For example, five banks colluding in a foreign exchange and interest rate fixing scheme over a period of five years between 2007 and 2013, resulted in no charges of any of the companies’ executives.  Instead, the government settled with Citigroup, JPMorgan Chase, UBS Group, Barclays, and the Royal Bank of Scotland for $5.6 billion.

In addition, the Securities and Exchange Commission (SEC), which enforces financial laws, issued waivers to the banks so they wouldn’t be banned from performing certain business transactions in the U.S.

The “guilty pleas . . . carry more symbolic shame than practical problems,” for the banks who violated the law, according to Warren’s report.

In Warren’s op-ed, the senator criticized two federal enforcement agencies in particular, the aforementioned SEC, and the Department of Justice. The former suffers from “weak leadership”, and the latter “has dodged one opportunity after another to impose meaningful accountability on big corporations”, wrote Warren.

The lesson is clear: Personnel is policy,” Warren continued. “Legislative agendas matter, but voters should also ask which presidential candidates they trust with the extraordinary power to choose who will fight on the front lines to enforce the laws.”

It’s interesting that Sen. Warren decided to release this report on the Friday before the Iowa caucuses. While she has yet to explicitly endorse a presidential candidate, this could be described as a nuanced way of throwing her support behind fellow progressive senator Bernie Sanders in 2016.

 

[CBS News] [The Hill] [New York Times]