Jailing Individuals is NOT the Same as Corporate Fines
In the last week, since the Justice Department announced a new policy focused on the prosecution of executives and individual employees, not just companies, the media has been full of chatter about what is to come. And although this is seemingly good news for the white collar defense lawyer, in reality it foreshadows a dangerous slippery slope that we are about to go down.
I read many articles applauding the announcement, but the one that hits the nail on the head about the dangers is Ellen Podgor’s post on White Collar Crime Professor Blog, titled“It’s Official — Throw the Employees Under the Bus.” In this excerpt from her post, Podgor correctly points out three significant problems associated with directly tying corporate cooperation credit with the requirement that corporations turn over all “relevant facts” about individuals involved in the misconduct:
What is meant by providing “all relevant facts”? Does this mean only information that is relevant to the government’s case against the individual’s? Will the government also be asking for Brady material that might be exculpatory for the individuals? Does this mean that the corporation now is officially a member of the government team?
What does this mean for the corporate culture? The concept of the individuals in the company working together, asking for legal advice from corporate counsel, and working to resolve problems in an open environment may now be officially over. This policy pits the corporation against the individual. Is this a wise approach to correcting business misconduct?
Does this make it more important that there be fairness in internal investigations?
Since when is jailing an individual on a level playing field with imposing a corporate fine. In reality, the reason the Government has been so successful in obtaining corporate pleas is that we have a culture in Corporate America where evidence is handed to the Government on a silver platter. Because it’s the cost of doing business these days and … because no one is going to jail! Now all of a sudden the game has shifted and the Government wants to continue to enjoy an environment where corporations hand them prosecutions of individuals on a silver platter. Is Corporate America now an arm of the government?
The reason that an individual’s prosecution is more strictly scrutinized is because the consequences simply of being charged with a criminal offense are so devastating to an individual, even if acquitted. And worse, if convicted, liberty is at stake.
Our constitutional rights and privileges are in place to prohibit illegal evidence gathering, preserve our right to remain silent, and protect communication with attorneys. Yet our Government is not only inviting, but promoting, an atmosphere where Corporate America will gather evidence against an individual for the Government without regard for search and seizure protections — where Corporate America can hold a potential accused hostage, with a threat of loss of their livelihood, without regard for Miranda, Fifth Amendment protections, or even protected attorney client communication.
So rather than applaud this new policy, I join Ellen Podgor in her caution of the problems that it creates in the already tricky landscape of corporate investigations and prosecutions. In my opinion, the Government just opened up a Pandora’s box of problems and set the stage for a constitutional Wild Wild West complete with the proverbial sacrificial lambs. And we all need to be concerned about where this will take us.