US Justice Dept. Wants Executives to Pay for Corporate Misconduct
Deputy US Attorney General Lisa Monaco announced Thursday that the US Dept. of Justice (DOJ) would unveil a new policy to reallocate the cost of corporate crime into the pockets of executives. This comes as part of a larger push by the Biden admin. to regulate illegal corporate actions....
- Deputy US Attorney General Lisa Monaco announced Thursday that the US Dept. of Justice (DOJ) would unveil a new policy to reallocate the cost of corporate crime into the pockets of executives. This comes as part of a larger push by the Biden admin. to regulate illegal corporate actions.1
- Monaco said 'to address the increasing intersection of corporate crime and national security,' the DOJ's National Security Division will hire more than 25 new prosecutors to investigate 'sanctions evasion, export control violations, and similar economic crimes.'2
- Companies — which often pay fines to authorities to settle inquiries into wrongdoing — would instead be expected to push the financial burden away from shareholders, who are rarely complicit in corporate crimes, to executives and other employees directly involved.3
- Principal Associate Deputy Attorney General Marshall Miller said that the so-called 'clawback' policy, which gives companies discounts on fines if they seek to take compensation away from wrongdoers, is not new but has not been implemented correctly.1
- He said the three-year pilot program will give discounts tied to the size of the clawback attempted. Firms will be able to retain a portion of that money even if they are unsuccessful, as long as they tried to do so in good faith.3
- Monaco said the DOJ is aware that it can be difficult for companies to decide the parameters for undertaking clawbacks or come forward to the authorities. She reiterated that companies should still include the wrongdoers and supervisors who had knowledge of the activity and were knowingly ignoring the consequences.4
Sources: 1Reuters, 2CNN, 3Al Jazeera and 4Los angeles times.
- Pro-establishment narrative, as provided by Wall street journal. This policy seems like a sensible step forward as national security and corporate crime increasingly become intertwined. Shareholders, who are rarely involved in wrongdoing, should not have to pay the price for the criminal activity undertaken by executives and supervisors. Between the DOJ's clawback policy and the Security and Exchange Commission's power to strip executives of bonuses, the Biden admin. is taking appropriate but forceful action to combat growing white-collar crime.
- Establishment-critical narrative, as provided by People's world. The real problem facing American society regarding white-collar crime is corporate greed, as companies continue to push for higher profits which in many cases harms both consumers and workers. Administration after administration, regulations have been cut as profits sore — but consumers and workers continue to face the brunt of a corporate world that has no checks and balances. Occasional fines, whether at the company or individual level, are no match for the exponential rise in profits and systemic corruption.