On Tuesday, PBS aired a Frontline report, The Untouchables, examining the reasons federal prosecutors had not charged Wall Street executives over the 2008 financial crisis. The program featured Lanny Breuer, who heads up the U.S. Department of Justices criminal division, and on Wednesday, the Washington Post was reporting that he was leaving his job.
The Post described Breuers tenure at the DOJ as filled with controversy and high-profile prosecutionsciting both the disastrous Fast and Furious gun-trafficking operation and the agencys multimillion-dollar settlements with financial institutions in money-laundering cases.
The report also weighed Breuers reliance on deferred-prosecution agreements for companies, citing criticism that the use of such tactics amounts to a slap on the wrists of companies that have engaged in egregious behavior. Breuer, however, has argued that the agreements result in greater accountability for corporate wrongdoing. The DOJ brought in $9 billion in corporate settlements during 2012 through deferred- and non-prosecution agreements.
The Frontline documentary puts the Justice Department and Breuers division in an often-harsh light, citing a drop in prosecutions for finance-related crimes during Barack Obamas presidency and the development of a Too Big to Jail approach to Wall Street executives. During an interview with Breuer for the program, he defended his approach, saying:
. . . the reality is, if a Wall Street executive was involved in a transaction, and on the other side of that transaction was another Wall Street executive, and they both had sophisticated lawyers and they both had sophisticated disclosure documents, as much as the conduct is reprehensible . . . there was a level of greed, a level of excessive risk taking in this situation that I find abominable and I find very upsetting. But that is not what makes a criminal case.
What makes a criminal case is that I can prove beyond a reasonable doubt every element of a crime. And if you can show that you disclosed in some document that your lawyers created that the risks that were created that you felt were disclosed in some form, then I cannot prevail in a criminal case. And I have a constitutional obligation not to bring the case.
Breuer spoke about this topic in a September 2012 address to the New York City Bar Association, when he said:
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. I personally feel that its my duty to consider whether individual employees with no responsibility for, or knowledge of, misconduct committed by others in the same company are going to lose their livelihood if we indict the corporation. In large multi-national companies, the jobs of tens of thousands of employees can be at stake. And, in some cases, the health of an industry or the markets are a real factor. Those are the kinds of considerations in white-collar crime cases that literally keep me up at night, and which must play a role in responsible enforcement.
