Senator Jeff Sessions (R-AL). (Photo: Diego M. Radzinschi/ALM)
U.S. Sen. Jeff Sessions, the President-elect’s pick to lead the U.S. Department of Justice, will face a host of questions Tuesday—at the start of his confirmation hearing—about immigration policy, civil rights and voting laws.
The Alabama Republican’s positions on many of those issues are clear. What’s less easily discernible is his record—and his plan—on white-collar enforcement. Indeed, for lawyers in the corporate and defense bar and in regulated industries, there are many unanswered questions about how Sessions would lead the Justice Department.
Will a Sessions DOJ move to block major corporate tie-ups? Will prosecutors embrace the new push to hold company executives accountable? And how will the feds confront the nascent but ever blossoming marijuana industry?
What follows is a snapshot of five questions for Sessions.
1. Antitrust enforcers face merger mania. Will Sessions give national companies a green light, or stop sign, to pursue big deals?
The Justice Department’s Antitrust Division’s grappling with what one top official called a “merger wave” in many regulated industries. From health care and technology to agriculture, proposed multibillion-dollar deals have been blocked in court or outright abandoned in the face of antitrust scrutiny.
President-elect Donald Trump’s position on the AT&T-Time Warner deal appears unchanged from his opposition earlier on the campaign trail. In October, Trump flatly stated his administration would not approve the $85.4 billion acquisition.
“As an example of the power structure I’m fighting, AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few,” Trump said in a campaign speech. Last week, Bloomberg reported that Trump has not changed his tune.
In Washington’s federal trial court, judges will soon rule on Anthem’s proposed $48 billion acquisition of Cigna Corp. and Aetna Inc.’s proposed $37 billion tie-up with Humana Inc. The DOJ challenged both deals in July, alleging that they would amount to an “unprecedented consolidation” in the health insurance industry. The judges are expected to hand down their decisions by month’s end.
Sessions would take the reins of the department at a crucial time for antitrust enforcement. Sen. Chuck Grassley, R-Iowa, chairman of the Senate Judiciary Committee, has urged a “careful analysis”of the proposed Dow Chemical Co.-DuPont merger.
One Trump adviser, Joshua Wright, a former Federal Trade Commission commissioner, has argued that “big” isn’t inherently “bad.”
“The new antimerger fervor is based upon the presumption that they are never a good deal for consumers because more consolidation always leads to higher prices, and never leads to cost savings or product improvements that benefit consumers,” Wright wrote in The New York Times in November. “Both are demonstrably false.”
2. Where does Sessions fall on holding individual executives accountable?
On Saturday, the FBI in Florida arrested a Volkswagen compliance executive, Oliver Schmidt, alleging he played a leading role in hiding the automaker’s emissions-cheating scheme from regulators. The high-profile arrest marked an example of the Justice Department moving to hold corporate executives responsible for misconduct.
The arrest could raise questions about the continuation of DOJ enforcement policy under the Yates Memo, named after deputy attorney general Sally Yates, the department’s second-in-charge. In the memo, published in September 2015, prosecutors outlined a new focus on individual accountability for corporate wrongdoing. Yates has insisted there’s no politics in holding executives accountable, and she hopes Trump’s DOJ to follow suit.
“Holding individuals accountable for corporate wrongdoing isn’t ideological; it’s good law enforcement,” Yates said in November. She noted the “significant number of corporate investigations” that will be resolved by Trump’s Justice Department.
Sessions has not publicly aired his views on individual corporate prosecutions. Two days of confirmation hearings may signal whether the “Yates memo” will survive a Republican-led Justice Department.
3. Sessions isn’t a fan of marijuana. Should companies built on the recreational-use of the drug be worried?
Sessions once said on Capitol Hill that “good people don’t smoke marijuana.”
Advocates for recreational drug use are waiting to hear how a Sessions-led Justice Department plans to confront the tension between state-legalization efforts and federal law, which still considers the drug illegal.
The Justice Department under Eric Holder Jr. and Loretta Lynch largely took a hands-off approach in states where voters adopted recreational use. One fear now is that Sessions will overturn Justice Department guidance, and inject uncertainty into an already-jittery industry.
California, the largest state to approve marijuana use, is just now building a set of rules to regulate the would-be multibillion-dollar industry. Regulatory schemes are raising questions about banking, insurance and intellectual property protection.
The advocacy group Drug Policy Alliance, which supported California’s legalization effort, backed a campaign in opposition to the Sessions nomination. Bill Piper, senior director of national affairs at the alliance, said recently that Sessions “played a critical role in blocking efforts to reform sentencing policy, asset forfeiture and marijuana laws.”
4. Will the Sessions Justice Department choose not to defend certain laws?
In 2011, the Obama administration’s Justice Department decided to stop defending a key component of the federal Defense of Marriage Act that it found unconstitutional. It was not the first time the DOJ declined to defend a policy enacted under a previous administration.
Sessions and Trump have both called for the repeal of the Affordable Care Act. As U.S. attorney general, Sessions could walk away from defending a big part of the health care law that’s tied up in the courts now.
In 2014, U.S. House Republicans sued the U.S. Department of Health & Human Services over billions of dollars in cost-sharing payments the government made—allegedly without congressional approval—to insurers. A judge agreed with the House.
House Republicans, represented by general counsel Thomas Hungar, successfully asked the U.S. Court of Appeals for the D.C. Circuit to pause the litigation to give the incoming Trump administration a chance to settle or dismiss the case.
Two Affordable Care Act exchange participants, represented by Mayer Brown, are seeking an official role in the case for fear that the incoming administration will not adequately defend the health care law.
5. The Foreign Corrupt Practices Act has brought in hundreds of millions of dollars to the feds. Will the Sessions DOJ embrace this tool?
In December, the Brazilian construction conglomerate Odebrecht S.A. paid a record $2.6 billion dollar foreign-bribery fine that was widely reported as one of the largest under the Foreign Corrupt Practices Act.
The settlement served as something of a punctuation mark on the Justice Department’s aggressive enforcement of the Foreign Corrupt Practices Act, a 40-year-old anti-bribery law that received new life over the past decade.
Sessions’s position on the FCPA is unclear. But he has, at times, been outspoken about big corporate fines.
In 2010, he argued that BP should have to pay as much as possible to compensate the victims of the Gulf of Mexico oil spill, which tarred his home state’s shores. “They are liable for the damages up to the extent of their very financial existence and they are not too big to fail,” Sessions said at the time, according to news reports.
Trump has gone on record as saying the FCPA is a “horrible law and it should be changed.”
“I mean, we’re like the policemen for the world,” Trump said in a 2012 phone-in appearance on CNBC. “It’s ridiculous.”
Originally published on National Law Journal. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.