Corporate Contamination

The infrastructure bill making its way through the Senate is said to include $55 billion for water systems, including funding to replace lead pipes throughout the country. That will be a relief for many localities, but other communities face water problems caused not by aging pipes but by corporate negligence.

One example is the town of Hoosick Falls in upstate New York, which discovered in 2014 that its water supply had been contaminated by perfluorooctanoic acid, or PFOA, a toxic chemical linked to a range of ailments, including cancer. PFOA is one of a group of substances known as PFAS, also called “forever chemicals” because they don’t break down in the body or in the environment.

The source of the contamination in Hoosick Falls was a plastics plant that produced electronic components treated with PFOA, which was originally developed by DuPont for its Teflon non-stick coating for cookware. DuPont has been embroiled in a long-running dispute over the impact of PFOA on residents living near the plant in West Virginia where it produced the dangerous chemical.

It is now in a similar controversy with regard to Hoosick Falls, together with the French company Saint-Gobain, which purchased the plant in 1999, and other companies that operated it before that. Residents filed a class action lawsuit against the companies and recently reached a tentative $65 million settlement with most of the defendants.

DuPont is not part of that deal and is challenging it in court, claiming that it will hinder its ability to get a fair deal in its ongoing negotiations with the plaintiffs. A federal judge just rebuffed the company and gave preliminary approval to the settlement.

It is difficult to feel any sympathy for DuPont, whose response to the PFOA problem over the years has left a lot to be desired. As dramatized in the 2019 film Dark Waters, it took a crusading lawyer named Robert Bilott to break through the attempt by the company and its outside attorneys to cover up the pattern of cancers and birth defects experienced by residents of Parkersburg, West Virginia exposed to PFOA.

Yet DuPont is not the only corporation responsible for causing harm to water quality. For example, poultry producer Mountaire Farms recently agreed to pay a total of $205 million to settle a class action lawsuit and a case brought by the Delaware Department of Natural Resources and Environmental Control in connection with groundwater contamination caused by its processing plants.

I am now in the process of documenting these and dozens of other major environmental lawsuits—also known as toxic torts—for the next expansion of Violation Tracker scheduled for September. These cases, pushed by community activists as well as lawyers, are a reminder that the civil justice system is often a necessary supplement to government regulatory action in addressing corporate misconduct.

More Competition Is Only Part of the Solution

The executive order on competition issued by the Biden Administration earlier this month gave rise to headlines suggesting it was a direct assault on corporate power. The New York Times said the administration was stepping up its “mission to rein big business in.” The Wall Street Journal said the order “targets big business.”

There is no doubt that the order lays out an ambitious agenda to address anti-competitive practices in numerous areas of the economy. Coupled with the nomination of aggressive advocates to head the Federal Trade Commission and the Justice Department’s Antitrust Division, it creates momentum in dealing with the increasing dominance of large corporations over major portions of the economy.

Yet there are risks in relying too much on the idea of competition as the way to deal with all the harmful effects of modern capitalism. There are some areas in which we need less rather than more competition. After all, for example, the basic mission of the labor movement is to take wages out of competition.

Moreover, unions have traditionally had more organizing success among larger companies than smaller ones. Union density is higher at utilities, which are often monopolies, than any other industry. Utility workers are also better paid than most other blue-collar workers.

This is not, of course, true across the board. Giant corporations such as Walmart and Amazon have adamantly resisted unions and have thus been able to suppress wages. Some smaller firms have learned to live with unions.

There are also complications when it come to areas such as consumer protection. Some large companies use their market domination to keep prices high (example: cable TV providers), while others use theirs to drive their competitors out of business by keeping prices artificially low.

And if we look at employment and consumer issues at the same time, we’re confronted with the fact that large corporations may use the lack of competition to benefit customers at the expense of workers, or vice versa.

One thing I have learned in the course of gathering data for Violation Tracker is that corporate misconduct can be found in companies of all sizes. The database now contains more than 490,000 entries with total penalties of $669 billion. Of those cases, about one-fifth involve units and subsidiaries of large corporations. That leaves several hundred thousand smaller companies that have been implicated in abuses such as wage theft, employment discrimination, government contracting fraud, predatory lending, nursing home negligence, and toxic dumping.

The larger companies pay vastly much more in total fines and settlements, but it remains unclear whether in the aggregate they or smaller firms do more harm to workers, consumers and communities.

All of this is to say that more competition, while in many respects desirable, would not necessarily address all the ills of private enterprise. What we need are not just more players in the market, but better controls on all the players, whether they are mammoth corporations or more modest-sized operations.

Striking Back

The media these days is full of what amounts to employer propaganda. The setbacks in the organizing drives at Amazon are called signs that unions are obsolete. The difficulties that low-wage companies are having in refilling positions are presented as justification for terminating enhanced unemployment compensation. The long-overdue upward movement in wages is depicted as part of a dangerous trend toward inflation.

The Washington Post has just bucked this trend by publishing an account of a labor conflict in Kansas that reminds us that certain unpleasant realities persist in the workplace and that some old-fashioned ways of responding to them are still suitable.

Hundreds of workers at a Frito-Lay snack food plant in Topeka went on strike earlier this month to protest work schedules that sound like something out of the 19th Century. Many of the employees were being forced to work seven days a week and up to 12 hours per shift, creating workweeks that could reach 84 hours.  

The reason for this is that demand for Cheetos and Doritos has been robust, and Frito-Lay wants to make the most of it. Fortunately, the workers are represented by the Bakery union (BCTGM), so they are not completely at the mercy of management. Yet the company is said to have rebuffed calls from the union to hire more workers and is taking a hard line in contract renewal negotiations.

Frito-Lay’s retrograde management style started long before the current dispute. The company, a division of the soft drink giant PepsiCo, has a record of workplace abuses dating back at least two decades. This can be seen in Violation Tracker, which documents 29 cases since 2000.

These include seven cases in which Frito-Lay had to provide back-pay to workers to settle unfair labor practice charges as well as 13 cases in which it was penalized by OSHA for health and safety violations.

But perhaps what is most remarkable about Frito-Lay is that it has been sued repeatedly for wage and hour abuses and has paid out more than $23 million to settle five different collective action lawsuits. The largest of these was an $11.9 million settlement back in 2001 involving driver-salespersons. In 2018 the company paid $6.5 million to settle allegations that it did not provide proper pay to long-haul drivers, including a failure to comply with California law concerning meal and rest breaks.

Frito-Lay’s workplace practices are in keeping with those of its parent. PepsiCo has paid millions more to settle similar lawsuits relating to its Pepsi operations. These include a $5 million settlement in 2018 and a $3 million settlement in 2015. It has also paid fines to the U.S. Labor Department for Fair Labor Standards Act violations.

While some of the circumstances of the Kansas strike stem from the current economy, at its core is the age-old struggle by workers to be treated fairly. Let’s hope that the time-honored tactic of withholding labor is sufficient to get Frito-Lay to do the right thing.

Attacking Corporate Concentration on Multiple Fronts

Big Tech breathed a sigh of relief in late June when a federal judge dismissed antitrust complaints that had been filed against Facebook by the Federal Trade Commission and a coalition of state attorneys general.

That respite is proving short-lived. Although some of its enforcement powers were curtailed by the Supreme Court earlier this year, the FTC under its new chair Lina Khan is mapping out an aggressive approach. The commission, for example, recently voted to make greater use of techniques such as subpoenas to compel companies to provide evidence. It also voted to prioritize investigations into technology platforms and health businesses, two areas in which large corporations have too much power.

At the same time, the dismissal of the Facebook actions has given more impetus to moves in Congress to modernize and strengthen federal antitrust laws, most of which are now well over a century old. Bills are pending that would address Big Tech practices such as buying up smaller competitors and giving preference to their own services on the platforms they control.

A third front is at the state level, where attorneys general have shown no sign of being deterred by the Facebook setback. A group of 37 AGs just filed an antitrust suit against Google, alleging that it effectively forces users of Android mobile devices to purchase apps through its Play Store and collects extravagant commissions in the process.

This is just the latest in a series of antitrust actions filed against Google by the states and the U.S. Justice Department. The state actions are of particular interest because they involve AGs from across the political spectrum. Those bringing the new Google suit come not only from unsurprising states such as New York and California but also the likes of Florida, Mississippi, and Oklahoma. In fact, the lead states include Utah and Tennessee.

At a time when partisan gridlock dooms many policy initiatives in Washington, it is encouraging to see states of very different political stripes find common ground in addressing corporate abuses.

This is not an entirely new phenomenon. As my colleagues and I at the Corporate Research Project of Good Jobs First pointed out in a 2019 report, state AGs have banded together hundreds of times to bring multistate actions against a variety of abuses. In Violation Tracker, we document more than 600 successful cases of this type, which have resulted in penalties of over $112 billion.

These include more than 100 cases involving anti-competitive practices. Yet many of these concerned outright price-fixing, which is a serious offense but one that is often not relevant to tech companies that abuse their power in other ways.

Addressing monopoly control and other abuses related to concentration of power is supposed to be the purview of federal regulators, whose enforcement approaches have failed to keep up with changes in the economy.

We can still hope the FTC and the Justice Department’s Antitrust Division will reinvigorate themselves, but for now it is good to see the states step in to address corporate concentration.

The Wolves of Wall Street

Morgan Stanley and Merrill Lynch are two of the oldest names on Wall Street. Morgan long focused on serving corporations with investment banking services, while Merrill was more of a retail brokerage. Both got caught up in the transformation of the financial services sector. Morgan purchased brokerage firms Dean Witter and Smith Barney, while Merrill was taken over by Bank of America during the 2008 financial crisis.

During the past dozen years, both Morgan and Merrill have seen their reputations tarnished by a series of legal controversies. When Violation Tracker began collecting data on financial offenses in 2015, BofA appeared atop the list of banks that had paid more than $1 billion in fines and settlements, thanks mainly to cases involving Merrill. Morgan ranked 7th.

The database, now with information extending back to 2000, shows BofA with total penalties of over $80 billion, far more than any other parent company.  Morgan has paid out more than $9 billion.

Morgan and Merrill also feature prominently in the newest category of data to be added to Violation Tracker: penalties imposed on securities firms by the Financial Industry Regulatory Authority. Unlike the other agencies whose cases are compiled in Violation Tracker, FINRA is not a government entity. It is, however, authorized by Congress to acted as an industry self-regulator and is overseen by the SEC.

By reviewing all press releases issued since 2000 by FINRA and its predecessor, the National Association of Securities Dealers, we have assembled 726 cases with total penalties of more than $1 billion. And when we matched the firms named in the cases to their corporate parents, we found that roughly half of the actions were linked to the giants of Wall Street. Those companies account for an even larger share of the penalty dollars.

Morgan Stanley and Bank of America (mostly via Merrill Lynch) are tied for first place in terms of the number of cases, with 38 each. Morgan leads in penalty dollars, with a total of $150 million, followed by BofA with $134 million. The other firms with the highest total penalties include Credit Suisse, Citigroup, Wells Fargo, Deutsche Bank, and UBS. (The Morgan and BofA totals on Violation Tracker’s FINRA summary page do not match the amounts cited here because they have been adjusted avoid double-counting of some penalties linked to cases handled jointly with the SEC.)

Because the penalties imposed by FINRA are relatively low, the case numbers are perhaps more significant. What does it say about Morgan and Merrill that they have each been cited more than three dozen times for violating rules meant to protect investors? In one case, Merrill was cited for failing to prevent one of its representatives in Texas from operating a Ponzi scheme.

And what does it say about FINRA that it allows the big players to commit violations over and over again without doing more than imposing additional modest fines?  

It should be noted that the cases we collected from the FINRA press releases make up only a portion of the organization’s actions, with thousands more against firms and individuals contained in a proprietary database. In other words, the level of recidivism among the large Wall Street firms is probably even worse than what is suggested by the press releases.

Moreover, just a few days ago, after we finished processing the FINRA data, the organization imposed a new $3.25 million fine on Merrill Lynch and ordered it to pay $8.4 million in restitution to customers.

Neither government action nor industry self-regulation seems to be very effective at curbing financial misconduct.

Note: Along with the new FINRA cases, Violation Tracker has just been updated with information from the more than 300 federal, state and local agencies covered by the database. The Tracker now contains 490,000 entries with total penalties of $669 billion.

The European Banking Blacklist

The European Union has shaken up the financial world by excluding a group of large banks from participating in the marketing of bonds being floated to help in the economic recovery of member states. According to reports in various business publications, the ten banks are being singled out because of their involvement in cases in which they were accused of manipulating bond and currency markets. In other words, they are being punished for misconduct.

While these moves may not have a major bottom-line impact on the banks—which include U.S. giants JPMorgan Chase, Citigroup and Bank of America—the EU is sending an important message about corporate wrongdoing.

Large companies have come to assume they can essentially buy their way out of legal jeopardy by paying fines and settlements that have grown larger but are still far from seriously punitive. As Violation Tracker documents, the big banks are Exhibit A for this phenomenon.

The database shows that the financial sector overall has paid more than $300 billion in U.S. penalties over the past two decades, far and away more than any other part of the economy. Bank of America is at the top of the list of penalty payers, with a total of $82 billion. JPMorgan is second with $35 billion, and Citigroup is fourth with $25 billion.

Non-U.S. banks being singled out by the EU have also accumulated substantial U.S. penalties, apart from what they have paid elsewhere. For example, Deutsche Bank has paid out $18 billion and NatWest (formerly the Royal Bank of Scotland) $13 billion.

The EU’s move is focused on a particular set of scandals in which these banks were alleged to have colluded to rig markets. Among these are cases involving the manipulation of currency markets. In 2015, Citigroup, JPMorgan, Barclays and Royal Bank of Scotland each paid hundreds of millions of dollars in settlements to resolve criminal charges brought by the U.S. Justice Department.

Unlike many other situations in which large corporations are offered deferred prosecution or non-prosecution agreements, the banks in this case had to plead guilty to the felony charges. Yet there was little in the way of consequences beyond the penalty payments. The banks were put on probation, on the assumption this would cause them to cease their bad behavior. Yet all the banks continued to rack up regulatory violations in subsequent years.

Reuters estimates that the blacklisted banks will lose out on about 86 million euros in syndication fees. This is a lot less than what the banks have paid in penalties. Yet, if banks begin to see that misconduct will cause them to be excluded from business opportunities, that may be more of an inducement to avoid corrupt behavior.

The dilemma for policymakers is that misconduct is so widespread in the financial sector that it is difficult to find service providers with clean hands. While excluding the ten banks, the EU turned to a group of others to handle the debt issue. Those included the likes of HSBC and BNP Paribas, which have their own substantial corporate rap sheets. Perhaps a larger blacklist is needed.

Gently Regulating Corporate Election Involvement

A recent announcement by the Federal Election Commission that it was fining the National Enquirer’s parent company was unusual in two ways.

The first had to do with which parties were targeted by the FEC and which were not. The agency imposed a penalty of $187,500 against A360 Media LLC (formerly known as American Media Inc.) for making a payment to Karen McDougal in 2016 to suppress her story about having had an affair with Donald Trump.

Watchdog group Common Cause alleged that the payment – which was facilitated by Trump’s former personal lawyer Michael Cohen– amounted to an illegal in-kind contribution to Trump’s campaign by American Media. The FEC agreed, but it chose not to sanction the beneficiary of the payment. In other words, this was another example of how Trump manages to avoid personal consequences for misconduct for which he was ultimately responsible.

The FEC action was also out of the ordinary because it entailed a penalty directed at a company. It has become so rare for the FEC to bring cases against corporations themselves (as opposed to their political action committees), that I have not been including the agency among those federal regulators from whom I collect data for Violation Tracker.

Seeing the A360 decision, I decided it was time to add the FEC, but I didn’t know how many corporate cases could be found. I knew that the heyday of prosecuting corporations for election finance violations came in the 1970s as an outgrowth of the Watergate investigations. Those cases would have to be left out, since Violation Tracker coverage begins in 2000.

I also knew that there were likely to be few cases after January 2010, when the U.S. Supreme Court’s Citizens United decision wiped away most limitations on campaign spending by corporations as well as other entities. The ban on the direct use of corporate funds for campaign contributions remained in place.

The other factor has to do with the FEC itself, which often deadlocks along partisan lines and has difficulty imposing penalties against corporations or other entities and individuals.

As I dove into the case archives on the FEC website, I focused on what the agency calls Matters Under Review and ignored its administrative fines brought against PACs and campaign committees for matters such as late filing of reports.

I ultimately found a total of 31 cases in the period since January 2000 in which a corporate entity was fined $5,000 or more for an election violation. There were only four penalties above $100,000 – including one for $1 million – and the overall average was just $77,000.

Most of these cases involved allegations that the corporation improperly reimbursed employees for their individual donations to try to get around the ban on the use of corporate funds.

It is difficult to believe that fewer than three dozen corporations broke this rule and other remaining regulations during the past two decades. Instead, the low case count is another symptom of underregulation of corporate activities with regard to elections and much more.

Note: the new FEC entries will be added to Violation Tracker later this month as part of an overall update of the database.

The Obscure Companies Threatening the Planet

Hilcorp Energy, a privately held oil and gas producer based in Texas, shows up in Violation Tracker with only $2 million in regulatory penalties, compared to more than $1.5 billion for petroleum giant Exxon Mobil. Yet according to a detailed new report published by Ceres and the Clean Air Task Force, Hilcorp dwarfs Exxon when it comes to climate-ruining emissions of methane gas.

Hilcorp is one of a group of lesser-known energy producers which turn out to be responsible for a remarkable portion of greenhouse gas emissions. The findings of the Ceres report, which outed the companies using data from the EPA’s Greenhouse Gas Reporting Project, were surprising enough to merit a front-page article in the New York Times.

Among the other low-profile/high-emissions companies featured in the report are Terra Energy Partners, Flywheel Energy, Blackbeard Operating and Scout Energy. These firms have few or no listings in Violation Tracker.

One of the reasons these companies fly under the radar is that they are not publicly traded. Some are controlled by private equity firms, making their business even more opaque.

As the Times article points out, some of these producers have purchased operations from larger, publicly traded corporations subject to more scrutiny. For example, Hilcorp acquired gas wells in the San Juan Basin in northwestern New Mexico from ConocoPhillips, reducing that company’s carbon footprint while doing nothing to reduce the burden on the climate.

It is significant that the Ceres report is appearing in the wake of the showdown at Exxon Mobil, where institutional investors concerned about the risks associated with climate change have just succeeded in winning three seats on the corporation’s board of directors.

That is a vitally important development in the effort to bring about change at the company which is still the largest overall emitter of greenhouse gases. The Ceres findings point out the necessity for the climate movement to target not only the corporate giants but also the smaller players which are having an outsized impact.

One difficulty in changing the practices of both larger and smaller corporations is the fact that the U.S. environmental regulatory system does little to punish firms for their greenhouse gas emissions. A producer such as Hilcorp can get away with its massive methane emissions because it does not need to worry about activist institutional investors or the possibility of substantial penalties from the EPA.

The EPA has gone after automobile producers such as Hyundai for their greenhouse gas emissions, but the agency has faced strong legal obstacles in the effort to regulate emissions by power plants and energy producers.

Those obstacles need to be overcome, and corporations of all kinds need to face substantial monetary penalties for their contributions to the climate crisis.

Note: Apart from the Ceres report, good use of the EPA’s greenhouse gas data has been made by the Political Economy Research Institute’s Greenhouse 100 Polluters Index, which ranks parent companies by the total emissions of their subsidiaries. In that index, power plant owners such as Vistra Energy and Duke Energy are at the top. Exxon is number 11 and Hilcorp number 36.

Oil Giants Pressed for Changes Instead of Promises

A substantial number of large corporations would have us believe they are in the forefront of the efforts to address issues such as climate change, inequality and racial injustice. They brag about their commitment to corporate social responsibility and claim to be devoted to high-minded ESG (environmental, social and governance) principles in their operations.

There are two big reasons to be skeptical about this self-congratulatory stance. The first is that Big Business is often the cause of those problems, not the solution. The second is that the remedial measures companies claim to be taking often turn out to be illusory.

Two recent developments suggest that that corporations may be unable to go on running these cons. In an unprecedented ruling, a court in the Netherlands ordered petroleum giant Royal Dutch Shell to cut its carbon dioxide emissions sharply to align with the Paris agreement on climate change. This was said to be the first time a company faced a legal mandate of this kind. What made the decision even more significant is that Shell was held responsible not only for its own emissions but also those of its supply chain. This suit, brought by environmental groups, was a legal breakthrough for the climate movement.

Yet, the ruling was also consequential in that it challenges the notion that corporations should be allowed to make their own decisions on how to address environmental and social goals. And in that sense it rocks the foundations of ESG, which is built on the idea of voluntary measures. Companies have gotten a great deal of mileage out of making claims about what they have done or plan to do. Many of these statements cannot be verified, and there is no enforcement mechanism for holding corporations to their promises.  

Much of what goes by the name of corporate social responsibility is a method of warding off more stringent government regulation by claiming that the private sector can address the issues on its own.

Shell is a prime example of a company that says one thing and does another. On its website, the company claims that its commitment to sustainability dates back to 1997 and that it works “to embed this sustainability commitment into our strategy, our business processes and decision-making.”

Yet during this same quarter-century, Shell has been embroiled in an ongoing controversy over its practices in Nigeria. Environmental groups alleged that the company’s operations were responsible for a large number of pipeline ruptures, gas flaring and other forms of contamination that also contributed to greenhouse gas emissions. The Nigerian government responded to protests with a wave of repression, including the arrest and killing of prominent activist Ken Saro-Wiwa. Shell denied it was involved, but critics pointed to the role played by the company in supporting the military dictatorship.

A lawsuit brought by Friends of the Earth Netherlands and four Nigerian farmers was filed in a Dutch court, alleging that spills from Shell pipelines damaged the livelihood of the farmers. The case dragged on for years, but in early 2021 the Hague Court of Appeal finally issued a decision on the case, ruling that Shell had to pay compensation to the farmers and install equipment to prevent future pipeline leaks.

Shell is not the only oil major on the hot seat. After years of leading the corporate climate denial effort, Exxon Mobil claimed to be changing its stance. It may have abandoned the overt denialism, but it resisted taking significant steps to reduce its carbon footprint. Now, institutional investors have run out of patience.

Led by an upstart hedge fund called Engine No.1, investors succeeded in electing two members to the Exxon board against the wishes of CEO Darren Woods. Those directors vowed to use their position to press the company to move toward carbon neutrality.

The two will be a minority on the board, but their election will make it harder for Woods to ignore the calls for Exxon to do more to address the climate crisis.

The revolt within Exxon and Shell’s legal setbacks will not by themselves transform business, but they are indications that large corporations may find it increasingly difficult to rely on vague commitments and instead may have to take concrete, enforceable measures to address climate change and other urgent issues.  

The 200-Year-Old Corporate Criminal

Boston-based State Street Corporation traces its history back to 1792 and now manages more than $3 trillion in assets, yet it has always maintained a lower profile than the goliaths of Wall Street. Recently, the company was in the spotlight, though not in a good way.

The U.S. Attorney’s Office for Massachusetts announced that State Street would pay a $115 million criminal penalty to resolve charges that it engaged in a scheme to defraud a number of its clients by secretly overcharging for expenses related to the bank’s custody of client assets.

“State Street defrauded its own clients of hundreds of millions of dollars over decades in a most pedestrian way,” said Acting U.S. Attorney Nathaniel Mendell. “They tacked on hidden markups to routine charges for out-of-pocket expenses.”

What’s remarkable is this simple fraud went on, according to prosecutors, for 17 years. This suggests that a large number of company executives were in on the scheme. In effect, it became part of State Street’s standard operating procedure.

It is disappointing that, aside from the monetary penalty—which can be easily absorbed by a company of its size–State Street was let off with what amounted to a slap on the wrist. Like numerous large corporate violators before it, State Street was allowed to enter into a deferred prosecution agreement rather than being compelled to enter a guilty plea.

The DPA is all the more controversial because State Street did not have a pristine record prior to this case. As shown in Violation Tracker, it has paid more than $1 billion in penalties in previous cases dating over a decade. These included a 2010 case in which it had to pay $313 million to resolve allegations by the Securities and Exchange Commission and the Massachusetts Attorney General that it misled investors about their exposure to subprime investments while selectively disclosing more complete information to specific investors.

Later, in 2016, State Street paid $382 million to the resolve an SEC case alleging that it misled mutual funds and other custody clients by applying hidden markups to foreign currency exchange trades. Hidden markups seem to be a recurring theme for State Street.

Since 2010 the company has paid out another $400 million in cases brought by the SEC and state regulators as well as class action lawsuits involving its management of pensions and benefit plans.

Yet perhaps the most disturbing entry on the Violation Tracker list is a 2017 case in which State Street paid a $32 million penalty to the Justice Department to resolve charges that it engaged in a scheme to defraud a number of the bank’s clients by secretly applying commissions to billions of dollars of securities trades.

As in this year’s criminal case, State Street was allowed to wriggle out of those charges by signing a deferred prosecution agreement. That puts the company in the dubious group of corporations that, as a 2019 Public Citizen report showed, have been offered multiple DPAs or non-prosecution agreements.

The ability of a corporation to obtain multiple leniency agreements makes a mockery of DPAs and NPAs. These arrangements are justified as a way to encourage a wayward company to change it practices, yet the ability to obtain multiple get-out-of-jail-free agreements does nothing more than incentivize more misconduct.