Corporate Crime

Recalling the Corporate Culprits of Yesteryear

Corporate crime has been happening as long as there have been corporations. But if you wanted to choose an event that marked the emergence of what we think of as modern big business misconduct it would be the admission by Enron in November 2001 that it had overstated profits by $600 million. Within months, the high-flying energy trader collapsed amid growing evidence that the company was one big scam. Enron’s lenders, investors, auditors and others were all pulled into the morass.

Enron turned out to be just one of a rash of accounting scandals that rocked the corporate world and severely damaged the legitimacy of American capitalism. The Bush Administration felt compelled to create a President’s Corporate Fraud Task Force headed by none other than James Comey.

I bring up this history because the Corporate Research Project is about to release a major expansion of Violation Tracker that will extend coverage to this period. We are adding ten more years of data, bringing the starting point back to January 2000. The expansion will nearly double the size of the database to 300,000 entries with more than $394 billion in fines and settlements.

More than 95 percent of that penalty amount comes from our universe of large parent companies, which is being increased to about 2,800. These include ones that are publicly traded and privately held, for-profit and non-profit, domestic as well as foreign-based.

Now the universe also includes a bunch of companies like Enron that are defunct but which are kept on the list for historical purposes. Here are some of those zombies. Note that Violation Tracker does not yet include entries relating to private litigation.

The largest penalty total comes from Adelphia Communications, a cable television provider that was riddled with corruption. In 2004 the Justice Department arranged for $715 million of what remained of the company to be handed over to a fund set up to compensate victims of Adelphia.

In 2002 WorldCom, another telecommunications company, filed what was then the largest bankruptcy ever in the wake of a massive accounting scandal. In 2002 the Securities and Exchange Commission reached a $500 million settlement with the company after originally seeking $1.5 billion in penalties. Since WorldCom was taken over by Verizon rather than being dismantled, its entries in Violation Tracker are listed under Verizon.

Enron shows up in nine entries with a penalty total of $446 million, the largest of which was a 2006 agreement with the Federal Energy Regulatory Commission giving the agency a $400 million claim in the company’s bankruptcy proceeding stemming from Enron’s misconduct during the 2000-2001 Western energy crisis.

We also list Arthur Andersen, which had served as Enron’s auditor and was convicted of obstruction of justice for shredding documents relating to that client. The conviction was overturned by the U.S. Supreme Court (and thus is not listed in Violation Tracker) but the firm never recovered from the scandal. We list a $7 million penalty imposed on Andersen by the SEC in 2002 in connection with its audits of Waste Management in the 1990s.

The corporate scandals of the early 2000s shook up the country and in some ways prompted even more aggressive remedial actions than are seen with more recent cases. There were many more criminal prosecutions of individual executives than occurred with the cases stemming from the financial meltdown, though the dollar amounts of penalties have grown larger.

One thing that has not changed is the persistence of wrongdoing by so many large corporations.

Note: The Violation Tracker expansion will officially launch on September 19.

Federal Watchdog Agencies Still On Guard

Donald Trump likes to give the impression that he has made great strides in dismantling regulation. While there is no doubt that his administration and Republican allies in Congress are targeting many important safeguards for consumers and workers, the good news is that those protections in many respects are still alive and well.

This conclusion emerges from the data I have been collecting for an update of Violation Tracker that will be posted later this month. As a preview of that update, here are some examples of federal agencies that are still vigorously pursuing their mission of protecting the public.

Federal Trade Commission. In June the FTC, with the help of the Justice Department, prevailed in litigation against Dish Network over millions of illegal sales calls made to consumers in violation of Do Not Call regulations. The satellite TV provider was hit with $280 million in penalties.

Drug Enforcement Administration. The DEA is a regulatory entity as well as a law enforcement agency. In July it announced that Mallinckrodt, one of the largest manufacturers of generic oxycodone, had agreed to pay $35 million to settle allegations that it violated the Controlled Substances Act by failing to detect and report suspicious bulk orders of the drug.

Federal Reserve. The Fed continues to take action against both domestic and foreign banks that fail to exercise adequate controls over their foreign exchange trading, in the wake of a series of scandals about manipulation of that market. The Fed imposed a fine of $136 million on Germany’s Deutsche Bank and $246 million on France’s BNP Paribas.

Consumer Financial Protection Bureau. Last month the beleaguered CFPB ordered American Express to pay $95 million in redress to cardholders in Puerto Rico and the U.S. Virgin Islands for discriminatory practices against certain consumers with Spanish-language preferences.

Securities and Exchange Commission. In May the SEC announced that Barclays Capital would pay $97 million in reimbursements to customers who had been overcharged on mutual fund fees.

Equal Employment Opportunity Commission. The EEOC announced that the Texas Roadhouse restaurant chain would pay $12 million to settle allegations that it discriminated against older employees by denying them front-of-the-house positions such as hosts, servers and bartenders.

Justice Department Antitrust Division. The DOJ announced that Nichicon Corporation would pay $42 million to resolve criminal price-fixing charges involving electrolytic capacitors.

Federal agencies are also finishing up cases dating back to the financial meltdown. For example, in July the Federal Housing Finance Agency said that it had reached a settlement under which the Royal Bank of Scotland will pay $5.5 billion to settle litigation relating to the sale of toxic securities to Fannie Mae and Freddie Mac. And the National Credit Union Administration said that UBS would pay $445 million to resolve a similar case.

It remains to be seen whether federal watchdogs can continue to pursue these kinds of cases, but for now they are not letting talk of deregulation prevent them from doing their job.

Note: The new version of Violation Tracker will also include an additional ten years of coverage back to 2000.

Corporate America Doesn’t Qualify for Moral Leadership Either

It may turn out that Donald Trump’s greatest contribution to American business is allowing the chief executives of tainted corporations to take a morally superior posture toward a presidency that seems to be completely devoid of principle. Their brands are boosted as his becomes increasingly toxic.

It is a good thing that big business is taking steps to separate itself from Trump. The collapse of the two advisory councils is not only a rebuke to Trump’s offensive comments on the events in Charlottesville but also an overdue retreat from entities that were set up mainly to foster the illusion that this administration is taking serious steps to reform the economy.

Yet it is dismaying that the moral vacuum created by Trump is being filled by the likes of Walmart chief executive Douglas McMillon, who got himself featured on the front page of the New York Times for a statement criticizing Trump.

For years the giant retailer was a national symbol of discriminatory practices. In 2009 it had to pay $17.5 million to settle a lawsuit alleging that it discriminated against African-Americans in the recruitment and hiring of truck drivers. The company was also widely accusing of gender discrimination. In 2010 the company was required to pay $11.7 million to settle a case brought by the U.S. Equal Employment Opportunity Commission, and it was facing potential damages in the billions from a class action suit brought on behalf of more than 1 million female employees until the Supreme Court came to its rescue and threw out the case for what amounted to technical reasons.

In addition to discrimination, Walmart has been at the center of countless controversies involved wage theft, union-busting, tax avoidance, bribery and much more.

After Merck CEO Kenneth Frazier led the way among business critics of Trump’s embrace of white nationalism, the president struck back with a tweet referring to “ripoff drug prices.” While Trump was just being vindictive, it’s true that Merck’s reputation is far from untarnished.

In 2011 the drugmaker agreed to pay a $321 million criminal fine and a $628 million civil settlement to resolve allegations that it illegally promoted and marketed the painkiller Vioxx. This came after Merck had to remove the drug from the market in the wake of reports that the company for years covered up evidence of serious safety issues surrounding its blockbuster product. This is just one of a long list of its cases involving illegal marketing, overbilling, false claims and anti-competitive practices.

Another of the CEOs who spoke out in response to Trump’s comments was JPMorgan Chase’s Jamie Dimon. Earlier this year, the bank had to pay $53 million to settle a case brought by the U.S. Attorney in Manhattan accusing it of engaging in discrimination on the basis of race and national origin in its mortgage business.

JPMorgan Chase was one of the parties that helped bring about the financial collapse of a decade ago, and in 2013 it agreed to a $13 billion settlement of federal and state allegations relating to the packaging and sale of toxic mortgage-backed securities.

In 2015 JPMorgan had to pay a $550 million criminal fine to resolve federal charges that it and other large banks conspired to manipulate foreign exchange markets. There are many more entries in the corporate rap sheet of this company, which since the beginning of 2010 has had to pay out more than $28 billion in fines and settlements.

It would be difficult to find any members of the disbanded advisory councils whose companies have not engaged in serious misconduct of one sort or another.

Such is the peril of looking for paradigms of virtue in the business world. Corporate executives should, along with many others, speak out against Trump’s reprehensible comments, but they cannot lay claim to moral leadership.

Exporting Hazards or Globalizing Regulation?

Americans may have initially felt a bit smug upon learning that the combustible material responsible for the Grenfell Tower disaster in London is largely banned in the United States. Perhaps our regulatory system is not as deficient as we thought.

That moral superiority went out the window when it came to light that the deadly cladding was purchased from an American-based company. Some of the outrage being exhibited toward public officials in Britain should also be aimed at Arconic, a company created from the break-up of the aluminum giant Alcoa. Arconic has announced that it will suspend sales of the cladding, known as Reynobond PE, for high-rises, but that does little good for the scores of people killed in the Grenfell fire or the thousands of others who have been forced to leave other apartment houses now found to contain the material.

Although most of the attention is on Arconic’s cladding and its role in spreading the conflagration, it turns out that fire itself was caused by another American product, a refrigerator made by Whirlpool under its Hotpoint brand. The appliance had a back made out of flammable plastic rather than the metal typically used in models sold in the United States. The London Fire Brigade had long lobbied, to no avail, to require new appliances to have fire-resistant backing.

The sale of banned products in offshore markets is, unfortunately, a longstanding practice among U.S-based multinational corporations. What’s unusual in this case is that the offshore market is a wealthy country such as Britain, whereas the dumping is normally done in poor countries.

As Russell Mokhiber points out in his 1988 book Corporate Crime and Violence, one of the earliest examples was that of the now defunct company A.H. Robins, which in the 1970s sold thousands of its Dalkon Shield intrauterine contraceptive devices in 42 countries even after it became apparent that thousands of U.S. women were experiencing severe and sometimes deadly ailments linked to the IUDs.

In 1972 the U.S. Environmental Protection Agency prohibited most uses of the insecticide DDT, yet American producers continued to sell in foreign markets for years until most other countries adopted their own bans.

U.S. companies also continued to export dangerous products such as asbestos, flammable children’s pajamas and lead-based house paint after being barred from selling them in domestic markets.

These practices illustrate the perverse way that most large companies regard the regulation of their business. They are not willing to admit that restrictions are legitimate — even when imposed in the wake or injuries and deaths — and will adhere to them only to the extent absolutely necessary. If they can continue to sell products they have been told are harmful to some customers, they will do so.

This mindset seems to result from both a knee-jerk ideological opposition to all regulation and an amoral pursuit of profits. The persistence of corporate crime suggests that attempting to reform big business from within — the dubious promise of corporate social responsibility — is far from adequate. Just as markets have superseded borders, so must regulation be globalized.

The Other Trump Collusion Scandal

For months the news has been filled with reports of suspicious meetings between Trump associates and Russian officials. Another category of meetings also deserves closer scrutiny: the encounters between Trump himself and top executives of scores of major corporations since Election Day. What do these companies want from the new administration?

During the presidential campaign, Trump often hinted that he would be tough on corporate misconduct — especially the offshoring of jobs — and this won him a significant number of votes. After taking office, however, much of the economic populism has disappeared in favor of a shamelessly pro-corporate approach, especially when it comes to regulation. Big business has put aside whatever misgivings it had about Trump and now seeks favors from him.

There is always a fine line between deregulation and the encouragement of corporate crime and misconduct. We should be concerned about the latter, given the roster of executives who have made pilgrimages to the White House.

Public Citizen has just published a report looking at the track record of the roughly 120 companies whose executives have met publicly with Trump since November 8 and finds that many of them “are far from upstanding corporate citizens.”

Using data from Violation Tracker (which I and my colleagues produce at the Corporate Research Project of Good Jobs First), Public Citizen finds that more than 100 of the visitors were from companies that appear in the database as having paid a federal fine or settlement since the beginning of 2010.

In its tally of these penalties, which includes those associated with companies such as Goldman Sachs and Exxon Mobil whose executives were brought right into the administration, Public Citizen finds that the total is about $90 billion.

At the top of the list are companies from the two sectors that have been at the forefront of the corporate crime wave of recent years: banks and automakers. JPMorgan Chase, with penalties of almost $29 billion, is in first place. Also in the top dozen are Citigroup ($15 billion), Goldman Sachs ($9 billion), HSBC ($4 billion) and BNY Mellon ($741 million). Volkswagen, still embroiled in the emissions cheating scandal, has the second highest penalty total ($19 billion). Two other automakers make the dirty dozen: Toyota ($1.3 billion) and General Motors ($936 million).

The rest of the dirty dozen are companies from another notorious industry: pharmaceuticals. These include Johnson & Johnson ($2.5 billion), Merck ($957 million), Novartis ($938 million) and Amgen ($786 million).

All these companies have a lot to gain from a relaxation of federal oversight of their operations. While it remains unclear whether the Trump campaign used its meetings with Russian officials to plan election collusion, there is no doubt that the administration has been using its meetings with corporate executives to plan regulatory rollbacks that will have disastrous financial, safety and health consequences.

The Emissions Scandal Widens

Big business would have us believe that it is on the side of the angels when it comes to the Paris climate agreement. A group of large companies just published full-page ads in the New York Times and Wall Street Journal urging (unsuccessfully, it turned out) President Trump to remain in the accord.

Not included in the list of blue chip signatories were the big auto producers, which may reflect the realization among those companies that it is becoming increasingly difficult for them to present themselves as defenders of the environment.

On the contrary, recent developments could cause them to be regarded as among the worst environmental criminals. That’s because evidence is growing that the kind of emissions cheating associated with Volkswagen is more pervasive in the industry.

Recently, the Justice Department, acting on behalf of the Environmental Protection Agency, filed a civil complaint against Fiat Chrysler alleging that the company produced more than 100,000 diesel vehicles with systems designed to evade federal emission standards. As a result, those vehicles end up producing pollutants (especially oxides of nitrogen or NOx) well above the acceptable levels set by EPA. In its announcement of the case, DOJ noted: “NOx pollution contributes to the formation of harmful smog and soot, exposure to which is linked to a number of respiratory- and cardiovascular-related health effects as well as premature death.” This is a polite way of accusing the company of homicide.

Around the same time, a class action lawsuit was filed against General Motors accusing the company of programming some of its heavy-duty pickup trucks to cheat on diesel emissions tests.

The two companies are responding differently. GM is denying the allegations, calling them “baseless” and vowing to defend itself “vigorously.” Fiat Chrysler tried to ward off the federal lawsuit by promising to modify the vehicles. It expressed disappointment at the DOJ filing but is still vowing to work with regulators to resolve the issue. Fiat Chrysler is also maintaining that its systems are different from those used by Volkswagen, which has had to pay out billions in settlements and criminal fines; several of its executives are facing individual criminal charges.

Whether the response involves stonewalling, remediation or splitting hairs, the emergence of these new cases turns the emissions scandal from one involving a single rogue corporation to a pattern of misconduct that may turn out to be standard practice throughout the auto sector.

This in turn raises broader issues about deregulation. The Trump Administration and its Republican allies in Congress try to depict corporations as helpless victims of regulatory overreach in need of relief. What the widening emissions scandal shows is that large companies are often instead flagrantly violating the rules and in doing so are putting public health at risk. Rather than relaxing regulation, policymakers should be intensifying oversight to make it harder for cheating to occur.

The car industry would be a good place to start. Misconduct among automakers dates back decades. It was GM’s resistance to safety improvements that inspired Ralph Nader to launch the modern public interest movement in the 1960’s, and it was Ford’s negligence in the deadly Pinto scandal of the 1970s that gave new meaning to corporate greed and irresponsibility. It’s time for these companies to clean up their act once and for all.

Targeting Those at the Top

It remains to be seen how high the new special counsel Robert Mueller aims his probe of the Trump campaign, but there are reports that another prominent investigation is targeting those at the top. German prosecutors are said to be examining the role of Volkswagen chief executive Matthias Muller and his predecessor Martin Winterkorn in the emissions cheating scheme perpetrated by the automaker. They are also looking at the chairman of Porsche SE, which has a controlling interest in VW.

Mueller and Muller, by the way, have more of a connection than the similarity of their names. Last year, the former FBI director was chosen by a federal judge to serve as the “settlement master” to help resolve hundreds of lawsuits brought against VW in U.S. courts. Mueller has played a similar role regarding suits brought against Japanese airbag maker Takata.

Although Winterkorn was forced to resign after the emissions scandal erupted in 2015, he and Muller — who was VW’s head of product planning while the cheating was taking place — denied any wrongdoing, and the company sought to pin the blame on lower-level managers.

The initial U.S. Justice Department case against VW named no executives at all, though a company engineer later pleaded guilty to fraud charges and in January DOJ indicted six other VW middle managers.

There is no question that many individuals had to be involved in a scheme as widespread as the one at VW. Although it was corrupt, VW was also bureaucratic, so it is to be expected that lower-level managers either sought permission from their superiors for undertaking a risky scheme — or they were carrying out a plot that originated from above.

In fact, the New York Times reports that it has been shown internal company emails and memos suggesting that VW engineers implementing the scheme were operating with the knowledge and consent of top managers.

As the evidence mounts, the issue for German prosecutors may no longer be whether the likes of Muller and Winterkorn were involved but whether they, the prosecutors, are willing to bring charges against those at the apex of the corporate hierarchy.

In the United States, a reluctance to take that step has tainted the prosecution of business crime for more than a decade. At a time when discussion of whether anyone is above the law is the focus of discussion in the government realm, we should not forget that the principle applies in the corporate sector as well.

Will DOJ Give a Deep Discount to Wal-Mart?

The Justice Department has a lot on its plate these days, but it has apparently found time to cook up a deal that would save Wal-Mart hundreds of millions of dollars. According to Bloomberg and the Wall Street Journal, DOJ is offering the giant retailer the chance to settle a foreign bribery case for $300 million, an amount far less than the penalty of up to $1 billion the Obama Administration was seeking in the long-running negotiations to resolve the matter.

I suppose we should be grateful that DOJ is not letting Wal-Mart off the hook entirely, given that Donald Trump once described the Foreign Corrupt Practices Act as a “horrible law.” Moreover, there has been speculation that Trump’s own business dealings may be vulnerable to FCPA prosecution in places such as Azerbaijan.

Attorney General Jeff Sessions has gone out of his way to affirm the commitment of his department to enforcing the FCPA, yet this is the same person who just involved himself in the firing of FBI Director James Comey after promising to recuse himself from the probe of the Trump campaign’s Russian ties.

It could be that Sessions intends to go on bringing FCPA cases but with reduced settlement amounts. That would be at least a partial victory for companies like Wal-Mart, whose FCPA problems first gained widespread attention after the New York Times published a 2012 investigation of widespread bribery in the company’s Mexican operations. In response, the company launched its own examination of possible misconduct in countries such as Brazil, India and China.

Given Wal-Mart’s size and prominence, a large penalty would be appropriate to send a message to the corporate world about the consequences of corrupt practices. The $1 billion amount reportedly sought by the Obama Administration would have been the largest single FCPA penalty ever imposed.

Instead, the reported $300 million settlement amount would not even rank among the top ten, according to the list maintained by the FCPA Professor blog. That list, topped by Siemens at $800 million and Alstom at $772 million, is dominated by foreign companies, including some such as VimpelCom (now known as Veon) and Snamprogetti (now part of Italy’s Saipem) that are hardly household names.

Giving a deep discount to a domestic behemoth would raise questions about the enforcement of a law that is meant to fight corruption worldwide.

DOJ’s decision on what to do about the Wal-Mart FCPA case will provide an important clue about how it intends to deal with corporate crime in general. The Obama Administration struggled to find the best way to deter business misconduct, and if nothing else increased penalties in major cases to unprecedented levels. Imposing a relatively small penalty on Wal-Mart would reverse that trend and signal to corporations that they have less to worry about from the Trump Justice Department.

Obama’s Final Blows Against Corporate Crime

$335 billion: that’s what has been paid by companies in fines or settlements in cases brought by federal agencies and the Justice Department during the Obama Administration. The estimate comes from the amounts associated with entries already in Violation Tracker and an update that is in the works.

Preparing that update has proven to be a challenge because of the remarkable flurry of cases that the Obama Administration has resolved in the waning days of its existence. Since the election the penalty tally has risen by more than $30 billion, much of that coming this month alone. The past ten days have seen four ten-figure settlements: Deutsche Bank’s $7.2 billion toxic securities case; Credit Suisse’s $5.3 billion case in the same category; Volkswagen’s $4.3 billion case relating to emissions fraud; and Takata’s $1 billion case relating to defective airbag inflators.

Here are some of the next-tier cases that would normally get significant coverage but may have gotten lost in the stream of announcements:

Moody’s agreed to pay $864 million to resolve allegations relating to flawed credit ratings provided for mortgage-backed securities during the run-up to the financial crisis.
Western Union agreed to pay $586 million to settle charges that it failed to guard against the use of its system for money laundering.
Shire Pharmaceuticals agreed to pay $350 million to settle allegations that one of its subsidiaries violated the False Claims Act by paying kickbacks to healthcare providers.
Rolls-Royce agreed to pay $170 million to resolve foreign bribery criminal charges; the military contractor was offered a deferred prosecution agreement.
McKesson, a large pharmaceutical distribution, was fined $150 million by the Drug Enforcement Administration for failing to report suspicious bulk purchases of opioids.

Although a few of these cases — including Volkswagen, Takata and Western Union– have involved criminal charges, for the most part the Obama Justice Department has kept its focus on extracting substantial monetary penalties from corporate wrongdoers.

While this approach has served the purpose of highlighting the magnitude of business misconduct, it remains unclear whether it has done much to deter such behavior. One of the aims of Violation Tracker is to document the problem of ongoing recidivism among corporate offenders by listing their repeated transgressions. JPMorgan Chase, for example, has racked up $28 billion in penalties in more than 40 cases resolved since the beginning of 2010. The list is likely to continue growing.

The steady stream of big-ticket cases has provided a constant source of new content for Violation Tracker, but it would have been preferable if federal prosecutors and regulators had figured out a way to get the bank and others like it to behave properly.

The Obama Justice Department’s rush to complete the recent settlements seems to be based in part on uncertainty as to whether the Trump Administration will continue to give priority to the prosecution of corporate crime. Attorney General nominee Jeff Sessions has not said much on the subject, while the President-elect has been uncharacteristically silent — both during his campaign and since the election — about corporate scandals such as the Wells Fargo bogus-account case while being outspoken in his critique of regulation.

We may soon look back fondly at the Obama approach as the new administration takes an even weaker posture toward the ongoing corporate crime wave.

Corporate Crime and the Trump Administration

With all that’s happening in the chaotic Trump transition, less attention is being paid to the announcement that Volkswagen is pleading guilty to felony charges and paying more than $4 billion in penalties while a half dozen of its executives face individual criminal indictments.

A development of this sort should represent a turning point in the prosecutorial handling of the corporate crime wave that has afflicted the United States for years. Yet because of its timing, it may end up being no more than a parting gesture of an administration that has struggled for eight years to find an effective way of dealing with widespread and persistent misconduct by large companies. And it may be followed by a weakening of enforcement in a new administration led by a president whose attacks on regulation were a hallmark of his electoral campaign.

First, with regard to the Obama Administration: The treatment of Volkswagen is what should have been dished out against the banks that caused the financial meltdown, against BP for its role in the Deepwater Horizon disaster, against Takata for its production of deadly airbags, and against the other corporations involved in major misconduct ranging from large-scale oil spills and contracting fraud to market manipulation and wage theft.

Instead, the Obama Justice Department continued the Bush Administration’s practice of avoiding individual prosecutions and offering many corporations deferred and non-prosecution deals in which they essentially bought their way out of jeopardy, albeit at rising costs. These arrangements, which are catalogued in Violation Tracker, imposed a financial burden but appear to have had a limited deterrent effect.

In a few instances, companies did have to enter guilty pleas, but the impact was softened when, for examples, the large banks that had to take that step in a case involving manipulation of the foreign exchange market later got waivers from SEC rules that bar firms with felony convictions from operating in the securities business.

It remains to be seen how much VW’s guilty plea affects its ability to continue doing business as usual. Yet the bigger question is how corporate criminals will fare in the Trump Administration.

Trump the candidate said little or nothing about VW, Wells Fargo and the other big corporate scandals of the day and instead parroted Republican talking points about the supposedly intrusive nature of regulation. Corporations that have supposedly been put on notice about moving jobs offshore or seeking overly lucrative federal contracts apparently are to have a free hand when it comes to poisoning the environment, maiming their workers or defrauding customers.

Although some have speculated that Jeff Sessions will be tough on corporate crime, a Public Citizen report on his time as Alabama’s attorney general in the 1990s provides evidence strongly to the contrary.

While Sessions took pains during his confirmation testimony to claim that he would not be a “rubber stamp” for the new Administration, he has strong political ties to Trump and worked hard to legitimize some of his more extreme positions during the campaign. Trump is unlikely to pay much heed to the traditional independence of the Justice Department, and Sessions is unlikely to adopt policies that rub Trump the wrong way.

Despite the inclinations of Sessions, the appointment of anti-regulation foes to head many federal agencies will mean that fewer cases will get referred to the Justice Department. And if Trump’s deregulatory legislative agenda gets enacted, the enforcement pipeline will dry up even more.

Corporate misconduct may very well decline during the Trump era because much of that conduct will become perfectly legal.