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Do Trump Administration Policies Encourage Corporate White Collar Crime?

By George Khoury, Esq. on July 26, 2018 12:57 PM

A new report might fall short of explicitly stating that the Trump administration is encouraging white collar and corporate crime, but the report data seems to suggest it rather strongly.

The report, from Public Citizen, explains that in over 90 percent of the federal agencies examined (including the DOJ, SEC, and EPA, to name a few), corporate violators were facing less stringent and fewer penalties. However, given President Trump's campaign promise of massive deregulation, and the efforts and inroads that have been made on that front, these conclusions shouldn't be wholly unexpected.

Lower Risk, Same High Reward

For in-house and general counsel, the coming months and years may be some of the most frustrating. Be prepared to have your exposure and risk assessments challenged. Despite your tendency to advise caution when your company skirts or breaks the law, if you're not being challenged, it's likely you'll start feeling ignored as corporate leaders become more emboldened as more federal regulations are dismantled and federal agencies weakened and news of enforcement actions show a weak federal stance.

For example, seeing an EPA enforcement action go from seeking nearly $5 million to settling out for $150K, as was the case last year in the Syngenta Seeds action, is the sort of news that makes companies chalk up legal violations to the "cost of business."

Fewer Enforcement Actions

The Public Citizen report explains that in addition to corporate offenders getting off easier, federal agencies are bringing fewer enforcement actions. Significantly, the SEC and FCC filed approximately 40% less actions, each, in 2017 (and the trend seems to be continuing in 2018).

While you might not want to hold back your memoranda advising caution and following the law, you'll want to remember what's really important for every for-profit business. When push comes to shareholders, private and publicly traded companies share the same goal: make as much money as possible. This often results in companies knowingly violating laws, despite what the lawyers say, in order to make more money because, well, pragmatism.

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