Nader, Groups Ask USDOJ for Annual Report and Public Database on Corporate Crime

For Immediate Release:  Wednesday, April 2, 2014
For More Information Contact: Gary Ruskin (202) 387-8030

Nader, Groups Ask USDOJ for Annual Report and Public Database on Corporate Crime

Ralph Nader, Public Citizen and the Center for Corporate Policy sent a letter today to Attorney General Eric Holder, urging the Justice Department to prepare an annual report and public database on corporate crime in the United States.

The letter states that: “Currently, the DOJ does not compile comprehensive data on corporate crime.  This is a notable oversight.  It is as if the Department of Education had no measures for how well our children learn, or if the U.S. Department of Agriculture had no idea of how much wheat or corn our farmers grew.”

The full text of the letter follows.

Dear Attorney General Holder:

The U.S. Department of Justice (DOJ) is clear about the dangers posed by corporate crime.  In its strategic plan for fiscal years 2014-18, the DOJ states that economic crimes present “very severe threats to the United States’ economy” and that the “explosion of financial fraud over the past few years has threatened the Nation’s financial stability.”

To put the gravity of these threats in context, the Obama administration and DOJ have recognized that “threats to the U.S. economic system must be addressed with the same seriousness and sense of purpose that guide efforts to protect the safety of the Nation,” on which our military will spend more than one-half of a trillion dollars in fiscal year 2014.

In similar terms, DOJ calls health care fraud “one of the most destructive and widespread national challenges facing our country.”

To properly face these major threats, it is obvious that that DOJ should have more specific and timely ways to measure the incidence and severity of corporate crime, to determine whether its efforts against them are successful or not, and the many ways they might be improved.

Currently, the DOJ does not compile comprehensive data on corporate crime.  This is a notable oversight.  It is as if the Department of Education had no measures for how well our children learn, or if the U.S. Department of Agriculture had no idea of how much wheat or corn our farmers grew.

The failure to measure can lead to sloppy thinking, bad decisions and entrenched neglect.  We urge the DOJ to equip itself with the power afforded by measurement and data analysis.

For street crime, the FBI oversees the Uniform Crime Reporting (UCR) Program, which tracks data from over 18,000 local and state law enforcement agencies. The DOJ should launch a parallel program for corporate crime and law-breaking, including but not limited to antitrust and price-fixing, environmental crimes, financial crimes, overseas bribery, health care fraud, trade violations, labor and employment-related violations (discrimination and occupational injuries and death), consumer fraud and damage to consumer health and safety, and corporate tax fraud onshore and offshore. A pittance invested here will go a long way toward promoting more lawful corporate behavior and the critical public support DOJ needs for adequate enforcement budgets and stronger laws.

The DOJ should produce and maintain a corporate crime database.  This is an elemental form of accountability; street criminals have rapsheets; corporate law-breakers ought to have them too.  This could help to deter and punish such crime in many ways.  For example, prosecutors, regulators and judges could use the database to identify recidivist violators and to assess proper levels of sanction; procurement officials could use it to identify corporations that fail to meet the “responsible contractor” standard in the Federal Acquisition Regulation.  In addition, by making the database available online to the public for free, it would benefit countless journalists, criminologists, other scholars, investors, and other interested members of the public.

At a minimum, the corporate crime database should:

•          Be searchable by parent company, major subsidiaries, corporate official name, industry, type of crime, city, state, and date of crime.

•          Contain individual company data, including the number of civil, administrative and criminal enforcement actions brought against corporate defendants by government agencies involving a felony charge, misdemeanor, or civil charge where potential fines may be $1,000 or more.

•          Specify the agency bringing each charge, the charge, the name of the company charged (including the ultimate parent company), and the outcome of the action if any, including plea agreements, consent decrees, findings of innocence, convictions, and fines and other penalties.

In the 111th and 112th Congresses, Rep. John Conyers, ranking member of the House Committee on the Judiciary, introduced legislation titled the “Corporate Crime Database Act” (H.R. 6545 in 111th Congress, H.R. 323 in 112th Congress) to require the DOJ to establish and maintain such a database, and to make it available to the public via the Internet. Such proposals have been made by advocates for many years.

The DOJ should also issue an annual report on corporate crime.  At a minimum, the report should provide an estimate of the total annual cost of corporate crime in the United States. It should include not only costs of crimes committed by individuals against businesses and investors (white collar crime), but also the costs that corporate crime imposes on the rest of society, such as the trillions of dollars lost, and millions of Americans who lost their jobs, due to the mortgage fraud-induced financial crisis of 2008-9.

The report should present an analysis of trends in corporate crime and an explanation of the relative effectiveness of different sanctions. While the UCR does measure certain forms of white collar crime, it is far from a thorough treatment of corporate crime.

The DOJ’s annual corporate crime report should also tally data about prosecutions. This should include the number of cases referred to U.S. attorneys for prosecution each year by the FBI or other federal and state agencies, as well as the status and ultimate disposition

(i.e. how many referrals were prosecuted; how many prosecuted were found guilty; how many settled with deferred and non prosecution agreements; the magnitude and kind of penalties involved; how many cases settled).  It should also compile agency enforcement data, including the number, description, and status of investigations initiated by federal agencies (including the FBI, but also EPA, SEC, IRS, OSHA, CPSC, etc.)

More than one-third of a century has elapsed since the DOJ issued a thorough analysis of corporate crime in America (“Illegal Corporate Behavior”, October 1979.) We are well into the 21st century, databases are commonplace, but there is still no database of corporate crime in America.  Given your recognition of the tremendous costs of corporate crime to Americans, our household wealth and our economy, the DOJ absolutely must employ these most elementary tools of analysis and accountability without further delay.


Ralph Nader
Robert Weissman, President, Public Citizen
Gary Ruskin, Director, Center for Corporate Policy