Watchdog slams DOJ’s ‘softball’ enforcement policies

A dramatic spike in Justice Department cases ending in settlements instead of criminal charges against corporate bad actors in the financial sector raises questions about whether the agency maintains “too big to jail” policies, a new study concludes.

The Public Citizen report issued Tuesday chronicles a gradual uptick in the use of deferred prosecution agreements (DPAs) and non-prosecution agreements (NPAs) in cases brought by the Justice Department during the George W. Bush and Obama administrations.

In the early 2000s, the practice was used only two or three times a year. But the Justice Department increasingly utilized the agreements to resolve cases in the years leading up to, and following, the 2008 economic crisis.

Over the last four years, the DOJ entered into between 27 and 39 DPAs and NPAs annually, according to the report, entitled “Justice Deferred.”

“Not prosecuting big banks that have engaged in criminal activity has given rise to the perception these financial institutions are ‘too big to jail,’ ” said Lisa Gilbert, director of Public Citizen’s Congress Watch division. “These softball prosecutions further highlight the real need to increase transparency on DOJ processes and decision-making when it comes to large financial institutions.”

The group describes murky enforcement policies at the Justice Department, where it is unclear whether prosecutors consider the size of a financial institution before deciding whether to file criminal charges.

“If such a policy exists, Congress should take steps to require the DOJ to publicly disclose if and when it is providing favorable treatment under the law to financial institutions,” the group concluded.

Several large financial institutions have entered into civil settlements to address charges of bad behavior stemming from the financial crisis, but no major institutions or individuals have faced criminal charges for their action.

For his part, Attorney General Eric Holder has repeatedly maintained that there is no such policy at his Justice Department.

“There is no such thing as ‘too big to jail,’” he said in a video message posted on the Justice Department’s website. “To be clear, no individual or company, no matter how large or how profitable, is above the law.”