Senator Warren Condemns New Justice Department Policy that Rewards Corporate Lawbreaking, Urges DOJ Leadership to Reverse Course
New Policy Announced Yesterday Gives “Safe Harbor” if Corporations Self-Report Misconduct, Handing Out Get-Out-Of-Jail-Free Cards for Mergers Involving Corporate Criminals
“This new policy represents a betrayal of the Department’s mission ‘to uphold the rule of law,’ and a massive step backwards in the Biden administration’s approach to preventing anticompetitive mergers. This policy would reduce competition and encourage corporate crime."
Washington, D.C. – U.S. Senator Elizabeth Warren sent a letter to Attorney General Merrick Garland and Deputy Attorney General Lisa Monaco, calling on the Department of Justice (DOJ) to immediately reverse its newly unveiled “safe harbor” policy that would provide a get-out-of-jail-free card for mergers involving corporate white-collar criminals – a betrayal of DOJ’s mission and a massive step backwards for the Biden administration’s fight against anticompetitive mergers.
“I have – for the majority of my time in the United States Senate – fought hard to ensure that corporate wrongdoers are held accountable. I pushed the Obama administration, the Trump administration, and now the Biden administration to punish white-collar criminals and recidivist corporations. Yesterday’s policy announcement represents a sharp reversal of hard-fought progress made since January 2021,” wrote Senator Warren.
Reports indicate that “under the policy, the DoJ will not bring charges against an acquirer that voluntarily reports misconduct committed by a company it buys within six months of the deal closing, whether the illegal activity was identified before or after the purchase.” The policy is reportedly “aimed at giving the DoJ an opportunity to spot misconduct during the due diligence and integration processes typical in mergers and acquisitions.”
“Deputy Attorney General Monaco told the Financial Times that ‘We want to incentivise good companies, companies with good, strong compliance records .?.?.?to acquire companies that may have?.?.?.?a less robust compliance program, that may actually have a history of misconduct.’ But there is no rationale for the Department putting its thumb on the scale in favor of these mergers, and legitimate questions about whether they would do anything to reduce corporate misconduct. Indeed, this approach would incentivize corporations to engage in illegal activity of all kinds – knowing that they could simply wipe the slate clean during a merger,” continued Senator Warren.
DOJ’s policy and Deputy Attorney General Monaco’s comments in favor of incentivizing mergers appear to directly conflict with President Biden’s 2021 Executive Order on Promoting Competition in the American Economy, which specifically calls on DOJ and the Federal Trade Commission to vigorously enforce antitrust laws. Senator Warren notes the new policy is entirely inconsistent with the order: it encourages more mergers and makes it easier for companies that have engaged in illegal activity to get bought up – reducing competition and eliminating penalties for bad behavior.
“There is no need for this policy, and no justification for it. It is a mistake for DOJ to eliminate accountability for corporate wrongdoers, and to adopt a policy that reduces competition by incentivizing mergers of corporate criminals. I ask that you quickly move to reverse the policy before engaging in any activity to approve any merger or provide amnesty for any corporate criminals,” concluded Senator Warren.
Senator Warren is also asking DOJ to answer a set of questions about this new policy by October 13, 2023.
Senator Warren has called on multiple administrations and agencies to full enforce antitrust laws, scrutinize or block mergers that would harm competition, and hold white-collar criminals accountable for their actions:
- In September 2023, Senator Warren and Representative Joe Neguse (D-Colo.) led 12 lawmakers in submitting a public comment to the Federal Trade Commission (FTC) in support of the agency’s proposed changes to the premerger notification form and associated instructions, and the premerger notification rules implementing the Hart-Scott-Rodino Antitrust Improvement Act.
- In September 2023, Senator Warren and Representative Becca Balint (D-Vt.), led 20 lawmakers in submitting a public comment to the DOJ and FTC, in support of the agencies’ proposed merger guidelines. They also encouraged the agencies to go further to fight consolidation and inequality.
- In July 2023, released a statement after the DOJ and FTC updated their merger guidelines.
- In February 2023, delivering a keynote speech on the fight to protect the economy and democracy from corporate monopolies, Senator Warren called on the Biden administration to stop harmful mergers before big companies turn into giants, including by investigating companies that may have skirted around the conditions for merger approval, toughening antitrust standards, issuing new merger guidelines, and opposing bad mergers outright.
- In March 2022, Senator Warren and then-Representative Mondaire Jones (D-N.Y.) introduced the Prohibiting Anticompetitive Mergers Act, which would ban the biggest, most anticompetitive mergers and give the DOJ and FTC the tools to reject deals in the first instance without court orders and to break up harmful mergers.
- In December 2021, at a hearing of the Senate Finance Subcommittee on Fiscal Responsibility and Economic Growth, Senator Warren called on Congress and regulators to pass stronger antitrust laws, ban mergers involving huge companies, and encourage robust enforcement to protect the economy, consumers, workers, and data.
- In May 2019, Senator Warren and. Representative Pramila Jayapal (D-Wash.) released a new report: Rigged Justice 2.0: Government of the Billionaires, by the Billionaires, and for the Billionaires. The report is the second in a series on the failure of the federal government to hold corporate and white-collar criminals accountable, and highlights how enforcement hit a 20-year low under the Trump administration.
- In January 2016, Senator Warren released a report: Rigged Justice: How Weak Enforcement Lets Corporate Offenders Off Easy. The report highlights 20 of the most egregious civil and criminal cases during the past year in which federal settlements failed to require meaningful accountability to deter future wrongdoing and to protect taxpayers and families.
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