August 11, 2022

Senators Warren and Luján Urge DOJ to Use its Full Suite of Tools, Including Suspension and Debarment Authority, Against Corporate Misconduct

“When companies repeatedly or brazenly commit misconduct, the Department has a duty to itself, other agencies, and the public to ensure the privilege of doing business with the government is not being abused.”

Text of Letter (PDF)

Washington D.C. – U.S. Senators Elizabeth Warren (D-Mass.) and Ben Ray Luján (D-N.M.) sent a letter to Attorney General Merrick Garland and Deputy Attorney General Lisa Monaco urging the Department of Justice (DOJ) to use its authority to ban corporations that commit misconduct from government contracting. 

Agencies like the DOJ have a significant but underutilized authority, known as suspension and debarment, which allows them to bar an individual or company from contracting with the government for a certain period of time. Entities can be debarred for a wide range of misconduct—even misconduct that falls outside a company’s contracting activities with the government. 

According to the lawmakers, the DOJ has historically failed to use this authority and therefore “allowed unscrupulous contractors to continue ripping off the government.” The lawmakers highlighted three examples of companies that engaged in massive fraud against the government but were not suspended or debarred, putting taxpayers at risk.

“We cannot allow these corporate entities to continue to engage in criminal misconduct and get by with a mere slap on the wrist,” said Senator Warren. “The Department of Justice can and should expand its use of these suspension and debarment authorities to protect the use of government resources and discourage recidivism by big business.” 

“No one is above the law. Corporate criminals must be held accountable, and it’s critical that the Justice Department utilizes its authority to ensure that no one can abuse public trust,” said Senator Luján. “Along with Senator Warren, I’m calling on the Justice Department to use its debarment power and put an end to corporations taking advantage of the government.”

To further deter corporations from committing misconduct, the lawmakers pushed the DOJ to expand its use of debarment in the following ways:

  • Use debarment authority for corporate entities, not just individuals. Historically, the DOJ has pursued debarment almost exclusively against individuals rather than corporate entities despite many cases showing that corporate misconduct is the product of extensive schemes, systematic lack of oversight, or corporate negligence. The DOJ should also aggressively use its authority to pursue debarment against companies. 
  • Use debarment government-wide. The DOJ’s authority to suspend and debar entities extends across any and all lines of government business—not just its own. Implementing this authority on a government-wide basis would signal to contractors that their misconduct will open them up to more than just criminal and civil punishment—regardless of which agency was most directly harmed.
  • Consider debarment for all corporate misconduct. Corporate misconduct in any context—whether the government was harmed or not—should inform whether the company has the business integrity the government expects of its contractors and subcontractors
  • Use suspension authority. While they are often considered together, suspension and debarment are distinct tools at the DOJ’s disposal. In many cases, suspension may be an appropriate action to take while an investigation is pending and can provide immediate protection to the government’s interests.

The lawmakers commended the DOJ for prioritizing corporate crime under the Biden Administration, but insisted that the DOJ should “use all the tools at its disposal and expand its use of the suspension and debarment authority.”

“The Department has a duty to go beyond just its prosecutorial activities to protect the government and its citizens from bad actors with a history of misconduct,” concluded the lawmakers. “Debarment is a powerful and underutilized tool to do so.”

Senator Warren has long advocated for greater accountability for corporate criminals. In 2019, Senator Warren reintroduced the Ending Too Big to Jail Act and introduced the Corporate Executive Accountability Act, legislation that would make executives of big corporations criminally liable if their companies commit crimes, harm large numbers of people through civil violations, or commit a new violation while under the supervision of the court or a regulator for a previous violation.