What If Holder and Obama Listened to DOJ’s Cartel Prosecutors?

By William K. Black
Quito: March 11, 2015

This is how Belinda A Barnett, Senior Counsel to the Deputy Assistant Attorney General for Criminal Enforcement, Antitrust Division, U.S. Department of Justice began her speech entitled “Criminalization of Cartel Conduct” on April 3, 2009.  This was, of course, early in President Obama’s first term.

  1. Introduction

“It is well known that the Antitrust Division has long ranked anti-cartel enforcement as its top priority. It is also well known that the Division has long advocated that the most effective deterrent for hard core cartel activity, such as price fixing, bid rigging, and allocation agreements, is stiff prison sentences. It is obvious why prison sentences are important in anti-cartel enforcement. Companies only commit cartel offenses through individual employees, and prison is a penalty that cannot be reimbursed by the corporate employer. As a corporate executive once told a former Assistant Attorney General of ours: “[A]s long as you are only talking about money, the company can at the end of the day take care of me . . . but once you begin talking about taking away my liberty, there is nothing that the company can do for me.”1 Executives often offer to pay higher fines to get a break on their jail time, but they never offer to spend more time in prison in order to get a discount on their fine.

We know that prison sentences are a deterrent to executives who would otherwise extend their cartel activity to the United States. In many cases, the Division has discovered cartelists who were colluding on products sold in other parts of the world and who sold product in the United States, but who did not extend their cartel activity to U.S. sales. In some of these cases, although the U.S. market was the cartelists’ largest market and potentially the most profitable, the collusion stopped at the border because of the risk of going to prison in the United States.”

1Donald I. Baker, The Use of Criminal Law Remedies to Deter and Punish Cartels and Bid-Rigging, 69 GEO. WASH. L. REV. 693, 705 (Oct./Dec. 2001).

In two paragraphs, Barnett (unintentionally) exposed the disgrace that is President Obama, Attorney General Eric Holder, and Lanny Breuer’s (President Obama’s first head of the Criminal Division) refusal to prosecute the senior bank officers that led the three fraud epidemics that caused the U.S. financial crisis and the Great Depression.  But her words are an even greater indictment of Presidents Clinton and Bush who could have prosecuted the elite bank felons’ frauds and prevented the crisis.

Please remember these two takeaways that we have been explaining for years.

“Companies only commit cartel offenses through individual employees, and prison is a penalty that cannot be reimbursed by the corporate employer.  As a corporate executive once told a former Assistant Attorney General of ours: ‘[A]s long as you are only talking about money, the company can at the end of the day take care of me . . . but once you begin talking about taking away my liberty, there is nothing that the company can do for me.’”

“We know that prison sentences are a deterrent to executives who would otherwise extend their cartel activity to the United States. In many cases, the Division has discovered cartelists who were colluding on products sold in other parts of the world and who sold product in the United States, but who did not extend their cartel activity to U.S. sales. In some of these cases, although the U.S. market was the cartelists’ largest market and potentially the most profitable, the collusion stopped at the border because of the risk of going to prison in the United States.”

We know how to deter elite white-collar crimes – the only way to do so.  Holder’s bank fines are useless – and DOJ’s real prosecutors told him why they were useless from the beginning.  No one, of course, thinks Holder went rogue in refusing to prosecute fraudulent bank officers.  President Obama would have requested his resignation five years ago if he were upset at Holder’s grant of de facto immunity to our most destructive elite white-collar criminals.

3 Responses to What If Holder and Obama Listened to DOJ’s Cartel Prosecutors?

  1. Ha, Ha, Ha. As a retired Government worker who has successfully prepared numerous “civil forfeitures” for my former employer, but never once had a criminal referral be ‘prosecuted’ I am only assume the DOJ is not interested in criminal prosecution, but happy to get the civil forfeiture money. If I ever decide to be a criminal, I would select control fraud as my weapon of choice.
    The few that understand the nature of how these work, are generally not in a position to effectively prosecute them, and their superiors often refuse to comprehend the circumstances precisely because their paychecks depend on their failure to understand. What a country!!

  2. These days it would appear the only point of becoming a Democratic and Republican politician is to become a lap dog for Wall Street and other assorted Fat Cats and attain the pampered life-style you narcissistically believe you are entitled to. To aid this endeavor it is obvious they can rely upon an electorate that also takes pleasure in being pampered by being lazy and not taking responsibility to invest much effort in who and what they are voting for!

  3. mallory buckingham

    https://www.change.org/p/the-statue-of-limitations-is-up-this-year-for-the-mortgage-frauds-that-crashed-the-economy-in-2008

    Alayne Fleischmann and William Black inspired my petition.

    Will you sign and share it??

    For the safety and soundness of our economy.
    Don’t let their courage and expertise go unrewarded.

    Don’t let the DOJ sit on her evidence of securities fraud at JP Morgan.

    It’s time for criminal charges against individuals named in her whistleblower evidence, before the statute of limitations runs out this year.

    If we leave wall st lawless, it guarantees another, larger economic disaster, if you can imagine that!

    Thanks
    Mallory