Just two weeks before the election, the Justice Department rolled out a series of high-profile white-collar cases and settlements that include an antitrust complaint against Google, a settlement with Purdue Pharma over its marketing of the drug OxyContin, and a global resolution with Goldman Sachs of a long-running bribery investigation. It was enough to prompt Axios to breathlessly declare that this was the “aggressive government crackdown on white-collar crime” that “America has waited a decade for.”
As I have written before, the Trump administration’s Justice Department has presided over two incongruous and dangerous trends—historically high levels of white-collar malfeasance and historically low levels of white-collar prosecutions. They did not start under Trump, but they have gotten sharply and unambiguously worse under his Justice Department. (You don’t have to take my word for it. For those interested in the subject, I highly recommend the recent and timely book Big Dirty Money, by law professor Jennifer Taub.)
You might explain the credulousness on the part of Axios as the simple result of a cognitive bias—the one that leads us to over-estimate the frequency of events that are prominent or easy to recall. But there is good reason to believe that the headlines represent a deliberate effort by the Justice Department to influence voters’ perceptions of its work by timing these cases so that they feature prominently in the news shortly before the election, and by presenting many of them in ways that suggest that they are more significant than they really are.
The Google antitrust case, for starters, reflects an investigation that has moved at the corporate investigation equivalent of warp speed. It began just last summer, and ordinarily, you would expect an investigation this consequential—and into a company as large and complex as Google—to last years. Instead, both The Wall Street Journal and The New York Times have been reporting since August that there was a push by Attorney General William Barr to get a complaint on file before Election Day. He reportedly overruled objections by career prosecutors working on the investigation who thought that the department was moving too quickly.
The Google case is the biggest antitrust case in decades, and there may be considerable merit to it, but expediting the case was a terrible idea for anyone who wants the case to succeed. Google will have an army of lawyers, and major antitrust cases can easily be lost. It was also completely unnecessary, since a Biden administration would have continued the investigation anyway. So why the rush? Perhaps it has something to do with the fact that the announcement of the case could draw praise from both liberals who want to constrain the power of major tech companies and conservatives who, like Barr and Trump, claim to believe that Google and other tech companies are biased against them.
The department’s resolution with Goldman Sachs, by contrast, caps a years-long investigation that began under the Obama administration into a complex bribery scheme that essentially involves the participation of Goldman executives in the looting of a multi-billion-dollar Malaysian state development fund. The particular timing of the settlement announcement at this juncture is curious to say the least, considering that there have been reports for years about these settlement negotiations and that the company settled with Malaysia itself months ago.
As for the Purdue settlement, it allows Trump to claim some vindication for the administration’s efforts to address the country’s opioid crisis, but here too, there was reportedly a deliberate push by the administration to get this settlement done prior to Election Day, and the resolution is considerably less than meets the eye. The Justice Department reported a topline $8 billion settlement figure, but that number is extremely misleading. The company is already in bankruptcy proceedings, so what it actually pays is likely to be a small fraction of that figure.
It also remains to be seen whether the company’s owners, the Sackler family, will someday face criminal charges themselves, but as a financial matter, the settlement may represent a triumph for them. The family agreed to kick in just $225 million in penalties out of their estimated net worth of $13 billion, and according to New York’s Attorney General, the family may have undertaken a concerted effort to move much of its money overseas and beyond the reach of the U.S. government, victims, and creditors.
The government also announced two tax fraud cases that seemed to represent the enforcement equivalent of a gigantic wash. One of them was a $2 billion tax evasion case against a Texas businessman named Robert Brockman that was touted as the largest such case in U.S. history. The other was what Axios called “an admission of tax fraud by Robert Smith,” a billionaire whose cooperation appears to have been integral to the case against Brockman.
That was an interesting way of putting it. The “admission” actually came as part of an extraordinary non-prosecution agreement between Smith and the Justice Department. Under that agreement, Smith—who has an estimated net worth of more than $5 billion—will pay about $140 million to the government and continue to cooperate. Much more importantly, the government agreed not to criminally charge him, which means that, unlike in the case of your standard criminal cooperator, he will never see the inside of a courtroom and face even the possibility that a judge will sentence him to prison time.
As The Wall Street Journal noted, this kind of deal in a tax fraud case appears to be unprecedented. Different parts of the Justice Department use non-prosecution agreements differently, but they are strongly disfavored as a matter of official policy. Generally speaking, they are an extreme last resort—used in cases, for instance, where the governments needs to quickly secure the cooperation of someone overseas who it cannot easily apprehend—and even extraordinary cooperation is not usually sufficient for someone to get one. The Justice Department, however, offered no meaningful explanation for why Smith deserved such a generous deal.
Far from representing a long-term change, it is likelier that the recent flurry of news is part of a larger trend in which the Justice Department, like other government agencies, has been doing part-time work as a de facto arm of the Trump campaign. At this point, it appears unlikely that the Justice Department will file any further charges in the probe of the Trump-Russia investigation being conducted by Connecticut U.S. Attorney John Durham, but that has not stopped the department from doing whatever else it can for Trump’s campaign. It is one more element of what Politico recently called Trump’s “heavy reliance on federal resources and his own executive powers to win reelection.”
At its most benign, the department’s support has included press conferences held on comically thin pretexts to generate press coverage that might reflect positively on the administration, like when officials recently touted an initiative that had generated over 50 criminal prosecutions—an entirely made-up milestone that allowed department officials to pat themselves on the back for 45 uninterrupted minutes. (My favorite part of that session was when an official self-seriously declared that the department had been pursuing its work “without fear or favor.” The phrase sounds lofty, but it is not some prosecutorial mantra; it is the credo of The New York Times.) Other such appearances appear to have been designed with the hope that they might briefly distract some people from the catastrophic, government-wide failure to address the pandemic, like when Barr appeared at a White House coronavirus briefing earlier this year to provide a baffling update on international drug interdiction efforts.
But this campaign has also involved subtler and more provocative efforts to influence public opinion. Those include the department’s announcement in August that it had issued requests for information to four states run by Democratic governors concerning their handling of the coronavirus in nursing homes; its attempt in recent weeks to provide support for the administration’s baseless claims of rampant mail-in voter fraud; its “Operation Legend” campaign, which appears to be intended to persuade the public that the country has been enveloped by a crime spree conducted by members of antifa and Black Lives Matter; and a report, released just Wednesday, that touts the Trump administration’s efforts to combat MS-13 and that may, in turn, remind many anti-immigration voters that Trump is their candidate. It is tempting to see all of this as directionless flailing on the part of desperate Justice Department and White House officials, but these efforts appear to represent a fairly sophisticated messaging project—one that appeals to different segments of potential Trump voters who have different interests in the work of federal law enforcement.
As for whether a significant number of voters might be persuaded by any of this, there is no way to tell at the moment, but make no mistake: Despite what credulous reports might suggest, the department’s recent spate of corporate cases does not come anywhere close to compensating for an abysmal track record on financial fraud and white-collar crime during this administration. The failure to prosecute white-collar crime has done serious and long-lasting damage to our country—a failure that a Biden administration, if it comes to pass, will need to address urgently and aggressively.
