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corporate crime
New Tracker Spotlights Corporate Criminals Trump Could Let Off the Hook
Out of nearly 200 companies currently facing federal investigations and cases, a third of them have connections to President-elect Donald Trump, according to a Public Citizen analysis.
Jan 08, 2025
The progressive advocacy group Public Citizen on Tuesday launched a new project aimed at tracking the incoming Trump administration's approach to corporate crime, an effort the watchdog said is particularly urgent given that many of the companies currently under federal investigation have connections to the president-elect.
Public Citizen found that of 192 individual corporations currently facing federal probes or cases, a third "have known ties with the Trump administration."
"They or their executives have either contributed to his inauguration, or Trump has nominated their former employees, investors, and lobbyists," the group noted.
Public Citizen said its new Corporate Enforcement Tracker will serve as "a resource for watchdogging ongoing federal investigations and cases against alleged corporate wrongdoing that are at risk of being dropped, weakened, or otherwise modified by the incoming Trump administration."
Corporate prosecutions plummeted to a 25-year low during Trump's first term, and Public Citizen's Rick Claypool—who is heading the new project—predicted that "it's likely Trump's second term will see a similar or worse dropoff in enforcement."
"Corporate crime enforcement fell during Trump's first term," Claypool noted, "even as his administration pursued 'tough' policies against immigrants, protestors, and low-level offenders."
"The five corporations with the most federal investigations or cases against them are Tesla (7), Amazon (6), Pfizer (5), Wells Fargo (4), and SpaceX (4)."
Four of the companies listed on Public Citizen's tracker—Tesla, SpaceX, Neuralink, and X—are helmed by billionaire Elon Musk, who donated heavily to Trump's presidential campaign and is set to co-lead a new advisory commission tasked with identifying spending and regulations to eliminate.
Tesla is facing investigations by the Justice Department, Securities and Exchange Commission, Occupational Safety and Health Administration, and other agencies—probes that could be shut down by the incoming administration, which is set to be packed with lobbyists and billionaires.
Reutersreported last week that "Musk's potential to have extraordinary clout with the new administration raises questions about the fate of federal investigations and regulatory actions affecting his business empire, of which at least 20 are ongoing, according to three sources familiar with SpaceX and Tesla operations and the companies' interaction with the U.S. government, as well as five current and former officials who have direct knowledge of individual probes into Musk's companies."
"The inquiries include examinations of the alleged securities violations; questions over the safety of Tesla's Autopilot and Full Self-Driving (FSD) systems; potential animal-welfare violations in Neuralink's brain-chip experiments; and alleged pollution, hiring-discrimination, and licensing problems at SpaceX," the outlet noted.
Public Citizen also highlighted 16 companies that have donated to Trump's inaugural fund as they face federal investigations or enforcement actions: Amazon, Apple, AT&T, Bank of America, Coinbase, Ford, Goldman Sachs, Kraken, Meta, OpenAI, Pfizer, Ripple, Robinhood, Stanley Black & Decker, Toyota, and Uber.
"The five corporations with the most federal investigations or cases against them are Tesla (7), Amazon (6), Pfizer (5), Wells Fargo (4), and SpaceX (4)," the group said in a statement.
Concerns about the fate of investigations into major U.S. companies were amplified by Trump's choice to lead the Justice Department. Public Citizen noted Tuesday that Amazon and Republic Services, two lobbying clients previously represented by Trump attorney general pick Pam Bondi, are among the corporations currently facing federal cases or investigations.
In a separate report published Wednesday, Public Citizen said that Bondi's record as a lobbyist raises "serious questions about potential conflicts of interest" and provides "sufficient grounds for senators to deny her confirmation."
"We depend on the DOJ to vigorously enforce our laws, hold corporate wrongdoers accountable, and protect the rule of law," said Public Citizen co-president Lisa Gilbert. "Pam Bondi is simply inappropriate for this post."
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Supreme Court's Right-Wing Majority Delivers Gift to Corporate Criminals
Decision in SEC v. Jarkesy decried as a "victory for the wealthy and powerful" delivered by a right-wing majority that once again put "corporations, Wall Street, and billionaire benefactors over everyday Americans."
Jun 27, 2024
The U.S. Supreme Court on Thursday ruled along ideological lines that the Securities and Exchange Commission cannot use in-house legal proceedings to civilly penalize fraudsters, a decision that could strike a devastating blow to federal agencies' ability to fight corporate crime.
In the 6-3 decision, the high court's conservative supermajority deemed the SEC's in-house proceedings unconstitutional, siding with the U.S. Chamber of Commerce and other big business-aligned organizations that weighed in on the side of the plaintiff—conservative radio host and hedge fund manager George Jarkesy, who was accused by the SEC of defrauding investors and ordered to pay a $300,000 civil penalty.
Jarkesy argued the SEC proceedings violated his Seventh Amendment right to a jury trial. But as Vox's Ian Millhiser observed, "the Constitution treats civil trials very differently from criminal proceedings."
"While the Sixth Amendment provides that 'in all criminal prosecutions' the defendant is entitled to a jury trial," Millhiser wrote, "the Seventh Amendment provides a more limited jury trial right, requiring them 'in suits at common law.'"
Millhiser argued that with its ruling in SEC v. Jarkesy, the high court effectively "lit a match and tossed it into dozens of federal agencies."
The Supreme Court's three liberal judges dissented from Thursday's decision, with Justice Sonia Sotomayor denouncing the ruling as "a power grab" with potentially "momentous consequences."
"Today's ruling is part of a disconcerting trend: When it comes to the separation of powers, this court tells the American public and its coordinate branches that it knows best," Sotomayor wrote, warning that the decision "means that the constitutionality of hundreds of statutes may now be in peril, and dozens of agencies could be stripped of their power to enforce laws enacted by Congress."
Congress would have to give a bunch of federal agencies VASTLY more money and personnel to handle all the jury trials they would need to conduct to patch the hole that SCOTUS just blew in their enforcement powers. It won't happen. This case will just let lawbreakers off the hook.
— Mark Joseph Stern (@mjs_DC) June 27, 2024
Consumer advocates and watchdog organizations warned the high court's decision in SEC v. Jarkesy could have implications that extend well beyond the Securities and Exchange Commission, given that other key agencies—including the Federal Trade Commission, the Federal Mine Safety and Health Review Commission, and the Environmental Protection Agency—use internal legal proceedings overseen by an administrative law judge.
The Associated Pressnoted Thursday that the SEC "had already reduced the number of cases it brings in administrative proceedings pending the Supreme Court's resolution of the case."
"Today's decision is another step in the long-term corporate project of neutering federal agencies' ability to protect the public from fraudsters, rip-offs, dangerous products, carbon polluters, and more," Robert Weissman, president of Public Citizen, said in a statement. "The decision will have near-term consequences for the financial system, as it hinders the SEC's ability to seek critical penalties."
As a result of Thursday's ruling, said Weissman, some federal agencies "will need new authority from Congress, which is not doing much legislating, in order to be able to enforce the law."
"The decision extols the Seventh Amendment, but shows little respect for the separation of powers that is at the heart of our constitutional system," Weissman added. "There's also more than a little irony in this court touting the right to access the court system, when it has broadly allowed companies to require consumers to use arbitration rather than protecting their right to access the courts."
"In gutting the federal government's ability to enforce laws enacted by Congress, this ruling gives special interests even more power to set the rules for the rest of us."
As Politicoreported last month, an "alliance of tech billionaires, conservative legal activists, and the business lobby" joined the fight to strip the SEC of the key enforcement tool.
The outlet noted that "since Jarkesy was filed, companies including Meta, SpaceX, and Amazon have escalated it into a broader fight against federal power by suing other agencies over their own courts—a way of fighting unfavorable judgments by attacking the system that delivered it."
The Revolving Door Project noted in an analysis released Thursday that at least 13 organizations with "ties to court-whisperers and judicial gift-givers like Leonard Leo, Charles Koch, Paul Singer, Harlan Crow, and wealthy elites in the Horatio Alger Association in which Clarence Thomas is a key member" submitted amicus briefs supporting Jarkesy's fight against the SEC.
"Some of the organizations that supported the weakening of the SEC have direct ties to the powerful friends and benefactors of the court," the group said. "The very same people who are flying Clarence Thomas and Samuel Alito to vacation destinations on private jets are closely tied to organizations that are urging the court through amicus briefs to rule in a manner favorable to corporate wrongdoers."
Caroline Ciccone, president of the watchdog group Accountable.US, said in a statement Thursday that the Supreme Court's decision "is a victory for the wealthy and powerful, delivered by a Supreme Court conservative majority all too used to putting corporations, Wall Street, and billionaire benefactors over everyday Americans."
"In gutting the federal government's ability to enforce laws enacted by Congress, this ruling gives special interests even more power to set the rules for the rest of us," said Ciccone. "Let's be clear: This is a power grab that will ultimately harm ordinary people by making it harder for federal agencies to hold corporations accountable for misdeeds."
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Boeing CEO's Voluntary Departure Is Not Accountability for Corporate Crime: Watchdog
"For real and lasting change to occur," said Public Citizen's Robert Weissman, "Boeing must now be held criminally accountable."
Mar 25, 2024
Embroiled once again in an alarming quality control and safety scandal, the aircraft manufacturing giant Boeing on Monday announced a management shake-up that will see CEO Dave Calhoun step down at the end of the year, the head of the company's commercial airplanes division resign immediately, and the chairman of the board depart after Boeing's annual meeting in May.
Calhoun, who said he decided on his own to resign, took charge at Boeing in the midst of the company's previous high-profile crisis—the grounding of the 737 MAX jet following a pair of crashes in 2018 and 2019 that killed more than 340 people.
Robert Weissman, president of the consumer advocacy group Public Citizen, said in response to the news of Calhoun's coming departure that "if Boeing had been held criminally accountable after the... 737 MAX disasters, the more recent quality debacles quite likely could have been averted."
Earlier this year, a door plug of a Boeing 737 MAX 9 flew off the aircraft as it ascended, causing minor injuries and forcing the pilots to conduct an emergency landing. More than 170 MAX 9s were subsequently grounded to undergo inspections.
The incident prompted federal regulators, airlines, and journalists to—once again—closely scrutinize Boeing's manufacturing process, cost-cutting efforts, lobbying against safety regulations, and executive and shareholder payouts.
The Leverreported days after the January 5 incident that "less than a month before a catastrophic aircraft failure prompted the grounding of more than 150 of Boeing's commercial aircraft, documents were filed in federal court alleging that former employees at the company's subcontractor repeatedly warned corporate officials about safety problems and were told to falsify records."
The outlet also found that "operators of Boeing's troubled 737 MAX planes have filed more than 1,800 service difficulty reports—more than one per day—warning government regulators about safety problems with the aircraft since the fleet was allowed to resume flying after two fatal crashes."
Alaska Airlines, the operator of the January 5 flight, said in late January that it found loose bolts on "many" of Boeing's 737 MAX 9s.
"The FAA identified noncompliance issues in Boeing's manufacturing process control, parts handling and storage, and product control."
In an update published on March 4, the Federal Aviation Administration (FAA) said its six-week audit of Boeing and Spirit AeroSystems—a major Boeing contractor—uncovered "multiple instances where the companies allegedly failed to comply with manufacturing quality control requirements."
"The FAA identified noncompliance issues in Boeing's manufacturing process control, parts handling and storage, and product control," the agency said. "To hold Boeing accountable for its production quality issues, the FAA has halted production expansion of the Boeing 737 MAX, is exploring the use of a third party to conduct independent reviews of quality systems, and will continue its increased onsite presence at Boeing's facility in Renton, Washington, and Spirit AeroSystems' facility in Wichita, Kansas."
Earlier this month, days after the FAA update was published, a Boeing whistleblower who raised concerns about the company's quality control practices was found dead of what local officials said appeared to be a self-inflicted gunshot wound.
Weissman of Public Citizen said Monday that "of course CEO Dave Calhoun should be dismissed" over the company's latest safety crisis.
"But for real and lasting change to occur," he argued, "Boeing must now be held criminally accountable both for the recent safety failures and the... crashes that took 346 lives."
In 2021, Boeing entered into a deferred prosecution agreement with the U.S. Justice Department to avoid a criminal charge over an alleged conspiracy to defraud the FAA in the wake of the 2018 and 2019 crashes.
Public Citizen noted in a report published Monday that "such agreements now help the most powerful businesses in the world dodge the legal consequences of their criminal misconduct."
"Instead of facing prosecution—which would mean plea agreements or trial in a public court of law—leniency deals are negotiated quietly between prosecutors and corporate lawyers with little or no judicial oversight," the group said. "Proponents say the agreements are a streamlined way to effectively deter corporate crime. Public Citizen research, however, shows about 15% of the agreements historically involve repeat offenders, casting doubt on their deterrent effect."
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