Professor David M. Uhlmann

  • December 10, 2013
    Guest Post

    by David M. Uhlmann, the Jeffrey F. Liss Professor from Practice and Director of the Environmental Law and Policy Program, University of Michigan Law School. For more on deferred prosecution agreements and corporate liability see Professor Uhlmann’s Maryland Law Review article, “Deferred Prosecution and Non-Prosecution Agreements and the Erosion of Corporate Criminal Liability.” Also see his recent post for The CLS Blue Sky Blog.

    The Justice Department announced last month that JP Morgan Chase would pay a record $13 billion for its role in the mortgage crisis that produced the Great Recession of 2008. The Justice Department deserves praise for reaching a civil settlement that will restore billions to investors and homeowners who were misled by JP Morgan Chase and Washington Mutual, the failing savings and loan that JP Morgan Chase bought in the midst of the financial crisis. In addition, if there is sufficient evidence, the Justice Department still can bring criminal charges against the individuals involved in the corporate wrongdoing.

    It is unlikely that JP Morgan Chase will face criminal charges, however, despite causing billions in losses and untold more in collateral damage to the global economy. Instead, if the bank pays anything more, it almost certainly will be the beneficiary of a disturbing shift in corporate prosecution policy that began in the Bush administration and has accelerated during the Obama administration: the increased use of deferred prosecution and non-prosecution agreements to address corporate wrongdoing. Under these agreements, corporations can avoid criminal charges if they pay large penalties, improve their compliance programs, and cooperate in investigations. Yet plea agreements -- the preferred approach to corporate crime before the last decade -- offer the same benefits without making it appear that justice can be bought.

    The Justice Department’s embrace of deferred prosecution and non-prosecution agreements has been dramatic. From 2004 through 2012, the Justice Department entered 242 deferred prosecution and non-prosecution agreements with corporations, after entering just 26 in the preceding 12 years combined (half of which occurred from 2001 to 2004). The use of the agreements has become so routine that the Justice Department’s Criminal Division now resolves most of its corporate criminal cases using “non-criminal alternatives” to prosecution. From 2010 to 2012, the Criminal Division entered more than twice as many deferred prosecution and non-prosecution agreements with corporations (46) as plea agreements (22). 

    Nor are these small cases involving technical violations of the law. The Justice Department agreed to a deferred prosecution with HSBC even though the bank was involved in nearly a trillion dollars of money laundering, much of it from drug trafficking. The Justice Department entered a non-prosecution agreement in the Upper Big Branch Mining disaster even though 29 miners died, and the Labor Department found that Massey, the company that owned the mine, committed over 300 violations of federal mine safety laws and kept a double-set of books to hide its misconduct from safety inspectors.

    The failure to prosecute corporations like HSBC and Massey sends the wrong message about how our society views corporate misconduct and sows doubts about the Justice Department’s commitment to address corporate crime. The Justice Department would never allow individuals who committed such serious crimes to escape prosecution. So why the double-standard for corporate defendants? Why has the Obama administration continued the questionable corporate crime policies of the Bush administration?

  • January 28, 2013

    by Jeremy Leaming

    Nearly a week after providing a staunchly liberal vision for a second term –– leading law professors, attorneys and other advocates are providing via an ACS project ideas and proposals for the administration’s second term. (Regarding the tone and vision of the president’s second Inaugural Address, some apparently believe the president was merely defending New Deal programs and policy the Clinton administration had supposedly advanced.)

    The ACS project, “Toward a More Perfect Union: A Progressive Blueprint for the Second Term,” was recently launched with three Issue Briefs:

    Former U.S. Pardon Attorney Margaret Colgate Love looks at why the presidential pardon power “has lost its vigor, its integrity, and its sense of purpose,” and argues why it should be reinvigorated, as well as offering examples, many from the states, for reforming the process.

    Brookings Visiting Fellow Russell Wheeler examines the Obama administration’s record of filling federal judgeships during his first term and puts forth ideas for fixing a judicial nominations process that has become increasingly rancorous and ineffective. In a Brookings’ Up Frontblog post, Wheeler, a leading expert on the federal bench, explains, in part, why the process needs reforming. “First, judicial vacancies, which declined in Clinton’s and Bush’s first terms, increased during Obama’s. Empty judgeships hamper the federal courts’ ability to do their jobs – to sort out contractual disputes and other matters that, left unresolved, contribute to economic uncertainty, as well dispose of criminal complaints and adjudicate claims of discrimination and civil liberties violations.”

    University of Michigan Law School Professor David M. Uhlmann urges the Obama administration to exert great presidential leadership on climate change. Uhlmann, director of the law school’s Environmental Law and Policy Program, noted the small steps the Obama administration took during its first term. But, citing the work of climate scientists, Uhlmann warns that if our country fails “to limit greenhouse gas emissions, searing heat, widespread drought, destructive storms, and massive flooding will become commonplace.” Moreover, Uhlmann argues that climate change will be a “legacy issue” for the president – “either because he helped chart a course toward a sustainable future or because America failed to act while it was still possible to prevent catastrophic climate change. Uhlmann’s Issue Brief goes on to provide ways for the president to act, even without the help of Congress, to put the nation on a path toward sustainable resources.

    During his second inaugural, the president reminded us that “preserving our individual freedoms ultimately requires collective action” and unlike too many of his predecessors lauded the noble goal of advancing equality. Obama also took a shot at right-wing economic policy that is all about coddling the superwealthy at the expense of everyone else.

    The president also called for collective action on climate change.

  • February 25, 2011
    Guest Post

    By David M. Uhlmann, the Jeffrey F. Liss Professor from Practice, and Director of the Environmental Law and Policy Program, University of Michigan Law School.
    Over the last 40 years, the United States has amassed a remarkable record of environmental, health, and safety accomplishments-with cleaner air and water, safer food, less dangerous cars, and overall a much higher quality of life for most Americans. It no longer physically hurts to breathe the air in major American cities, as it did in Los Angeles during the 1970's. The indelible image of the Cuyahoga River on fire, which burned as it passed through Cleveland during the 1960's, is now a distant memory.

    America today is better and stronger than it was 30 or 40 years ago as a result of the changes brought by our environmental, worker safety, and food and drug laws. In the span of a generation, we have outlawed lead in gasoline and paint, cars without seatbelts, and red dye number two in food. We have engineered startling health and safety advances from air bags and catalytic converters to scrubbers on smoke stacks and the elimination of chemicals like Freon that were burning a hole in the ozone layer.

    Yet it is unlikely that any of the health and safety gains we have enjoyed would have been possible under legislation proposed by Senator Rand Paul called the "REINS Act," which would strip federal agencies of the authority to implement environmental, public health, and safety protections unless a majority in both the House and the Senate approved the rules and they were signed by the President. The REINS Act is described as an effort to increase accountability and transparency in the regulatory process, but as with other "regulatory reform" measures, the high-minded rhetoric glosses over what is a cynical attempt to block further environmental, public health, and safety protections.

    We can and should ensure that we regulate American businesses only when necessary to meet broader societal objectives like limiting harmful pollution or preventing worker injuries or reducing motor vehicle deaths. For that reason, the Executive Branch only has the power to regulate when Congress passes laws that confer regulatory authority. As a further protection against unwarranted regulation, the Congressional Review Act allows Congress to veto any regulations that a majority in both Houses deem unacceptable. Congress also retains its authority to limit funding for marginal regulatory programs and to enact new laws if it believes regulatory protections are no longer necessary.