Despite lofty rhetoric from politicians who vowed in the aftermath of the 2008 financial crisis to hold Wall Street accountable, U.S. Justice Department statistics show a “long-term collapse” of federal white collar crime prosecutions, which are down to their lowest level in 20 years, according to a new report from Syracuse University.
The analysis of thousands of records by the university’s Transactional Records Access Clearinghouse (TRAC) shows a more than 36 percent decline in such prosecutions since the middle of the Clinton administration, when the decline first began. While there was an uptick early in Barack Obama’s presidency, current projections indicate that by the end of the 2015 fiscal year, such prosecutions will be at their lowest level since 1995.
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But that doesn’t mean white collar crime itself—which involves a wide range of activities such as health care fraud and the violation of tax, securities, antitrust, federal procurement, and other laws—is on the wane.
“The decline in federal white collar crime prosecutions does not necessarily indicate there has been a decline in white collar crime,” the researchers are swift to point out. “Rather, it may reflect shifting enforcement policies by each of the administrations and the various agencies, the changing availabilities of essential staff and congressionally mandated alterations in the laws.”
They add that “because such enforcement by state and local agencies for these crimes sometimes is erratic or nonexistent, the declining role of the federal government could be of great significance.”
Furthermore, failure to prosecute white collar crimes does more than let individual fraudsters off the hook, as journalist Glenn Greenwald argued in 2013:
But while news of the 20-year low is troubling, it’s not particularly surprising. As journalist David Sirota noted on Thursday for the International Business Times:
Sirota went on to point out, both the former head of the Justice Department’s criminal division, Lanny Breuer, and former Attorney General Eric Holder made similar remarks at the time. “Prior to serving in the Obama Justice Department, both Breuer and Holder worked at white-collar defense firm Covington & Burling,” Sirota wrote. “Both of them went back to work for the firm again immediately after leaving their government posts.”