The key question is whether the legislation she has proposed is the best means to police corporate leaders.
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Prosecutions of finance executives related to the 2008 financial crisis were few and far between — and that has remained a persistent complaint about the government’s response to the meltdown.
Senator Elizabeth Warren of Massachusetts has offered legislation that would make it easier to prosecute them with the Corporate Executive Accountability Act.
The challenge with charging corporate executives is that they are often insulated from the decisions that violate the law. That can make it difficult, if not impossible, for prosecutors to prove they have the requisite intent. The former head of the Justice Department’s criminal division, Lanny A. Breuer, has defended the lack of prosecutions. In a PBS “Frontline” special, he said, “When we cannot prove beyond a reasonable doubt that there was criminal intent, then we have a constitutional duty not to bring those cases.” Former Attorney General Eric H. Holder Jr. told a Senate committee that some banks had become so big that prosecuting them would have negatively affected the economy. In other words, they had become “too big to jail.”
Ms. Warren’s bill would make it easier for federal prosecutors to pursue charges against individuals by holding executives liable if they “negligently permit or fail to prevent a violation of law.” The government often uses statutes like mail and wire fraud to pursue criminal cases. Those laws, however, require proving the defendant’s intent to defraud, which is unlikely when a senior executive has little to do with the actual misconduct. The new provision would allow punishment if the executive were merely negligent in overseeing the enterprise, which means the person acted in an objectively unreasonable manner.
