The Yates Memorandum's Impact on Corporations' Culpability

Just one month ago, the Department of Justice’s second-in-command, Deputy Attorney General Sally Yates, issued a memorandum describing a shift in DOJ policy to increasingly target individuals involved in corporate crimes. Responding to criticism over the lack of consequences for executives involved in the 2008 crisis, Yates pushes the idea that the individuals acting on behalf of the corporation must take responsibility for their criminal actions.

It is an established practice for individuals to be prosecuted along with their

corporations. Similar verbiage to the Yates Memo is found in statements given by

ex-Attorney General Eric Holder, who said “few things discourage criminal activity…

a corporation may entire a guilty plea and still see its stock price rise… but an

individual who is found guilty… is most likely going to prison.” His statement echoes

the sentiment that it is more resounding for individuals to be held culpable since it

shows other employees that they have personal liability when acting illegally under

the firm’s name. However, this statement was given in 2014, long after the 2008

crisis, so how is the Yates memo different?

The big policy change is raising the standards to qualify for cooperation

credit. In order for a company to get leniency with the government, it has to “cough

up the individuals…;” the DOJ will not “accept a company’s cooperation when they

just offer up the vice president in charge of going to jail,” as Deputy Attorney

General Yates said in an interview with the New York Times. Rather than being

content with the “fall guy,” the DOJ will now be targeting high-level executives to

truly send the business community a message that no one can escape scot-free.

All in all, the Yates Memorandum has sparked a lot of discussion in

boardrooms across America, but whether or not any real change occurs is still up in

the air. The next few months will show whether or not the DOJ will follow through

on their newly issued set of teeth.

#politics #yatesmemorandum #corporations #policy #departmentofjustice #law