NEW YORK (Thomson Reuters Regulatory Intelligence) - President Donald Trump’s firing of the Justice Department official who led a push for greater individual accountability for corporate wrongdoing has prompted uncertainty over the department’s future enforcement policies.
Trump on Monday fired acting Attorney General Sally Quillian Yates after she took the rare step of defying the White House and refused to defend new travel restrictions on several Muslim-majority nations. Yates was a holdover from the administration of President Barack Obama, serving pending the confirmation of Trump’s nominee, Alabama Senator Jeff Sessions. She had expressed doubts over whether Trump’s order implementing the restrictions was lawful.
In her role as Deputy Attorney General under Obama, one of Yates’ hallmark achievements was the agency’s policy of holding individuals more accountable for corporate wrongdoing, what came to be widely known as the “Yates Memo.” The memo triggered a shift in Justice Department prosecution strategy to increase the focus on individuals involved in corporate wrongdoing, and to require companies to identify liable individuals as a condition for cooperation credit in investigations.
Legal experts compared the firing to President Richard Nixon’s dismissal of independent special prosecutor Archibald Cox in 1973 at the height of the Watergate scandal. Cox’s firing, along with the resignations of attorney general Elliot Richardson and deputy attorney general William Ruckelshaus, came to be known as the “Saturday Night Massacre.”
“This will add to the general demoralization within the DoJ and may increase the exodus of the career professional staff,” said Columbia University law school professor John Coffee. “It is not a huge surprise that she was fired and it parallels the Saturday Night Massacre under Nixon, but for the professional career person it increases the fear that they will be forced to defend hopelessly vulnerable politicized decisions,” he added.
What has become worrying, say experts, is what they described as a White House’s willingness leave key implementation officials outside of the process of deciding major policy changes.
“The White House, which did not consult with her or other Cabinet members in drafting the order, could have worked with her to make changes that would satisfy her concerns about its legality,” said Matthew Miller, former head of public affairs at the Department of Justice, in an opinion piece in the Washington Post.
Whether Yates’ firing will weaken the resolve among remaining and future staff to maintain and enforce existing policies in the corporate world remains to be seen. Some caution that one shouldn’t necessarily extrapolate from the firing that there will be major policy shift.
“It’s not clear to me we are going to see some massive change right away in corporate prosecutions,” said Miriam Baer, professor of law at Brooklyn Law School.
“On the other hand I would not be surprised if at some point we return to the question of deferred prosecutions and the DoJ’s corporate charging processes,” she added.
Much will depend, say observers, on how Sessions, who was approved by the Senate Judiciary Committee on Wednesday and is expected to receive Senate approval — will lead the agency.
During a hearing before the Senate Committee on Tuesday, Democrats painted Sessions as a defender of Trump’s ideologies, while Republicans portrayed him as a smart lawyer and tough prosecutor who would enforce the law as written.
“How could we possibly conclude that this nominee will be independent?” asked Senator Dianne Feinstein of California, the top Democrat on the Senate Judiciary Committee.
Sessions told the committee in his initial confirmation hearing last month that he was committed to following the law. The U.S. Attorney General, he said, “must be willing to tell the president ‘no’ if he overreaches. He or she cannot be a mere rubber stamp.”
How Sessions’ relationship with Trump would translate into policy is at this stage difficult to predict.
“We don’t know how much we can draw from this going forward, because presumably the president will have a different relationship with nominee Sessions. . . One would expect a different relationship,” added Baer of Brooklyn law school.
Other legal experts said the Yates firing might bode ill for relations with the law enforcement agency’s career prosecutors.
“This firing sends a possibly dangerous precedent in areas of enforcement,” said another law school expert who requested anonymity. “If this becomes an adversarial relationship, then you’re looking at a potentially weakened institution. . . That’s not good for anyone.”
Sessions said in his initial hearing that he would defend his agency’s staff. He said an attorney general must “set the example for the employees in the department to do the right thing and ensure that ... they know the attorney general will back them up, no matter what politician might call, or what powerful special interest, influential contributor, or friend might try to intervene.”
Nevertheless, comments from Trump’s press secretary, Sean Spicer, fanned worries over political influence when he made clear on Monday that State Department officials unwilling to abide by the executive order on immigration could choose to find employment elsewhere. The implications of Spicer’s views for Justice Department staff members were stark, Miller noted in the same Washington Post article.
“White House press secretary Sean Spicer had announced that career State Department officials who disagreed with the president’s immigration order should ‘either get with the program or they can go.’ In its attack on Yates, the White House made clear the president expects the same level of quiet obeisance from his attorney general,” said Miller.
(Henry Engler is a North American Regulatory Intelligence Editor for Thomson Reuters Regulatory Intelligence. He is a former financial industry compliance consultant and executive, and earlier served as a financial journalist with Reuters. Email Henry at firstname.lastname@example.org)
This article was produced by Thomson Reuters Regulatory Intelligence and initially posted on Feb. 2. Regulatory Intelligence provides a single source for regulatory news, analysis, rules and developments, with global coverage of more than 400 regulators and exchanges. Follow Regulatory Intelligence compliance news on Twitter: @thomsonreuters