The Prosecutor as Regulatory Agency
Rachel E. Barkow
New York University School of Law
July 2, 2009
PROSECUTORS IN THE BOARDROOM: USING CRIMINAL LAW TO REGULATE CORPORATE CONDUCT, Anthony Barkow & Rachel Barkow, eds., NYU Press, Forthcoming
NYU School of Law, Public Law Research Paper No. 09-40
NYU Law and Economics Research Paper No. 09-30
The simple account of America’s system of separated powers has legislators responsible for making laws, the executive branch (and prosecutors within it) charged with enforcing the laws, and judges with the power to adjudicate any disputes by declaring what the law commands. Two aspects of our modern government that have disrupted this paradigm - judicial and agency policymaking - have become scholarly obsessions. But there is another, equally strong challenge to the traditional separation-of-powers framework that has received far less attention: prosecutors who regulate.
The constitutionally limited role of the prosecutor is to enforce the policies laid down in laws enacted by the legislature. Whether this was ever true, it is certainly not the case today that prosecutors are merely enforcing pre-established rules. Armed with expansive criminal codes and broadly worded statutes, plus the ability to threaten harsh and mandatory sentences, prosecutors have so much leverage in negotiations with defendants that they have, for all practical purposes, taken on the roles of adjudicator and legislator as well.
But prosecutorial regulatory power has gone further than the incidental power to regulate that comes with enforcement discretion. In the area of corporate crime in particular, prosecutors have gone beyond law interpretation and the pursuit of punishment for what they believe to be past violations of existing criminal laws. In this context, prosecutorial goals are sometimes more grand, with prosecutors seeking to reform the way companies do business going forward. They have increasingly reached agreements with companies that allow the companies to avoid indictments so long as they meet the prosecutors’ regulatory terms. The agreements go by different names. In the federal system, they consist of non-prosecution agreements (NPAs) and deferred prosecution agreements (DPAs). In some states, they are known as settlement agreements. When the agreements require companies simply to obey the law or pay for prior bad acts, they are not particularly noteworthy from a separation of powers perspective because they are incidental to executive power. But in many of these agreements, prosecutors impose affirmative obligations on companies to change personnel, revamp their business practices, and adopt new models of corporate governance. These dictates are often sweeping and some prosecutors have imposed them on industries, not just isolated companies. These prosecutorial commands have been imposed without legislative guidance, much less relatively clear rules or intelligible principles.
Judges and regulatory agencies have been closely scrutinized to determine whether they have the accountability, institutional competence, and procedural reliability to regulate. This Chapter considers prosecutor-imposed regulations using the same metrics.
Number of Pages in PDF File: 32
Keywords: corporate crime, corportate regulation, criminal law, law enforcement, prosecutorial power, administrative law
JEL Classification: K14, K20, K22, K23, K42
Date posted: July 3, 2009 ; Last revised: August 10, 2009