Branch Office of the Prosecutor: The New Role of the Corporation in Business Crime Prosecutions
New York University School of Law
December 1, 2010
North Carolina Law Review, Vol. 89, p. 23, 2010
NYU Law and Economics Research Paper No. 11-03
This article describes the evolution of the public corporation's role in the criminal justice process - from potential defendant to "branch office of the prosecutor," partnering with the government in investigating business crime - and assesses the impact of this evolution on criminal justice policy.
The first part of the article describes the branch-office role, tracing its development back to the 1970s, and shows how it has come to be routine for public corporations to assist prosecutors in their investigations.
The second part discusses the implications of this shift in institutional role. The article first argues that the public corporation's branch-office role is likely to be durable because it benefits both corporations and prosecutors, effectively exploiting the misalignment of interests between the corporation and its employees and providing substantial efficiency gains to prosecutors. The article next examines the effect of this new role on legal rules, arguing that the protections of the corporate attorney-client privilege should not be increased nor constitutional constraints imposed when the corporation is acting in its branch-office role. The article then examines the potential effect of the new role on prosecutors' willingness to bring criminal charges against corporations and, ultimately, on deterrence in business crime cases. The article argues that the danger of this new role lies primarily in these areas. The new branch-office role, with its tools of amnesty, agreements not to prosecute, and agreements to defer prosecution, provides a middle ground for prosecutors between declination and prosecution. This middle ground may prove overly attractive to prosecutors, increasing their ability to prosecute corporate executives, but cutting down on first-offense prosecutions against corporations, likely the most critical for deterring corporations from committing business crimes. Although pursuing criminal charges against executives and employees can certainly be an effective deterrent to business crime, it is not a sufficient one. A credible threat of corporate criminal liability is necessary to assure overall deterrence, as well as to assure that corporations continue to have an incentive to play this important branch-office role in investigating complex business crime cases.
Number of Pages in PDF File: 77
Keywords: Business Crime, Corporate Crime, White Collar Crime, Corporations, Criminal Procedure, Deferred Prosecution Agreements, Deterrence, Organizational Criminal Liability, Prosecutorial Discretion, Fraud, Antitrust, Mail Fraud, Securities Fraud
JEL Classification: K14, K22, K42
Date posted: February 20, 2011 ; Last revised: March 7, 2011