Pardoning Corporations

Abstract

Though the Pardon Clause could be interpreted to include or exclude corporate offenses, overlooked history suggests the broader interpretation is the more plausible one.  The Clause codified a power that had existed for centuries in England. And corporations were often pardoned at common law—including the Massachusetts Bay Company. This tradition lasted for hundreds of years, and it is the backdrop against which the Framers drafted the Pardon Clause. Even following the Founding, people continued to understand that the pardon power stretched to corporations. Since that time, however, institutional memory has faded.

The President could condition forgiveness on corporate compliance programs or on donations to his political campaign. He could offer pardons to foreign companies to sweeten relations with other countries. He could effectively abolish corporate criminal liability during his terms, at least at the federal level, even for prosecutions initiated by independent agencies. He could pardon his own companies to protect them from prosecution. Or he might even pardon companies that bribed him. Given the sweeping pardon power in Article II, all these decisions fall within the President’s discretion. He does not even need to wait for a company to apply.

Some of these consequences are startling, but Congress can limit the pardon power’s effects in two ways. First, Congress can refuse to appropriate refunds of pardoned fines. At the time of writing, Congress has not appropriated such refunds for individuals or companies.  That decision denies people reprieve from the most common, and often most consequential, punishments imposed on companies. Second, Congress can repeal statutes that impose corporate criminal liability and replace them with unpardonable civil infractions, depriving the President of offenses to pardon.

Some state constitutions might also include a power to pardon companies. Though this account is more tentative, some attorneys could be more effective advocates if they encouraged their corporate clients to apply for pardons. Federal juries convict around 100 companies per year;  states impose the rest of the corporate criminal liability.  In most states, there is little authority one way or the other, which creates opportunities for good lawyering. This is important because, even if the President never pardons a company again, some state governments might consider doing so. Alaska’s Governor already did, and that pardon is unlikely to be alone forever.

Keywords: pardon, executive power, presidential power, history, originalism, original law, common law, pardon power, clemency, corporate law, corporations