White Collar and Corporate Criminal Enforcement in the Trump 2.0 Era

White Collar and Corporate Enforcement May Stall or Dip Temporarily …

A change in administration always results in a shakeup at the top of DOJ, and with President Trump’s return, there may be more turnover than usual among career prosecutors at the line-level in Washington, D.C. and U.S. Attorneys’ Offices with larger white collar enforcement dockets, including the Southern and Eastern Districts of New York, the Eastern District of Virginia, the District of Columbia and other select offices. This, coupled with substantial budget constraints, means that a downturn in large white collar enforcement cases in the near term is likely. This is not unusual: the period immediately before and after a presidential election is a natural time for prosecutors to depart DOJ for private practice, and prosecutors with white collar experience typically leave the Department in higher numbers due to their marketability within law firms and at sought-after in-house positions. Further, due to the complexity of larger financial and international corruption cases, which typically involve well-resourced defendants and experienced outside counsel, white collar cases can be difficult to transition from one federal prosecutor to another. Further compounding this issue, DOJ may not have politically confirmed supervisors in place who are needed to approve larger corporate settlements, which are the cases that are likely to generate more headlines and public scrutiny. This too will delay significant settlement discussions and enforcement decisions at the beginning of the Trump Administration. Finally, as with other government agencies, DOJ will be operating under a significantly constrained budget, which will limit the ability of Main Justice and individual U.S. Attorneys’ Offices to backfill positions when prosecutors depart.

Another piece of this puzzle is that the pay disparity between federal prosecutors and lawyers in Big Law has never been greater. In addition, public confidence in government institutions and the justice system in general has diminished significantly over the past several years. These factors have changed the calculus for talented attorneys in the private sector who previously would be attracted to public service as a federal prosecutor, resulting in a narrowed talent pool of private sector attorneys seeking to become federal prosecutors.

These factors create practical obstacles for white collar enforcement after the transition. Federal prosecutors who remain at DOJ may find themselves overburdened and forced to prioritize some matters over others, and their natural instinct will be to work their own cases over those they “inherited” from others who left. These combined effects of attrition, which hits white collar units particularly hard, and the inability to hire enough new prosecutors to fill the resulting vacancies will either stall or temporarily reduce white collar enforcement in the near term.

… But Enforcement Will Pick Up During the Trump Administration

However, after this transition period, there will likely be an uptick in white collar enforcement, notwithstanding DOJ leadership’s understandable focus on other important areas of enforcement. Our prediction is based on trends, a practical understanding of how DOJ operated under the previous Trump Administration, and the nominees to fill important roles in the incoming one.

Enforcement data from the last eight years show that white collar enforcement at DOJ was higher under the Trump Administration than the Biden Administration, despite the latter’s vocal prioritization of white collar cases. The Biden Administration promoted a “surge” in resources for white collar and corporate cases and numerous enforcement policy enhancements,¹ and elevated corruption to a “Core United States National Security Interest.”² Yet according to data compiled by Syracuse University’s Transactional Records Access Clearinghouse (“TRAC”), actual white collar enforcement numbers have lagged under the Biden Administration.³ Similarly, enforcement of the FCPA, which is typically one of the most frequently enforced statutes in high-profile corporate cases, enjoyed record levels of enforcement under the Trump Administration, in terms of both the amount of fines imposed and the number of companies and individuals who were prosecuted, according to data complied by Stanford’s Foreign Corrupt Practices Act Clearinghouse.⁴

We see three primary reasons for the difference in white collar enforcement under the past two administrations:

Less Attention from Management Will Unburden Line White Collar Prosecutors

When DOJ’s political appointees in the front office at Main Justice are more interested in a subject, the result often is institutional paralysis in decision-making. Thus, the Deputy Attorney General and the Assistant Attorney General for the Criminal Division, and the staff attorneys in those offices, are more likely to flyspeck enforcement decisions in high-profile cases, which can slow down their progress. As a result, career federal prosecutors under the Trump Administration were given more latitude to make decisions and move their cases forward while Department leadership focused on other priorities. Meanwhile, corporate cases over the past few years have appeared to move more slowly under the active oversight of Biden Administration political appointees, due to the longer timeframe prosecutors are subject to when obtaining critical approvals needed to conclude enforcement actions. A direct consequence of cases taking longer is that DOJ has less bandwidth to bring more cases. Given that the second Trump Administration will have similar enforcement priorities as the first, with many issues like immigration, trafficking and fentanyl receiving even more attention than before, it is likely that white collar prosecutors will be less burdened by administrative bottlenecks at the political levels.

The Pandemic Is a Relic of History

Another apparent reason for the white collar enforcement downturn over the last four years was the lingering impact of the COVID shutdowns, which should no longer be a factor under the second Trump Administration. Investigating white collar cases can require frequent travel for federal agents and prosecutors, and the lockdowns of the early pandemic years inhibited both domestic and international travel, which had understandable effects on the ability to build cases. With those restrictions now lifted, investigators can more freely travel to conduct investigations and build relationships with foreign prosecutors in cross-border cases. Federal prosecutors and regulators at DOJ and the Securities and Exchange Commission were also slow to return to the office in Washington, D.C., particularly in comparison to employees in the private sector outside the Beltway. With the Trump Administration’s renewed focus on government efficiency, the federal government will likely be quick to impose return-to-office policies that will bring prosecutors and agents back to the office, which will likely lead to enhanced efficiency and effectiveness of the investigation teams.

Sanctions and Export Controls Enforcement Will Increase

Finally, with the Trump Administration facing a world with multiple areas of hot conflict and the rise of China as a global superpower, the incoming administration is expected to focus on national security issues, and DOJ will likely ramp up rigorous enforcement of sanctions and export controls laws. This will no doubt have direct consequences for companies with business operations touching on adversarial countries like Iran, Russia and China. However, the cascading compliance risks will extend to those doing business in other countries close to U.S. adversaries, and potentially also countries south of the border that are beset by violent cartels and groups involved in the transnational trafficking of fentanyl and other illegal substances into the United States. Although extensive sanctions programs existed during the previous Trump Administration, the enforcement environment in this area is significantly more mature now, with DOJ officials under the current administration pronouncing that sanctions enforcement is “the new FCPA.”⁵ As this enhanced enforcement focus dovetails with the incoming administration’s priorities, recent trends in this area of criminal enforcement are likely to continue.

What This Means for You

To accomplish its enforcement priorities, the Department will need to secure increased funding and hire prosecutors, which will take time. Once DOJ has the resources it needs, however, the Department’s line prosecutors should enjoy wider latitude to build and advance white collar cases quicker, with fewer administrative roadblocks as Department political leadership focuses on other priorities. With time, white collar enforcement should rebound during the second Trump Administration.

As a result, companies with current matters before the Department, and those that want to ensure their compliance functions are keeping up with best practices and regulator expectations, would be wise to continue to engage experienced counsel who understand the Department, the U.S. Attorneys’ Offices, and how this new Trump Administration is likely to operate. Working with attorneys who know the Trump Administration and how new officials are going to prioritize white collar cases will only better serve companies by helping them assess their compliance and enforcement risks with the benefit of practical insights and expertise.

¹See, e.g., Lisa O. Monaco, Deputy Att’y Gen., U.S. Dep’t of Just., Keynote Address at the ABA’s 36th National Institute on White Collar Crime (Mar. 2, 2022), https://www.justice.gov/opa/speech/deputy-attorney-general-lisa-o-monaco-gives-keynote-address-abas-36th-national-institute.

²Joseph R. Biden, Jr., Memorandum on Establishing the Fight Against Corruption as a Core United States National Security Interest, The White House (June 3, 2021), https://www.whitehouse.gov/briefing-room/presidential-actions/2021/06/03/memorandum-on-establishing-the-fight-against-corruption-as-a-core-united-states-national-security-interest/.

³Transactional Records Access Clearinghouse, White Collar Crime Prosecutions for September 2024, TRAC Reports (Sept. 24, 2024) (reflecting monthly white collar criminal prosecution data and the six-month moving average for this data over a 15-year period), https://trac.syr.edu/tracreports/bulletins/white_collar_crime/monthlysep24/fil/.

⁴Stanford Law School, FCPA Statistics & Analytics, Foreign Corrupt Practices Act Clearinghouse (last visited Nov. 12, 2024), https://fcpa.stanford.edu/statistics-analytics.html?tab=1.

⁵Lisa O. Monaco, Deputy Att’y Gen., U.S. Dep’t of Just., Keynote Remarks at the 2022 GIR Live Women in Investigations (June 23, 2022), https://www.justice.gov/opa/speech/deputy-attorney-general-lisa-o-monaco-delivers-keynote-remarks-2022-gir-live-women.