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Deferred prosecution

A new approach to corporate crime

The New York Times reported recently:

In a major shift of policy, the Justice Department, once known for taking down giant corporations, including the accounting firm Arthur Andersen, has put off prosecuting more than 50 companies suspected of wrongdoing over the last three years.

Instead, many companies, from boutique outfits to immense corporations like American Express, have avoided the cost and stigma of defending themselves against criminal charges with a so-called deferred prosecution agreement, which allows the government to collect fines and appoint an outside monitor to impose internal reforms without going through a trial. In many cases, the name of the monitor and the details of the agreement are kept secret.

Deferred prosecutions have become a favorite tool of the Bush administration.

Deferred prosecution is a beautifully tactful way to say No prosecution (as long as you pay us big wads of cash). But perhaps you suppose that “deferred” means, as it is normally understood, just put off until later? Not really:

Most agreements end after two or three years with the charges permanently dismissed.

Ah, so the prosecutions are “deferred” for ever. That’s a relief.

But why is the government so interested in collecting big wads of cash in lieu of prosecuting companies for acts that include “financial crimes, […] Medicare and Medicaid fraud, kickbacks and environmental violations”? This might be a clue:

Deferred prosecution agreements, or D.P.A.’s, have become controversial because of a medical supply company’s agreement to pay up to $52 million to the consulting firm of John Ashcroft, the former attorney general, as an outside monitor to avoid criminal prosecution.

I am reminded of George W. Bush’s insistence that “the justice system” shouldn’t “affect the flows of capital”. ((Cited in Unspeak, p208.)) Presumably, diverting a little of those flows into the pockets of the former chief law-enforcement officer of the US doesn’t count.

A “deferred prosecution”, of course, is only a narrow case of the administration’s speciality, which we might be tempted to christen deferred justice — retaining, of course, the special meaning of “deferred”, so that it means “no justice, ever”. This is the species of justice that, in an admirable display of even-handedness, the government metes out not only to prisoners held for years without trial but also to the politicians and lawyers responsible for dreaming up its torture régime: they are granted immunity from US prosecution by the MCA. ((But not global immunity: see lawyer Philippe Sands’s interesting piece in Vanity Fair on the prospect of individuals who travel to foreign countries being arrested and prosecuted there on war-crimes charges.)) Really, a justice forever deferred is the most perfect kind.

What have you “deferred” recently, readers?

  1. 1  Russell Davies  April 17, 2008, 8:02 am 

    What you’re missing here is that ‘defer’ also means ‘to yield (to) or comply (with) the wishes or judgements of another’. So these deferred prosecutions, rather than being merely delayed, are prosecutions in which the prosecutors have yielded to the wishes of the corporations, for a suitable fee of course, to drop the case at a mutually agreed time. It’s quite a subtle use of ‘deferred’ on this basis.

  2. 2  Steven  April 17, 2008, 8:06 am 

    I defer to your judgment on that excellent point.

  3. 3  Alex Higgins  April 17, 2008, 8:47 am 

    Right now, I am deferring the work I have to do on my portfolio and reading blogs instead.

    Unfortunately, that is deferral in the traditional sense of the word, rather than the new, fun meaning described above.

  4. 4  Steven  April 17, 2008, 8:58 am 

    I am deferring my work in favour of more coffee. Sadly, this is not a permanent deferral either.

  5. 5  richard  April 17, 2008, 11:36 am 

    So the DoJ is enforcing a protection racket, but doesn’t even get to keep the protection money? It’s positively Brazilian!

  6. 6  Steven  April 17, 2008, 12:07 pm 

    Is this you too, richard?

    I was struck, however, by how this recasts the DoJ, not just as an extractor of protection money, but as a kind of freelance mafia enforcer, providing the intimidation while the funds themselves are actually siphoned off to the private business interests of former government employees.


  7. 7  richard  April 17, 2008, 12:46 pm 

    Thanks. I vent more over there, about a variety of minority concerns, which is why I don’t commonly provide a link.

  8. 8  Adam  April 17, 2008, 1:47 pm 

    A legally similar story without the linguistic twist of “deferral” arose in the sport of cycling this week.

    The German criminal investigation (for fraud, through doping) into Jan Ullrich was stopped on the condition that he paid a big fine that isn’t a fine:

    “The amount of the payment was not disclosed but reckoned to be 250,000 euro. Ullrich did not admit to any guilt, and is not considered, under German law, to have been found guilty”. (

    I better stop deferring my work now too.

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