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66 Fla. L. Rev. Forum 1 (2014)

handle is hein.journals/flrf66 and id is 1 raw text is: 






REHABILITATING CORPORATIONS


                         Brandon L. Garrett*

   Blockbuster corporate fines grab headlines, but corporate criminal
prosecutions have rapidly evolved far beyond using monetary penalties to
punish complex organizations. A central goal of federal prosecutors is to
rehabilitate corporations, and not simply to fine them. Indeed, some of the
largest companies now obtain deferred and non-prosecution agreements
that permit them to avoid an indictment and a conviction. In deciding not
to fully pursue such companies to a conviction, prosecutors emphasize
how they can offer alternatives to prosecution in order to secure positive
changes to compliance and ethics programs. Such structural reforms also
implicate corporate governance structures, and can involve sustained
interventions in the workings of a corporation. Lawrence A. Cunningham's
wonderful new article takes the provocative and counterintuitive position
that prosecutors should care about rehabilitating corporate governance far
more and not less.1
   Why is the view that prosecutors should more closely engage with
corporate governance surprising or controversial? Others have argued that
the game is not worth the candle. For example, Judge Jed Rakoff has
recently and prominently argued that corporate prosecutions are not
particularly worthwhile, where what prosecutors now do largely consists in
imposing internal compliance measures that are often little more than
window-dressing.,2 Still others decry undue intrusion in corporate
governance by prosecutors who have no business stepping inside the
boardroom. Cunningham argues that doing corporate prosecutions right
means engaging with corporate governance more carefully, investigating
what failures of governance contributed to the criminality, and clearly
explaining what governance reforms can correct the problem. The
fascinating case studies he provides suggest how insufficiently engaging
with governance issues can result in a range of failures, from unnecessarily
harming a company, to permitting recidivism, to magnifying governance
                                   4
problems or even creating new ones.
   Of course, in most corporate prosecutions no case studies are possible,
because we know little about any governance interventions beyond the
often-boilerplate quality text of the agreements with prosecutors. We do

     * PROFESSOR OF LAW, UNIVERSITY OF VIRGINIA SCHOOL OF LAW.
     1. Lawrence A. Cunningham, Deferred Prosecutions and Corporate Governance: An
Integrated Approach to Investigation andReform, 66 Fla. L. Rev. 1 (2014).
     2. Jed S. Rakoff, The Financial Crisis: Why Have No High-Level Executives Been
Prosecuted?, New    York   Review    of   Books   (January  9,   2014),
http://www.nybooks.com/articles/archives/20 14/jan/09/financial-crisis-why-no-executive-
prosecutions/.
     3. Cunningham, supra note 1, at 3.
     4. Id. at 25-40, 61-70.

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