There's money in federal regulations. Lots of it. American companies spend more than $2 trillion a year complying with federal laws. Firms spend tens of thousands of dollars per employee per year just trying to make sure they're in compliance with laws.
And there are so many of them. It's easy to break the law and not even know about it. People have written books about it. That's why, as part of this current push for criminal justice reform, activists want to require in more cases that mens rea be considered—that's the legal concept that in order for a person to be convicted of a crime, he or she must be shown to have known and have purposefully broken the law.
The Department of Justice does not seem to be in support of this particular reform. And they're fighting it by pointing out that requiring more federal laws to take mens rea into account would cover corporate entities and employees accused of crimes. That's the focus of the attack in a new story at The New York Times. Prepare for an invocation of the Kochs:
Mark V. Holden, general counsel and senior vice president at Koch Industries, acknowledged in an interview this week that the company's efforts to pursue revisions in federal criminal law were inspired in part by a criminal case filed 15 years ago against Koch Industries claiming that it covered up releases of hazardous air pollution at a Texas oil refinery. Those charges resulted in a guilty plea by the company and a $20 million penalty.
That case, Mr. Holden said, demonstrated that the Justice Department too often pursues criminal cases even when the accused had no criminal intent. The company itself discovered the problems and notified the authorities, he said, meaning the company did not knowingly violate the law.
A Justice Department spokesman on Tuesday rejected any suggestion that the criminal case against the company was unfounded.
"Koch Petroleum Group knowingly and voluntarily pleaded guilty to criminal violations of the Clean Air Act and to making false statements," the spokesman, Wyn Hornbuckle, said. "These admissions and the significant criminal liability in this matter speak for themselves."
So let's talk about "false statements," because that's part of the whole problem. In 2010, the National Association of Criminal Defense Lawyers and the conservative Heritage Foundation partnered up for a report titled "Without Intent: How Congress Is Eroding the Criminal Intent Requirement in Federal Law." The report showed that hundreds of proposed new federal criminal offenses didn't have an adequate mens rea requirement.
What does that mean for "false statements"? That doesn't mean that you have to be shown to be lying. It just means you have to be shown to be incorrect or mistaken. There's an example in the report: It's a felony to make a false statement in support of a Family Medical Insurance Program application. But there's no mens rea requirement, so any information that is incorrect is a felony, such as accidentally providing a wrong date of birth or work history dates.
This is behavior that the Department of Justice is defending. In the Times story, DOJ representatives talk about how it's all about holding people accountable for the most serious of crimes only. But note the language they use:
The proposed standard, Justice Department officials said, might have prevented guilty pleas in a variety of cases, such as the charges filed in 2013 against Jensen Farms of Colorado for failing to adequately clean cantaloupe, resulting in an outbreak of food-borne illness that was cited as a factor in at least 33 deaths. It also might have prevented the plea in the 2012 charges against the owner of a pharmacy who sold mislabeled, super-potent painkillers blamed in three deaths.
The same powers, officials said, have allowed the government to pursue charges against major corporations, like the 2011 conviction of Guidant, the giant medical device company, for failing to report safety problems with defibrillators, used to restart heartbeats. [Emphasis added]
The Department of Justice isn't even arguing that they will not be able to hold bad actors accountable for breaking the law. They're complaining that they'd actually have to go to trial for some of these cases rather than piling on every single offense they can find from the federal code in order to secure plea deals.
The cynical might suggest there's a bigger fear for mens rea reform at the DOJ. The federal government rakes in billions of dollars annually from fines via settlements, and those numbers have skyrocketed in the past decade. The ability for corporations to point to the increasingly complicated, impossible-to-navigate monolith of federal regulation and say "How are we supposed to know about all of this?" could put a gravy train out of commission.
(Disclosure: David Koch sits on the Board of Trustees for the Reason Foundation, which publishes this site.)