After witnessing the CEOs of Equifax and Wells Fargo recently enter retirement without any criminal charges, Sen. Elizabeth Warren introduced a bill on Wednesday that would hold executives of large corporations criminally responsible when their companies commit crimes, harm large numbers of Americans through civil violations, or repeatedly violate federal law. Warren also reintroduced another bill designed to hold bank executives accountable when the banks they lead break the law.
In response to the recent plush retirement of Wells Fargo CEO Tim Sloan, who held a senior position in the bank while millions of fake accounts were opened, thousands of cars were unlawfully possessed, and hundreds of homeowners were inappropriately foreclosed, Warren introduced the Corporate Executive Accountability Act, which builds on existing federal statues, including the Food, Drug, and Cosmetic Act and the Clean Air Act. Warren’s new bill seeks to make legislation easier to send executives to jail for serious crimes by expanding criminal liability to negligent executives of corporations with more than $1 billion in annual revenue.
The bill would cover company leaders who, according to a statement from Warren’s office:
- “Are found guilty, plead guilty, or enter into a deferred or non-prosecution agreement for any crime.”
- “Are found liable or enter a settlement with any state or Federal regulator for the violation of any civil law if that violation affects the health, safety, finances, or personal data of 1% of the American population or 1% of the population of any state.”
- “Are found liable or guilty of a second civil or criminal violation for a different activity while operating under a civil or criminal judgment of any court, a deferred prosecution or non-prosecution agreement, or settlement with any state or Federal agency.”
Punishment for such a violation would be up to a year in jail, while a second violation could carry up to three years in jail, consistent with the Food, Drug and Cosmetic Act.
“Corporations don’t make decisions, people do, but for far too long, CEOs of giant corporations that break the law have been able to walk away, while consumers who are harmed are left picking up the pieces,” said Senator Warren. “These two bills would force executives to responsibly manage their companies, knowing that if they cheat their customers or crash the economy, they could go to jail.”
In addition, Warren also reintroduced the Ending Too Big to Jail Act, which would make it easier to hold financial executives accountable by creating a permanent investigative unit for financial crimes within the Treasury Department. The bill would also require executives at big banks larger than $10 billion to certify that there is no criminal conduct or civil fraudwithin the institution, making it easier to prove wrongdoing if it is later discovered, and put deferred prosecution agreements under the jurisdiction of judges so that they can ensure that the agreements are in the public interest.
On Wednesday, Warren took to Twitter and wrote, “When big Wall Street banks & giant corporations cheat their customers & break the law, they pay a fine, consider it a cost of doing business, & go back to life as normal. Nothing changes. The system stays rigged for the rich & powerful.”