A New Era of Justice for Businesses, Too?
by Stites & Harbison, PLLC
When Jefferson Beauregard Sessions was sworn in as the 84th Attorney General of the United States in January, business owners were among those wondering what he meant when he declared: “A new era of justice begins, and it begins right now.” Unlike many political appointments, this member of President Trump’s cabinet’s role as the nation’s chief law enforcement officer has the potential for immediate direct and meaningful impact upon businesses, especially those in heavily-regulated industries. What will that impact be?
President Trump won the election in part, at least, on a promise to shrink the federal government, and to get it “off the backs” of American business. Further, he and General Sessions have emphasized their intention to address immigration, and “guns and drugs” as part of a campaign promise to keep Americans safe. Does this mean businesses can breathe a sigh of relief and assume the Department of Justice and other regulatory agencies will leave them alone?
Yes and no.
First, career federal lawyers within the agencies and in the Department of Justice (and at the United States Attorneys’ Offices around the country) consider crime and regulatory violations in their local, immediate settings and not necessarily as a part of a broader, less specific national strategy. Two categories of federal investigation and, in certain cases, criminal prosecution may continue at the same – or at an even higher – pace as in the previous administration.
Immigration: Perhaps the President’s signature campaign promise involved reducing illegal immigration. Employers’ hiring practices could come under even greater scrutiny under Attorney General Sessions’ DOJ. In April General Sessions announced the addition of 50 more immigration judges this year, and 75 next year in a memo that required federal prosecutors to prioritize federal criminal immigration enforcement. Immigration authorities have long held employers responsible for knowing the legal status of their applicants, and it’s reasonable to believe documentation and processes will be looked at even more closely. “To ensure that these priorities are implemented” the Attorney General said “starting today, each U.S. Attorney’s Office . . . will designate an Assistant United States Attorney as the Border Security Coordinator for their District.” These coordinators will be looking for work to do, and to make an impression. (New I-9 Form Takes Effect September 18, 2017 - What's changed and Important Reminders to Ensure Compliance.)
False Claims Act investigations/prosecutions: Businesses that submit claims for payment to the government, or submit claims to others who in turn submit claims to the government (any government contract, and some that aren’t) can run afoul of the False Claims Act (“FCA”) and its fines, treble damages, and even criminal implications. Most FCA investigations, though, are filed first by whistleblowers – “relators.” These relators are often disgruntled ex-employees, and there is no reason to believe there will be fewer of them simply because there is a new President or Attorney General. The potential financial awards to relators are high. The DOJ will continue to gladly investigate complaints that have merit.
EPA/Environmental: Businesses regularly under the scrutiny of the Environmental Protection Agency (“EPA”) may, on the other hand, feel the effect of a dramatically reduced relevant federal workforce. The DOJ depends upon the EPA to investigate its environmental cases, and the EPA’s budget has declined from $10.3 billion in 2010 to about $8.1 billion in 2016. Transactional Records Access Clearinghouse, affiliated with Syracuse University, reports that EPA criminal prosecutions are down by 50% in the past five (5) years.
The work of the DOJ and local federal prosecutors and agencies will continue. Businesses in highly-regulated industries should continue to consider rhetoric and high-level public statements as important but not determinative of the relationship between their business and the federal government.