Kochs Embedded In Major Rift On Bipartisan Criminal Justice Reform

The proposed reform could make much white-collar crime harder to prosecute.
The Washington Post via Getty Images

WASHINGTON -- A major rift is opening among criminal justice reform advocates over how to deal with conservative efforts that could write off white-collar crimes ranging from environmental pollution to food safety.

Most of the discussion surrounding criminal justice reform has dealt with mass incarceration and policies surrounding mandatory minimum sentences for low-level, nonviolent drug offenders. But right-wing players including the Koch brothers, the Heritage Foundation and the Manhattan Institute have been advocating for another provision that would make it much more difficult for prosecutors to pursue white-collar crime. A measure approved by the House Judiciary Committee last week would eliminate a host of criminal penalties for negligence, gross negligence and reckless behavior.

The Huffington Post first reported on the white-collar crime controversy last week. The New York Times also reported on the divide Tuesday.

To tackle criminal justice reform, the Kochs have allied with a host of their traditional political adversaries. Koch Industries is a major funding source for the Coalition for Public Safety, a bipartisan alliance including the American Civil Liberties Union, the NAACP, Americans for Tax Reform, an anti-tax group run by Grover Norquist, and the Center for American Progress, a think tank closely linked to the Obama administration.

But divisions over reform priorities have roiled the alliance in recent months. The Coalition for Public Safety's first executive director, Christine Leonard -- a former staffer for the late Sen. Edward Kennedy (D-Mass.) -- left the group this fall. And the white-collar crime initiative appears to be a major source of controversy. Leonard's office declined to comment for this article.

The Kochs and other conservatives are advocates of "mens rea reform," which deals with what defendants knew about their actions and whether they knew those actions were illegal. The current House bill would require prosecutors to prove that corporate criminals "knew, or had reason to believe, the conduct was unlawful" to secure a conviction under a broad array of laws for which there is currently no knowledge standard.

That could help corporate executives evade prosecution for destructive behavior in which the company ignored red flags and whistleblowers in the pursuit of profit.

Department of Justice spokesman Peter Carr told HuffPost last week that the House bill "would create confusion and needless litigation, and significantly weaken, often unintentionally, countless federal statutes," including "those that play an important role in protecting the public welfare ... protecting consumers from unsafe food and medicine."

"We think it would undermine bedrock areas of regulatory safeguards, particularly on the environment and food safety," said Todd Cox, a senior fellow at the Center for American Progress. "We're in favor of criminal justice reform. We're not in favor of these non-evidence-based efforts to revise our regulatory system."

A White House official went further.

"If the bill became law, a terrorist could only be found guilty for using a weapon of mass destruction if he specifically knew his victims were going to be U.S. nationals, a killer could only be found guilty of certain firearm crimes if he knew the gun traveled in interstate commerce, and a white-collar criminal could only be found guilty of bank fraud if he knew he was robbing a bank that was FDIC-insured," the official told HuffPost in a statement.

"Let's be clear," said Jeffery Robinson, deputy legal director of the ACLU. "All of the attention here is on whether this will only benefit quote-unquote white-collar criminals -- people at financial institutions, people at firms that are damaging the environment. If it only benefits those people, then I haven't seen any evidence that there is any over-incarceration among that group. In fact, we see very few prosecutions of such individuals."

Kochs are standing behind the controversial bill.

"We favor comprehensive criminal justice reform, which includes ensuring that there are intent and knowledge standards in any and all criminal laws," said Koch Industries General Counsel Mark Holden in an email. "This is a fundamental requirement of a just criminal justice system."

"While sentencing reform and corrections reform are vitally important, mens rea reform deals with people who never should have been in prison to begin with because they lacked the intent and knowledge to commit the crime at issue," Holden continued. "That being said, I have repeatedly stated that Koch will not stand in the way of other needed reforms even if the final version of the criminal justice reform bill does not contain mens rea reform."

Large corporations can diffuse responsibility for illegal activity across a wide organization, making it difficult for prosecutors to prove that executives knowingly and willfully violated the law -- even when individuals clearly broke it. CEOs can pressure lower-level employees to act illegally without explicitly ordering them to violate a specific statute. They can demand underlings achieve results that are impossible to reach without breaking the law, for instance. Prosecutors sometimes bring cases against such officers on the grounds that this behavior is criminally reckless or negligent, even if they cannot prove the CEO was actually aware that underlings were breaking the law to meet performance goals.

The Kochs have maintained for years that they became interested in criminal justice reform in part due to a previous criminal prosecution of their own employees and enterprises over environmental infractions. The Kochs have maintained that they and their employees had not known the firm was violating the law.

The House white-collar crime bill was approved by the Judiciary Committee along with a host of other criminal justice reform measures. It is not clear whether Democrats have agreed to allow the full slate to be voted on as a single bill on the House floor -- a move that would force Democrats to choose between white-collar crime inoculation and more humane sentences for drug crimes.

The white-collar crime bill has bipartisan support in the Judiciary Committee, however. The panel's top-ranking Democrat, John Conyers of Michigan, Committee Chairman Bob Goodlatte (R-Va) and Rep. Sheila Jackson Lee (D-Texas) are all co-sponsors. Jackson Lee's chief criminal justice staffer, Tiffany Joslyn, has previously written policy briefs published by the conservative Heritage Foundation when she worked for the National Association of Criminal Defense Lawyers.

In the past, liberal reformers have pushed form narrower mens rea reform in regards to some violent crime cases, including death penalty. Liberal experts have argued that prosecutors need to show that defendants were participating in a violent operation. They have not argued for applying to same standards to cases that would effectively wipe out broad swaths of white-collar offenses, as the House legislation would do. The ACLU does not support the bill, but Robinson says his organization is also is not actively opposing it, on the grounds that some narrower version of mens rea reform could be productive.

In October, the Senate Judiciary Committee approved a different criminal justice reform package that would require the government to conduct a study showing which federal statutes without mens rea provisions are resulting in criminal prosecutions, demonstrating how the laws are actually applied. That study would allow lawmakers to tailor future mens rea reform to cases where abusive prosecutions appear to be taking place.

"Show us what laws would be impacted so that we can then make a reasonable and intelligent determination about whether we support the bill or not," said the ACLU's Robinson. "But to potentially change every criminal statute that's on the books -- that just makes no sense and it's dangerous."

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