Eric H. Holder Jr., the attorney general, seemed to say during Senate testimony in March that some banks were "too big to jail," as critics immediately paraphrased.
"I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy. And I think that is a function of the fact that some of these institutions have become too large," he said at the time.
He later tried to backtrack. "Let me be very, very, very clear," he said at a House hearing in May. "Banks are not too big to jail. If we find a bank or a financial institution that has done something wrong, if we can prove it beyond a reasonable doubt, those cases will be brought."
Nonetheless, it has long been Justice Department policy to bear in mind corporate issues not present in individual cases. In 1999, Mr. Holder, the deputy attorney general at the time, said in a memo to prosecutors that before indicting a company they should consider "collateral consequences, including the disproportionate harm to shareholders and employees not proven personally culpable."
Andersen, the accounting firm, went under because of its failed audits of Enron, and it probably would have done so even without the indictment, so severe was the hit to its reputation. In that case, prosecutor anger against the firm stemmed in part from the fact it had been spared indictment in a previous accounting scandal, involving Waste Management, after it promised to mend its ways. The Enron case made it clear those promises had not been kept.
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In recent years, some corporations do appear to have escaped indictment because of concerns about creating a new Andersen. In retrospect, many officials who concluded that four big accounting firms were too few wished that a way could have been found to keep a reformed Andersen alive.
At KPMG, one of the remaining Big Four accounting firms, former partners were convicted and imprisoned for their role in illegal tax shelters, but the firm itself escaped prosecution. It signed a "deferred prosecution agreement" in which it admitted culpability and paid a large fine but avoided a criminal record.
Such agreements, and related "nonprosecution agreements," have been signed with many large companies in recent years, among them Merck, JPMorgan, Google, UBS and Johnson & Johnson. None of those suffered obvious consequences in terms of the ability to conduct their business in the future.
And many companies have gone on to success after being convicted of felonies. One of the most famous antitrust cases ever, concerning a price-fixing conspiracy among large manufacturers of electrical equipment in the 1950s and early 1960s, led to a conviction for General Electric. And a subsidiary of Merck was forced to plead guilty to state criminal charges in connection with the marketing of the drug Vioxx, although the parent escaped with a nonprosecution agreement. In January, BP pleaded guilty to a series of felonies, including manslaughter, in connection with the 2010 Gulf of Mexico oil spill. On the day that was announced, its stock price went up.
—By Floyd Norris of The New York Times.