Bernie Sanders wants 'criminal' CEOs locked up, but lawyers say that's unlikely to happen

Key Points
  • Bernie Sanders has said he would use the Sherman Antitrust Act to put CEOs of monopolistic companies in jail.
  • Sanders said the country should be having a discussion about whether that would apply to Boeing CEO Dennis Muilenburg in the wake of two fatal 737 Max crashes.
  • Experts say it would be difficult to use the Sherman Antitrust Act to punish allegedly anti-competitive activities.
VIDEO4:3204:32
Sanders calls oil, pharmaceutical and Wall Street executives candidates for jail time

Sen. Bernie Sanders can say he wants CEOs to go to jail all he wants, but experts in corporate law say it's unlikely to happen.

In a wide-ranging interview with CNBC's John Harwood published Tuesday, Sanders ripped Wall Street CEOs for "greed" and "corruption," saying that jail should be on the table as punishment for the pain he says their companies have inflicted.

He came down harder on pharmaceutical and energy executives.

Sanders, who is running for the Democratic presidential nomination in 2020, called opioid manufacturers "criminal." The Sackler family that owns and runs now-bankrupt Purdue Pharma, has been accused of promoting the sale of opioids, despite knowing their dangers. Others, including drug distributors AmerisourceBergen, Cardinal Health and McKesson and drugmaker Teva Pharmaceutical reached a last-minute settlement earlier this month for their role in the opioid crisis.

Sanders said Exxon Mobil executives and their peers "knew that the product that they were producing was causing climate change and in fact helping to destroy this planet." Exxon Mobil is battling a lawsuit that accuses it of misleading investors about the risks of climate change regulations to its business.

Sanders, who describes himself as a democratic socialist, has said he wants to use the Sherman Antitrust Act, a federal statute that outlaws monopolistic business behavior, to prosecute CEOs who lead allegedly anti-competitive companies.

Lawyers say such a move is rare, and reserved for CEOs engaged directly in an activity that limits competition, like price fixing.

"It does happen, but the purpose of the Sherman Act is not to send CEOs to jail," said Will Lavery, a partner in the antitrust and competition practice of law firm Baker Botts.

Senior executives at Archer Daniels Midland and Sotheby's auction house have been sentenced for their roles in price-fixing schemes. The former CEO of Bumble Bee Tuna is expected to go to trial in November for his alleged role in a price-fixing scheme with Chicken of the Sea and StarKist. He has pleaded not guilty.

Sanders sidestepped when Harwood asked him about whether his enforcement of the Sherman Act would apply to Boeing CEO Dennis Muilenburg regarding the 346 people who died in two crashes of the company's 737 Max planes. The Vermont senator did say, though, that the subject "is the kind of discussion that we need as a nation, and that will take place when I'm president."

Yet experts who spoke to CNBC said the Sherman Act would not apply to executives like Muilenburg.

Convicting CEOs based on nonantitrust charges poses difficulties as well, experts said. It requires proof of direct participation in a criminal act. Criminal liability for negligent conduct that allows for improper activity without actually ordering it is rare.

Dennis Muilenburg, chief executive officer of Boeing Co., listens during a Senate Commerce, Science and Transportation Committee hearing in Washington, D.C., U.S., on Tuesday, Oct. 29, 2019.
Bloomberg | Bloomberg | Getty Images

Muilenburg is already feeling the heat in other ways. He was stripped of his chairman role as Boeing struggles to contain damage from the 737 Max crisis. On Tuesday, he faced harsh congressional questioning over his leadership in the context of the crashes – admitting that his company made mistakes. Likewise, Boeing's chief engineer for commercial planes, John Hamilton, said Tuesday that the company's safety assumptions and assessments fell short.

Muilenburg, though, pushed back on senators' accusations that the company lied by pointing to pilot error as the cause of the two crashes.

"The premise that we would lie or conceal is just not consistent with our values," Muilenburg said.

While a CEO may pay other costs for mistakes made under his or her watch, lawyers say it's extremely hard to hold them criminally liable.

"The problem isn't that there aren't criminal laws on [the books]. If CEOs aren't being charged it's because we don't go after people who are not personally involved in doing something wrong," said Jonathan Gleklen, chair of the U.S. antitrust/competition practice at law firm Arnold & Porter.

"We don't punish parents criminally for the conduct of their children," he added.

— CNBC's Leslie Josephs contributed to this report.