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Sen. Elizabeth Warren took aim at Wall Street again Wednesday with two bills that could throw executives at giant corporations into jail if they break the law.
Warren, a 2020 presidential candidate, introduced the Corporate Executive Accountability Act, which would hold executives at corporations criminally responsible when the companies they oversee commit crimes. Warren also re-introduced the Ending Too Big to Jail Act, which she first introduced in 2018 and would create a permanent investigative body within the U.S. Department of the Treasury to prosecute financial crimes.
“When a criminal on the street steals money from your wallet, they go to jail,” Warren wrote in a Washington Post op-ed announcing the first bill. “When small-business owners cheat their customers, they go to jail. But when corporate executives at big companies oversee huge frauds that hurt tens of thousands of people, they often get to walk away with multimillion-dollar payouts.”
Warren pointed, for example, to former Equifax CEO Richard Smith, who retired with a $90 million payday after a data breach — including Social Security numbers and credit card numbers — at the credit reporting bureau affected more than 140 million people.
Warren’s Corporate Executive Accountability Act builds upon existing federal laws to make it easier to send CEOs and other executives to jail by expanding criminal liability at corporations that bring in more $1 billion in revenue per year. Under the bill, executives could face jail time if:
- They are found guilty, plead guilty, or enter into a non-prosecution agreement for any crime;
- They violate a civil law and it affects the health, safety, finances, or personal data of 1 percent of any given state or the entire American population;
- They are found liable or guilty of a second civil or criminal violation for a different activity while operating under a civil or criminal judgment.
Offenders would face a year in jail, with up to three years in jail for a second violation.
The bills have no chance of passing the Republican-controlled Senate, and top Democrats have historically gone easy on Wall Street. But a new wave of progressives in the House and an embrace of bold policy ideas by 2020 candidates indicates that it could see the light of day in 2020.
“Four words are engraved over the front door of the Supreme Court: ‘Equal justice under law.’ It’s the fundamental principle that’s supposed to drive our legal system,” Warren wrote. “But it’s not equal justice when a kid with an ounce of pot can get thrown in jail while a wealthy executive can walk away with a bonus after his company cheats millions of people."
The Massachusetts senator, along with her 2020 opponent Sen. Bernie Sanders, is among the most outspoken opponent of big banks sitting in Congress. Former President Barack Obama’s administration faced fierce criticism from progressives who say Democrats were too lenient on Wall Street executives for their role in the 2008 financial crisis. (Zero big bank CEOs went to prison — or were even prosecuted.)
Warren’s bills come one week after the abrupt retirement of Wells Fargo CEO Timothy Sloan, whom Warren famously sparred with in a committee hearing over the bank’s fake-accounts scam. Wells Fargo employees, under pressure from managers to meet sales goals, opened millions of fake accounts without customers' permission.
“You enabled this fake accounts scam,” Warren told Sloan in 2017. “You got rich off it. And then you tried to cover it up. At best, you were incompetent. At worst, you were complicit. And either way, you should be fired. Wells Fargo needs to start over and that won’t happen until the bank rids itself of people like you who led it into this crisis.”
Cover image: Democratic presidential candidate Sen. Elizabeth Warren, D-Mass., speaks during the We the People Membership Summit, featuring the 2020 Democratic presidential candidates, at the Warner Theater, in Washington, Monday, April 1, 2019. (AP Photo/Jose Luis Magana)