    [Senate Hearing 118-771]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 118-771

                       CLEANING UP THE C-SUITE: ENSURING
                     ACCOUNTABILITY FOR CORPORATE CRIMINALS

    =======================================================================

                                    HEARING

                                   before the

                           COMMITTEE ON THE JUDICIARY
                              UNITED STATES SENATE

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                               DECEMBER 12, 2023

                                   __________

                              Serial No. J-118-46

                                   __________

             Printed for the use of the Committee on the Judiciary

                  [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                           www.judiciary.senate.gov
                               www.govinfo.gov

                                   ______

                     U.S. GOVERNMENT PUBLISHING OFFICE

    62-797                    WASHINGTON : 2026

                           COMMITTEE ON THE JUDICIARY

                       RICHARD J. DURBIN, Illinois, Chair

    SHELDON WHITEHOUSE, Rhode Island     LINDSEY O. GRAHAM, South Carolina,
    AMY KLOBUCHAR, Minnesota                     Ranking Member
    CHRISTOPHER A. COONS, Delaware       CHARLES E. GRASSLEY, Iowa
    RICHARD BLUMENTHAL, Connecticut      JOHN CORNYN, Texas
    MAZIE K. HIRONO, Hawaii              MICHAEL S. LEE, Utah
    CORY A. BOOKER, New Jersey           TED CRUZ, Texas
    ALEX PADILLA, California             JOSH HAWLEY, Missouri
    JON OSSOFF, Georgia                  TOM COTTON, Arkansas
    PETER WELCH, Vermont                 JOHN KENNEDY, Louisiana
    LAPHONZA BUTLER, California          THOM TILLIS, North Carolina
                                         MARSHA BLACKBURN, Tennessee

                 Joseph Zogby, Chief Counsel and Staff Director
          Katherine Nikas, Republican Chief Counsel and Staff Director

                                C O N T E N T S

                                  ----------

                               OPENING STATEMENT

                                                                       Page

    Durbin, Hon. Richard J...........................................     1

                                   WITNESSES

    Argentieri, Nicole M.............................................     3
        Prepared joint statement with Hon. Matthew G. Olsen..........    37
        Responses to written questions...............................    54

    Garrett, Brandon L...............................................    26
        Prepared statement...........................................    87

    Hampton, Ryan....................................................    22
        Prepared statement...........................................    94

    Lelling, Hon. Andrew.............................................    23
        Prepared statement...........................................    98

    Olsen, Hon. Matthew G............................................     5
        Prepared joint statement with Nicole M. Argentieri...........    37
        Questions submitted with no response returned................   106

                                    APPENDIX

    Items submitted for the record...................................   109

                       CLEANING UP THE C-SUITE: ENSURING
                     ACCOUNTABILITY FOR CORPORATE CRIMINALS

                                  ----------

                           TUESDAY, DECEMBER 12, 2023

                                  United States Senate,
                                    Committee on the Judiciary,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 10:13 a.m., in
    Room 216, Hart Senate Office Building, Hon. Richard J. Durbin,
    Chair of the Committee, presiding.
        Present: Senators Durbin [presiding], Whitehouse,
    Klobuchar, Hirono, Booker, Welch, Grassley, Cornyn, Hawley,
    Cotton, Tillis, and Blackburn.

              OPENING STATEMENT OF HON. RICHARD J. DURBIN,
               A U.S. SENATOR FROM THE STATE OF ILLINOIS

        Chair Durbin. This meeting of the Senate Judiciary
    Committee will come to order. My apologies for being late to
    get started, but we had a meeting this morning with President
    Zelensky of Ukraine, and most of the Senate showed up for the
    meeting. So it was--he had to be someplace at 10, and we did
    too, and went over a little bit. So, please forgive me.
        Today, the Committee's going to hear from Government
    officials and expert witnesses about the harm caused by
    unchecked corporate crime, and the steps that Congress and the
    Justice Department can take to better hold corporate criminals
    accountable.
        Countless companies have settled multi-billion-dollar
    lawsuits outside of the court. Far too often, the executives
    responsible for the decisions that led to these lawsuits have
    escaped all prosecution and liability.
        As a result, many people personally impacted by these
    corporate crimes have been denied true justice, like Ryan
    Hampton, whom we will hear from today. He is one of millions
    who became addicted to opioids because of corporate greed and
    misconduct by companies like Purdue Pharma. While billionaire
    members of the Sackler family, who own Purdue Pharma, have been
    shielded from personal liability.
        I will now show a video about the impact of corporate crime
    on America, and the Department of Justice's efforts to bolster
    enforcement policy.
        [Video is shown.]
        Chair Durbin. In recent decades, Federal prosecutors have
    regularly settled criminal investigations with corporations
    with agreements to defer prosecution in exchange for increased
    compliance. This process has led to the limited judicial
    oversight and lack of real consequences for corporations when
    they commit crimes. The victims of corporate crimes deserve
    better.
        As a first step, we need greater transparency about these
    lenient and frequently unjust resolutions. That's why last year
    I introduced with Senator Blumenthal a requirement for more
    comprehensive data collection regarding corporate crime.
        This week, we will reintroduce our Corporate Crime Database
    Act, which would require the Department of Justice to collect
    and publish comprehensive data on Federal corporate criminal
    enforcement action.
        Since our bill was first introduced last year, Justice has
    established a new searchable corporate crime database on its
    public website. While the database currently contains only 52
    cases, DOJ has promised to eventually include all of them, what
    they consider significant and relevant corporate crime.
        This is a step in the right direction. But transparency
    alone is not enough. The decision to settle these cases is
    frequently motivated by a lack of resources for Federal
    prosecution to battle deep-pocketed corporations in the
    courtroom. We need to provide DOJ with the resources necessary
    to prosecute corporations when they engage in complex criminal
    activity.
        This is a bipartisan failing. Federal prosecutions of
    corporate crime have reached record lows under both the Trump
    and Biden administrations.
        In 2020, DOJ prosecuted 94 corporate crimes. In 2021, 90
    corporate crimes prosecuted. That's less than half the average
    annual number of corporate crimes in the previous 25 years.
    Less than half.
        Corporate executives have little incentive to change their
    criminal conduct without fear of real consequences for their
    actions. Right now, they're not worried about much more than a
    measly fine, a rounding error compared to their enormous
    profits like the Sacklers.
        It's an unacceptable process that gives no relief to the
    families of the victims and those who face real life damages.
    For those who might suggest the Committee should be focused on
    other issues, keep in mind that corporate criminals, like the
    Sacklers, played a key role in causing the opioid epidemic that
    has led to hundreds of thousands of deaths.
        And the FBI estimates the cost of corporate crime is over
    $300 billion annually. In comparison, the cost of street crime,
    $16 billion annually.
        I want to commend Attorney General Garland, Deputy Attorney
    General Monaco, for making corporate crime a priority and
    updating DOJ's enforcement policies. I'm sure they'd agree that
    more needs to be done. There can't be two systems of justice.
    Too many people have suffered at the hands of corporate
    criminals and they deserve real justice.
        Senator Graham, when he arrives, will be given the option
    of an opening statement. I hope you understand, as we move
    forward.
        Let me lay out the mechanics. After I swear in Acting
    Assistant Attorney General Argentieri and Assistant Attorney
    General Olsen, they'll each have 5 minutes to provide opening
    statements. Rounds of questions will follow from Senators with
    5 minutes each, and then to our second panel.
        For our first panel, we welcome the administration's
    witnesses, whom I'll now introduce. Our first witness, Acting
    Assistant Attorney General for DOJ Criminal Division Nicole
    Argentieri. Ms. Argentieri first joined the Division in 2022 as
    Chief of Staff to Attorney General Polite, before serving as
    Criminal Division's Principal Deputy Assistant Attorney
    General. Previously served in the Justice Department for over a
    decade as an assistant U.S. attorney in the Eastern District of
    New York.
        Second witness is Assistant Attorney General for National
    Security Matt Olsen. The Senate confirmed Mr. Olsen for this
    role in 2021. In this capacity, he leads DOJ's efforts to
    combat terrorism, espionage, cybercrimes, and other threats to
    national security. A long career as a Federal prosecutor and
    intelligence official, including service with the Director of
    the National Counterterrorism Center.
        Would the witnesses please stand to be sworn in?
        [Witnesses are sworn in.]
        Chair Durbin. Let the record reflect that both have
    answered in the affirmative, and Acting Assistant Attorney
    General Argentieri, you're first. You may proceed.

               STATEMENT OF NICOLE M. ARGENTIERI, ACTING

             ASSISTANT ATTORNEY GENERAL, CRIMINAL DIVISION,

               U.S. DEPARTMENT OF JUSTICE, WASHINGTON, DC

        Ms. Argentieri. Thank you, Chair Durbin----
        Chair Durbin. I think you need to turn on your microphone.
        Ms. Argentieri. How's that?
        Chair Durbin. That's best.
        Ms. Argentieri. Thank you, Chair Durbin, and Ranking Member
    Graham, and Members of the Judiciary Committee. It is an honor
    to be here before you today to discuss how the dedicated women
    and men of the Criminal Division work tirelessly to uphold the
    rule of law, to hold wrongdoers accountable, and to protect the
    American public.
        I am very proud of the work the Criminal Division and the
    Department as a whole is undertaking related to white-collar
    and corporate enforcement. Our recent cases involving CEOs of
    two cryptocurrency companies are prime examples of our
    determination to hold companies and corporate executives
    accountable no matter how prominent or influential.
        The guilty pleas from Binance, the world's largest
    cryptocurrency exchange, and its CEO last month were historic.
    This is the largest corporate guilty plea that also involved
    the plea of the company's CEO.
        And that landmark case came on the heels of the
    Department's swift conviction of Sam Bankman-Fried, the founder
    and CEO of the cryptocurrency exchange, FTX, who perpetrated
    one of the largest financial frauds in American history.
        The Criminal Division is committed to combating white-
    collar and corporate crime, including by investigating and
    prosecuting both individuals and companies who commit crimes.
        We do so out of two primary Sections.
        Our Fraud Section, which handles all cases under the
    Foreign Corrupt Practices Act, as well as cases involving
    fraud, healthcare, security, commodities, investment fraud.
        Second, our Money Laundering and Asset Recovery Section
    prosecutes financial institutions and their insiders for Bank
    Secrecy Act and sanctions violations.
        The Criminal Division is also proud to be at the forefront
    of other important Department initiatives from Task Force
    KleptoCapture, to our National Cryptocurrency Enforcement Team.
    Corporate crime undermines public trust in the fairness of our
    economic institutions. And corporate crime threatens our
    national security by destabilizing our institutions from Main
    Street to Wall Street.
        Holding culpable individuals accountable is the
    Department's number one priority in this area. Corporations can
    only act through people, and we, of course, cannot put
    companies in jail.
        This year so far, the Criminal Division's Fraud and MLAR
    Sections have secured over 280 convictions against individual
    defendants, and they charged or convicted more than 30
    executives. Our corporate resolutions this year have secured
    over $4.8 billion in criminal penalties from corporations with
    more to come, and the numbers demonstrate the scale and
    complexity of our white-collar cases.
        This year, the average penalties imposed in our corporate
    resolutions was $350 million, and the average alleged fraud
    loss in cases brought by our Fraud Section was over $25 million
    per individual defendant. These are the highest numbers in
    years.
        The Department is also implementing robust policies to
    encourage companies to voluntarily self-disclose misconduct and
    cooperate with our investigations.
        Companies that self-report their misconduct, set the right
    tone for their employees and lead by example, showing with
    their actions that criminal conduct will not be tolerated and
    will be reported to authorities. Companies that self-disclose
    may alert us to criminal conduct we would otherwise be unaware
    of and enables us to hold culpable individuals accountable.
        Let me just give you just one example. In 2022, Jardine
    Lloyd Thompson, a reinsurance broker, made a voluntary self-
    disclosure about bribery of foreign officials under our policy,
    started cooperating. That led to the prosecution of five
    individuals, and the development of similar bribery cases
    against two other UK reinsurers, H.W. Wood and Tysers.
        Building on that evidence, we were able to prosecute three
    additional individuals, and just last month, held H.W. Wood and
    Tysers to account for their conduct.
        A single self-disclosure in 2022 not only led to meaningful
    individual and corporate penalties against eight individuals
    and three companies, it also allowed the Department to achieve
    a significant impact across the reinsurance industry.
        Deterrence and creating a culture of compliance is another
    pillar of our corporate enforcement policy. Our clear
    communications to the business community about our policies and
    our expectations regarding corporate compliance programs is key
    to deterring crime. Where misconduct does occur at a company,
    we seek to hold the company accountable, but also to remediate
    to avoid future misconduct.
        We will continue to work every day not only to bring
    impactful cases and hold white-collar criminal actors
    accountable, but also to apply our corporate enforcement
    policies with transparency, consistency, and predictability so
    that we can affect real change in corporate behavior. Thank
    you.
        [The prepared joint statement of Ms. Argentieri and Hon.
    Matthew G. Olsen appears as a submission for the record.]
        Chair Durbin. Thank you very much. Mr. Olsen.

             STATEMENT OF HON. MATTHEW G. OLSEN, ASSISTANT

                ATTORNEY GENERAL FOR NATIONAL SECURITY,

               U.S. DEPARTMENT OF JUSTICE, WASHINGTON, DC

        Mr. Olsen. Thank you, Chair Durbin, and good morning. It is
    a--I appreciate the opportunity to testify before the Committee
    this morning.
        In 2006, Congress established the National Security
    Division to carry out the Justice Department's mission of
    combating terrorism, and espionage, and other threats to our
    national security. Fighting terrorism remains a top priority
    for us, but the threat landscape has changed significantly in
    recent years.
        Today, the United States faces dynamic threats from a
    number of capable nation-state actors--China, Russia, Iran,
    North Korea--and these countries engage in aggressive and
    sophisticated efforts, both inside our Borders and abroad. They
    work to undermine our security, our economic interests, and our
    democratic institutions.
        The National Security Division's work has evolved to
    respond to the challenges that we face from nation-state
    adversaries. We are focused especially on our enforcement of
    sanctions and export controls on countering malicious cyber
    activity, foreign malign influence, and foreign investment
    risks.
        And increasingly, our efforts interact with corporations
    and the business community. Corporations are on the front lines
    when it comes to enforcing national security tools like
    sanctions and export controls. The bottom line is that
    companies make business decisions every day that have serious
    consequences for our national security. When corporations and
    their executives break laws that protect national security, we
    use the full range of our authorities to hold them accountable.
        Last fall, for example, the National Security Division
    secured the first ever guilty plea by a corporation for
    supporting terrorism, and a $778 million penalty in that case.
        Last spring, we obtained a guilty plea from the subsidiary
    of a British tobacco company for violating sanctions laws
    against North Korea. The company paid a $629 million penalty in
    that case--the largest ever criminal penalty for violating
    North Korea sanctions.
        And then just last month, along with the Criminal Division,
    we secured a guilty plea by Binance, the world's largest
    cryptocurrency exchange for violating, in part, Iranian
    sanctions, and that case involved a $4.3 billion penalty, one
    of the largest criminal penalties in DOJ history, along with
    the guilty plea by the corporation's CEO.
        Finding and prosecuting corporate and individual wrongdoers
    is a core responsibility for us, but we also need companies to
    prevent people from evading sanctions and violating our export
    control laws in the very first place. We rely on financial
    institutions and technology companies to be gatekeepers,
    building strong compliance programs to prevent, detect, and
    report violations. Our private sector engagements, our
    voluntary disclosure policies, they all encourage compliance
    and drive corporate responsibility.
        At the end of the day, every dimension of our work and our
    relationships with companies and corporations, advances our
    national security mission. So, given the critical role that
    businesses play in protecting our national security, we are
    investing in corporate enforcement.
        We've added 25 new prosecutors, more than doubling the
    number of attorneys assigned to investigate and prosecute these
    crimes. We've also hired two veteran prosecutors to serve as
    the Division's first-ever Chief and Deputy Chief of Corporate
    Enforcement.
        So, here's why this work matters so much.
        Our enforcement tools cut off Iran's access to the
    financial markets and technologies that it needs to support its
    weapon systems and its brazen aggression.
        Our work prevents China from stealing cutting-edge
    technologies that enables their military advances and their
    human rights abuses.
        They block North Korea from funding its nuclear ambitions.
        And our efforts impose costs on Russia for its invasion of
    Ukraine.
        I was in Kyiv last month where Ukrainian officials showed
    me Russian drones recovered from the battlefield made with
    U.S.-manufactured parts. I saw firsthand the devastation that
    these weapons can inflict in the hands of our adversaries.
        The stakes are high, and the consequences of violating
    these laws are real. So that is why we are so determined to
    make sure that companies act responsibly, and uphold their
    national security obligations. I look forward to your
    questions.
        [The prepared joint statement of Mr. Olsen and Ms. Nicole
    M. Argentieri appears as a submission for the record.]
        Chair Durbin. Thanks, Mr. Olsen. Your team worked with U.S.
    Attorney's Office for the Eastern District of New York to
    successfully prosecute Lafarge, a company that paid millions to
    terrorist groups like ISIS for permission to operate a cement
    plant in Syria. This prosecution was the first time ever that
    the Department secured a corporate guilty plea for material
    support of terrorism. Lafarge was sentenced to pay fines of
    more than $750 million.
        I celebrate this victory. But I'm concerned that this case
    reflects the increasing trend of resolving these matters
    against corporations without any individual liability or
    accountability. Although French authorities arrested some of
    the executives involved, no Lafarge executives were ever
    charged in the United States. Why it is that the case?
        Mr. Olsen. Thank you, Chair Durbin. That, in fact, case was
    a groundbreaking case. First, as you mentioned, the first ever
    time that we prosecuted a company--a corporation, for violating
    our material support to terrorism laws, in that case providing
    material support to ISIS by doing business in Syria, in
    violation of the material support laws and our sanctions laws.
        We worked closely with French authorities to ensure that
    that prosecution covered all of the wrongdoing. That the
    individual members of Lafarge are facing prosecution in France
    for their part.
        And in fact, I mentioned that we've brought in our first
    Chief of Corporate Enforcement, one of the individuals who
    handled that case in Eastern New York, has joined the National
    Security Division to bring that expertise to us, to the
    National Security Division, to help us as we advance these
    efforts going forward.
        Chair Durbin. So, are you saying that because the French
    were acting on individuals, that the United States did not?
        Mr. Olsen. In every case, we look for in the opportunity to
    prosecute individuals. That's our priority. In this case, the
    way that case played out, it made more sense for us to work in
    tandem with the French and to divide up our work in that
    regard.
        Chair Durbin. Ms. Argentieri, let me talk a little bit
    about Purdue Pharma. I think everybody's aware of what
    happened.
        This company made billions of dollars by selling an
    addictive product, which took thousands of lives in the United
    States.
        A bankruptcy proceeding was filed, and somehow, the Sackler
    family which owned Purdue Pharma, was trying to engineer a
    possibility that they would not only escape civil liability,
    but even criminal liability in the process. Tell me about your
    reaction to that outcome.
        Ms. Argentieri. So--I'll get that right by the end of the
    year--so, the Department is committed to using all tools to
    combat the opioid crisis. It's something that we take very
    seriously. We, in the Criminal Division, actually have three
    Strike Forces to address the opioid pandemic--the opioid
    epidemic based on data. And we've charged over 100 individuals,
    including the majority of those individuals being healthcare
    providers or medical professionals that unlawfully or illegally
    prescribed opioids. So, it is something that we share your
    concern.
        As to the Purdue Pharma settlement from 2020, that--in that
    case, Purdue pled guilty to 3 felony counts. It's a case the
    Criminal Division was not involved in, but I can speak to parts
    of it. They pled guilty to 3 felony counts that were very
    serious. And it was a substantial step toward Purdue taking
    responsibility for their part--their part in the opioid
    epidemic. As part of that, they had to agree to remediation and
    the financial penalties make it the largest resolution with a
    company--with a pharmaceutical company.
        Chair Durbin. Why was no criminal action brought against
    the Sacklers?
        Ms. Argentieri. So, pursuant to long-standing Government
    policy, I can't speak to whether--how we make charging
    decisions. What I can say, Senator, is that we follow the facts
    and the law, and we apply the principles of Federal
    prosecution.
        Chair Durbin. Well, I'm glad to hear that. But I will tell
    you this, when the Sackler family ends up with billions of
    dollars and walks away from the devastation they created, it's
    just unacceptable.
        The message is, basically, if you've got enough money, you
    can game the system and walk away with the plenty of billions
    when it's left over. Don't you see that?
        Ms. Argentieri. We share your concern about the opioid
    epidemic. As I said, the Criminal Division was not involved in
    that agreement--that 2020 agreement, but it was a significant--
    I'm sorry?
        Chair Durbin. Why didn't they bring their own action
    against the Sacklers?
        Ms. Argentieri. So that was an investigation out of a
    different Office. But as I said, we follow the facts and the
    law where we can. We do prosecute individuals. But that as to
    why no one else was prosecuted, I can't say further.
        Chair Durbin. Well, that's at the heart of this hearing, is
    the understanding that some people have found how to game the
    system.
        Now, some are naive or stupid enough to go ahead with their
    own personal defenses. We recently saw in the crypto case, a
    finance case.
        But the problem we see here is that these people lawyered
    up and put themselves in a political position where the family
    basically escaped liability when it was over. And that strikes
    me as a sad condemnation on our justice system. Senator
    Grassley, I believe you're next.
        Senator Grassley. Ms. Argentieri, in response to my
    February letter this year about the Crime Victims Fund, the
    Justice Department said that the ABB Limited agreed to pay $315
    million criminal penalty as part of a deferred prosecution
    agreement. That agreement, quote, ``resulted in a significant
    deposit in the fund,'' end of quote.
        However, the terms of the agreement stated only $72.5
    million would be collected by the United States. The rest would
    be reduced by up to $242 million to settle other claims,
    including $179 million involving foreign governments. I'm
    looking for the financial details. How much of the $315 million
    was actually collected and deposited in the Crime Victims Fund?
        Ms. Argentieri. Thank you for your question, Senator. I
    agree with you that the Crime Victims Fund is essential to
    providing compensation and assistance to victims who--in the
    wake of crime, both physical, emotional, and financial
    assistance.
        And I want to thank many of the Members in this room for
    amending the Crime Victims Fund to make it possible to put
    fines from non-prosecution agreements, deferred prosecution
    agreements into the fund.
        Senator Grassley. How much of the $315 million was actually
    collected and deposited in that Fund?
        Ms. Argentieri. So, Senator----
        Senator Grassley. I know all about the Fund. You don't have
    to tell me about that. I just want to know how much money is--
    went to it.
        Ms. Argentieri. So, I know that the Fund currently has over
    $1 billion dollars in it for this year. As to how much
    precisely from that resolution went into the Crime Victims
    Fund, I would have to get back to you on that. And I commit to
    doing so.
        Senator Grassley. Now, I appreciate the fact you might not
    know now, and you said you're going to get back to us. Will you
    get back to us?
        Ms. Argentieri. I commit to doing so.
        Senator Grassley. Okay. Then tell me why the U.S. criminal
    penalty offset by payment to foreign authorities is the same
    done for the United States by other countries?
        Ms. Argentieri. So many of the cases that we bring, we seek
    to bring the most impactful cases so that we can affect change
    across industries and global change. Here, the resolution
    involved--it was historic, and it was our first resolution with
    South Africa.
        And so, part of--part of the work that we do as part of the
    ``Anti-Piling On'' is making sure that when we do these
    resolutions where it's important to have cooperation from
    foreign countries, because that's how we get evidence
    internationally, we do credit foreign governments, as part of
    our Anti-Piling On policy, to make sure that the end resolu--
    the end of the resolution is just and fair.
        Senator Grassley. Yes. Also, do you--the 2022 Criminal
    Division Fraud Section year-end report stated that it imposed
    more than $1.15 billion in U.S. criminal monetary penalties for
    corporate offenders. As you're aware, imposed is one thing, it
    doesn't necessarily mean collected. Of this $1.1 billion, how
    much was collected? And of that amount, how much was deposited
    in the Crime Victims Fund?
        Ms. Argentieri. So, thank you for your question. I think
    that the Fraud Year in Review report is helpful to providing
    transparency about our work. And as to how much of that $1.3
    billion went into the fund, that's another thing that I commit
    to getting back to you on.
        Senator Grassley. Okay. Will you get back to me on that?
        Ms. Argentieri. Yes.
        Senator Grassley. Okay. Also, for you, last week, Director
    Wray said the FBI is unfairly blamed when agents aren't
    prosecuted for FISA abuses because the FBI makes prosecution
    referrals, but doesn't have the authority to prosecute. Is the
    FBI referring FISA abusers to the Justice Department for
    prosecution? And is the Justice Department declining to
    prosecute?
        Ms. Argentieri. So, the Department must hold itself to the
    highest standards, and that means conducting our work by the
    book. And it means that we hold anyone accountable who's
    engaged in wrongdoing.
        I can't speak to any or confirm any potential
    investigations. But I can tell you that when we are looking at
    charges against individuals or companies, we follow the facts
    and the law, and we--we apply the principles of Federal
    prosecution.
        Senator Grassley. Do you believe that folks who knowingly
    help others submit material--false information to the Foreign
    Intelligence Surveillance Court should be criminally or civilly
    liable for that false submission?
        Ms. Argentieri. I think as Department employees, we must
    hold ourselves to the highest standard, and that where we fall
    short, we should be held accountable.
        Senator Grassley. Do you think that these people that give
    this false information should be criminally and civilly liable
    for that false information?
        Ms. Argentieri. So, I can't speak hypothetically to these
    individuals. I'm not sure of this----
        Senator Grassley. I'm not asking about an individual. I'm
    just asking you about the whole mass of people that might fall
    into this category.
        Ms. Argentieri. We take--the Department of Justice
    prosecutes violations of Federal law.
        Senator Grassley. And then last--to you, according to the
    Sentencing Commission in 2022, the Justice Department brought a
    case against an offending corporate officer or employee only 60
    percent of the times it charged the corporation.
        The Justice Department doesn't appear to target COs. Is
    that--why is that number so low?
        Ms. Argentieri. So--so, if I could just speak for a second
    about the types of cases the Criminal Division is doing. We do
    try to do the most impactful cases, which are, which can be
    complex, they can be time consuming, but we think that we have
    shown significant results.
        As to your question on corporate executives, this year
    alone, we have charged over 30 corporate executives, including
    the CEO of the world's largest cryptocurrency exchange who pled
    guilty last month.
        Last week, we charged a different CEO of a publicly traded
    healthcare company for securities fraud and healthcare fraud.
        Holding individuals accountable is our highest priority in
    this area because companies can only act through individuals.
    And companies themselves cannot go to jail----
        [Gavel is tapped.]
        Ms. Argentieri [continuing]. So, we are very focused on
    individual prosecutions.
        Chair Durbin. Thank you, Senator Grassley. Senator Hirono.
        Senator Hirono. Thank you, Mr. Chairman. So, Ms.
    Argentieri, you just talked about going after the corporate
    officers, directors. And what happens to them? Do they also get
    to enter into these deferred or these limiting agreements so
    that they do not face any jail time? What happens to the
    corporate officers that you just talked about going after?
        Ms. Argentieri. So, as I said, we've charged over 30
    corporate executives this year by guilty plea or convicting
    them after trial. I would also like to point out that we, in
    the Criminal Division, are trying more white-collar cases than
    ever.
        Last year, we hit a record high. We charged, we, we tried
    52 cases of individuals involved in corporate crime and we
    convicted 57. So, individuals are being held accountable.
        Senator Hirono. That's good to know. So, what happens to
    them, those who you have tried?
        Ms. Argentieri. So, they----
        Senator Hirono. Do they go to prison?
        Ms. Argentieri. Yes, they do.
        Senator Hirono. Would you consider that to be one of the
    best deterrents for white-collar crime when their--the
    executives go to prison?
        Ms. Argentieri. So, there are many deterrents to white-
    collar crime. One is holding individuals accountable so that
    others in the public can see what happens. But by holding
    companies accountable, we also engage in specific deterrence.
    By hav--I'm sorry?
        Senator Hirono. The thing is though, companies don't go to
    prison. And so, I do have some concerns about the holding and
    also boards and shareholders. So, these are not just the
    executives of the companies, but the shareholders.
        So, can you speak a little bit about, you know, how and
    when the Department could hold corporate boards and
    shareholders accountable----
        Ms. Argentieri. So----
        Senator Hirono [continuing]. Not just the executives of the
    company?
        Ms. Argentieri. So, with our criminal resolutions, again,
    we've entered into 90 since 2017. With companies, we are
    holding the shareholders and the company itself accountable.
        And the way that we're doing that is when we resolve with a
    company, whether it's through a guilty plea, a deferred
    prosecution agreement, or a non-prosecution agreement, those
    are highly negotiated forward-looking agreements.
        Senator Hirono. Mm-hmm.
        Ms. Argentieri. And under those agreements, companies have
    real obligations. They have to cooperate in an ongoing fashion
    with the Government. They have to remediate their compliance
    programs.
        And what that means is we have our experts look at their
    compliance programs, meet with their compliance officers,
    understand what their risk is, how are their compliance
    programs, and then they have to remediate. And that's something
    that we judge them on.
        And if they fail to live up to the obligations under those
    agreements, there are serious consequences.
        So, for example, in 2019, we entered into a deferred
    prosecution agreement with Ericsson. Ericsson did not live up
    to the terms of its agreement. It violated the agreement by not
    disclosing to us relevant information we asked for that
    prevented us from prosecuting individuals.
        They also failed to disclose a problematic bribery scheme
    in Iraq.
        What did we do? We, we basically tore up their agreement.
    They had to plead guilty to the two felonies that had been on
    the table before. They lost all of the cooperation credit they
    had received, had to pay an additional $200 million, and we
    extended the term of their monitorship.
        So, all of these agreements have an impact on companies,
    and what we're trying to do is to incentivize good corporate
    conduct to detect and to deter future misconduct.
        Senator Hirono. So, I note that the Fraud Section employs
    around 150 prosecutors to root out, well, white-collar crime.
    And it's only a slight increase over the number of prosecutors
    employed by the Fraud Section 10 or even 20 years ago. Do you
    have the resources that you need and the number of prosecutors
    that you need to prosecute these kinds of crimes?
        Ms. Argentieri. So, we have been able to put the resources
    that we have to prioritize white-collar prosecution, including
    individual prosecutions. But with more, we could always do
    more.
        Senator Hirono. I think you can--you should, you should
    have more resources. I do have a question about the use of
    forfeiture. So, this is both for you and for Mr. Olsen.
        Mr. Olsen, several months ago, the Department announced a
    guilty plea involving the attempted sale of Iranian oil. And
    the plea involved a fine of $2.5 million and a period of
    corporate probation.
        But most significantly, the company transporting the oil
    was required to bring the oil to the United States where it is
    the subject of a forfeiture action, and the oil is worth
    perhaps some $75 million. Do you think that they--that you are
    using the forfeiture provisions that you have to the extent
    that you can? For example, how about seizing the ship that is
    being used to transport the oil?
        Mr. Olsen. Senator, of course we look for every opportunity
    to impose costs on those individuals or companies that violate
    our sanctions laws. That is a very effective tool in preventing
    that money that would go from the illicit sale, for example, in
    that case of oil----
        Senator Hirono. Mm-hmm.
        Mr. Olsen [continuing]. To the Iranian regime where it will
    support their malign efforts in the region and against us here.
        So yes, I mean, we look for every opportunity to extract
    the maximum penalty to impose those costs. However, of course,
    we are subject to the rules of the court and to follow the rule
    of law in general to, you know, to--as we go after that money,
    whether it's to seize it or forfeit it.
        Senator Hirono. Then maybe we need to provide you with more
    authority to seize more of the assets of these bad actors.
        [Gavel is tapped.]
        Senator Hirono. Thank you.
        Chair Durbin. Thank you, Senator Hirono. Senator Cornyn.
        Senator Cornyn. Thank you, Mr. Chairman. There's a lot we
    could talk about, but Mr. Olsen, I want to talk about Section
    702 of the Foreign Intelligence Surveillance Act.
        There are stories that are on social media, and I actually
    hear Members of Congress suggesting that under Section 702,
    that the U.S. Government can spy on innocent Americans by
    listening to their phone calls and reading their emails. Is
    that true or false?
        Mr. Olsen. So that's--that's fundamentally false. That is
    not what 702 does.
        Senator Cornyn. Yes, 702 is a Foreign Intelligence
    Surveillance Act. That's why the F is in ``Foreign''--means
    that it's target is foreigners overseas, not in the United
    States, for who are suspected or believed to be a threat to the
    United States national security. Correct?
        Mr. Olsen. Correct.
        Senator Cornyn. So, here's where people, I think, get a
    little confused if they are actually communicating with an
    American or a U.S. person, it's called, right, it could be a
    legal permanent resident, then there is--that information is
    collected as part of 702--the contact between the foreign
    target and the U.S. person. Right?
        Mr. Olsen. Correct. That's right.
        Senator Cornyn. And that goes into a database that then can
    be queried by the FBI or the Intelligence Community in the
    future.
        Mr. Olsen. Correct. Under rules.
        Senator Cornyn. So the--so the, it's a little weird because
    I think some people say, well, you shouldn't be able to get
    incidental collection on the U.S. person. But I was thinking
    that, you know, if you go to a court and get a warrant for a
    wiretap, you don't know who the person you've wiretapped under
    the authority of the court is actually going to be talking to.
    Do you?
        Mr. Olsen. It's exactly the same in the criminal as in the
    foreign intelligence context. Exactly, right.
        Senator Cornyn. And so, if you want to find out more about
    that U.S. person, don't you have to go to court and get a
    warrant from the Foreign Intelligence Surveillance Court?
        Mr. Olsen. Exactly. If the Government is going to target
    the U.S. person, or somebody in the United States, then the
    Government must go to the FISA Court, establish probable cause,
    and get an order from the Court in order to conduct the
    surveillance of the person in the United States.
        Senator Cornyn. And there is this database of lawfully
    collected 702 information that can then be queried or tasked
    for further information. And there's been some suggestion that
    this lawfully collected 702 information that you would need an
    additional search warrant in order to look at what you've
    already lawfully collected. Does that make sense to you?
        Mr. Olsen. It does not. It then, I suppose more
    importantly, it doesn't make sense to the entire leadership of
    the Intelligence Community, which has come out unanimously
    opposed to any sort of a warrant requirement, to simply query
    the data that's been lawfully collected.
        Both because it's not required by the Constitution, but,
    more importantly, because it would be devastating to the value
    of this indispensable collection.
        Senator Cornyn. It seems kind of odd to say information
    that's been lawfully collected, if you want to actually use
    that information, you have to go back and ask permission for
    something that's already been lawfully collected.
        So, like I said, there's just a lot of myths, and
    conspiracy theories, and incorrect narratives, which is the
    reason why I'm, like--I appreciate the opportunity to be able
    to get you to clarify some of this for us.
        I think, basically, the misconception is, while the
    Constitution clearly applies to American citizens, that's why
    you have to go to court and show probable cause, that it does
    not--the Constitution does not protect foreign targets'
    information. Does it?
        Mr. Olsen. It does not. The Fourth Amendment does not apply
    to protect non-U.S. persons who are overseas.
        Senator Cornyn. What would happen if we--if Section 702
    expired at the end of this year without reauthorization?
        Mr. Olsen. I think it would, again, as the Intelligence
    Community, the Attorney General, the Director of National
    Intelligence have all made clear, it would be devastating to
    our national security. So, I do welcome the opportunity, here
    this morning, to speak to you more about this.
        Senator Cornyn. Well, I've called it the most important law
    that most Americans have never heard of before. And as I said,
    there just seems to be a lot of confusion, and so I appreciate
    the opportunity to ask you a few questions and hopefully
    provide some clarity. Thank you very much.
        Chair Durbin. Thanks, Senator Cornyn. Senator Blackburn.
        Senator Blackburn. Thank you, Mr. Chairman. Ms. Argentieri,
    let me--Argentieri. Am I saying that right?
        Ms. Argentieri. You are.
        Senator Blackburn. Thank you very much. I want to talk a
    little bit about sexual abuse in the workplace. And recently,
    Senator Gillibrand and I led on a piece of legislation that
    President Biden signed, the Speak Out Act. And this legislation
    would prohibit the use of predispute NDAs in the case of
    workplace sexual harassment.
        But I think that that's a good step. It's a good first
    step. I think there is more that needs to be done in order to
    make certain that workplaces are safe for women, and that they
    are functioning without the trauma and the drama that comes
    with that type of harassment. So, I'd like to hear what DOJ is
    doing to ensure that workplaces are transparent and safer.
        Ms. Argentieri. Thank you for your question. So, the
    Department shares your concern. Shares your concerns about
    making sure that people, individuals feel safe in the
    workplace, and that there are mechanisms for individuals to
    speak out, to be protected. And we are committed to having a
    safe workplace environment. As to what we're specifically
    doing, I can get back to you about that in writing.
        Senator Blackburn. I would like to know that. And I think
    we've seen other Federal agencies that have a history of not
    producing that safe workplace.
        I want to talk with you about crime, and you and I spoke a
    little bit about this before the hearing. And we have seen a
    lot of crime here in DC.
        We've talked a little bit about Memphis and the crime that
    is there. And I know that you all have a unit that is going to
    be working with the City of Memphis in order to address the
    crime situation.
        And as I was looking at this, I saw--and going through
    DOJ's funding priorities, and we learned a lot about what's
    important to you by looking at these funding streams. And you
    all sought $300 million for the Accelerating Justice System
    Reform initiative. Now, this is something that is, ``re-
    imagining public safety,'' and that is a quote that is on DOJ's
    website.
        What people want is safe communities and safe cities. They
    want their children to be safe. They want to see you all get
    behind violent crime. So why would you put $300 million into
    re-imagining public safety when what you're hearing from
    communities is you've got to get in behind this and do
    something about it today?
        Ms. Argentieri. So, there is no higher priority for the
    Department than keeping the American people safe. And we are
    committed to reducing violent crime, to making sure that people
    are safe in their neighborhoods, in their homes, when they're
    walking their children to school.
        I'm very proud of the work the Criminal Division is doing
    in this space. We have two different violent crime initiatives
    right now. One in Houston, one in Memphis, which were cities
    that were initially selected because of a rise in violence. And
    so--but the initiative----
        Senator Blackburn. Okay.
        Ms. Argentieri [continuing]. Is holistic and different----
        Senator Blackburn. All right. Let me jump in on that with
    you. But at the same time, we've got 72 million Americans, the
    City of Memphis being one, where you have DAs that are soft on
    crime, that have been backed by Soros and some of his
    initiatives, and we see the same thing happening.
        You've talked about two of these cities. So, what are you
    doing with these DAs, with these prosecutors that go below
    sentencing guidelines? Or, they are not holding kids that are
    under 18, teens that are out here committing these carjackings
    and these smash-and-grabs?
        So, these are policies--you all have to have an opinion on
    these policies. And I think it's confusing to us that you say
    you're going to do this, but then you don't step forward and
    really go for what is necessary to make these communities safe.
        Ms. Argentieri. So--so, I'm so glad that you asked this
    question because we really are stepping forward, and it's not
    just with prosecutions. So, for an example, the violent crime
    initiative I described, we're using data to identify the worst
    of the worst offenders that are driving violence in these
    communities.
        But we're also going into the communities to build trust
    and relationships, to teach them----
        [Gavel is tapped.]
        Ms. Argentieri [continuing]. About the grants that are
    available to help people who are reentering the community,
    reenter safely, to have the supports that they need to be
    successful. It is like a whole-of-community approach--that
    rehabilitation, reentry. So, it's not just prosecuting----
        Senator Blackburn. Okay. My time is expired. Let's visit
    separately about that. And thank you for being here today.
        Ms. Argentieri. Thank you.
        Chair Durbin. Senator Klobuchar.
        Senator Klobuchar. Thank you very much, Mr. Chair. I'll
    start with you, Ms. Argentieri.
        First of all, thanks for your work. I think you know how
    important it is for me to make sure the Antitrust Division is
    funded, both for civil and criminal cases.
        Senator Grassley and I led the Merger Filing Fee
    Modernization Act, which passed the Senate and is starting to
    be implemented. And I hope it's implemented correctly. I'll
    leave that for another day.
        But could you talk about how important it is to make sure
    we have funding in Antitrust, one.
        And then second, a more, kind of, in the weeds question.
    When the Antitrust Division recently announced deferred
    prosecution agreements with two pharmaceutical companies, the
    Department determined that a fine was not sufficient penalty
    and instead required the drug companies to divest from a widely
    used cholesterol medicine that was a core part of the price
    fixing scheme between the companies.
        This was the first time that the Department required
    divestiture as part of a corporate criminal settlement. I'm not
    complaining about it--I know there's a lot of people complain
    about things here.
        I just wondered if you could talk about innovative remedies
    such as divestiture to promote accountability and deter further
    corporate crimes, because I see it as a way of helping us on
    the price issue.
        Ms. Argentieri. So, thank you. Thank you for your question.
    So, the Department of Justice, including the Antitrust
    Division, are committed to enforcing all Federal laws,
    especially to maintain the competitive environment that is so
    important to our economy.
        And so, I think when you're talking about innovative
    remedies and divestiture, I would defer to the Antitrust
    Division on that specific remedy to discuss it.
        We, in the Criminal Division, have also tried to use
    innovative solutions in our corporate resolutions to make sure
    that we are changing a company--changing a company's corporate
    culture.
        One example that I could point to is in historic Binance
    resolution, which we announced last month. Part of the
    resolution with the company required the CEO to step down, and
    for them not to have any additional CEOs that had been
    convicted--convicted of crimes. It's a way to change--to
    change, change the company from the top--from the tone at the
    top.
        But we are always looking for new ways to incentivize good
    corporate conduct across the Department.
        Senator Klobuchar. Okay, thank you.
        Mr. Olsen, in October, Deputy Attorney General Monaco said
    that the biggest shift in corporate criminal enforcement is the
    rapid expansion of national security-related corporate crimes.
        The National Security Division has added more than 25 new
    prosecutors to meet threats from corporate crimes, from
    terrorist financing, to sanctions evasion schemes that fund
    North Korea's illicit WMD programs. Can you talk about that?
        And also, that one of the most effective ways of shutting
    down a criminal organization is by targeting their income. As
    you know, the U.S. and its Allies have developed a robust
    sanction scheme against the regime--against the Russian
    government, and the oligarchs who support Putin. Talk about how
    that's going. So really, two questions. One is the importance
    of this expansion to focus worldwide on terrorist schemes, and
    then the work on Russia.
        Mr. Olsen. Yes, of course. Thank you, Senator. As the
    threat landscape has changed, as we're seeing increasing
    threats from nation-states like Russia, China, Iran, North
    Korea, our enforcement priorities have changed. So, we are
    increasingly focused on, as you mentioned, sanctions evasion,
    violations of export control, nation-state cyberattacks,
    foreign-line influence.
        And these--these enforcement priorities mean that we are
    increasingly interacting with the private sector, and because
    they are often on the front lines of these violations, in some
    cases actually as the violators. And we've brought cases
    against companies like British American Tobacco that evaded our
    sanctions against North Korea.
        And so, what we've done is invested in those priorities by,
    as you mentioned, adding prosecutors to our Counterespionage
    and Export Control Section. We've added two experienced
    prosecutors to help lead this effort.
        But we are responding to the threats we face. And what that
    means is increasing efforts around these crimes that occur at
    the intersection of national security and the decisions that
    companies are making.
        I should add that in addition to our straight enforcement
    and our prosecution efforts, we also are trying to drive
    compliance. I think it's really important to identify the fact
    that companies are on the front lines and they're sometimes the
    first to see these violations. So----
        Senator Klobuchar. Yes.
        Mr. Olsen [continuing]. They need to develop these
    compliance programs. Let me turn to Russia, to your second part
    of your question. Of course, Russia and its invasion of Ukraine
    is a priority for us.
        I was in Ukraine last month. I met with officials there.
    They are very determined to support our efforts to hold--to
    hold Russia accountable, whether that's going after oligarchs
    who support the Kremlin, or stopping the flow of technologies
    that go into Russian military systems. So that's been an
    effective effort. We have more work to do, but we're very
    focused on that.
        Senator Klobuchar. Thank you.
        Chair Durbin. Thanks, Senator Klobuchar. Senator Tillis.
        Senator Tillis. Thank you, Mr. Chairman, and thank you,
    both, for being here.
        Ms. Argentieri, I got a quick question. I think you
    mentioned or you said that there had been 52 cases and 57
    convictions. Are those numbers right, recently, or over the
    last year?
        Ms. Argentieri. I said that in 2022, we had a record year
    of white-collar trials in the Criminal Division, and that the
    Fraud Section tried 52 cases and convicted 57 defendants.
        Senator Tillis. Can you give me an example of what you
    would consider to be one of the most profound convictions?
        Ms. Argentieri. So last year after a trial, we convicted
    Mark Schena, who is an executive at a company that engaged in
    widespread COVID and securities fraud. He was sentenced to 8
    years in prison this year. The scheme involved statements that
    he made about COVID testing and other types of genetic testing
    that was not----
        Senator Tillis. So that's a happy ending. The question I
    have is, what more should we do? When you have cases come
    before you, how many instances do you say, ``But for this
    enabling statute, I would love to pursue this.''
        In other words, what obstacles do you have today to pursue
    criminal convictions of corporate bad actors? What are you
    missing? What do we need to do to better enable you, outside of
    the resource question, where you can always do more if you have
    more?
        Ms. Argentieri. So, I believe today we are sending up
    additional legislation to address some of our issues in
    international matters----
        Senator Tillis. Can you in 30 seconds give me the
    highlights of some of your priorities, things that would be
    helpful?
        Ms. Argentieri. Yes. So, for example, with the rise in
    digital assets many of the cases that we're doing involve
    cryptocurrency exchanges. Some of the things that we're looking
    for, for example, are in anti-tip-off legislation to keep
    financial institutions from telling the subjects and targets of
    our investigations about the investigations before they go
    forward. Increased penalties for violations of the BSA, related
    to money services businesses. So, for example, that statute has
    much lower penalties than other types of money laundering
    offenses.
        Senator Tillis. That would be very--my office would be very
    interested in that. I got a very compelling presentation from
    the DEA. We're talking about how cryptocurrency has become the
    laundromat of the future for currency, and we've got to get our
    hands around it.
        What we need to do is strike the balance because we also
    know that regulators could--others could use this for purposes
    just to shut down the banking industry or shut down payments
    industry. We need to work on that. But that's something I'm
    particularly interested in.
        I did have a--I read an article this morning. Do you know
    what G-T-A-I-R-L stands for?
        Ms. Argentieri. No.
        Senator Tillis. ``Grand Theft Auto In Real Life.''
        We have these minors here in Washington, DC, thinking that
    they're playing a video game when they're holding people at
    gunpoint and stealing 10 cars. We have these organized crime
    rings.
        And I think what I'm--these 15-year-olds need to be held
    accountable, and hopefully we can save them from a life in
    prison. Probably the odds are against them if they think this
    is a video game and they can threaten people's lives.
        But I've always, or I've heard from many law enforcement
    people who know their communities well, that about 80 percent
    of all the crimes are perpetrated or at least organized by
    about 20 percent of the criminals in the community.
        Is there--is that concept--I'm not talking about 80/20 or
    whatever. But is there evidence to suggest that if we did a
    better concerted--in the same way I want to go after corporate
    bad actors, if we could go after what I would consider to be
    corporate criminals--people organizing, whether it's organized
    retail theft, which is a real problem, it's going to create
    shopping deserts in some of the more challenged communities
    because they're just going to leave.
        They're actually destroying communities. Is there anything
    that we should be doing to provide you with more prosecutorial
    tools to go after these corporate--what I consider to be
    corporate criminals?
        Ms. Argentieri. Look, I think--I think you made the point
    earlier that with more resources we could do more. And that's
    for sure----
        Senator Tillis. With the existing tools? Or do we need more
    tools based on the nature of what we're talking about here,
    like a social media message perpetrated by someone who's
    encouraging groups of people to go in and destroy a store and
    walk away with it? Or do you have already all the tools that
    you would need to take those fact patterns and get that person
    to be guilty of organized crime, for example?
        Ms. Argentieri. So, racketeering--racketeering-related
    offenses are some of my personal favorite tools. I think you'll
    see in the legislation that we're sending over, some of the
    increased authority we're looking for is to increase--is to
    include more categories of crimes as racketeering predicates.
        Senator Tillis. Of the 57 convictions, and I'll close with
    this, of the 57 corporate cases, how many of those were violent
    crimes?
        Ms. Argentieri. So, of the--of the 57----
        Senator Tillis. Back to the corporate cases----
        Ms. Argentieri [continuing]. Those were just--those were
    just white--those, not just. But those were----
        Senator Tillis. I know the answer, I saw----
        Ms. Argentieri [continuing]. White-collar----
        Senator Tillis. I've usually asked questions I don't know
    the answer to. But I wanted to point out, we need--do need to
    go after corporate bad actors.
        But when there's a palpable sense of fear for walking from
    the Capitol Building to Eastern Market at 10 o'clock at night,
    we've also got to work on your basic crime. And the streets in
    Washington, DC, I think, is the case example.
        So, I'm particularly interested in additional tools that we
    can use to get things under--under control. Thank you, Mr.
    Chair.
        Chair Durbin. Thank you very much, Senator Tillis. Senator
    Welch.
        Senator Welch. Thank you very much. I want to thank you,
    both, for being here. Big admirers of both of your careers and
    of the folks' who you work with.
        I understand, Ms. Argentieri, that mobsters don't
    particularly like you. Good for you. And let's hope that you
    strike the same fear in corporate bad actors.
        So, the question I have, all of us want this incredible
    cost that--there's two costs, I think, in corporate crime.
        One is, according to the FBI, it's about $300 billion--
    whereas street crime is about $16 billion. So, there's real
    economic loss.
        But there's also a real erosion of confidence in a lot of
    our institutions, and to the extent citizens have a sense that
    big corporations can just get away with it in its, quote,
    ``consent decree,'' which may result in some reasonable
    outcomes, but no real accountability. It creates an immense
    amount of frustration, I think, for everyday folks.
        And what are some of the obstacles that make it tough for
    there to be more--standing in the way of more prosecutions for
    more corporate crime? Could you just elaborate on that?
        Ms. Argentieri. Yes. So, as I said, I think we in the
    Criminal Division are focused on bringing the most impactful
    cases because we think by doing that, we can really drive
    change in industries.
        And so, the obstacle we--and I think we are doing a very
    good job. The numbers bear out that we're doing a very good job
    at that. Like, since 2017, over 90 corporate resolutions and
    declinations, $30 billion in fines.
        With more resources, we could do more. But I also think
    that deferred prosecution agreements, non-prosecution
    agreements, those are really serious agreements that are highly
    negotiated, and they require forward-looking change by a
    company. So, they're not a pass.
        Senator Welch. No, you know, I might ask about that because
    I know that's true. I'm a lawyer, so I get it, and you
    negotiate some reasonable standards for going forward. But
    aren't there some folks who just ought to be in jail for what
    they did?
        Ms. Argentieri. So, we follow the facts and the law we
    provide, and then in line with the principles of Federal
    prosecution. That's how we make charging decisions. And for
    companies, that's why individual accountability is such a
    priority for us, because you cannot put a company in jail, and
    that's why you've seen so many policies. And----
        Senator Welch. Let me ask this. Should there be more
    authorities?
        I mean, what--companies can't go to jail. But companies are
    people. They're--they're run by individuals, and the incentive
    for a lot of the CEOs is to boost the profits by whatever--by
    any means possible, and then boost their salary.
        And are there some things that we could do that would
    address the accountability issue where they skate and the
    company does something in terms of your agreement that's
    beneficial to the public. But the public sees the executives
    who are account--who's responsible not being held accountable.
        So, there are other things that we could do here that would
    enable you to put the folks who should be in jail, in jail.
        Ms. Argentieri. So, thank you for your interest in that.
    We're happy to work with you on specific legislative proposals.
    I think we do have some, but I think I--what I was going to say
    about our policies is what they're really driving is for
    companies to self-disclose misconduct we might not otherwise
    know about.
        Senator Welch. Right.
        Ms. Argentieri. And what that enables us to do is to
    prosecute the individuals responsible as a result of our
    independent investigation where we go out and get evidence.
        Senator Welch. Okay. Well, let me just--I'm toward the end.
    But thank you, and thank you for your work, and thank you for
    all the folks in your Department's work.
        And Mr. Olsen, the companies--you do great work in
    protecting our national security. I appreciate that. But what
    about some of these bad companies abroad? There must be
    incredible obstacles to prosecution. Can you tell us what those
    are, and, in a very short time, are there things we could do to
    be of help to you to do your job?
        Mr. Olsen. Yes. I mean, the--we do face challenges when we
    talk about enforcing sanctions and export controls, actors
    overseas, whether they're companies or individuals who carry
    out cyberattacks against our companies and our critical
    infrastructure.
        So, there are just obstacles to being able to investigate
    and prosecute entities overseas. We are really aggressive
    though in going after them, and if they touch on the U.S.
    financial system, they interact with individuals or companies
    in the United States, then we bring charges. When I was in
    Ukraine last month talking about stopping the flow of U.S.
    goods that were finding their way into Russian weapons, the
    Eastern District of New York, the U.S. Attorney's Office there,
    along with my Division brought two cases against companies and
    individuals in New York who were part of that supply chain.
        So, we need to find those connections between those
    overseas entities and those in the United States that we have
    jurisdiction over in order to enforce those laws. But to your
    other question, by enforcing those laws, we do send a strong
    deterrent message, and we raise up those cases as the video
    that was shown at the beginning of the hearing where the
    Attorney General gave the press conference about Binance. We're
    trying to raise those cases up in order to bring that broader
    deterrent message to home.
        Senator Welch. Thank you very much. My time is up. I yield
    back. Thank you.
        Chair Durbin. I want to thank both the witnesses for
    joining us today. We appreciate your testimony and insight.
    Thank you, again. And we ask the second panel to please come to
    the witness table. I'm going to introduce them as they arrive
    and are seated.
        First, we're joined by Professor Brandon Garrett. Professor
    Garrett has served as the L. Neil Williamson Professor of Law
    at Duke Law since 2018. Written extensively about corporate
    criminal enforcement records. Created the Corporate Prosecution
    Registry.
        Second, we welcome Ryan Hampton. Mr. Hampton is an
    addiction recovery advocate and a survivor of Purdue Pharma's
    opioid scandal. Mr. Hampton became addicted to OxyContin after
    receiving a prescription to treat a knee injury in 2003 that
    led to overdoses and even periods of homelessness. He's been in
    recovery for 7 years.
        We also have, as the Republican witness, Mr. Andrew
    Lelling, 20 years as a Federal prosecutor. Prosecuted cyber,
    white-collar, and complex corporate fraud cases.
        Between 2017 and 2021, he was the 55th U.S. Attorney for
    the District of Massachusetts. In that capacity, led the
    groundbreaking nationwide prosecution of fraud and college
    admissions, commonly known as Varsity Blues, achieved a $5
    billion settlement with Royal Bank of Scotland from the
    financial crisis of 2008 and 2009, secured convictions of top
    pharmaceutical executives for their roles in exacerbating the
    opioid epidemic.
        Presently, he's a partner at the international law firm,
    Jones Day, where he specializes in white-collar criminal
    defense. We start with an oath. If you don't mind standing,
    please.
        [Witnesses are sworn in.]
        Chair Durbin. Let the record reflect all three answered in
    the affirmative, thankfully, and we'll start from Mr. Hampton.
    Five minutes.

      STATEMENT OF RYAN HAMPTON, PERSON IN RECOVERY AND ADDICTION
                  RECOVERY ADVOCATE, LAS VEGAS, NEVADA

        Mr. Hampton. Thank you, Mr. Chairman, and Members of the
    Committee. My name is Ryan Hampton. I'm an advocate and person
    proudly in recovery from opioid use disorder.
        The story of my opioid addiction is not unique. Millions
    upon millions of Americans have experienced the very same pain
    and misery I have at the hands of corporate criminals. I just
    happened to be one of the lucky few who survived.
        Today, I am using my voice as a survivor and advocate
    committed to the recovery community. I am here to call for true
    accountability and justice for corporate crime, and to
    highlight the urgent need for action at the Department of
    Justice toward corporate criminals.
        The latest available data shows a staggering decline of
    white-collar prosecutions at the DOJ. Just 90 corporate crime
    cases were brought forward in 2021. That's less than half of
    the average annual number of corporate crime prosecutions in
    the previous 25 years.
        This was the lowest number of corporate prosecutions since
    tracking began during the Reagan administration. The notion
    that certain executives at select companies are simply too big
    to jail, has caused tremendous harm to American citizens, and
    has eroded the public's trust in our institutions.
        My painful, near-death experience at the hands of
    pharmaceutical companies illustrates how dire this problem is.
    From the 1990s to the 2010s, a tidal wave of pharmaceutical
    opioids crashed down on this country, drowning thousands of
    communities in an unprecedented volume of pills that cause
    dependence, addiction, and death.
        Like so many, I had to learn this the hard way. I was
    prescribed an absurd dose for an absurd amount of time by
    licensed doctors who made scant mentions of serious side
    effects.
        After I became addicted, doctors continued refilling my
    prescriptions until one day they didn't. At my most sick and
    desperate, I was cut off and left to fend for myself without
    any referral for treatment.
        Instead of being seen as a patient who needed help, I was
    now treated as a liability and faced with prejudice and shame.
        What truly stuns me is that while all this was going on,
    Federal prosecutors at the Department of Justice had already
    opened multiple investigations into several pharmaceutical
    companies, from Purdue Pharma, which manufactured the
    medications, to McKesson, which distributed the medications,
    and pharmacies like Walmart, which dispensed the medications--
    medications that were approved by the FDA under false and
    deceptive pretenses.
        The truth of this fraud and deception was out there, but I
    had no way of knowing. I often think about why so many of us
    learned about the true nature of these pain relievers after it
    was far too late, after we were addicted, after we were sick
    and shivering in withdrawal, after we had lost everything,
    after people were incarcerated for their addictions, after our
    friends and our loved ones had died.
        I'm not here today to only demand justice and retribution
    for corporate crimes, but I believe these waves of pain and
    despair can be prevented not only by full prosecution under the
    law, but through transparency and public awareness.
        The Corporate Crime Database Act would require the DOJ to
    collect, analyze, and publish comprehensive data on Federal
    corporate criminal enforcement actions. That is an important
    start.
        By making these enforcement actions publicly available, the
    public would be better informed about the products they
    purchase and use. A balance of deterrence and transparency can
    prevent future disasters, and spare others from what I
    experienced.
        I'd like to talk a little bit about deterrence today, and
    highlight the fact that white-collar corporate criminals are
    rarely held accountable in this country.
        Though numerous pharmaceutical companies have pled guilty
    to major Federal crimes and settled multi-billion-dollar
    lawsuits, justice has still not materialized for victims.
        The simple fact is this, the more opioids flooded
    communities, the richer they became. Without enforcement and
    deterrence, these executives had zero incentive to change their
    business model. People at corporations made the decision to
    break the law, and many remain unapologetic and openly defiant.
        The Sackler family, for example, could not give a clear
    answer on whether they feel responsibility or even whether
    they're sorry for their actions.
        It seems the wealthy get off scot-free or with a slap on
    the wrist, offered sweetheart deals and offered non-prosecution
    agreements. The most they expect is a measly fine in what
    amounts to rounding errors, and their enormous profits chalked
    up as the cost of doing business.
        These powerful companies knowingly defrauded the Government
    and misinformed the public. Senators, these are felonies. Where
    I'm from, if you commit a felony, you get punished for it.
        But if you run a big pharma corporation, it appears that
    wealth and power grant your entry into a parallel system of
    justice. This parallel system for the wealthy and powerful
    generates cynicism and erodes faith in our institutions.
        A society that does not own up and face up to its crimes is
    doomed to repeat them. That is why families like the Sacklers
    must be fully investigated, indicted, and prosecuted with
    transparency by the DOJ to the full extent of the law for the
    lives they cut short, the communities they tore apart, and the
    families they destroyed.
        America deserves better than this. My community deserves
    better than this. And we are better than this. Thank you.
        [The prepared statement of Mr. Hampton appears as a
    submission for the record.]
        Chair Durbin. Thank you, Mr. Hampton. Mr. Lelling.

                   STATEMENT OF HON. ANDREW LELLING,

                 FORMER U.S. ATTORNEY FOR THE DISTRICT

                OF MASSACHUSETTS, BOSTON, MASSACHUSETTS

        Mr. Lelling. Thank you, Chairman Durbin----
        Chair Durbin. You want to push the button. There you go.
        Mr. Lelling. Chairman Durbin, Ranking Member Graham, thank
    you for inviting me to address this important topic. I've been
    a student of this subject for over 20 years.
        I joined the Department of Justice in August, 2001, one
    month before 9/11, but also four months before the ultimate
    collapse of the Enron Corporation. That financial disaster
    ushered in a new phase of corporate enforcement at DOJ.
        And ever since, DOJ has wrestled with striking this balance
    between too little and too much enforcement in this space,
    meaning against corporations and against individual executives.
        I was there for most of that. I was a Federal prosecutor
    from 2001 until 2021, focusing mostly on white-collar crime. I
    was also the United States Attorney in the District of
    Massachusetts from 2017 to 2021.
        I now defend companies and executives that are being
    investigated by DOJ. So, I've seen this from the inside and
    from the outside, and I can provide a few thoughts.
        First, the last 20 years is generally a story of positive
    evolution in our Government's approach to this problem. The
    Sarbanes-Oxley Act in 2002 was a major reform in corporate
    accounting and securities regulation, passed obviously partly
    in response to Enron.
        Dodd-Frank in 2010, in response to the financial crisis,
    greatly reformed our governance of the banking industry. DOJ
    itself has steadily calibrated its enforcement approach across
    administrations from the Holder Memo in 1999 through today. The
    result is an enforcement system that no one in the private
    sector takes for granted, especially executives at major
    companies. I know, I talk to these people every day.
        DOJ enforcement today genuinely influences behavior at
    companies. It genuinely deters corporate wrongdoing. Not
    completely, but nothing ever does. Nothing ever will. One need
    look no further than the millions and millions of dollars
    companies spend to maintain internal compliance and training
    programs that will pass muster with regulators, and pass muster
    with DOJ.
        Moreover, as a matter of policy, and as others have
    mentioned, DOJ consistently prioritizes prosecuting individual
    executives as opposed to corporate entities. This has been true
    for years and across administrations--all of these senior
    officials correctly concluding that real deterrence requires
    targeting human beings, not legal constructs, like
    corporations.
        A quick review of Federal dockets shows that DOJ routinely
    prosecutes corporate executives, and that these people do, in
    fact, go to prison, even today, under the more lenient
    guideline regime.
        Over the years, Congress itself has greatly improved
    accountability for corporate executives. For example, the
    provisions in Sarbanes-Oxley that required CEOs and CFOs to
    personally sign certifications that their financial statements
    were fair and accurate.
        Second, keep in mind that this is a resource-intensive area
    of enforcement, as some Members of this body have noted. It's
    not like prosecuting guns and drugs, which tends to be stat
    driven.
        Corporate enforcement can involve terabytes of data,
    require Government investigators to understand complex business
    practices before they can even understand the underlying fraud.
    That can take months or years. Negotiations with lawyers can
    add months or years.
        My point here is that stats, the number of cases charged in
    a year, may not be the right metric to focus on here, or
    frankly, one that is fair to DOJ, whether on the Democrat or
    Republican side. It hides the true level of enforcement in this
    space and the true level of deterrence that is imposed on
    private actors by DOJ's activities.
        Third, the tools DOJ uses to efficiently dispose of
    corporate cases don't mean the companies and executives are
    getting off easy. Here, I'm talking about the use of deferred
    prosecution agreements, and about DOJ's new self-disclosure
    policies for corporate wrongdoing. As the DPAs, they generally
    are not used for individual defendants, which I think is a very
    important distinction to make.
        DOJ uses them to impose billions of dollars in penalties on
    corporate entities, and to force those companies to make
    forward-looking changes in how they do business, publicly admit
    wrongdoing to a statement of facts that DOJ drafts, and
    sometimes accept an independent monitor to independently
    govern--monitor their affairs for years, and cooperate against
    their own executives. All of that is in the public interest.
        That tool can occasionally be misused. I would submit that
    that is rare, and that the risk of too-lenient treatment is one
    that exists in all areas of prosecution. As the DOJ's self-
    disclosure policies, that has worked well in the past. It
    really improves the Government's ability to police what is
    happening at a given area of the private sector, it
    incentivizes companies to disclose problems, and will increase
    the number of individual executives who are prosecuted as those
    companies are forced to cooperate with the Government.
        Last, I'd like to note that in my time as a Federal
    prosecutor and U.S. attorney, what I have learned is that you
    will never have ``enough resources,'' quote, unquote, to combat
    a particular kind of crime, including crime by corporate
    executives. The trick is knowing how much of your resources to
    devote.
        There's no question that corporate crime is a serious
    problem. But 111,355 Americans died of overdoses in the year
    ending April, 2023, most of it from fentanyl pouring over our
    Southwest Border.
        This is not the opioid crisis of 10 years ago that was
    driven by prescription opioids, as awful as that was. This is
    fentanyl and we know where it comes from. It's a Federal
    enforcement crisis driven by a porous Border, and an inability
    to get at the cartels where they live. It is also a public
    health catastrophe.
        I would submit, respectfully, to this body that that is
    where we could use additional resources on the law enforcement
    side.
        Thank you, again, for the opportunity to share some
    thoughts on this subject. I look forward to your questions.
        [The prepared statement of Mr. Lelling appears as a
    submission for the record.]
        Chair Durbin. Thank you. Professor Garrett.

           STATEMENT OF BRANDON L. GARRETT, L. NEIL WILLIAMS

                   PROFESSOR OF LAW, DUKE UNIVERSITY

                 SCHOOL OF LAW, DURHAM, NORTH CAROLINA

        Professor Garrett. Chair Durbin, Members of the Committee,
    thank you, and to staff, thank you for the opportunity to
    testify before you today about corporate prosecutions.
        I'm the Professor of Law at Duke University School of Law
    in North Carolina. And I guess I've been there on the outside
    as a scholar during the same time period I've been researching
    and tracking Federal criminal prosecution since they took their
    modern form in the early 2000s.
        My goal today, speaking as a researcher and scholar, not on
    behalf of Duke or any other institution, is to give an overview
    of the changing landscape of corporate criminal enforcement and
    describe my data collection work for this Committee.
        As we've been discussing as legal persons, corporations can
    be criminals, too, and never before has corporate criminal
    enforcement been so important in the United States, and across
    the globe, which is, you know, many other nations are looking
    to enforcement strategies in this country. Billion-dollar
    corporate criminal fines are now annual events. And they would
    have been inconceivable, you know, three decades ago.
        And yet, concerns do persist that the largest criminal
    offenders are corporations, and that they escaped the types of
    punishment routinely meted out in much lower-level cases. As
    the title of my 2011 book, ``Too Big To Jail'' conveyed, using
    criminal law to hold corporations accountable is inherently
    challenging. And the approach of Federal prosecutor certainly
    has been evolving based on lessons learned over the past couple
    of decades.
        So, my background is as a law professor, not a data
    scientist. When I was first doing this work in the early 2000s,
    there were dozens of these deferred and non-prosecution
    agreements where a company settled a case without an indictment
    or a conviction. I could print them out and put them in one
    stack on my desk.
        By the time I wrote my book in 2011, there were hundreds of
    these and I needed help. I approached a reference librarian,
    Jon Ashley, who's right here, at the University of Virginia--at
    the Darden School now, and we created what is now called the
    Corporate Prosecution Registry to collect as a--as a--as a
    library, as a digital collection these prosecution agreements.
        Today, we have almost 5,000 cases in this public online
    repository. Updating it is labor intensive, and it's gratifying
    to the--to my students out there, former students, the law
    students we have to thank for hard work updating this registry.
        It's the best collection of information about Federal
    organization prosecutions that's out there. But despite our
    best efforts, it is incomplete. Updating the registry not only
    requires doing searches across PACER and Federal dockets
    looking for press releases, it has also involved over the years
    filing Freedom of Information Act suits against the Department
    of Justice because some prosecution agreements with
    corporations had not been made public.
        Every time that has happened, the DOJ has settled all such
    suits, and attempted to cooperate and locate the requested
    documents. The difficulty has been with documents not filed in
    court. So deferred prosecution agreements are, at least,
    ideally filed in court if there is a motion in court to stay
    the otherwise applicable speedy trial deadlines.
        But non-prosecution agreements, declinations, those aren't
    filed in court. And so, it's harder to know whether they exist,
    and the Department itself, and absolutely, you know,
    cooperating with us in these FOIA requests, has itself had a
    hard time locating these documents.
        I think it's really salutatory and no doubt because of
    Chairman Durbin, you know, your efforts as in this Committee's
    efforts, the DOJ now has a practice of making agreements
    available online. I guess it's up to 52. It was 51 when I
    checked last week.
        This nascent database is small, but hopefully will continue
    over the years. They are welcome to, you know, take all the
    cases, the 5,000 or so historical cases from our registry and
    include them on a Department registry.
        The trends from these data continue to be highly
    informative. We can absolutely see the remarkable rise in the
    size, but not the numbers, as we've heard, of these Federal
    corporate prosecutions in recent years.
        You know, the billion-dollar penalties were inconceivable
    in years past. We just heard, you know, in the last couple of
    weeks, about a new $4 billion penalty against the Binance
    Holdings Ltd., which is not yet finalized.
        Each year, the bulk of the penalties, like in the Binance
    case, you know, come from just a handful of cases. And so, when
    one looks at, you know, what was this, a $2 billion a year, a
    $10 billion a year, a $1 billion a year in terms of total
    penalties against companies, that's often coming from three or
    four cases.
        The largest cases are typically not resolved through guilty
    pleas, like in the Binance case, but often through these out-
    of-court deals, these deferred to non-prosecution agreements.
    Companies are getting credit for cooperation and compliance,
    and it is hard to tell from the outside whether that credit is
    deserved. And I think more could be done to make these
    agreements themselves more detailed and transparent so we
    understand what considerations were involved.
        Deferred prosecution agreements never intended for
    corporations. They grew out of Speedy Trial Act provisions,
    from the 1974 Act, designed to divert first-time and juvenile
    nonviolent offenders for rehabilitative reasons.
        There are no provisions in that Act that are specifically
    designed for the rehabilitation of corporate offenders.
        As a result, we also have too little judicial oversight of
    these undertakings, as would occur if it was a civil consent
    decree or a corporate probation agreement under a plea. When
    judges have occasionally intervened to ask questions about the
    oversight or the initial approval of a deferred prosecution
    agreement, the appellate courts have tended to reverse such
    efforts.
        So, you know, just to briefly note a few areas where this
    Committee and where, you know, Congress could get involved.
        Legislation could certainly provide for more comprehensive
    data collections surrounding these agreements.
        Legislation could amend the Speedy Trial Act to create
    corporate deferred prosecution-specific provisions with the
    relevant considerations that courts should consider.
        They could provide for oversight over these agreements.
        We could have resources for corporate probation for
    companies that do plead guilty, but there isn't really the
    bandwidth to have real court-overseen monitorships of pleas
    that could be expanded.
        We've talked about enforcement resources today.
        We could also, finally, emphasize the need for testing the
    effectiveness of compliance so that companies aren't spending
    money needlessly on compliance which isn't effective. But, like
    in other areas where we insist through regulation and through
    enforcement on quality controls, we could be testing the
    effectiveness of this compliance. Because as we all know, we've
    had companies that have been prosecuted repeatedly, sometimes
    for different offenses. But there is a concern that some on
    this Committee have raised with corporate recidivism.
        [Gavel is tapped.]
        Professor Garrett. So, I just wanted to end by saying that,
    you know, my--my--my view as a researcher following this area
    is that there is more that both Congress and the judiciary
    could do. And that while the DOJ has evolved in its approach,
    this shouldn't be just be driven by prosecutorial discretion.
        A greater role for lawmakers in the judiciary is much
    needed, and I deeply thank this Committee for its continued
    attention to both the challenges and the important
    opportunities in the field of corporate prosecutions.
        [The prepared statement of Professor Garrett appears as a
    submission for the record.]
        Chair Durbin. Thank you, Professor. We're going to have 5-
    minute rounds of questions for the Senators who are present.
    I'll start.
        Mr. Hampton, my Chief of Staff in Chicago's husband had a
    serious surgery over 10 years ago. And thank God he's recovered
    well. He's a great success story.
        He was given an open prescription for OxyContin for a year,
    meaning he could go and fill the prescription at will. I assume
    that was at the period of time when Purdue Pharma was pedaling
    the story that it was non-addictive. There's some question as
    to whether they knew that to be true or false at the time.
        I think that he escaped it by not filling the prescription.
    It's an indication of what happened to you in a much different
    circumstance. But a sad outcome for your own personal safety
    and life.
        And it also, I think your testimony as much as any, brings
    to a real question, what is justice in America when the Sackler
    family can make billions--that's with a B--billions of dollars,
    and somehow use our system of justice to escape all personal
    liability, which I believe is the case as of now.
        Even if the billions are divided by two, at the end of the
    day, it is an outrage that the hundreds of thousands of
    victims, like yourself, cannot feel personally--cannot but feel
    personally as you reflect on the situation. Thank you for your
    testimony. Is there anything you'd like to add?
        Mr. Hampton. Yes, Mr. Chairman. I'd just like to say the
    number, in terms of the Sackler family, made over $10 billion
    from Purdue Pharma. Hundreds of thousands of victims, as you
    mentioned, that have been impacted. Many friends of mine who
    died at the hands of Purdue's products and OxyContin.
        I believe that there is more evidence in the public domain
    than we probably have ever had in terms of the liability--in
    any case that's in the public domain in terms of the
    liability--criminal liability of the Sackler family.
        Real justice for folks who have been impacted--family
    members who have lost loved ones--is that the Sacklers will
    face their day in court similar to everyday Americans who are
    justice-involved every single day.
        I know plenty of people in my community, and there are
    millions around this country who face the justice system, who
    are way less guilty of crimes than the Sacklers, who have
    committed crimes that pale in comparison--small drug possession
    charges--serving months, years in jail. And yet the Department
    of Justice has yet to indict or file a single charge against
    any member of the Sackler family.
        It is unconscionable. And the victim community, the
    advocacy community, people who have been directly involved in
    this case and who have been directly impacted by this cause,
    are, simply put, disgusted.
        Chair Durbin. I am, too.
        Mr. Lelling, interesting phenomena when it came to the
    decision on filing a class action against Purdue Pharma for the
    actions--for the results of their wrongdoing. And somehow or
    another, the Sacklers came along for the ride. And I wondered
    if you could kind of explain what's going on here. When we look
    at the ``Texas Two-Step,'' are you familiar with that?
        Mr. Lelling. I am not, Senator.
        Chair Durbin. Well, it is an effort to use the Bankruptcy
    Court to end up with a subsidiary corporation assuming all
    liability--civil liability, then it is underfunded and thrown
    into bankruptcy so that it can erase any outstanding
    plaintiffs' claims against the corporation.
        When you hear that story and you read the Sackler story,
    there are some fundamentals on our system of justice which
    don't seem to work very well at all, and in some cases going to
    involve civil litigation.
        I know your specialty is criminal litigation. There seems
    to be an incentive for some plaintiff's lawyers and class
    action lawyers to rush to a settlement as opposed to demanding
    that certain things happen when it comes to personal liability
    of individuals. Do you have any observations on that?
        Mr. Lelling. I can't speak specifically to the Purdue
    Pharma case. I don't know the facts well enough. But I do agree
    with you that when it comes to vindicating the public's
    interest in seeing wrongdoing remedied, if there has been
    criminal wrongdoing, there should be criminal prosecution.
        We did this in Boston. We were the first to prosecute
    senior executives of a pharma company for their role in the
    opioid crisis. That was the Insys incorporated case. Those
    executives went to jail. We felt good about that case. We
    thought it was an important statement to make.
        So, when you have a situation where corporate executives at
    a pharma company have engaged in criminal wrongdoing, a civil
    resolution often will not seem satisfactory to the public. And
    it will not appear that justice has been served. And so, we
    should avoid those kinds of scenarios.
        Chair Durbin. Thank you. Senator Hirono.
        Senator Hirono. Thank you, Mr. Chairman.
        I think the Purdue Pharma case does raise questions
    relating to the role of the courts, whether it be the
    Bankruptcy Court or any other court.
        So, I have a question for Professor Garrett. You have
    studied the practice of granting deferred prosecution
    agreements to corporate criminal defendants. And although rare,
    at times individual judges have tried to step in and reject
    such agreements, arguing that the Government had given the
    defense a sweetheart deal.
        Unfortunately, in a 2016 case, the D.C. Circuit rejected
    almost any role for judges in evaluating deferred prosecution
    agreements presented to them.
        Can you tell us a little more about that disagreement over
    the proper role of the judiciary in evaluating the deferred
    prosecution agreements? And, whether you think Congress should
    act to overturn the D.C. Circuit's decision?
        Professor Garrett. Yes. You know, I mean, I certainly
    thought that the Speedy Trial Act was clear enough when it said
    that a judge may permit the parties to agree on a deferred
    prosecution agreement and told the Speedy Trial Act deadlines.
    You'd think ``may'' means may, and judges have discretion, and
    ordinarily judges can inform that discretion by relevant
    factors.
        The relevant factors in a corporate case are quite distinct
    because what it means for a first-time juvenile or first-time
    offender to rehabilitate is very different than what it means
    for a corporation to rehabilitate.
        But, you know, the D.C. Circuit, and in a similar case in a
    slightly different scenario, where a judge had ordered a
    monitor report to be disclosed to the public because of the
    interest in the HSBC case, the Second Circuit similarly said,
    the judge didn't have discretion to step into the supervision
    of a deferred prosecution agreement in that way.
        Senator Hirono. So, at this point, when we have two
    different circuits already saying that limiting a judicial
    role, do you think that Congress should consider basically
    overturning or disagreeing with the----
        Professor Garrett. Well, it can----
        Senator Hirono [continuing]. Second and D.C. Circuits?
        Professor Garrett. Absolutely, Senator Hirono.
        Senator Hirono. Okay.
        Professor Garrett. And I think that the Speedy Trial Act
    could be amended. And it would be a good thing anyway to have
    it set out in the statute what the review authority is of a
    judge when it's an organizational deferred prosecution
    agreement. I think that there would be lots of other good uses
    of that.
        I think actually, you know, we could have a separate
    provision for approval of a guilty plea with a corporation as
    well, and that might be useful.
        Senator Hirono. Also, if we want to have these deferred
    prosecution agreements, as well as the non-prosecution
    agreements, we know that you've been tracking them and by the
    thousands. Shouldn't both of these kinds of agreements be made
    public in some kind of registry--which is what you are doing.
    But shouldn't we require disclosure by law?
        Professor Garrett. Yes, and I think, again, one of the
    biggest challenges is with these agreements that are filed out
    of court. But even deferred prosecution agreements, sometimes
    the judge approves the motion, but doesn't ask that the
    agreement itself be filed.
        The Department is doing a much better job of collecting
    these, but the practices are not uniform across the different
    U.S. Attorney's Offices. I absolutely, wholeheartedly, I would
    love to be put out of the business of updating the corporate
    prosecution registry because--because the relevant government
    actors began to do such a thing themselves.
        Senator Hirono. So, I recognize that it is not the easiest
    thing to prosecute white-collar crimes. And, you know, there
    are all kinds of--these corporations have all these lawyers and
    everything else.
        But it is one of the reasons that you think that there are
    not as many trials going forward, is that the DOJ just does not
    have the kind of experienced prosecutors who have gone to trial
    in these kinds of cases?
        Professor Garrett. Well, I mean, we've heard about trials--
    --
        Senator Hirono. Uh-huh.
        Professor Garrett [continuing]. And individual cases, and
    the increase in trials. So, I suspect that corporations don't
    want to risk a trial. And that trials may be more appropriate
    for individuals than for corporations, really. But, you know,
    we have a problem of declining trials and negotiated
    resolutions across the criminal system in this country.
        Senator Hirono. So, I think that may also go to the kind of
    resources that the Department of Justice has in the Criminal
    Fraud Division as I had asked earlier. They probably could use
    more help.
        So, another question for you. As you were putting together
    this directory and you say you have law students helping you,
    what was one of the things that really came to your--you know,
    what surprised you the most when you began to collect the data
    for this registry?
        Professor Garrett. Well, you know, I remember, you know,
    there was a--there was a--I remember colleagues observing that
    this might be a flash in the pan. These out of court
    settlements with all these complex terms, this may just be a
    temporary phenomenon.
        The agreements have become lengthier and more complicated.
    I guess that what has surprised me is, that over the years,
    we've heard more and more about lawyers and prosecutors using
    the registry as they're negotiating these agreements. But, in
    part, because, you know, you don't want these to become a
    cookie-cutter operation. Right?
        There should be, like, evidence-based thinking about what
    the right approach is and how much detail to include in these
    agreements. And so, you know, we don't want these to become
    self-replicating.
        The other surprise over the years is to see companies
    coming back. That we see companies----
        Senator Hirono. Uh-huh.
        Professor Garrett [continuing]. That have settled multiple
    cases, maybe with a different overseas division, a different
    subsidiary, but you see companies that appear frequently on
    this registry.
        Senator Hirono. Just one more clarifying question. Are you
    saying that if this kind of information was put--was made
    public, that it could actually create some kind of a template
    for corporations to enter into these kinds of agreements? Not
    exactly the result we're looking for, necessarily.
        Professor Garrett. Perhaps not. I mean, hopefully the, you
    know, you have prosecutors saying, like, my colleagues
    negotiated a very tough, and stringent, and careful agreement.
    We'd like to do that, as well.
        I mean, the information is all out there and people can use
    it as, as they will. We have noticed, you know, like certainly
    the compliance provisions have become much more detailed. And I
    think there have been some really positive changes, which--
    which--in the direction that we would want.
        Chair Durbin. Thank you, Senator Hirono.
        Senator Hirono. Thank you, Mr. Chairman.
        Chair Durbin. Senator Whitehouse.
        Senator Whitehouse. Thank you, Chairman. Let me ask Mr.
    Lelling and Professor Garrett, if you have noticed as corporate
    criminal prosecutions have reached an all-time low, whether
    there's any--been any kind of an offsetting increase in the use
    of the civil RICO statute as another way to get at corporate
    misconduct? I, for one, am not seeing it, but you've looked
    more closely at it.
        Professor Garrett. I actually, I--I don't study RICO cases,
    and so I couldn't say----
        Senator Whitehouse. You might want to think about putting
    that in your database.
        Professor Garrett. We, we could expand. The--I mean, there
    are cases like Mr. Lelling, I think, would say that where,
    where individuals are prosecuted and not the company. And so,
    it is hard to make too much of just nose counting the number of
    cases with organizations, but----
        Senator Whitehouse. I go back to the era at the Department
    of Justice when the Department brought a very significant civil
    RICO case against the tobacco industry to put an end to the
    fraudulent conduct of the tobacco industry in misstating the
    dangers of its product.
        And that was a very successful case. The industry was put
    under an order. In a nutshell, thou shalt lie no more. As a
    result, industry behavior had to rapidly shift and policy
    shifted rapidly behind it, with very significant public
    benefit.
        So, I think one of the things that can be useful--and by
    the way, when you're taking on the tobacco industry, that's an
    enormous, enormous array of defendants. So, there's some
    efficiency in handling it under the civil RICO statute.
        I'd note that when I asked questions about whether that
    might make sense against the fossil fuel industry, the actual
    official response that I got back from the Department of
    Justice--the actual official response was that civil RICO
    really presented a very daunting standard of proof beyond a
    reasonable doubt. You guys are lawyers, you know perf--you get
    the joke there.
        So, it seems that it's been rather disfavored when you get
    an official response back from the Department of Justice that
    gets the standard of proof wrong, that's not a sign that they
    have a very lively approach to taking advantage of that piece.
        Let me ask one other question having to do with some of the
    differentiation between the way a human defendant and the way a
    corporate defendant is treated for purposes of criminal
    prosecution.
        The DOJ manual says that a corporation's conviction should
    lean toward leniency if the conviction would result in
    disproportionate harm to shareholders, pension holders,
    employees, and others not proven personally culpable.
        Is there an analog to that for human beings where they take
    the fact that a marriage might blow up, the major earner in a
    family, the spouse, might lose access to the earnings, the
    children will no longer have a father, or a mother while they
    serve in a penitentiary. Is there an analog for those
    consequences of conviction if the defendant is a human being?
        Mr. Lelling. In my experience, Senator, only in an
    unofficial way----
        Senator Whitehouse. Only in terms of sentencing judgments
    by a court. Correct?
        Mr. Lelling. Respectfully, no, Senator. You do see it
    unofficially in the discretion exercised by prosecutors. I have
    seen this happen. But it's a, you know, sort of an unofficial,
    in-the-hallway----
        Senator Whitehouse. Yes.
        Mr. Lelling [continuing]. Decision that the prosecutor is
    making at a given----
        Senator Whitehouse. And a----
        Mr. Lelling [continuing]. Case.
        Senator Whitehouse [continuing]. Judge in a similar way,
    completely unofficially, as long as they're staying within the
    guidelines, they could express sympathy for a defendant's
    family by sentencing to a lower sentence.
        Mr. Lelling. And I've seen other adjustments. So, for
    example, I've seen cases where a husband and a wife were both
    prosecuted for a criminal scheme, and you can strike deals
    where you arrange leniency for one and not the other, or you
    stagger sentences. I'm thinking of situations where there are
    children involved----
        Senator Whitehouse. But it's only----
        Mr. Lelling. But that's----
        Senator Whitehouse [continuing]. It's only for corporate
    defendants where this policy has been formally adopted into the
    Department of Justice Manual, the U.S. Attorney's Manual.
        Mr. Lelling. I think I'd, respectfully, disagree that the
    principles of corporate prosecution direct the Department to be
    lenient, necessarily, on companies.
        I think--I think what has happened to the Department is,
    think back to the early 2000s, and I know you were paying
    attention in those days when the Department destroyed Arthur
    Andersen. And Arthur Andersen was then vindicated on appeal to
    the Supreme Court. And all the convictions were reversed, but
    the company had gone under and thousands were unemployed.
        I-- don't think it's wrong, personally, for the Department
    to keep that in mind when you are doing corporate enforcement.
    You could be implicating thousands of jobs, and I think that's
    as far as that goes.
        Senator Whitehouse. Yes. No, I agree with that. It just is
    notable that that's not the case, and certainly not officially
    the case once the defendant is a human being. My time is up.
    Thank you, Chairman.
        Chair Durbin. Thank you, Senator Whitehouse. Senator Welch.
        Senator Welch. Thank you very much. You know, thank you.
    Incredible challenge to have an addiction and overcome it, no
    matter what.
        You know, the pharma folks, the Sackler family, they're
    like ``El Chapo.'' I mean, they ought to be in jail.
        So, I'm appalled, that's number one.
        Number two, it's bizarre to me that you can have this
    settlement with the Texas Two-Step, as Senator Durbin was
    mentioning, where the guilty folks--who in a premeditated way
    with the use of significant funds in profits they made by
    addicting folks like you--can hire top-tier consulting firms,
    and how to sell more bad stuff to make poor people addicted.
    And then hire lawyers to basically offload the responsibility
    and keep billions of dollars from their illicit activity. So,
    thank you for being a voice on that. And I'm just absolutely
    appalled by it.
        Mr. Lelling, I want to talk to you about the prosecution.
    Again, this is the stuff that drives folks I represent crazy.
        In the financial crisis, a lot of people lost their homes,
    and a lot of folks made billions. And one of the most stunning
    cases--and I want to get your opinion on this--was Goldman
    Sachs was approached by a very smart investor who saw the
    housing market going south, and he saw that these funds were
    selling A-rated--Triple A-rated securities because they were
    ironclad. And this investor knew that there was a lot of junk
    in them.
        So, he approached Goldman and said, Goldman, put together a
    lot of these packages that are presented as Triple-A, but have
    a lot of junk. And then I'm going to turn around.
        And then, Goldman did that. And then Goldman sold those
    portfolios that they created to serve the needs of this
    investor. And that was: they were designed to fail.
        And they turned them around and sold them to firefighter
    pension funds--Goldman did, as Triple A-rated, totally secure.
    ``Your retirement is rock solid.'' They did that. They did
    that.
        Is there any reason in the world they should not be
    prosecuted for that kind of double-dealing, and the heartache,
    and the financial insecurity they inflicted on our police
    officers, and our firefighters around the country? Is there any
    justification for them not being prosecuted?
        Mr. Lelling. Senator, I'm not familiar with the Goldman
    Sachs example, specifically, but I can say----
        Senator Welch. Everybody knows about that. You're--don't
    tell me that. You're a smart guy. You're in prosecution.
    Everybody knows Goldman did that.
        Mr. Lelling. Well, I know that happened in the industry.
    I'm just saying that----
        Senator Welch. You don't know that--are you serious? You
    don't know Goldman did that?
        Mr. Lelling. I was not thinking specifically of Goldman,
    but there's a--absolutely----
        Senator Welch. Goldman's the elite bank.
        No. I mean, this is what drives it--I'll speak for myself.
    It drives me crazy.
        They literally have an investor, and the question is, would
    you put together a package of securities that's going to fail,
    as I see it? And then, they sell those failed securities to
    people who are being told that they're rock solid. I mean, you
    know about that.
        But anyway, let's pretend you don't know about it. Do you
    think that the company that did that should get away with it?
        Mr. Lelling. I do know about it on an industrywide basis.
        Senator Welch. Yes. And Goldman wasn't alone.
        Mr. Lelling. I have direct experience with this. I helped
    achieve the largest single bank settlement----
        Senator Welch. Thank you.
        Mr. Lelling [continuing]. To come out of the financial
    crisis.
        Senator Welch. By the way, thank you for your good work.
        Mr. Lelling. I guess----
        Senator Welch. I'm not mad at you. I'm mad at what happened
    in the financial crisis. I apologize.
        Mr. Lelling. I note it because we had exactly this problem.
    Which is that, you know, on a macro level, that this has
    happened in the industry, that they have repackaged these
    residentially, mortgage-backed securities, which are basically
    garbage. Made them look Triple A.
        The companies that rate them made their own mistakes--total
    systemic failure. They sell this, the whole thing comes
    crashing down. Getting it down to the micro level, banker X is
    responsible in a way that we can't prove. Not so easy to do.
        Senator Welch. I understand that.
        Mr. Lelling. That was the frustration that we ran into. So,
    I appreciate your frustration, and you are correct. I think
    that it is an open question whether the Department in that era
    should have done more to get individuals----
        Senator Welch. All right----
        Mr. Lelling [continuing]. On the hook instead of----
        Senator Welch. Yes----
        Mr. Lelling [continuing]. The companies. And I----
        Senator Welch. I mean, that's part of why people are so fed
    up with what's happened. But thank you, and thank you for your
    good work as a prosecutor.
        And Professor Garrett, I don't have time for questions, but
    I do have time to say thank you for your solid suggestions, and
    I yield back.
        Chair Durbin. Thank you, Senator Welch. Some of the critics
    of this hearing say--you heard them and I wasn't surprised.
    Said, why don't you concentrate on important things like
    carjacking and violent crime. Those are important things. And
    my State of Illinois, and across the United States, we all feel
    those personally. We all want our families safe.
        But as Mr. Hampton can tell you, those who are addicted and
    are fighting that addiction, many times turn to crime to try to
    feed the addiction, and the cost to society is pretty obvious.
        So, I think there's also a basic question which has come to
    this Committee over and over again during this hearing: What
    does this say about the system of justice in America if the big
    guys are exempt, and the little guys go to jail for possession
    of a handful of crack cocaine for long periods of time?
        So, striking a balance and meeting the needs of justice is
    part of our responsibility. This hearing will be added to that
    arsenal of information of what we can do to make this a safer
    country and a better country.
        The hearing record's going to be open for a week, and you
    may get a question or two coming your way. If you respond as
    quickly as possible, we would appreciate that.
        And with that, the Senate Judiciary Committee stands
    adjourned.
        [Whereupon, at 12:03 p.m., the hearing was adjourned.]
        [Additional material submitted for the record follows.]

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                                A P P E N D I X

    The following submissions are available at:

      https://www.govinfo.gov/content/pkg/CHRG-118shrg62797/pdf/CHRG-
        118shrg
        62797-add1.pdf

    Submitted by Chair Durbin:

      Public Citizen, Washington, DC, statement.......................     2

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