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Release of New Manhattan Institute Report on DPAs/NPAs

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Vinny Sidhu
Legal Intern, Manhattan Institute's Center for Legal Policy

The Manhattan Institute's Center for Legal Policy has just released a new report detailing the expanded use of deferred and non-prosecution agreements by the federal government against various companies, entitled "The Shadow Lengthens: The Continuing Threat of Regulation by Prosecution." The report can be found here.

While the federal government justifies the increased use of DPAs and NPAs by pointing out that they allow a company to re-shape its corporate structure without formal charges being filed against them, this contention ignores the fact that the lack of transparency behind the pre-charge agreements can breed governmental abuse by allowing the government to utilize their leverage in crafting the agreement to create desired outcomes.

For example, if a company is threatened with federal charges by the government, it will naturally find it more desirable to enter a DPA or NPA to stave off bankruptcy, avoid radical corporate structure changes, and the bad PR that comes with being charged with wrongdoing. If the government, however, has unmitigated authority to craft DPAs or NPAs as it wishes, the company would have no choice but to accept the agreement in whatever form it may come, or risk formal charges. Ultimately, there needs to be a premise of fairness behind these agreements, i.e. companies having some way to make sure prosecutors do not go too far. Otherwise, it appears that too much power is being left in the hands of prosecutors to determine the corporate shape of entire industries.

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Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.