Prosecutors in the Boardroom: Using Criminal Law to Regulate Corporate Conduct

9. What Are the Rules If Everybody Wants to Play? Multiple Federal and State Prosecutors (Acting) as Regulators

202 | 9 What Are the Rules If Everybody Wants to Play? Multiple Federal and State Prosecutors (Acting) as Regulators Sara Sun Beale This chapter describes the multiple layers of overlapping jurisdiction involving prosecutors at the federal, state, and local level and explores the issues this multiplicity of actors raises. The federal structure has long created the possibility that the various federal, state, and local actors might all seek to open investigations or bring charges against the same defendants. The potential for multijurisdictional prosecutorial activity is particularly high when prosecutors are acting in a regulatory capacity because those cases typically involve multistate activity. For purposes of this chapter, activity is “prosecutorial” not only when formal criminal charges are filed but also when a prosecutor pursues an investigation to determine whether criminal charges are warranted or when the potential for criminal liability becomes a factor affecting negotiations concerning civil charges. Multijurisdictional prosecutorial activity takes many forms. The number of jurisdictions can vary from two to many more. There may be close cooperation between the jurisdictions or conflict regarding which jurisdiction ’s case should take precedence, how to proceed, or what terms to include in a negotiated agreement or sentence. Often there are closely related civil proceedings, and such civil cases frequently involve additional jurisdictions that are not formally parties to the criminal case(s). There is, of course, some variation in the procedural course of multijurisdictional prosecutions, but trials are extremely rare, and many cases are concluded during the investigative phase or shortly after formal charges are filed. This is especially true in cases involving corporations or other entities. As discussed throughout this volume, prosecutors have so much leverage over corporations facing a criminal prosecution that they are often able to negotiate quick settlements What Are the Rules If Everybody Wants to Play? | 203 with wide-ranging regulatory effects. These agreements are often global settlements disposing of both criminal and civil liability, and many agreements provide for payments to jurisdictions that would not have been parties to the formal prosecution. Other multijurisdictional civil charges are settled with no formal reference to criminal liability. To the degree that prosecutors negotiate such facially “civil” agreements in the shadow of criminal liability , those cases are encompassed in this discussion. It will often be difficult, however, for external observers to determine with certainty which facially civil cases fall within this category, though press reports and insider accounts sometimes indicate that the potential for criminal liability was a major factor in particular negotiations. The first section of this chapter describes a variety of examples in which prosecutors from more than one jurisdiction initiated criminal investigations or brought formal prosecutions concerning the same conduct, and it analyzes the factors that determine whether more than one prosecutor will become involved. Access to shared resources and enhanced negotiating power serve as powerful incentives favoring cooperative multijurisdictional prosecutions; most of the cases to date exhibit significant (and often complete ) cooperation among the various prosecutors. There are, however, multijurisdictional cases in which prosecutors from different jurisdictions do not act cooperatively. The state and federal prosecutions of telecommunications giant WorldCom and its executives demonstrate some of the complexities that can arise in the absence of voluntary cooperation among the prosecutors who are targeting the same defendants. The second section of this chapter considers the issues raised if prosecutors in multijurisdictional cases do not cooperate voluntarily. There is no single principle or mechanism that regulates or coordinates all of the actors. Federal law does not, in general, preempt state and local laws, and the federal Double Jeopardy Clause does not preclude multiple convictions by different jurisdictions. Although there are laws in many states barring conviction for conduct that has been the basis for a conviction or acquittal in another state or in federal court, the effect of these laws is quite limited. They prohibit additional trials and the imposition of multiple penalties once a first prosecution has concluded, but they do nothing to relieve the burdens created by multiple investigations and charges before there has been a conviction or acquittal in another jurisdiction. No other coordinating device currently exists. Courts in one jurisdiction cannot generally order a stay of criminal proceedings in another jurisdiction, and no mechanisms are in place that would permit the consolidation of criminal cases from multiple jurisdictions in a single court. 204 | Sara Sun Beale I. Concurrent Criminal Jurisdiction and the Potential for Multijurisdictional Prosecutions National and international...