Jurisprudence

Trump’s Plans for Protecting Polluters Have Been a Devastating Success

Photo illustration of Steve Bannon as seen on March 25 in Rome.
Steve Bannon as seen on March 25 in Rome.
Alberto Pizzoli/AFP/Getty Images

In the first days of the Donald Trump presidency, former White House chief strategist Steve Bannon famously described the administration’s plans for the “deconstruction of the administrative state.” Despite the constant apparent chaos in parts of the West Wing, Trump officials throughout the executive branch have lived up to this promise to use bureaucratic tools to throttle federal law enforcement of polluters and corporations with an almost zealous meticulousness.

Across the Trump administration, top agency officials have been busy building a bureaucratic scaffolding to stymie federal enforcement actions against the nation’s wealthiest and most powerful players. Officials in the Justice Department, Environmental Protection Agency, and the Consumer Financial Protection Bureau, among others, have been moving to muzzle agencies’ fact-finding powers, add layers of bureaucratic control, complicate chains of command, and strip power from regional officers and enforcement specialists. The result has been historic declines in enforcement actions against banks, corporations, and corporate executives—precisely as Bannon promised.

The Trump administration has more than lived up to that initial slashing tone. Through its tenure, the administration has ramped up immigration enforcement, while presiding over a precipitous drop in enforcement of environmental and civil rights laws, and of regulating corporate crime. For polluters and corporations, the administration has doled out a handful of meager reprisals, wielding bureaucratic tools such as memoranda and fortified top-down structures to chill agencies’ enforcement powers.

Across the agencies, enforcement actions against polluters, banks, and corporations have dwindled. The Environmental Protection Agency collected a mere $69 million in civil and administrative penalties from polluters in 2018, the lowest amount levied by the agency in more than a decade. Criminal fines collected by the EPA from polluters plunged to $88 million, the lowest total for such penalties assessed in a decade. In 2018, EPA referred the fewest new criminal cases to the Justice Department in any year since 1988.

The nation’s financial sectors also received a reprieve. Corporate penalties imposed in Justice Department prosecutions plummeted by 72 percent during the first 20 months of the administration, compared to those levied during the final 20 months of the Obama presidency. Meanwhile, penalties imposed and illicit profits ordered returned by the Securities and Exchange Commission fell by 62 percent. The volume of publicly announced enforcement actions by the Consumer Financial Protection Bureau under Donald Trump’s tenure has also steeply declined.

Often, the enforcement decline is less a product of slash-and-burn practices than slow bloodletting and bureaucratic sandbagging. Staffing reallocations, buyouts, and mass resignations have diminished parts of the Justice Department and Environmental Protection Agency, including the divisions responsible for civil rights and environmental enforcement. Several agencies have curbed their fact-finding activities, ensuring there is little grist for the enforcement mill. Formal guidance issued by top officials has sewed confusion and injected additional supervision and control over lower-level investigators and enforcement lawyers. And reporting relationships between boots-on-the-ground staff and senior agency officials have, at times, been replaced by commands to seek approval from political appointees.

At the EPA, a 2017 memo signed by the agency’s former director for civil enforcement instructed regional enforcement officers to seek permission from Washington before ordering certain air and water pollution tests. These tests are often necessary to determine whether companies violated environmental laws. The result was to clog the case-building pipeline, causing such fact finding activities to decline in at least two of the agency’s most active regional offices. The messaging has caused confusion and dampened spirits among many of the agency’s investigators. The agency additionally inspected fewer industrial facilities during 2018 under Trump than at any time in the preceding decade.

Again, the dismantling project has been virtually across the board. As one example, last year the Trump administration softened its stance on an Obama-era Justice Department memo prompting companies to report on individuals involved in corporate misconduct. As a result, the agency now requires fewer details to be produced by companies to secure government leniency when misconduct occurs. Though the impact of the decision on prosecutions is disputed, it capped off a series of policy changes weakening the agency’s corporate prosecution program. Rod Rosenstein, the outgoing deputy attorney general, ordered federal prosecutors to avoid “piling on” penalties against companies being investigated for the same wrongdoing by multiple regulators and countries, lessening the financial penalties businesses can expect to pay. The agency also issued guidance scaling back the deployment of corporate monitors in criminal matters.

The CFPB, an agency created during the Obama administration to police predatory lending by financial institutions, meanwhile, announced last year that it would no longer perform routine examinations of financial lenders for possible violations of the Military Lenders Act, baffling lawmakers and the Defense Department. Under Mick Mulvaney, the bureau’s former acting director who has since been promoted to chief of staff, lawyers in the enforcement office were instructed to write summaries justifying every active enforcement matter. Mulvaney also severed channels of communication between enforcement officials and the senior career officials in charge of divisions, requiring employees to present their cases to newly established intermediary directors appointed by Mulvaney himself.

All of these issues have been compounded by resource constrictions and staffing shortages. High-level signaling has seeded doubt and demoralization among lower-level officials who typically collect the kindling to spark enforcement actions.

All administrations shuffle enforcement priorities, and some observers have posed contextual quibbles over the data documenting the decline. But the overall scale at which the Trump administration is pulling back on enforcement actions against corporate actors, banks, and polluters would be shocking under any other administration. As fewer cases gestate within the agencies’ ranks, companies will be emboldened to violate with greater impunity laws meant to protect public health, safety, and financial well-being. That’s bad news for all of us.