Date of Degree
Justice Department, Prosecutorial Discretion, Institutional Incentives
More than ten years after the financial crisis of 2008, which sparked America’s Great Recession, many citizens are still asking why no high-level bank executives were prosecuted for criminal fraud. This question becomes even more perplexing when they remember that many powerful executives did face jail time during the Enron-era accounting scandals of the early 2000s and the savings and loan crisis of the early 1990s. This sense of injustice Americans felt in the wake of the biggest economic disaster of their lifetimes has had reverberating political consequences, such as populist movements like Occupy Wall Street and populist political campaigns from Bernie Sanders and Donald Trump in 2016. Millions of Americans were left in financial ruin, but the banks were bailed out, with no lasting consequences for their leaders. If this represents a high-water mark in recent memory for most citizens’ distrust and anger in their government, why do we still have no satisfying explanation of how the bankers “got away with it?” Commentators, journalists and lay people have offered seemingly plausible, yet shallow explanations over the years since the crisis. Many of these explanations say powerful, wealthy Wall Street people use campaign donations and lobbying connections to get bailed out by the politicians who take this money. However, this explanation falls short because wealthy campaign donors existed in the previous crises where they did face jail time for their fraudulent behavior. This study uses the lens of political science to attempt a deeper and more satisfying explanation for the phenomenon of “Too Big to Jail.” The popular idea that wealthy campaign donors bought their way out of trouble will be more thoroughly explored, as will the clubby atmosphere between Washington and Wall Street, and presidential leadership. However, I ultimately reject them as less compelling explanations in favor of the internal incentive structure of the Justice Department itself and external incentives for prosecutors. Prosecutors who are hired as civil servants, not political appointees, are responsible for the majority of the work in bringing cases. They are disincentivized to bring difficult and lengthy cases that they may lose, as this kind of high-profile loss may reduce their chances for private sector, high-paying partnerships in the near future. Prosecutorial discretion is an underappreciated and under studied topic in political science literature, considering its vast power and importance to American society. The discretion prosecutors have to bring cases and the incentives they face within the institutions in which they operate offer the most compelling evidence for an answer.
Krieger Rivera, Sari, "Incentivizing Injustice: Why No High-Level Executive Prosecutions from the Financial Crisis?" (2021). CUNY Academic Works.