How Will Trump II Change DOJ’s Corporate Enforcement Priorities?

Introduction

The corporate enforcement landscape in the United States has been shaped by changing administrations, with different priorities and approaches to holding companies accountable for legal and ethical violations. As former President Donald Trump sets the stage for a potential second term in office, questions arise about how his administration will impact the Department of Justice’s (DOJ) enforcement priorities, especially in terms of corporate misconduct. While Trump’s first term focused on deregulation and a more business-friendly environment, a second term may bring new challenges and shifts in DOJ policies. In this article, we examine how a potential second Trump presidency could influence corporate enforcement priorities, including the prosecution of white-collar crimes, regulatory reforms, and the role of the DOJ in corporate governance.

1. Trump’s First Term Approach to Corporate Enforcement

During his first term, President Trump’s administration adopted policies that favored reducing regulatory burdens on businesses and limiting corporate accountability in some instances. The DOJ under Trump focused more on voluntary compliance and self-reporting rather than aggressive investigations and prosecutions. There was a significant emphasis on reducing the enforcement of certain financial and environmental regulations, with some corporate leaders feeling empowered by the less stringent regulatory environment.

However, this approach faced criticism from those who argued that it allowed corporations to evade accountability for harmful practices. While some business sectors flourished under deregulation, others, including industries like banking, healthcare, and environmental services, saw more scrutiny due to the public outcry over corporate negligence and fraud.

The first term showed that Trump’s policies leaned towards a corporate-friendly stance, but corporate misconduct was still met with some level of scrutiny, especially if it involved large-scale fraud or activities affecting consumers directly.

2. Shifting DOJ Priorities in a Second Term

A second term for Trump could signal a shift in DOJ priorities that may impact corporate accountability. While it is difficult to predict the exact policies of a second Trump presidency, there are several potential changes and continuations of his first-term agenda that could affect corporate enforcement:

• Stronger Focus on Antitrust Enforcement: Trump’s administration already had an interest in scrutinizing big tech companies and monopolistic practices, with ongoing investigations into tech giants like Google and Facebook. A second term could bring a stronger emphasis on antitrust enforcement to curb perceived corporate consolidation that harms competition and consumers.
• Increased Corporate Accountability for Fraud and Corruption: If Trump’s second term emphasizes “America First” economic policies, there may be a renewed focus on enforcing laws related to corporate corruption and fraud, particularly when it involves foreign entities or entities engaging in activities that could undermine national interests.
• Focus on National Security and Corporate Compliance: Trump’s first term saw an emphasis on national security, especially regarding foreign investments in U.S. companies. The second term may carry forward these national security concerns, with the DOJ paying more attention to corporate compliance issues, particularly regarding foreign influence and espionage concerns.

3. The Role of the DOJ in Corporate Governance and Ethics

The DOJ’s involvement in corporate governance could see a new direction under Trump’s second term, with potential shifts in how businesses are held accountable for internal misconduct. Some areas to consider include:

• Encouraging Corporate Self-Regulation: Under Trump’s previous tenure, there was a preference for businesses to self-regulate, with the expectation that corporations would take greater responsibility for ensuring ethical behavior and compliance. In a second term, this could continue, with incentives for companies that voluntarily disclose wrongdoing and implement reforms.
• Corporate Whistleblower Protections: Another area where the DOJ may focus more heavily is the protection of corporate whistleblowers. In the past, Trump has voiced support for protecting those who report illegal activities within organizations, though this has been inconsistent. A second term could bring more structured support for whistleblowers to encourage the identification of corporate misconduct.
• Adjustments to Corporate Prosecution Policies: The DOJ’s policies regarding the prosecution of corporations, particularly in cases of financial crimes, could evolve. Under Trump’s leadership, the DOJ may lean toward more lenient enforcement in some cases while strengthening corporate prosecutions in other areas, particularly those involving national security.

4. Potential Challenges to Corporate Enforcement in Trump II

While a second Trump presidency could offer opportunities for corporate entities to benefit from deregulation and fewer enforcement actions, there are also challenges. These could arise from shifting global dynamics, public pressure, and increased focus on transparency:

• Public Backlash Against Corporate Misconduct: As corporate misconduct continues to garner public attention, a second Trump administration may face growing pressure to take action against companies engaging in illegal activities. In cases of egregious corporate wrongdoing, the DOJ may feel compelled to prosecute more aggressively, despite a general preference for deregulation.
• The Role of International Relations: Global tensions, especially with countries like China and Russia, may lead to more scrutiny of companies involved in international trade or having ties with foreign entities. The DOJ might impose stricter enforcement measures to protect U.S. interests in the global marketplace.
• Increasing Calls for Ethical Business Practices: As movements for greater corporate responsibility gain traction, the DOJ may face increased public demand for businesses to act ethically and comply with regulatory standards. Trump’s administration may need to balance the demands of business leaders with those of consumers and advocacy groups who demand higher standards of corporate responsibility.

5. The Impact on Corporate Compliance Programs

In a second Trump term, businesses could see changes in how they approach corporate compliance and internal governance, with implications for both small and large corporations.

• Corporate Compliance in the Era of Deregulation: As the Trump administration focuses on reducing regulatory oversight, businesses may prioritize building their own compliance programs to ensure adherence to best practices while staying within a legal framework. This could lead to a rise in self-audits and internal investigations to prevent violations of laws or regulations.
• Incentives for Corporate Cooperation with the DOJ: Companies may continue to benefit from cooperating with the DOJ in exchange for leniency in prosecutions. The focus on voluntary disclosure of potential wrongdoing could become an even more significant factor in corporate decision-making as part of a broader risk management strategy.

Conclusion

A second Trump presidency is likely to bring changes to the DOJ’s corporate enforcement priorities. With a continued focus on deregulation, antitrust actions, and national security, businesses may find themselves navigating a complex landscape of self-regulation and heightened scrutiny in certain sectors. Although the overall trend may lean toward a business-friendly environment, the DOJ will continue to balance corporate accountability with public demands for ethical behavior and fair practices. For companies, staying ahead of potential regulatory shifts will be key in maintaining compliance and safeguarding against future legal challenges.