Lessons From Justice Dept Meltdown
You may have noticed that the Justice Department’s ethical reputation blew apart last week — shards of integrity streaking across the stage, leaving a miasma of unprincipled conduct looming over attorney general William Barr’s office.
By now you probably know the story. Last week Barr intervened in the sentencing recommendation for Roger Stone, self-professed dirty tricker for President Trump and convicted of lying to Congress and witness intimidation. Barr’s intervention prompted all four prosecutors on Stone’s case to quit the team. (That’s the integrity part.) This week Stone was sentenced to 40 months in prison.
There’s more. This week we also saw President Trump pardon a pack of white-collar criminals, circumventing the standard process for presidential pardons in favor of handing them out to personal acquaintances, political donors, or pals of Trump’s cronies. Trump also proclaimed on Twitter that he is the country’s chief law enforcement officer, and has every right to intervene in any criminal case he wants.
Regardless of your politics, compliance officers have lots of lessons to consider here. Some are practical issues for companies under investigation; others are larger statements about how a strong corporate culture unravels, and the role that ethically weak leaders play in that demise — plus how the unraveling of a strong ethical culture in the Trump Administration may well complicate your life here in the private sector. Let’s take a look.
The Practical Stuff
Start with how Barr intervened in Stone’s case. Prosecutors had originally asked for a sentence of seven to nine years, which was in line with U.S. Sentencing Guidelines given the charges against Stone and the inflammatory nonsense he pulled during trial, such as violating a court gag order.

Barr
Then came Barr, rescinding that recommendation. His new argument was that while the Sentencing Guidelines were “perhaps technically applicable,” the judge should disregard them because they “disproportionately escalate the defendant’s sentencing exposure.”
OK, in that case — can companies facing criminal charges now make that same argument?
Sarah Kropf, corporate defense lawyer, explores this issue in detail in a post on her Grand Jury Target blog. Her take is that the new Stone sentencing memo is a gift to defense bar, since the Justice Department is making the same argument that defense lawyers try to make all the time. As she says:
I can imagine a sentencing memo that reads, “Even if the strict principles of judicial estoppel may not bind the government to its positions in the Stone sentencing memo, the Court should take into account the fact that even DOJ admits that technical sentencing enhancements may result in an inherently unfair sentencing range. That is the situation here.”
The new sentencing memo also argues that Stone shouldn’t receive harsher punishment for his attempted obstruction, because “it is unclear to what extent the defendant’s obstructive conduct actually prejudiced the government at trial.”
Again, can other defendants now argue this point in their own cases? If your company is facing a sentence for misconduct, and your company did try to drag its feet during an investigation, could you now say that foot-dragging shouldn’t matter if it didn’t affect the investigation? Hmmm.
These questions will be raised in future litigation eventually. As always, I look forward to the fact pattern that will let us debate them.
Perils of Abandoning Policy & Procedure
Barr’s intervention in the Stone case looks so bad because it looks like favoritism. The attorney general intervened to go easy on a friend of the president, when that friend was convicted at trial and facing a sentence duly derived from the Sentencing Guidelines.
Trump’s pardoning of white-collar criminals also looks so bad because it looks like favoritism. The president ignored the longstanding process to consider pardons, and instead granted the pardons to friends and political donors.

Stone
What sticks out is that in both instances, one could at least try to make a reasoned case for what Barr and Trump did. I’ve seen arguments supporting Barr’s intervention in the Stone case, and Trump’s pardoning of Rod Blagojevich. I could even entertain the idea of pardoning Michael Milken, a 1980s fraudster who has done at least some good works since then.
None of those arguments were made. Instead, both Barr and Trump just acted unilaterally. They disregarded process in favor of their own judgment, regardless of whatever outcome the process would normally create — and that’s a disaster for corporate culture.
For example, several times Barr has denounced local district attorneys who are retreating from harsh sentences in favor of a more rehabilitative approach for low-level offenders. He gave just such a speech on Feb. 11, the same day he intervened in the Stone memo.
That comes across as hypocrisy; it comes across as privilege. So even if Barr did reach the right conclusion about Stone’s sentencing (for the record, I don’t believe he did), then he reached the conclusion the wrong way. And that’s bad for corporate culture.
The plain truth is that inconsistent application of policy comes across as arbitrary application of policy. That chews away at the culture of ethics and compliance for the whole organization, in favor of supplication to whomever at the top gets to make those arbitrary decisions. The organization isn’t based on cultural norms that enshrine ethical values; it’s based on worship of the leader.
I belabor this point so much because we’ve all seen CEOs who believe their judgment is supreme. That’s not the same as management override, where an executive decides against some outcome that policy or procedure recommends. It’s disregarding policy and procedure entirely.
That’s a risk for any organization. It’s a point compliance professionals should appreciate deeply, so we can warn executives against that temptation, or bug out when they ignore that counsel anyway.
Yes, This Could Reach You
For all our talk about corporate culture rot within the Trump Administration — yes, this rot can spread to the private sector and drive you nuts.
Consider the case of one Nelson Gibson, who receives kidney treatments from a dialysis center in Port St. Lucie, Fla. Gibson wanted to bring a life-sized poster of President Trump to his treatments for emotional support. The dialysis center, run by Fresenius Kidney Care, said no. So Gibson has been refusing care until the center lets him have his way.
Gibson has taken to social media and the press, complaining of censorship and political bias. Never mind that Fresenius did allow him to bring a smaller picture of Trump to prior treatments, or that a life-sized poster violates Fresenius safety policies.
Now, let’s be honest. Gibson is just a man unhappy that Fresenius won’t bend its rules for him, so he hopes that if he wails loudly enough on social media, Trump will hear his cries and intervene.
Well, when government operates as a personality cult, where the dear leader doles out favors to any worshipper who might somehow catch his eye — that’s a risk other organizations ignore at their peril. That’s how the dysfunction within the White House could affect your organization.
After all, Gibson’s case is silly, but he’s using the same tactics that disgraced Navy Seal Eddie Gallagher used to get Trump to pardon Gallagher for war crimes. And Gallagher succeeded. When the Navy tried to push back against Trump’s interference, the Secretary of the Navy was sent packing.
If you don’t believe Trump might try to meddle in your own company’s affairs, you’re naive. The only question is when he will try.
The answer: as soon as he believes he can get away with it.