U.S. Senators Schumer and Shelby recently introduced a bill entitled the Supplemental Anti-Fraud Enforcement (“SAFE”) Markets Act. The purpose is to dedicate an additional $110 million for new hires at law enforcement agencies to investigate and prosecute white-collar crimes.
Although white-collar criminal defense attorneys appreciate the gesture, other factors will determine whether the country sees any meaningful increase in the number or quality of cases. For example, the summary of the legislation in the press release suggests that the bill will provide for 50 new Assistant United States Attorneys at a cost of $10 million. If the salary for each AUSA is about $100,000, then it appears this may be another series of fifty two-year term AUSA positions. These short-term slots have been a favorite way for Congress, in recent years, to increase the number of AUSAs working in a particular area without committing to a permanent budget increase.
The problem is, white-collar prosecution is a long-term endeavor. Many investigations (and certainly the resulting prosecutions) are not begun and concluded in a two-year time frame. Moreover, although the rocky economy may change the hiring dynamic, the type of attorney interested in a limited-term stint as an AUSA is generally a mid-level associate at a large law firm. Those smart, driven individuals often have no prosecutorial experience and limited courtroom experience. They require at least several months to get “up to speed” on the techniques for the investigation and prosecution of criminal cases. By the time they have their feet wet, they are well into a two-year term, and generally turn their attention to applying for a permanent AUSA slot, which may or may not be available. Any cases they begin investigating during their tenure may have to be handed off to a permanent AUSA, if the term slots are not renewed.
The government would attract the most qualified and experienced applicants by creating additional permanent AUSA positions, even if there have to be fewer positions created. A temporary influx of short-timers may be effective in combating, for example, a spike in violent crime that can be addressed by a series of reactive prosecutions. However, the length and nature of white collar prosecution is not conducive to limited-term prosecutors, and that $10 million could be better spent elsewhere.
The legislation also creates a significant number of positions for FBI agents and SEC enforcement staffers. Certainly, the diversion of FBI resources to anti-terror efforts after 9/11 has contributed to a decline in the number of white-collar prosecutions, in this region and elsewhere. The creation of additional permanent agent positions will be a significant step towards investigating and prosecuting more white-collar offenders.