There's no relief in sight for corporations and their lawyers who might be hoping that budget cuts would restrain federal prosecutors. Though the U.S. Department of Justice took a small hit in President Donald Trump's 2018 budget request, the Criminal Division actually saw its budget increase slightly.

But the Justice Department's Civil Division did not fare as well as the Criminal Division by comparison.

The overall DOJ request is for $27.7 billion, compared with $28.8 in 2017, less than a 4 percent decrease. However, the Criminal Division will receive about $819,000 more, rising to $182.2 million.

The Criminal Division will still lose some 88 positions, including 27 attorneys, according to statistics released by the DOJ.

Wyn Hornbuckle, the DOJ's deputy director of public affairs, said 48 currently vacant positions will be eliminated, and another 40 positions will be “realized through attrition by the end of” fiscal year 2018. That will leave the division with 688 attorneys.

Veteran white-collar criminal lawyers agree that those cuts are not enough to make a major difference in the division's enforcement of such matters as the Foreign Corrupt Practices Act, health care fraud or financial fraud.

“I wouldn't expect it to have material impact on enforcement. But it makes a difficult job even harder,” said Jason Jones, a 10-year federal prosecutor and now a partner in King & Spalding's special matters and government investigations practice in Washington, D.C.

“These prosecutors are already thinly staffed,” added Jones, who served as assistant chief of the FCPA unit in the fraud section. “You'll typically have one or two federal prosecutors investigating a company that has a much larger team of lawyers.”

But Jones said he doesn't think the cuts will stop any significant investigations. “They may take longer, and [the] DOJ may be a little pickier in the cases they choose to pursue,” he said.

Besides, he said, the department can obtain additional, nonbudgeted money from the so-called working capital fund. Created in 1975, the fund obtains 3 percent of penalties levied in deferred and non-prosecution agreements, often amounting to millions of dollars.


David O'Neil.


Courtesy photo

Debevoise & Plimpton's David O'Neil agreed that the Criminal Division's loss of lawyers will hurt, but not cripple, the department.

“Every prosecutor counts, and any reduction will have some effect,” said O'Neil, a litigation partner and member of the firm's white-collar and regulatory defense group. He served eight years in the DOJ, including leading the Criminal Division in 2014.

“But I think it is worth remembering that presidential budgets are really policy documents that don't often go into effect as written. It is unclear whether this will actually mean a reduction in the Criminal Division,” he added.

“Besides,” O'Neil added, citing recent DOJ pronouncements, “I think the department has made clear that is going to prosecute white-collar crime with the same vigor that it has in the past.”

The DOJ's budget actually included some increases for U.S. Attorney General Jeff Sessions' priorities of fighting illegal immigration and violent crimes, despite the fact that violent crimes figures are near a historic low.

The budget increases include: $403 million more for agency operations, such as the FBI and the U.S. Drug Enforcement Administration; $79 million more for immigration review and new immigration judges; and $61 million more for U.S. attorneys, including 300 new assistant U.S. attorneys to help prosecute violent crime and protect borders from illegal immigration.

The department also requested an increase of $24.9 million for the U.S. Department of Health & Human Services to support criminal and civil health care fraud enforcement efforts, among others.

By comparison, larger reductions were proposed for the DOJ's Civil Division. Its budget request remains at the 2017 level of $292 million, but includes a decrease of 185 positions, including 120 attorneys. That leaves 833 lawyers in the Civil Division to defend the government's agencies and laws.

But those cuts are minor compared to the president's budget reduction requests for other departments. For example, Trump has proposed slashing the U.S. State Department budget by about 33 percent, the U.S. Environmental Protection Agency by 31 percent and the Agriculture and Labor Departments each by 21 percent.

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