On May 28, 2021, President Biden submitted his Budget for Fiscal Year 2022 to Congress, including $35.3 billion for the Department of Justice (“DOJ”), which was an overall increase of almost $4 billion from the previous administration’s DOJ request for Fiscal Year 2021.1 In looking at the Department’s request, we can discern the key priorities of Attorney General Garland and the DOJ. In the area of white collar enforcement in particular, the budget requests for the Antitrust Division, Criminal Division, and the U.S. Attorney community are most instructive given those sections’ outsized role in the white collar arena.
Division Funding Requests
Given that we expect white-collar enforcement activity to increase under the new administration, it is no surprise that DOJ’s budget request includes increased funding for the Antitrust Division in comparison to FY 2021. Specifically, the Division requested $8.4 million to provide funding for 66 new positions to meet the additional workload of the Division’s enforcement programs in online platform investigations, criminal cartel prosecutions, and the Procurement Collusion Strike Force. These additional positions will be a force multiplier in terms of the number and complexity of investigations and enforcement actions that the Antitrust Division can handle. Given Attorney General Garland’s statement at his confirmation hearing that his “first love… was in fact antitrust,”2 it is not surprising to see this doubling down on antitrust enforcement.
Online Platform Investigations. Of the $8.4 million increase requested by the Antitrust Division for enforcement enhancement, the largest by far was the $5.1 million increase for online platform investigations, underscoring its continued prioritization of big tech antitrust enforcement, after it first announced in July 2019 that it would focus attention on regulating “market-leading online platforms.”3 The Antitrust Division notes that many of the online platform investigations are “entering a critical phase as the Division moves into FY 2022.”4 Its budget request noted that as of April 2021, the Division has hired 25 new attorneys, 24 new paralegals, and 1 new statistician to two-year term positions to work on online platform matters, and the funding for these positions was limited and “unsustainable.”5 In addition to the Division’s ongoing litigation, its ongoing tech investigations, which the Division hinted could result in additional litigation in FY 2022, require converting 27 of the existing term positions to permanent positions and an additional $3.2 million in permanent funding for more positions.6 These additional positions, which attract hundreds of the best and brightest attorneys as applicants for each open position, will quite frankly allow for a serious increase in targeted enforcement. Put simply, you are doing more with more. This demonstrates the DOJ’s continued prioritization of enforcement against big tech. After initiating a large civil antitrust suit in the fall of 2020, it is logical that the DOJ will prioritize its other ongoing big tech investigations, following the trend.
The Procurement Collusion Strike Force. The Antitrust Division’s second largest enforcement-related budgetary request of approximately $2.1 million was for the new Procurement Collusion Strike Force (“PCSF”). The PCSF was created in November 2019 to promote competition in the public procurement process and safeguard taxpayer dollars from collusion. However, it currently lacks dedicated funding. Especially in light of the more than $2 trillion in recent pandemic relief funding, the Division requested dedicated funding for the PCSF to investigate and prosecute procurement-related schemes and deter wrongdoing by training government officials and contractors on antitrust risks associated with the procurement process. The $2.1 million in dedicated funding would be used to support 14 attorneys, 7 paralegals, and 1 economist for the PCSF.7 This dedicated funding, increased personnel, and the naming of a permanent, career (non-political) director all indicate the continued and increased prioritization of procurement fraud investigations and prosecutions.
The Criminal Division’s budget request demonstrates the Justice Department’s continued focus on meeting workload demands stemming from COVID-related fraud.8 Since April 2020, the Criminal Division’s Fraud Section has led efforts to investigate and prosecute COVID-related fraud. The Fraud Section also leads the Justice Department’s COVID-19 Health Care Fraud Working Group, which centralized the government’s health care fraud response within the Criminal Division. The FY 2022 budget proposal requests $10,100,000 to fund 20 temporary attorney positions to address these crimes, primarily fraud concerning the Paycheck Protection Program (“PPP”), Economic Injury Disaster Loans administered by the Small Business Administration (“SBA”), and health care fraud.9 In the year since pandemic relief programs began, the DOJ has prosecuted more than 100 defendants in more than 70 criminal cases for a variety of types of pandemic-related fraud. For example, on May 26, 2021, the DOJ announced criminal charges against 14 defendants across seven federal districts for their alleged participation in various health care fraud schemes that exploited the pandemic and resulted in $143 million in false billings.10 In addition, on June 2, 2021, a Wisconsin man was sentenced to 57 months in prison for fraudulently obtaining over $1 million in PPP loans guaranteed by the SBA.11 We can expect that the DOJ will continue to prosecute a large number of these cases. At present, most of the criminal prosecutions related to pandemic fraud have been the proverbial low-hanging fruit of brazen theft through the creation of fake companies with fake payroll documents, but as the mandatory audits for any entity that received over 2 million dollars begin as well as potential successor liability for acquiror companies, it is likely we will see more sophisticated and larger pandemic fraud prosecutions.
The U.S. Attorney’s Offices (“USAOs”) highlight a few major programmatic changes in their budget request, totaling $119 million in additional requested funding. These areas include domestic terrorism,12 fallout from the Supreme Court’s McGirt decision regarding state and federal jurisdiction over tribal lands, the eLitigation initiative, and COVID fraud. Looking solely at the COVID-fraud request, similar to the Criminal Division, the USAOs have requested increased funding in order to combat COVID-related fraud.13 Specifically, the USAOs are requesting $26.4 million and 100 term attorney positions to combat a wide variety of COVID-related fraud offenses, involving individuals and entities targeting government relief programs including the Paycheck Protection Program, the Economic Injury Disaster Loan Program, distribution of Economic Impact Payments, and state unemployment insurance programs that have been supplemented with federal funds.14 The USAOs expect this workload to increase dramatically in FY 2022 with the increased government spending for pandemic relief.15
An examination of these budget proposals — the Antitrust Division, the Criminal Division, and the U.S. Attorney’s Office — provides concrete evidence of some of the DOJ’s major priorities. The Justice Department’s budget request suggests its focus is on investigating large antitrust matters in the tech sector and other industries, as well as continuing to prosecute pandemic-related fraud. We can expect that the DOJ will utilize this increased funding to pursue large and sophisticated cases in these areas.
1 Dep’t of Justice, Department of Justice Fiscal Year 2022 Funding Request (May 28, 2021), https://www.justice.gov/opa/pr/department-justice-fiscal-year-2022-funding-request.
2 CNN Newsroom, Transcript of Confirmation Hearing for Attorney General Merrick Garland (Feb. 22, 2021), http://edition.cnn.com/TRANSCRIPTS/2102/22/cnr.05.html.
3 Dep’t of Justice, Justice Department Reviewing the Practices of Market-Leading Online Platforms (Jul. 23, 2019), https://www.justice.gov/opa/pr/justice-department-reviewing-practices-market-leading-online-platforms.
4 Dep’t of Justice, Antitrust Division, Congressional Submission FY 2022 Performance Budget, at 14, https://www.justice.gov/jmd/page/file/1398291/download.
5 Id. at 50.
7 Id. at 53.
8 Dep’t of Justice, Criminal Division, Congressional Submission FY 2022 Performance Budget, https://www.justice.gov/jmd/page/file/1398341/download.
9 Id. at 25.
10 Press Release, Dep’t of Justice, DOJ Announced Coordinate Law Enforcement Action to Combat Health Care Fraud Related to COVID-19 (May 26, 2021), https://www.justice.gov/opa/pr/doj-announces-coordinated-law-enforcement-action-combat-health-care-fraud-related-covid-19.
11 Press Release, Dep’t of Justice, Man Sentenced for his Role in Directing COVID-19 Relief Fraud Scheme (June 2, 2021), https://www.justice.gov/opa/pr/man-sentenced-his-role-directing-covid-19-relief-fraud-scheme.
12 As highlighted in the Department’s press release, the USAOs request $40 million to fund 100 positions, including 60 attorneys, to respond to an increase in prosecutions associated with domestic terrorism, such as cases stemming from the January 6, 2021 attack on the Capitol.
13 Dep’t of Justice, United States Attorneys, Congressional Submission FY 2022 Performance Budget, https://www.justice.gov/jmd/page/file/1398566/download.
14 Id. at 38.
15 Id. at 39.