History is rife with examples of wrongdoing in the corporate boardroom, from the early days of the Great Depression to the recent Great Recession. Besides a handful of high-profile prosecutions — think Bernie Madoff — why aren’t more wrongdoing executives in prison? Jesse Eisinger, a Pulitzer Prize-winning journalist at ProPublica formerly with The New York Times and The Wall Street Journal, says prosecutors are too scared to fail and also mindful of the legal consequences of doing their jobs. He exposes the roots of this feckless attitude in his book, The Chickenshit Club: Why the Justice Department Fails to Prosecute Executives. Eisinger recently talked about his book on the Knowledge@Wharton show, which airs on SiriusXM channel 111.

An edited transcript of the conversation follows.

Knowledge@Wharton: Let’s begin with this question: Why aren’t there more prosecutions?

Jesse Eisinger: The Justice Department has lost the will and ability to prosecute top corporate executives. They focus on settlements with corporations for money, and I think this undermines justice in America.

Knowledge@Wharton: They lost the will. That’s not exactly an excuse a lot of Americans will take to heart.

Eisinger: No, I don’t think it is a good enough excuse, but what happened was a series of aggressive prosecutions in the wake of the Enron-era scandals. Many will remember that energy trader fraud that went down. After that, there was a backlash against aggressive prosecutions. Prosecutors suffered fiascos and losses and lost tools, and gradually the skill set eroded. Now, I don’t think that they can prosecute top corporate executives.

Knowledge@Wharton: I get the sense that it is an old boy’s network in that some of these prosecutors had to be thinking ahead about when they were not in those positions anymore.

Eisinger: Yeah, there’s a big revolving door here. We talk about inequality in this country. We talk about things like mass incarceration where we disproportionately punish the poor and people of color. Well, the flipside is that we don’t punish the rich and powerful — and often white — men. One reason is a kind of elite affinity, class affinity. The prosecutors and these executives all come from the same milieu, and it’s just hard for them to see them as criminals.

As one Securities and Exchange Commission regulator put in an email that I uncovered in the book, “Well, these Goldman Sachs bankers are good people who have made one bad mistake.” This is what they think of executives. They don’t think of young black males on the streets dealing drugs as good people who have made one mistake.

Knowledge@Wharton: It’s interesting that we are talking about a period of unbelievable economic growth, especially in the last few years. Yet we still see examples of fraud, such as the Wells Fargo case with millions of fake bank accounts. You certainly have executives at the top who should have been prosecuted. Overseas, the former CEO of Volkswagen may well be prosecuted for what happened with the company’s emissions scandal.

Eisinger: My argument is that this is not just an issue of the financial crisis, and it’s not just something that plagues banks and bankers. It is a problem that started building before the financial crisis in 2008, and it has persisted today. It affects financial entities of all stripes and also industrial companies, retailers, tech companies, pharmaceutical companies. We have a problem prosecuting individuals at the highest echelons.

“The Justice Department has lost the will and ability to prosecute top corporate executives.”

Other countries do it a little bit better, but I don’t think their record is so spectacular. We have a problem in this country where we don’t seek to find the highest-level wrongdoers and try to bring them to trial and bring them to justice.

Knowledge@Wharton: Does public pressure have any effect?

Eisinger: I think the public is very angry about this. The public understands that there is injustice in America and a two-tiered justice system, and it feeds into this anger. I think it undermined Hillary Clinton, it undermined President Obama when they tried to reform the financial system. People saw that no one is personally being held accountable.

I think it fed into the anger that fueled Donald Trump. Donald Trump ran against Wall Street, ran against Goldman Sachs for taking over and owning politicians. Of course, that was ridiculous since he ends up installing Goldman Sachs executives in his White House. But there was this rhetoric that fed into it.

Knowledge@Wharton: And once you get the job and make the moves that you need to make, it doesn’t matter what the past is anymore.

Eisinger: Right. I think that despite that rhetoric, he has given over his administration to a lot of bankers and corporate executives. One of the effects is that we are going to have even less accountability for corporate crime, in addition to a lot of deregulation and lower taxes. I’m a big critic of the Eric Holder regime, the attorney general under Obama, and I think Jeff Sessions is going to be worse.

Knowledge@Wharton: The Dodd-Frank Act of 2010 was meant to rein in some of the misdeeds in the banking industry. But we still have issues.

Eisinger: I don’t think Dodd-Frank solves any problems, or it didn’t solve enough problems. I think it was an incrementally good piece of legislation. But it speaks to the way Democrats approach these issues, which is on a technocratic and systemic level. They seek to try to reform the system rather than prosecute individuals. They criticize prosecutions as weeding out bad apples.

The old-line Republican idea and the traditional idea was law and order. They wanted to save capitalism from the bad capitalists and put a few people in prison. The answer is that you have to do both, and both go hand in hand. The reforms only have legitimacy if you are also punishing the wrongdoers.

Knowledge@Wharton: You mentioned the post-Enron period, but there had to be a couple of situations right after Enron where we saw wrongdoing by executives and no prosecution?

Eisinger: The Enron era is a turning point. Of course, there have been prosecutions that have failed and where we didn’t punish people in this country. It’s never been a golden age where the rich and powerful, if they committed crimes, were sure to go to prison. We’ve had silver ages. There was a silver age after the Enron prosecutions.

The government under President George W. Bush prosecuted some of the Enron executives who were closest politically to his administration, which was a remarkable thing. They assigned a task force, a team of prosecutors and FBI agents who had sole responsibility for that, and they succeeded. They prosecuted almost all of the top executives from Enron.

“The prosecutors and these executives all come from the same milieu, and it’s just hard for them to see them as criminals.”

But oddly enough, it came to be viewed as a bunch of cowboys who had made a bunch of mistakes and were overly aggressive. So what happened was the Department of Justice mislaid the lessons of the Enron task force. They thought that these guys had done the wrong thing instead of the right thing, and that has influenced the way that they enforce corporate law-breaking today.

Knowledge@Wharton: The accounting firm Arthur Andersen was convicted of obstruction of justice in the Enron scandal, and the Supreme Court later overturned the conviction. How much do you think that decision plays into this?

Eisinger: It was a piece of it that certainly affected the way the Department of Justice prosecutors saw the prosecution. I think the Arthur Andersen prosecution was absolutely the right thing to do. It was a recidivist entity that had been the handmaiden to numerous corporate frauds and had clearly obstructed justice. I think that if they had retried that case, they would have won. They didn’t retry it because Andersen didn’t exist as an entity at that point. It was a bad ruling from the Supreme Court. The Supreme Court can make mistakes.

What happened in the wake of that is the Department of Justice effectively decided, “We’ll never prosecute another company again or indict another large company again. Instead, what we’ll do is settle with corporations,” and so they start to settle for money. The money doesn’t come out of the executive’s pocket, it comes out of the shareholders’ pocket. It becomes very easy and enticing to do, and in doing so they lose focus on individuals.

Knowledge@Wharton: What is the role of the attorneys general in these situations?

Eisinger: Do they have responsibility for it? Absolutely. Eric Holder did not prioritize these investigations. He could have sent a message that we want to create a bunch of task forces and assign prosecutors to look at this and take these prosecutions of financial crises cases seriously, and then focus on individuals. Holder’s message to his staff was settlements are OK and what I want is multibillion-dollar settlements, huge numbers so that I can have press conferences. That’s not the way to get justice.

Knowledge@Wharton: Are executives just not concerned about prosecution or worry that the DOJ is going to come after them?

Eisinger: It’s hard to look into their heads to really understand what they’re doing, but I don’t think that they feel any deterrents from committing crimes or exploiting their customers because they don’t see anybody going to prison. There’s a big argument about whether prison is effective or deters crime.

My argument is that in the white-collar arena with corporate executives, it absolutely deters crime because these people are well informed, they pay attention to the news, they have a stake in society, they have their reputations to preserve. If you put a CEO or two in prison, it will have a cascading effect throughout the financial system, throughout corporate America. I think these kind of prosecutions pay dividends.

By contrast, if you don’t prosecute, a banker looks around and says, “I got paid huge bonuses, we destroyed the financial system and nobody went to prison, nobody really paid a fine, nobody really had any reputational costs. Why shouldn’t I just do that again?”

Knowledge@Wharton: What about the role of the White House?

Eisinger: I never found a smoking gun where former Treasury Secretary Timothy Geithner called up Eric Holder and told him to lay off the banks. I don’t think this was a priority for them. One of the things they say is, “We didn’t see any crimes that we could have prosecuted, and we have to be very careful as prosecutors. We can’t just go willy-nilly and respond to the pitchfork-wielding mob.”

My argument is the evidence shows that you didn’t look. If you didn’t look, it’s no surprise that you didn’t find crimes. Obama did a lot of superficial things like hold some press conferences and talk about this issue and have a kind of fake task force that really wasn’t serious like the Enron task force. Those were inadequate responses to the greatest financial crisis since the Great Depression.

Knowledge@Wharton: At least when you think about Enron, the government had the right idea that you had to go after these people.

Eisinger: Yes. They kind of hate losing, and the Enron team lost some cases and some were overturned. That was the way they take their lumps when you prosecute these very difficult cases, and there’s no question that these cases are hard to prosecute and hard to prove.

“If you put a CEO or two in prison, it will have a cascading effect throughout corporate America.”

But they won more cases than they lost, and they won the important cases against the founders, the top two guys. I think that this is not something they could do today. I think that if Jeff Skilling and Ken Lay, the two heads of Enron, were on trial today in America, we would not win that case.

Knowledge@Wharton: Is there concern that something like that could occur again because the Justice Department won’t put its foot on the necks of some of the people involved?

Eisinger: I think that contributes to it. I think another financial crisis is inevitable. We have financial crises in this country with some regularity. In fact, you can’t really stamp them out. What you can do is make the banks more stable so that they don’t take the entire economy with them when they do fail. We’re going to have another financial crisis — I’m not predicting that it’s going to happen soon; I’m just predicting that it will happen. And one of the reasons we’re going to have reckless behavior again is that we didn’t punish anybody.

Knowledge@Wharton: Who do you think was the greatest case of getting off the hook in terms of the banking industry around 2008, 2009?

Eisinger: I’m not a lawyer and the book is not a legal brief for any one executive. It’s a narrative that follows a bunch of heroic people who try to buck the system in the legal world and the bureaucracy. My argument is that we could have put dozens and dozens of bankers away if we had really looked.

I think that they should have looked much harder at former Countrywide CEO Angelo Mozilo and the top executives at Lehman Brothers. And they should have looked at Merrill Lynch and Citigroup and the collateralized debt obligation business, complex mortgage securities. I think that if they had looked, they would have found crimes. And if they would have found crimes, they could have won these cases.

Knowledge@Wharton: In the current administration, there is a move to roll back regulations. You can’t gauge when we might see another financial crisis, but the expectation is there. If the Justice Department is not looking to prosecute, and the White House goes down the path it may be going, we’re talking about a one-two punch that could have a significant effect.

Eisinger: I think that’s right. We’re going to have to be vigilant. I think that it’s a slightly separate issue whether we have a financial crisis and a destabilization of the capital markets and prosecutions. The financial crises come about through deregulation. And right now we’re setting ourselves up for a big deregulatory wave under the Trump administration. I think it’s quite dangerous. I don’t think the regulation went far enough after the financial crisis.

I think the banks are healthier, but they’re not healthy. I think the system is more stable but not stable enough. Instead, we’re going to start to roll back those reforms. That is going to cause a problem. I would never be stupid enough to predict when, but I can predict in certainty that we’re planting the seeds right now of a grave financial crisis.

“I think another financial crisis is inevitable.”

Knowledge@Wharton: If there had been more prosecutions coming out of the recession, that would have had an impact on the end of the Obama administration and possibly on who would be president now.

Eisinger: I think so. I think we would have had a stronger reform effort because people would have understood that there was a core of fraud that happened in the financial crisis that needed to be rooted out and addressed. We would have had much more serious reform. We would have had a sense of accountability, which would have led to a different attitude about what Obama did in the wake of the financial crisis. Then whoever ran in his stead, it also would have undermined any argument that the Republican candidate had that bankers had taken over Washington and that the Democratic Party was in the pocket of the bankers, which is what Trump did run on. I think history would be different if we had prosecuted adequately in the wake of the financial crisis.

Knowledge@Wharton: What about some of the other people, such as former Attorney General Loretta Lynch or former FBI Director James Comey. They might have wanted to push for more aggressive action but probably got shut down very quickly.

Eisinger: When Lynch comes in after Holder leaves, she and Deputy Attorney General Sally Yates changed the policy of the Department of Justice. It is a tacit admission that Holder went down the wrong route. They essentially say we need to prosecute individuals when we look at corporate prosecutions. I agree with that fundamental tenet, but the problem is they are still basing the regime on settlements with corporations. They are still fining corporations rather than trying to root out serious crime in a more serious way.

What this will lead to and has led to, to the extent that it’s successful, is that corporations finger the fall guy, they throw some mid-level employee under the bus, but they don’t really get to the top.

This is a big problem in this country. We have essentially outsourced and privatized investigations of corporate wrongdoing to the corporations themselves. Loretta Lynch and Sally Yates recognized that a little bit and tacitly criticized it but didn’t go remotely far enough.