PP and MR are very nice people and the furthest thing from corrupt, where it actually matters.
The profession puts a lot of pressure on juniors to produce and do so fast. Put a lot of pressure on somebody and what you see is not their true colours, but, rather, what the messed up version of them can potentially behave like.
Juniors often have to rely on the guidance of seniors to understand what is and what is not acceptable conduct in our profession. The AER incident is as much their mistake as it is the editor's and every other researcher's who was aware of the existing literature and failed to challenge them on it.
Yes, they messed up. But, just to get some perspective and assuming intent, their "crime" is that they kept silent about the competition. That's it. They did not falsify data. They did not misreport results. They did not do any of the long list of extremely bad things that corrupt researchers in our profession, and elsewhere, do.
Just let the punishment fit the crime. These are good researchers and good people whose quality and ethics extend beyond whatever the AER incident seems to provide a summary statistic for in this board members' eyes. The profession knows what they did and they know that everyone else knows. That's punishment enough I think. Time to move on.
Either they were dishonest and didn't cite the relevant papers or they were incompetent and missed them in the lit review in which case they should have withdrawn the paper from AER and resubmitted it.