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"Hands up Corporate Crooks!" Not Really Unless it's in a Movie.

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Much of corporate wrongdoing such as endless wars, bribery of politicians, tax dodging and the like has been made legal by our three servile branches of government. What's left is illegal corporate wrongdoing, or corporate crime, and it is basically immune to being held accountable.

It doesn't take a rocket scientist to explain corporate wrongdoing either the legal or the illegal kind. It always happens when certain personal factors and certain situational factors, or badvantages (temptations and pressures), come together.

First, needless to say, there must be corporate people predisposed to cut ethical and legal corners. Second, there must be badvantages within the corporation. They always exist. Ignoble expectations and upside down rewards are classic examples. Third, there must be badvantages outside the corporation. A hands-off government is a huge badvantage with its lap dogs instead of watch dogs; escape hatches (e.g., legal loopholes); pampering instead of prosecuting and punishing; and deregulation. Without these four laissez-faire policies and practices, corporate crime would shrivel.

Because this article was prompted by Rob Kall's November 28 piece, "Big corporations may not pay taxes, but they pay billions in fines for corruption," I am going to single out here for a brief discussion the fourth hands-off policy and practice, the pampering of corporate crooks.

Stop Pampering, Start Prosecuting and Punishing Corporate Crooks

The U.S. Supreme Court upheld California's tough "3 strikes and you're out" law, letting stand two consecutive 25-year terms to life imprisonment with little chance for parole of a man convicted of stealing nine videotapes worth $150 after two earlier offenses. Now that's more like bloody overkill and certainly not a case of pampering or coddling the criminal! Consider, in stark contrast, pampered corporate criminals. If they only stole videotapes I wouldn't be writing this article. But by any stretch of the imagination corporate crime is not petty theft. Yet the paucity of its prosecution and the puniness of its punishment are beyond any stretch of the imagination except that of the corpocracy, the Devil's marriage between powerful corporate interests and all three branches of our government.

The best way to get tough on corporate crime is to stop the pampering and to start prosecuting and punishing, really punishing, the corporations and the crooks inside them. The Department of Justice, though, throws up one obstacle after another to meeting its own hypocritically stated goal of prosecuting and punishing corporate criminals. The thrust of any offensive to get tough on corporate crooks and their corporations, therefore, should be aimed at that federal agency, but not without also pressuring Congress for tough anti-crime legislation that neither the executive nor the judicial branch can circumvent. That thrust, of course, will have to wait until we rid America of her corpocracy entirely, but that is another and much broader subject.

Numerous proposals for meaningful prosecution and punishment of corporate crime and criminals have been made in the literature and on the websites of a few NGOs although not as far as I can tell for preventing each and every one of the following ways the Department of Justice coddles corporate criminals: non-prosecution; "deferred" prosecution; mitigation; double-disclaimers; plea bargaining; non-criminal alternatives; and wrist slapping. And in every one of these ways we can be sure there are stables of corporate lawyers working to ensure their crooked employers go scot-free or nearly so.

1. End Non Prosecutions

The sine qua non of pampering is simply not to prosecute. Despite two arguments that try to justify this practice, non prosecution is a blatant as well as an unlawful cop out by our non-law enforcing captive government. One argument is that only persons can commit crimes. The argument is ludicrous when made by defenders of corporate personhood, but that is really beside the point. Much more to the point is that the persons responsible for the crime occupy official positions legitimized by the corporation; the crime is usually intended to benefit the corporation; the harm done is magnified by the overall presence and power of the corporation; and the organizational history and culture conducive to the crime will likely remain even if the individual culprits are removed. The second argument is that indicting corporations would put them out of business and in doing so would hurt innocent shareholders, employees, creditors, and other stakeholders. But few corporations have ever been put out of business by being indicted. Nevertheless, advocates of this argument point to what happened to the consulting firm hired by Enron, Arthur Anderson. It was indicted, folded with some 28, 000 employees left unemployed, and then was subsequently acquitted by the U.S. Supreme Court. The ruling, however, turned on technicalities that didn't really exonerate its culpability.

Government will sometimes go to extreme lengths not to prosecute corporate crime. A good example is what I call "phantom substitutes" in cases of Medicare fraud committed by corporations. Instead of having to give a "death sentence" mandated by its own harsh (on paper only) rule of excluding corporations that defrauded Medicare from doing further business with it, the prosecution has a phantom or defunct unit plead guilty (I guess the phantom can write and talk) and gives it the death sentence. The "parent" criminal, meanwhile, continues to milk the cash cow.  

The Department of Justice currently has given itself entirely too much discretion in choosing whether to prosecute. Non-prosecution might be limited to cases where the harm done is relatively miniscule and no-repeat pledges are required and tied to heavy penalties if not honored. There should be no other exceptions.

2. End Deferred Prosecutions

If it doesn't think it can get away with not prosecuting criminal corporations, government resorts to "deferred" prosecutions, but they eventually evaporate into non prosecutions. Ever since the Arthur Anderson case the trend has been for criminal corporations to be offered "deferred" prosecution agreements and the public gets hoodwinked yet again. The agreements aren't publicized, so the corporation avoids damage to their reputation. Sometimes the court appoints a monitor with authority to impose internal reforms, but the monitor usually turns out to be cozy with the corporation. In any case, most often all charges in deferred agreements are dropped after the agreement "expires." Some legal experts refer to these agreements as a "get-out-of-jail card," but I prefer to call it a "stay-out-of-jail card."

Deferred prosecution agreements should be totally banned. In their place, criminal corporations should be fully and rigorously prosecuted with no double disclaimers or plea bargaining allowed, and, where appropriate, put on tough probation that includes a bona fide outside monitor or trustee, ouster and severe punishment of the offending executives, a court-ordered restructuring plan, and publication in the major media of the corporation's crime and punishment. Executives involved in any really serious corporate crimes should be prosecuted as criminals under the principle of "do crime, do time."  

3. Severely Limit Mitigation

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www.uschamberofdemocracy.com

I toiled for many years over the research for and the writing of my book, The Devil's Marriage: Break Up the Corpocracy or Leave Democracy in the Lurch. I had the time to do it after retiring from working in the retail industry, the insurance (more...)
 
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"Do crime, do time" is for petty street thieves. N... by Gary Brumback on Saturday, Dec 3, 2011 at 8:29:24 AM
Excellent work, Gary. Did you see "60 Minutes" ton... by Arlen Grossman on Monday, Dec 5, 2011 at 12:55:35 AM