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OpEdNews Op Eds    H2'ed 5/19/14

We've Known for 75 Years Why GM Killing Customers Isn't Treated as "Real Crime"

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Sutherland also championed the view that the effect of elite fraud in eroding "trust" was likely to cause even greater societal losses than these immense direct expenses of fraud.

"The financial loss from white-collar crime, great as it is, is less important than the damage to social relations. White-collar crimes violate trust and therefore create distrust, which lowers social morale and produces social disorganization on a large scale. Other crimes produce relatively little effect on social institutions or social organization."

Sutherland: white-collar crime is real crime

Sutherland knew that elite white-collar criminals had huge advantages. The most fundamental advantage was that their crimes were not treated as crimes. Sutherland made it a priority to expose and refute this treatment. "White-collar crime is real crime. It is not ordinarily called crime"."

Frederic Bastiat warned about this tendency to excuse, even celebrate, the crimes of the elites.

"When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it."

Sutherland: Elite crimes rarely prosecuted

"[W]hite-collar criminals are relatively immune [from prosecution] because of the class bias of the courts and the power of their class to influence the implementation and administration of the law. This class bias affects not merely present-day courts but to a much greater degree affected the earlier courts which established the precedents and rules of procedure of the present-day courts."

Sutherland's Explanation of why GM Faced Regulators Instead of Prosecutors

"The crimes of the lower class are handled by policemen, prosecutors, and judges, with penal sanctions in the form of fines, imprisonment, and death. The crimes of the upper class either result in no official action at all, or result in suits for damages in civil courts, or are handled by inspectors, and by administrative boards or commissions, with penal sanctions in the form of warnings, orders to cease and desist, occasionally the loss of a license, and only in extreme cases by fines or prison sentences. Thus, the white-collar criminals are segregated administratively from other criminals, and largely as a consequence of this are not regarded as real criminals by themselves, the general public, or the criminologists."

Sutherland's Explanation of Class, Power, and Impunity for Crime

"This difference in the implementation of the criminal law is due principally to the difference in the social position of the two types of offenders. Judge Woodward, when imposing sentence upon the officials of the H. 0. Stone and Company, bankrupt real estate firm in Chicago, who had been convicted in 1933 of the use of the mails to defraud, said to them, 'You are men of affairs, of experience, of refinement and culture, of excellent reputation and standing in the business and social world.' That statement might be used as a general characterization of white-collar criminals for they are oriented basically to legitimate and respectable careers."

Creating Regulatory and Prosecutorial "Black Holes"

"Because of their social status they have a loud voice in determining what goes into the statutes and how the criminal law as it affects themselves is implemented and administered. This may be illustrated from the Pure Food and Drug Law. Between 1879 and 1906, 140 pure food and drug bills were presented in Congress and all failed because of the importance of the persons who would be affected. It took a highly dramatic performance by Dr. Wiley in 1906 to induce Congress to enact the law. Finally, the Administration has not been able to enforce the law as it has desired because of the pressures by the offenders against the law, sometimes brought to bear through the head of the Department of Agriculture, sometimes through congressmen who threaten cuts in the appropriation, and sometimes by others."

Sutherland's cites Drew's Parable of the Bumblebees v. the Fable of the Bees

"The statement of Daniel Drew, a pious old fraud, describes the criminal law with some accuracy, 'Law is like a cobweb; it's made for flies and the smaller kinds of insects, so to speak, but lets the big bumblebees break through. When technicalities of the law stood in my way, I have always been able to brush them aside easy as anything."

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William K Black , J.D., Ph.D. is Associate Professor of Law and Economics at the University of Missouri-Kansas City. Bill Black has testified before the Senate Agricultural Committee on the regulation of financial derivatives and House (more...)
 
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