And the hits, they just keep on comin'.
Not a day goes by without the granting of special treatment to one corporation or another by government and its agencies.
As always, this week has seen its share of high profile beauties, including the Supreme Court's unanimous ruling in favor of Wal-mart in the landmark pay and promotion discrimination suit. This ruling will effectively limit plaintiffs' ability to win group damages against employers, so it is good news for other companies facing gender discrimination actions such as Cigna Corp., Goldman Sachs, Bayer AG, Toshiba Corp., Deere & Co. and Costco Wholesale. Adding to the general merriment of the occasion, Wal-mart's share price rose in response to the SCOTUS decision.
But my favorite outrage of the week (so far) is the report that JP Morgan Chase has settled civil fraud charges alleging it misled investors in the housing market by agreeing to pay $153.6 million to the Securities and Exchange Commission. This comes a year after Goldman Sachs paid $550 million to the SEC to settle similar charges.
According to PBS, in this most recent case, "The firm neither admitted nor denied wrongdoing. But the government accused the investment bank of steering investors toward mortgage securities that another one of its clients, a hedge fund called Magnetar, was betting against in a big way, to the tune of hundreds of millions of dollars."
The phrase "neither admitted nor denied wrongdoing" is important, a key point to which we will again return. In the interview that accompanied the PBS report, Jesse Eisinger of ProPublica said the settlement "adds up to fractions of bonuses that these bankers made and these banks made in profits in 2007. You know, so this is chump change for Wall Street. And, in fact, Wall Street's top executives have not been held accountable to any significant degree for any of their actions or their banks' actions in the lead-up to the financial crisis, when often they misled their own clients."
Yes, the scale of the fraud was enormous; the deceit practiced by Morgan, Goldman and all the others was breathtaking, and the consequences for the economy and the general public were staggering, but the real insight of this story is that at no time does anyone admit wrongdoing -- ever -- demonstrating again, and still, how corporate crime in America is so well tolerated by the government. Not surprising, given that the corporations have bought the access to write their own rules, and show not the slightest hesitation to break them as needed. As Russell Mohkiber of the Corporate Crime Reporter has said, "Corporate criminals are the only criminal class in the United States that have the power to define the laws under which they live."
Corporate crime is far more pervasive, and far more damaging, than all street crime combined. It is also far less vigorously prosecuted. From the Corporate Crime Reporter website come these important points:
- Big companies that are criminally prosecuted represent only the tip of a very large iceberg of corporate wrongdoing.
- For every company convicted of health care fraud, there are hundreds of others who get away with ripping off Medicare and Medicaid, or face only mild slap-on-the-wrist fines and civil penalties when caught.
- For every company convicted of polluting the nation's waterways, there are many others who are not prosecuted because their corporate defense lawyers are able to offer up a low-level employee to go to jail in exchange for a promise from prosecutors not to touch the company or high-level executives.
- For every corporation convicted of bribery or of giving money directly to a public official in violation of federal law, there are thousands who give money legally through political action committees to candidates and political parties. They profit from a system that effectively has legalized bribery.
- For every corporation convicted of selling illegal pesticides, there are hundreds more who are not prosecuted because their lobbyists have worked their way in Washington to ensure that dangerous pesticides remain legal.- Advertisement -
- For every corporation convicted of reckless homicide in the death of a worker, there are hundreds of others that don't even get investigated for reckless homicide when a worker is killed on the job. Only a few district attorneys across the country have historically investigated workplace deaths as homicides.
- Corporate crime prosecutors are underfunded by a factor of, say -- 100.
- White collar crime defense attorneys regularly admit that if more prosecutors had more resources, the number of corporate crime prosecutions would increase dramatically. A large number of serious corporate and white collar crime cases are now left on the table for lack of resources.