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Cracking down on corporate crime

'Cracking down on crime', is the top priority of most governments, reports Russell Mokhiber. Billions are spent annually on tackling criminals, but of those billions, little if any is spent on bringing corporate criminals to justice. Although it is corporate crime which most fundamentally affects society, transnational corporations are allowed to get away with murder. Published in The Ecologist Volume 29 Number 4, July 1999.

Russell Mokhiber is the editor of Corporate Crime Reporter, a legal weekly based in Washington D.C He is co-author, with Robert Weissman, of Corporate Predators: The Hunt for Mega-Profits and the Attack on Democracy , Common Courage Press, 1999.

Only the most myopic of observers would deny the obvious: that large, undemocratic corporations are the dominant institutions of our time and are inflicting a kind of damage on society that individuals acting alone could not conceive of inflicting.

From the destruction of inner city rail transit (General Motors was convicted of this crime in the 1950s and paid a $5,000 fine) to unprosecuted and perhaps unprosecutable mass occupational homicide (125 workplace-related deaths an hour worldwide), pollution, corruption and the unconscionable tampering with life through genetic engineering - the list is endless.

And yet the dominant voices of society deny the evidence and proclaim the opposite: that individual criminals inflict more damage on society than corporate criminals.

Charles Krauthammer, a Washington Post columnist and a corporate conservative has written, for instance, that "crime is generally an occupation of the poor." Richard Cohen, a Washington Post columnist and a corporate liberal believes that "young black males commit most of the crimes in Washington, D.C." James Glassman, another Washington Post columnist writes that the rich "don't commit the violent crimes that require billions to be spent on law enforcement."

And the American people, fed an unending stream of such garbage, are likely to agree.

Ask any American to name a crime and most likely he or she will say: burglary, robbery or theft. Most likely he or she will not say: corporate fraud, pollution, corporate homicide, price-fixing, or corruption of the government regulators.

Every year, the US Justice Department puts out a big fat book-length compilation of crime statistics. It's called: Crime in the United States. But by "Crime in the United States," the Justice Department means "Street Crime in the United States".

The Justice Department has no equivalent publication called Corporate Crime in the United States. This despite the fact that there is an emerging consensus among corporate criminologists that corporate crime and violence inflict far more damage on society than all street crime combined.

The Federal Bureau of Investigation (FBI) estimates, for example, that burglary and robbery - street crimes - cost the nation $3.8 billion a year. Compare this to the hundreds of billions of dollars stolen from Americans as a result of corporate and white-collar fraud.

Health care fraud alone costs Americans $100 billion to $400 billion a year. The savings and loan fraud - which former Attorney General, Dick Thornburgh, called "the biggest white collar swindle in history" - cost them anywhere from $300 billion to $500 billion. And then you have your lesser frauds: auto repair fraud, $40 billion a year securities fraud; $15 billion a year - and on down the list.

Recite this list of corporate frauds and people will immediately say to you: but you can't compare street crime and corporate crime - corporate crime is not violent crime.

But in fact, corporate crime is often violent crime.

The FBI estimates that 19,000 Americans are murdered every year by street criminals. Compare this with the 56,000 Americans who die every year at work or from occupational diseases. On-the-job deaths are often the result of criminal recklessness. They are sometimes prosecuted as homicides or as criminal violations of federal workplace safety laws. Environmental crimes often result in death, disease and injury.

And, the vast majority of corporate crime and violence goes undetected or unprosecuted for a number of reasons. Firstly, corporations tend to 'win' (with the help of generous research grants and the promise of endless job opportunities) the backing of most government and university scientists, and it is they who are charged with legitimising (often unsafe) products. Secondly, unlike all other criminal groups in the US, major corporations have enough power to define the law under which they live and to influence prosecutors not to bring criminal charges.

This point has been made over and over again, most recently in the book, Toxic Deception: How the Chemical Industry Manipulates Science, Bends the Law and Endangers Your Health by Dan Fagin, Marianne Lavelle and the Centre for Public Integrity (Common Courage Press, 1999), where the authors show how the chemical industry has overpowered the lawmakers and the police (euphemistically known here as "regulators") and forced dangerous chemicals onto the market.

Here's a case in point: The chemical companies are required by federal law to make any scientific findings available to the government if a chemical already on the market is found to pose a "substantial risk of injury to health or to the environment." Toxic Deception found that the industry frequently acted in "bad faith" in this regard. In 1991 and 1992 the despairing Environmental Protection Agency, knowing that there was little they could do to enforce the law, offered amnesty from big-money fines to any manufacturer that turned in health studies they should have provided under the law. In response chemical corporations turned over more that 10,000 studies showing that their products already on the market pose a substantial risk. In this way, corporations were able to avoid crippling fines.

Weak law, weak law-enforcement, no 'crime'

There is a debate now raging among activists in the United States: what to do about an ever-expanding wave of unprosecuted corporate crime and violence? There are those activists who engage in battles against individual corporate predators, who seek to leverage power to change the ways of individual corporations, who seek to get regulatory reform legislation, who meet with corporations, who praise them when they do good and condemn them when they do bad. This has been the de facto model of activism for the past 30 years.

But there is a new breed of activist roaming the land. These activists believe that there is something fundamentally wrong with the large corporation itself. These activists believe that it is not what multinational corporations do wrong that is the problem - it is corporations that are the problem.

These activists believe large corporations as they exist today are fundamentally undemocratic and cannot be reformed. These activists question whether corporations should be considered legal persons with the same rights as you and me and other living human beings. They question the very nature of the corporation.

Hope for re-igniting a democratic campaign against dehumanising corporate power lies with this second camp, led by Richard Grossman and his colleagues, at the Programme on Corporations, Law and Democracy.

For the past couple of years, Grossman and his colleagues have been travelling the country, encouraging activists of all stripes to begin asking fundamental questions about citizen control of corporations, to research the history of corporations, and to begin to question corporate control over the citizenry.

Grossman and his colleagues believe that instead of focussing on one corporate crime at a time, we must begin to question the legitimacy of the corporate form.

In each state where they are organised they are digging through the history books and finding that at the beginning of the corporate era more than 150 years ago we the citizens controlled corporations.

Through the corporate charter, citizens imposed full liability on shareholders for corporate wrongdoing (today, shareholder liability is limited), we limited the life span of corporations (today, they have unlimited life), and we revoked their charters when they did things we told them they couldn't (today, the corporate elites laugh at the possibility or corporate charter revocation).

And back at the turn of the century, we understood the corporation to be fundamentally different from you and me - not something deemed to have the legal rights of a human citizen.

Here is Williams Jennings Bryan speaking to the 1912 Constitutional Convention in Columbus, Ohio. Ask yourself: Who today would speak in such a manner? (And Bryan was not alone - he reflected a healthy cultural distaste for corporate power.)

"The first thing to understand is the difference between the natural person and the fictitious person, called the corporation. They differ in the purpose in which they are created, in the strength which they possess, and in the restraints under which they act. Man is the handiwork of God and was placed upon earth to carry out a divine purpose. The corporation is the handiwork of man and was created to carry out a moneymaking policy. There is comparatively little difference in the strength of men. A corporation may be one hundred, one thousand, or even one million times stronger than the average man. Man acts under the restraints of conscience, and is influenced also by a belief in the future life. A corporation has no soul and cares nothing about the hereafter."

The corporate culture is a century or more in the making. It will take a while before we figure out how we got ourselves into this soup - from a situation where we controlled corporations, to where corporations are controlling us.

It will take a while longer to figure how to get out of it.


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