Collapsing Federal Corporate Crime Enforcement

By Ralph Nader
July 30, 2021

As the size and severity of the corporate crime wave surges, Congress is asleep at the switch. The mostly captive Capitol Hill Gang has sat on an antiquated federal criminal code, starved the budget of regulatory health, safety, and consumer/labor protection agencies, and let corporate crooks routinely get away with their crimes.

Despite constant exposés in the mainstream media – still only reporting the tip of the iceberg – neither members of Congress nor presidents from the Republican and Democratic parties have raised the banner of tough “law and order” to counter rampaging corporate crime.  Proposals to bring the laws up to date in their penalties and coverage to deter corporate lawbreaking are never a priority for Congress. When was the last time you heard a politician demand “corporate reform”?

Many people still remember how Wall Street, in its greed and power, collapsed the economy in 2008-2009, cost nine million jobs, shredded pension and mutual funds, and insisted on a multi-trillion-dollar bailout. In 2018 Public Citizen found during President Donald Trump’s first year in office, enforcement against corporate crime and wrongdoing plummeted from the final year of the Obama administration (See Corporate Impunity “Tough on Crime” Trump Is Weak on Corporate Crime and Wrongdoing).

None of the big boys and mid-sized big boys were ever prosecuted. Shortly thereafter polls showed 90 percent of Americans (conservatives and liberals) wanted to break up the big banks that were too big to fail. Conservative columnist, George Will, wrote that companies too big to fail should not exist.

But exist they do, and their marauding continues almost unabated. According to fraud expert, Harvard Professor Malcolm Sparrow, year after year, billing fraud and abuse accounts for at least 10% of healthcare expenses. That’s over $350 BILLION this year. Less than two percent is recovered by law enforcement.

As one prosecutor put it, no matter how complex the rip-offs are, no matter how silent or invisible is the violence (e.g., toxics, latent defects, dangerous pharmaceuticals hospital induced infections, etc.), it comes down to lying, cheating, and stealing.

Some corporate crimes are too big to be ignored. Here is a New York Times report: “Over the past two decades, more than 500,000 people in the United States have died from overdoses of prescription and illegal opioids …. Purdue [Pharma], widely believed to have helped ignite the problem by downplaying the addictive potential of OxyContin and aggressively marketing the drug with misleading campaigns, pleaded guilty to two separate investigations by the Justice Department.” The company escaped into bankruptcy. There are all kinds of lawsuits. The bottom line is that the proposed settlement let the Sackler family, mega-billionaire owners, paid out just a small chunk of their immense ill-begotten fortune. Criminal prosecutions of corporate wrongdoers and criminals are almost never pursued.

As the Times wrote: “Neither the company, nor the Sacklers, would admit to wrongdoing in connection with these [about to be settled] lawsuits,” brought by many state attorneys general and the Justice Department.

Welcome folks to the widespread phenomenon of corporate crimes without criminals. Also, the settlement, expected to be signed off by the judge, would release the Sacklers and their company from any personal civil liability. The several billions of dollars that will be paid without any personal prosecutions is the way corporate attorneys succeed in monetizing murder or manslaughter as just a deductible cost of doing business. No clients going to jail. (See Rena Steinzor’s book, Why Not Jail? Industrial Catastrophes, Corporate Malfeasance, and Government Inaction, 2014).

Boeing’s attorneys are also pushing for their strategy of immunity under existing litigation. They got the Trump Justice Department, (DOJ), days before Trump left office in January 2020, to conclude a corrupt, sweetheart “deferred prosecution” settlement (See Corporate Crime Reporter: Lead Boeing Prosecutor Joins Boeing Corporate Criminal Defense Firm Kirkland & Ellis). Though there was a grand jury in operation, there were no indictments or other charges against any of the culpable company bosses who made the decisions that led to the loss of 346 lives in two 737 MAX crashes. Boeing paid a measly $2.5 billion mostly deductible dollars.

To make the stench worse, DOJ’s Attorney General William Barr chose a faraway federal court in Fort Worth, TX, known for its corporatist judge, with a right-wing prosecutor, who after cutting the deal, quit and took a job with Kirkland Ellis – Boeing’s criminal defense law firm.

In the civil lawsuits against Boeing, brought by the aggrieved families, Perkins Coie, Boeing’s law firm, is going all out to avoid trials and settle all these cases through mediation, which, of course, excludes sworn testimony and punitive damages. The overriding goal is to assure that the culpable Boeing bosses and others are neither charged or put on the witness stand under oath in a public trial open to the media and citizenry. See why big corporate lawyers make so much money? They keep the prisons empty of corporate wrongdoers by having them be above the law.

Senator Richard Blumenthal (D-CT), now Chair of the Senate Judiciary Committee’s Constitution Subcommittee, has spoken out about the absence of any criminal penalties in numerous federal statutes such as the ones covering auto and aviation safety. In 2015 Senator Blumenthal introduced the S.2140 the “Hide No Harm Act” that would make it a crime for a corporate officer to knowingly conceal information about a corporate action or product that poses the danger of death or serious physical injury to consumers or workers. As a former longtime Attorney General of Connecticut, he decries weaknesses of existing federal criminal statutes and small budgets. He wants action. It is high time to hold historic hearings that go to the cause of the systemic derelictions of justice regarding corporate abuses. America, besieged by corporate crime, needs corporate crime laws that fit these crimes.

Urge full Judiciary Committee Chair Senator Richard Durbin (D-IL) to provide Senator Blumenthal the requisite staff and resources for this historic mission. Senator Durbin’s phone numbers are Washington D.C. office: 202-224-2152 / Chicago office: 312-353-4952.

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