Taming the Corporate Criminal in 11 Easy Steps

Bring back the death penalty for corporations, and other good ideas


Can it be any more clear that the national response to the corporate crime wave sweeping the country has been an utter and abysmal failure?

This is to take nothing away from the hard-working prosecutors who bust their chops working day in and day out, with minimal resources, dodging political attacks from the corporate lobbyists whose primary job it is to keep the cops on their heels and off their case.

For example, lack of enforcement of federal worker safety laws by Clinton administration has resulted in fewer inspections and fewer violations cited compared to prior administrations. Whose fault is that? Not the head of the Occupational Safety and Health Administration, who claims in his defense that for him to do an adequate job, his meager $350 million budget, which is constantly under attack by the corporate crime lobby, would have to be bumped up to at least $7 billion.

Same with antitrust enforcement. Between 1977 and 1997, the total budgets of the two primary antitrust enforcement agencies — the Federal Trade Commission and the Justice Department’s Antitrust Division decreased by 7 percent in constant dollars while the Gross National Product grew by 112 percent. Mergers have increased by 550 percent since 1992.

According to Albert Foer, director of the American Antitrust Institute, the failure of antitrust enforcement has resulted in airlines that monopolize hub terminals, international cartels that cost consumers dearly, price fixing and bid rigging that are a continual abuse of the system, monopolies that can control the global flow of information, and agricultural, meatpacking and food retailing industries that are unduly concentrated.

Even when the system works, and the prosecutors nail the criminals to the wall, what good does it do? The recent criminal convictions of major corporations for fixing the prices of vitamins in the United States resulted in two of the biggest criminal fines in the history of corporate crime.

Earlier this year, Hoffman LaRoche pled guilty and was fined $500 million and BASF pled guilty and was fined $225 million for leading a worldwide conspiracy to raise and fix prices and allocate market shares for certain vitamins sold in the United States and elsewhere.

Hoffman LaRoche and BASF alone control 80 percent of the vitamin market worldwide. What impact did the fines have on the behavior of these two criminals? It made them more aggressive in their desire to control the remaining 20 percent of the market.

That’s according to Eugene Reed, the Arkansas broker who first blew the whistle on the price fixing conspiracy.

“They have become super aggressive and more committed (since their convictions),” Reed told us earlier this month. “They are already at the foot of the bridge. They sent signals into the marketplace. They want to drive all other vitamin suppliers out of the world market and control it themselves.”

The lesson: even the largest criminal fines ever levied in the United States were too small to affect giant multinational corporations.

When individuals commit street crimes, on the other hand, they pay the price with a loss of freedom. That’s why by next year, there will be two million inmates in U.S. prisons and jails and the United States will overtake Russia as the world leader in the rate of incarceration — a rate six to ten times the rate of other industrialized countries. This rate of incarceration costs the nation about $40 billion a year. And it disproportionately affects poor and minority populations. One in three young African American men is now under supervision of the criminal justice system — in prison or jail, or on probation or parole. A black male born today has a 29 percent chance of spending time in prison in his lifetime. (For more on how the United States deals with street criminals, check out the recently released Race to Incarcerate by Mark Mauer and The Sentencing Project (The New Press, 1999).

When we released the Top 100 Corporate Criminals of the 1990s, we received a message from Robert Waldrop, the director of the Archbishop Oscar Romero Catholic Worker House in Oklahoma City.

Waldrop’s Catholic Worker House feeds the poor, takes in people who are being evicted and generally helps those in need.

Having worked with the poor, Waldrop has come to the conclusion that in this country “you get all of the justice that you can afford to pay for.” That’s why the prisons aren’t overrun with the executives and shareholders of our major corporate felons.

Waldrop has concluded that we should begin treating corporate criminals the way we treat street criminals.

So, he drew up a list of “Necessary Measures for Curbing the Corporate Crime Wave.” Waldrop wrote the list “tongue in cheek,” but he has gotten such a rave response to it that he believes that it might be the basis for a political movement to curb corporate crime.

After all, why should a corporate felon, its owners and managers, be allowed to influence our elections when an individual is stripped of his or her right to vote? It is time to start thinking about how to level the playing field.

With Waldrop’s permission, we hereby reprint his “Eleven Necessary Measures for Curbing the Corporate Crime Wave.”

  1. The stockholders and management of corporations convicted of felonies should lose their right to vote and run for public office.

  2. A registry should be maintained in each area of criminal corporations, and any corporation convicted of a felony should be required to register with the local police. A notice should be sent to all of their neighbors that a criminal corporation is taking up residence in their locality.

  3. Criminal corporations should lose all corporate welfare benefits and government contracts.

  4. Criminal corporations should be required to make weekly visits to parole officers, and their stockholders and management should be subject to random drug tests (either urine or hair).

  5. Criminal corporations should not be allowed to operate within 500 yards of a school, church, or library.

  6. Criminal corporations should be required to place the phrase “A criminal corporation” on all advertising, signs and vehicles as a public warning.
  7. If criminal corporations violate the terms of their parole, their stockholders and officers should go to jail.

  8. In addition to the fine on the corporation, the personal assets of stockholders should be forfeited for their criminal negligence and lack of oversight.

  9. The increasing number of lawless corporations calls for stricter penalties. Bring back the death penalty for corporations. In this context, the ‘death penalty’ is the closure of the corporation, the forfeiture of its assets to its victims and/or the government and the winding up of its affairs by a court appointed receiver.

  10. Stockholders and management should be required to wear monitoring bracelets for the duration of their parole, and may not travel outside of their jurisdiction without a written pass from their parole officer.

  11. The stockholders and management of criminal corporations may not associate with the stockholders and management of other corporate felons, and are forbidden to keep and bear arms.

Waldrop believes says that “the original conception of the corporation was limited — there had to be a definite public service.”

“Now that whole concept has been stretched and there is no accountability,” Waldrop says. He encourages readers to spread his list far and wide. And check out his other good works at his web site: http://www.justpeace.org.  

Russell Mokhiber is the editor of the Corporate Crime Reporter and Robert Weissman is the editor of Washington, D.C. -based Multinational Monitor. Their column appears weekly on the MoJo Wire.