The Corporate "Person" and Corporate Crime
by nancy a heitzeg
"The Corporation is a person without a soul to save or a body to incarcerate."
~ Noam Chomsky in The Corporation (2003)
CI typically focuses on the criminal injustice system, and the harsh and, often discriminatory responses to "street crime". But now that a Corporation -- namely Romneyhood, RyanRandRove, Koch, Adelson, et. al., LLC* -- is running for President of the United States, perhaps it is time that CI turns the spotlight on the real murderers and robbers of the US public. The Corporate Criminal.
Corporate "Personhood" and the Law
The rise of industrial capitalism in the post-Civil War USA also fueled the rise of the corporation. The corporation has a unique legal status. Although it is an organization that may be comprised of a multitude of stockholders and employees, the corporation is legally an individual entity, referred to as a juristic, or sometimes metaphysical person. As an individual, the corporation has certain rights and responsibilities. The legal tilt towards many rights and few responsibilities began with the 1886 Supreme Court case, Santa Clara County v. Southern Pacific Railroad Company:
In 1886, . . . in the case of Santa Clara County v. Southern Pacific Railroad Company, the U.S. Supreme Court decided that a private corporation is a person and entitled to the legal rights and protections the Constitutions affords to any person. Because the Constitution makes no mention of corporations, it is a fairly clear case of the Court's taking it upon itself to rewrite the Constitution.
Far more remarkable, however, is that the doctrine of corporate personhood, which subsequently became a cornerstone of corporate law, was introduced into this 1886 decision without argument. According to the official case record, Supreme Court Justice Morrison Remick Waite simply pronounced before the beginning of argument in the case of Santa Clara County v. Southern Pacific Railroad Company that
"The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of opinion that it does."
The court reporter duly entered into the summary record of the Court's findings that -
The defendant Corporations are persons within the intent of the clause in section 1 of the Fourteen Amendment to the Constitution of the United States, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws.
Thus it was that a two-sentence assertion by a single judge elevated corporations to the status of persons under the law, prepared the way for the rise of global corporate rule, and thereby changed the course of history.
The 14th Amendment -originally passed to prohibit the Old Confederacy from discriminating against newly freed Blacks- instead became the primary protector of corporate interests in the ensuing years. In fact, the bulk of 14th Amendment cases heard by the Supreme Court in the late 19th century the rights of "corporate persons. Few cases involved African Americans and those that did were decidedly unfavorable (See Plessy v Ferguson and Cruikshank v Louisiana)
The corporate person is equally protected -- left in fact on a level playing field with you and me. Despite their enormous advantage in $$ and power, they legally demand and receive the same consideration under the Constitution, even those 1st Amendment rights of "free speech". Citizens United v the Federal Election Cmmission and the tremendous gusher of corporate money that now flows freely into political campaigns painfully reminds us that All Persons are Not Created Equal.
Although highly protected, the corporate individual also -theoretically at least -- may be held accountable for wrongdoing. Civil and criminal law, however, were designed to control the wrongdoing of the actual, not organizational, individual. Civil liability for the corporation was relatively easy to construe. Much civil law does not require specific intent; strict liability is often sufficient. Corporations were, thus, from the outset, civilly accountable for private wrongs they inflict, but collectively so -- hence the Limited Liability Corporation designation that does limit the specific liability of individual members.
The criminal law is another matter. Public harms are the domain of the criminal law, but the long-standing reliance on individual intent ( i.e. mens rea ) made difficult to prosecute and punish the corporation. In lieu of corporate self-regulation, a growing number of public harms ensued, as large numbers of people were endangered by hazardous working conditions and unsafe products. The turning point came with the outrage generated by Upton Sinclair's The Jungle -- as the exposed conditions of slaughterhouses raised public concern over food quality and safety (never mind the workers just yet). A new type of law was needed to control the corporation and administrative law was the solution.
Administrative agencies theoretically ease the potential burden on the civil court system, control the corporate perpetration of public harm, and allow experts to create the rules that govern a specific area of contemporary life. The first administrative agency, the Food and Drug Administration (FDA) was created in 1906 to prohibit the distribution of adulterated, mislabeled, unsafe, or ineffective food and drugs. The Federal Trade Commission (FTC), mandated to protect the public from antitrust violations and unfair or deceptive business procedures, and the Securities and Exchange Commission (SEC) which regulates the sale of stocks and bonds to the public, were created shortly thereafter. Other administrative agencies, such the Occupational Safety and Health Administration (OSHA), the Environmental Protection Agency (EPA), the Equal Employment Opportunity Commission (EEOC), and the Consumer Protection Safety Commission (CPSC) have more recent histories.
Administrative law and related agencies have tended to offer the "illusion of regulation." Administrative agencies are unduly constrained by political influence -- the legislative branch sets fine limits and agency funding, while the executive branch appoints agency heads. The EPA, for example, played a very different role under the Bush Administration compared to that of President Clinton. Administrative agencies are under-funded and under-staffed and as a result, often can only react to disasters when they occur. Their power is limited and often confounded by over-lapping jurisdiction. In the case of the meat industry, the USDA has no actual power to order a recall -- they can ask suspected violators to do so and hope that bad press serves a compelling interest. Further, the meat industry (like many others) is regulated by a hodge-podge of agencies - FDA (feed additives, hormone and antibiotic use in meat, dairy and egg production). USDA (slaughterhouse and meat product inspection for contamination), OSHA (workplace “safety”), NLRB (labor-management disputes and unions) and the EPA (air and water pollution standards, permits and fines) - that is, de facto, no control at all.
As a result of such ineffectual oversight, the corporate person -- despite massive complaining about the costs of compliance and the need to "de-regulate" -- is largely free to profit and pillage, practically, unfettered by legal constraint.
Misplaced Fears versus Real Public Harm
Scholarly research, public fear and media attention has long been falsely and dis-proportionately fixated on "street crime", whose name alone invokes images of crimes committed by a particular social class. For more than half of the 20th Century, criminology was devoted to developing theories which attempted to explain the connections between crime and poverty, based on the assumption that "street crime" was all crime. Of course, it is just the tip of the iceberg, but it was not until the 1950s that the term "white-collar crime" ( i.e. occupational crimes by middle-class and wealthy individuals and organizations) was coined and later still that a substantial literature developed on "elite deviance" and corporate crime.
Despite a now large body of research on corporate crime, the media does little to inform the public. The old journalist adage - "if it bleeds it leads" - still holds true and then some. the medias image of crime is fixated on the dramatic, the violent and the stereotypical. Homicides, for example, make up nearly 30% of all crimes reported on TV news, even though homicides account for 1/10th of one percent of all arrests per year. Although crime rates have been declining for nearly two decades, crime coverage has increased exponentially. Further, Blacks and Latinos are overrepresented as violent offenders including as perpetrators of falsely over-represented inter-racial crime, and under-represented as victims. Immigrants and youth of color are similarly misrepresented. The criminal is wrongly seen as the literal and figurative stranger— one whom we do not know and foundationally someone who is not “us”—and of a different race/ethnicity, social class, or neighborhood. TV news coverage of crime creates and reinforces the stereotype of the young black male, in particular, as the criminal.
This allows the extensive public harm --and it is literal harm here, not the symbolic public harm that is central to the criminal law -- induced by corporate crime to go largely unreported. When it is covered, it remains an unconnected series of dots, described as "accidents" "spills', assorted mishaps, and when actually acknowledged as crime, attributed then to a few "bad apples."
Perhaps this is unsurprising since media itself is a series of multi-billion dollar corporations. Nonetheless, the harm that corporate crime does to the public is extensive and far-reaching in impact. In reality, our risks of victimization are most likely to come from corporate and white-collar crime, which annually accounts for at least 10 times more deaths and 100 times more economic loss than all street crime combined.. Workplace hazards, environmental risks, unsafe drugs and consumer products, tainted meat, and toxic waste are far more likely to do us in than "street crime".
As The Corporate Crime Reporter notes:
Corporate crime inflicts far more damage on society than all street crime combined. Whether in bodies or injuries or dollars lost, corporate crime and violence wins by a landslide.The list of corporate crimes and scandals is a long one. Many involve financial ruin, more still such as Love Canal, Cancer Alley, Exxon-Valdez and the BP Deepwater Horizon Oil "Spill", result in long term illness, death and environmental destruction that cannot be remedied at any price.
The FBI estimates, for example, that burglary and robbery -- street crimes -- costs the nation $3.8 billion a year.
The losses from a handful of major corporate frauds -- Tyco, Adelphia, Worldcom, Enron, Haliburton -- swamp the losses from all street robberies and burglaries combined.
Health care fraud alone costs Americans $100 billion to $400 billion a year...
Corporate crime is often violent crime.
The FBI estimates that, 16,000 Americans are murdered every year.
Compare this to the 56,000 Americans who die every year on the job or from occupational diseases such as black lung and asbestosis and the tens of thousands of other Americans who fall victim to the silent violence of pollution, contaminated foods, hazardous consumer products, and hospital malpractice.
These deaths are often the result of criminal recklessness. Yet, they are rarely prosecuted as homicides or as criminal violations of federal laws.
All these crimes are committed in the name of profit, with little accountability and less remorse. So what type of a "person: is the corporation?? This question was asked by Jennifer Abbott, Mark Achbar, and Joel Bakan were making the 2003 documentary The Corporation. The answer provided by Dr. Robert Hare, a world-renowned psychiatrist and developer the Psychopathy Checklist,was this. The Corporation is a psychopath, exhibiting these key symptoms * :
- Callous unconcern for the feelings of others
- Incapacity to maintain enduring relationships;
- Reckless disregard for the safety of others;
- Repeated lying and conning of others for profit;
- Incapacity to experience guilt; and,
- Failure to conform to the social norms with respect to lawful behaviours.
There are fewer clearer examples of this than the Exploding Ford Pinto -- one of the only two cases of corporate killing that actually lead to criminal charges --
In September 1970, the Ford Motor Company introduced its Pinto model (left). Seven years later, after a number of accidents in which Ford Pintos erupted into deadly fireballs, Mother Jones published an expose of the vehicle. The magazine’s article, alerted the public to a flaw in the car’s design that Ford knew about and decided not to rectify. The problem was that the gas tanks ruptured easily in rear-end collisions.
Engineers discovered the defect in pre-production testing but the assembly-line was already tooled so Ford decided to go ahead and make the car without modifications.
The magazine estimated that at least 500 people burned to death needlessly. A memo came to light in which Ford executives compared the cost of fixing the car against the cost of compensating victims.
Time Magazine in its The 50 Worst Cars of All Time publication wrote, “…the Ford Pinto memo, which ruthlessly calculates the cost of reinforcing the rear end ($121 million) versus the potential payout to victims ($50 million). Conclusion? Let ‘em burn.”
The organizational corporate criminal and the living individuals that maintain it are rewarded for their crimes as long as they make profit. Financial ruin for the public, a mounting body count all are "externalities" -- costs deferred elsewhere and the price of profitability. And the rewards come with very few risks -- for every corporate criminal apprehended, 100++ more go unnoticed. Those who are caught face minor consequences as fines are much less than the $$$$ generated by law-breaking. The wheels of commerce churn on barely interrupted, scarcely noticed by a press, a public and a justice system devoted to a different class of criminals, who cause much less havoc but generate much fear. As Jeffrey Reiman so aptly puts it in the title of his ground - breaking book; "The Rich Get Richer and The Poor Get Prison".
The power of the corporation to rob, maim and pillage is at a zenith unseen since the Gilded Age. Scandals are now international in scope. Jeffrey Sachs:
"The explosion of corruption – in the US, Europe, China, India, Africa, Brazil, and beyond – raises a host of challenging questions about its causes, and about how to control it now that it has reached epidemic proportions.Citizens have fought back -- in the courts, in the streets, with threatened revocations of corporate charters and local limits on corporate expansion. But the law must adapt as well with tighter regulations, meaningful fines, asset forfeiture, strict liability for CEOs and Board members, Justice Department databases and citizen hotlines to report.
Corporate corruption is out of control for two main reasons. First, big companies are now multinational, while governments remain national. Big companies are so financially powerful that governments are afraid to take them on.
Second, companies are the major funders of political campaigns in places like the US, while politicians themselves are often part owners, or at least the silent beneficiaries of corporate profits. Roughly one-half of US Congressmen are millionaires, and many have close ties to companies even before they arrive in Congress.
As a result, politicians often look the other way when corporate behavior crosses the line. Even if governments try to enforce the law, companies have armies of lawyers to run circles around them. The result is a culture of impunity, based on the well-proven expectation that corporate crime pays.
Given the close connections of wealth and power with the law, reining in corporate crime will be an enormous struggle. Fortunately, the rapid and pervasive flow of information nowadays could act as a kind of deterrent or disinfectant. Corruption thrives in the dark, yet more information than ever comes to light via email and blogs, as well as Facebook, Twitter, and other social networks.
We will also need a new kind of politician leading a new kind of political campaign, one based on free online media rather than paid media. When politicians can emancipate themselves from corporate donations, they will regain the ability to control corporate abuses.
Taking on the Corporate Criminal has been -- will be a struggle -- Do what you can to create awareness.
And in the meantime, please Do Not Vote for One.