White collar criminals should NOT get a pass

Great Debates
1

NASA Says Metals Fraud Caused $700 Million Satellite Failure

Falsifying tests and delivering faulty parts FOR NINETEEN YEARS!!!. That seems like a pattern of criminal behavior to me. But THIS is what caught my eye:

They were able to PAY to resolve criminal charges. They paid a fine.

I assume the following:

  1. The 46 million is an amount far less than what the company was paid. Further, I assume that this plus their legal fees are less than what they were paid. Meaning the company still made some money

  2. No one from the company was ever arrested, booked, fingerprinted, etc…

  3. The Company executives all got the salaries, insurance, stock options, etc…

  4. If a company employee was engaged in some sort of fraud for personal gain through the company, THAT employee would be arrested and prosecuted.

If I broke into the corporate offices of SAPA in the dead of night, and made off with 4 thousand dollars worth of office supplies, I could be arrested, prosecuted and do prison time. Why do the executives of this company get to have the company pay fine and retain their freedom and clean records after stealing millions?

RESOLVED!

  1. Defrauding Government agencies out of tax dollars is every bit as harmful to society as other types of theft, if not more so. *

  2. Company Executives are responsible for the actions of the company. **

  3. Company Executives should not be able to hide behind the company. They should all held personally accountable for their actions. ***

  4. Company Executives who participate in defrauding the Government (stealing from the taxpayers) should be investigated and prosecuted just as vigorously as any other types of theft. I am OK with extraditions for execs who are foreign nationals. I am also OK with raiding parties snatching from their beds and hauling them across the border under cover of night. ****

  5. Company Executives should face criminal penalties commensurate with amounts taken.

If 4 guys can get 10 years each for robbing a bank (breaking in, no violence), then company executives should face at least that much.

[sub]* The old adage ‘you can steal more with a briefcase than you can with a gun’. Or ‘the best way to rob a bank is to own it’. They are thieves and they steal from us all.

** Assuming, of course, they had knowledge of and\or approved the illegal action

*** Companies do not commit crimes, people do. If individuals do not face personal consequences, then there is a disincentive to act ethically.

**** Seriously, fuck these guys.

***** I’m thinking 10 years minimum. [/sub]

Mods, if this is inappropriate, feel free to move, delete, bend, staple, fold…

2

If I’m reading this correctly, they were only paid 1.8 million by NASA.

3

NASA wasn’t the only agency/company they defrauded.

4

While in general I agree with your title - that WC criminals should not get a pass - I have problems w/ many of your specific resolutions. (Sorry, I didn’t read the link, and know nothing of the specific case.)

2-5 might run afoul of some of the most basic principles of incorporation. Sure, there are instances in which executives ought to be held personally liable, but I’m not eager to greatly expand officer liability across the board.

WRT your final comment, I’m somewhat concerned by the recent trend of criminalizing activity and imposing incarceration. I’m not certain that incarceration is a desirable or appropriate response to a great deal of nonviolent crime.

But having said that, I’m not a strong supporter of unbridled capitalism, and am all for the perpetrators of fraud being punished. The problem is that the “rules” are often so complicated, and the corporate resources so greater than the government’s, that it is often difficult to prove fraud.

5

The real problem is The Golden Rule.

6

From what I’m reading, the $46 million is mostly to settle a civil case.
The criminal charges that keep getting mentioned are mail fraud.
I’m not sure paying $46 million dollars, pleading guilty to a federal crime and not being allowed to take government contracts anymore constitutes getting a pass.

7

ISTM that one of the problems in these types of cases is often that the middle management and employees on the ground refuse to flip on their bosses. I think they system should be set up so that the person who ultimately made the call to commit the crime is the one who should receive the harshest punishment. This would encourage the midlevel offenders to turn on the boss since then they would no longer be the one on the hood for having made the call.

8

The problem is we have what’s essentially a two-tier legal system.

Most people break a law, get arrested, and receive some appropriate punishment.

But we also have a legal system that allows people who have enough money to lawyer up and buy their way out of facing the consequences for breaking the law.

9

OK, then treat the corporations as people, just as we do in Citizens United. So, if a company is found guilt of a crime, the company will be “incarcerated” for the length of the sentence. Since a company can’t physically go to jail, incarceration would be that they can’t do business at all during the length of the sentence, just like a natural person wouldn’t be able to continue doing business if found guilty of a crime.

10

Really? If I robbed a convenience store and the judge offered me a deal where all I had to do was plead guilty, pay back some of the money I’d stolen, and promise not to rob any more convenience stores in the future, I’d consider myself lucky.

11

But it is that artificial person(the corporation) that pays the fine and is forbidden to take government contracts, isn’t it? Can the humans that made the decision to defraud just form another corporation and do business with the government again?

12

Some lawyers plead on behalf of the company. No individuals were charged, let alone pleaded to anything.
The company cannot take on government contracts, but those company executives are free to start and\or join other companies and bid on contracts or sit on Boards of Directors, etc…

13

But as it stands now, a simple cost\benefit analysis says defrauding is the right thing to do. You can profit greatly and face no personal consequences. it doesn’t tarnish your career and *you may not even loose your current job if caught.
*

14

I’d be OK with civil forfeiture. We can’t allow these legal entities to use assets like factories and laboratories to commit crimes, so the government should seize those assets and sell them at auction to fund their white collar crimes unit.

15

We’re human beings with human emotions. Fraud by deception is always going to get judged more lightly than shoving a gun in someone’s face and threatening to kill them.

16

I guess I’m just not a huge fan of incarceration - at least to the extent we do it in America. I fully support civil penalties - maybe they should be higher. And restitution is a good thing. But for many nonviolent offenders, I’m not persuaded incarceration is the best option. Probably more of a general position of mine, not necessarily relevant to this thread.

17

First, before you guys get your underwear in a righteous twist, this is a settlement, not the results of a trial. So the DOJ, NASA, etc… all agreed that this is better than going to trial on this. It’s not like somehow someone weaseled out of anything.

Second, the Sapa testing lab supervisor DID get 3 years in jail and is required to pay $170,000 in restitution for his role in this. Also there’s another 34.6 million that Sapa/Norsk Hydro is on the hook to pay to NASA as part of a related civil settlement for not complying to specifications.

So in the end, the company’s on the hook for 80 million dollars, more or less, and the guy most directly responsible is in jail and on the hook personally for $170k.

18

If you rob a convenience store and get away with $1000 but your lawyer convinces the judge to let you pay restitution and fines totaling $50,000, that wouldn’t be getting a pass.

It should be noted that at least one person that one of the articles linked here states that the person who directed others to falsify the test results got a 3 year prison sentence as well as a $170,000 fine.

Yes, some individuals plead guilty, were charged and were sentenced to jail.

19

But that doesn’t explain why frauds by corporations are judged more lightly than fraud by individuals, or theft where there was no violence at all (safecrackers, pickpockets, scam artists, con men)

20

what if in the process you accidentally set off the sprinkler system in the mall containing the convenience store causing $700 thousand dollars in damage (the equivalent of crashing a 700 million dollar satellite.)