The Trump administration likes to chest beat about its “zero tolerance” and “tough on crime” policies, but it is a rare day indeed when federal prosecutors go hard after corporate criminals.
So, it’s worth taking note of and giving credit where due for a rare exception to this rule. Last week, federal prosecutors won a racketeering conviction against executives from Insys, a company that helped fuel the opioid addiction epidemic — now killing more than 40,000 Americans a year — by bribing doctors to prescribe dangerous opioids to patients who didn’t need them.
There’s little reason to view this as anything other than an aberration in a justice system that harshly punishes low-level and nonviolent offenders, especially people of color, but gives the kid glove treatment to corporate executives.
But imagine if as a society we did impose meaningful criminal accountability on corporate executives for their wrongdoing. Not only would it work to rebalance the outrageous inequality in our criminal justice system, it would make our country dramatically safer, healthier, less polluted and more fair.
Corporate criminal prosecution is materially different than street crime prosecution — 180 degrees different — and far more likely to serve societal interests.
First, there are far too few, not too many, corporate criminal prosecutions. Only a couple hundred corporations are prosecuted each year, and prosecutions of executives of major corporations are exceedingly unusual. The problem is only growing worse, with Trump administration white-collar prosecutions plummeting a remarkable 35 percent as compared to five years ago.
Second, where nonviolent and victimless crimes don’t directly hurt anyone other than the perpetrator, corporate crime exacts a massive, often violent, toll in lives lost, injuries inflicted, destruction of the environment, consumers ripped off and much more. Consider just this sampling:
—Wall Street wrongdoing spurred the Great Recession, costing the economy more than $20 trillion, and imposing devastating pain on families, communities and national well-being. No criminal prosecution of executives. Widespread illegality by Big Banks and Wall Street firms is probably far worse than we know, with Wall Street professionals themselves saying that criminal behavior is rampant in the industry.
—General Motors’ ignition switch defect is responsible for the deaths of an acknowledged 174 people, and likely many more. No criminal prosecution of executives.
—Roughly 50,000 people die annually from occupational disease, an unknown part of which are due to violation of existing workplace health standards. Prosecutions almost never ensue.
—The explosion of BP’s Deepwater Horizon killed 11 workers and the ensuing oil gusher created what is arguably the worst environmental disaster in U.S. history. No executives were charged and no one went to jail.
—Boeing recklessly rushed its 737 Max planes to market, resulting in the deaths of 346 human beings. So far, no sign any executive will be held criminally liable.
Third, corporate criminals are the utmost rational actors. Weak enforcement and lax standards, as we have seen over and over, will invite more corporate crime and wrongdoing. Tougher standards with meaningful enforcement will deter corporate criminals.
What would a tough-on-corporate-crime agenda look like?
It would start with a real effort to change the prosecutorial culture, so that prosecutors stopped looking at corporate executives as a possible neighbor to whom they should give the benefit of the doubt, and so that prosecutors — like those in the Insys case — took seriously the criminal actions of corporations and the devastating impact on victims.
It would also mean a change in the culture for prosecuting corporations (in addition to executives), starting with an end to so-called deferred prosecution agreements, by which corporations are able to escape pleading guilty to crimes by virtue of promising not to commit crimes in the future.
It would involve a sharp increase in enforcement and prosecutorial budgets. To take one example among many, there is general agreement that the Food and Drug Administration does not have sufficient resources to meet its responsibilities to ensure the safety of drugs and medical products, including through inspection of overseas plants.
It would mean toughening up criminal penalties for corporate wrongdoing, including especially relating to food and drug adulteration and misbranding cases, and workplace endangerment. Currently, the willful violation of a workplace safety rule that leads to death of an employee is punishable by a maximum of a mere six months in prison! We need desperately need a new criminal provision making it a serious crime for any corporation or corporate officer to endanger their consumers or workers and conceal information about deadly hazards.
There’s little doubt that corporations and their executives will respond to the threat of criminal prosecution. If they know they will face criminal prosecution and jail time for wrongdoing, they will stop. It’s that simple.
