[R-G] Fwd: why Harper is fighting street crime

[Anthony Fenton]

"... as you move up the ladder, you have to make nice with the  
corporate powers that be. And so you turn your attention and rhetoric  
to various forms of street crime."


CORPORATE CRIME REPORTER

Twenty Things You Should Know About Corporate Crime
21 Corporate Crime Reporter 25, June 12, 2007

Twenty years ago, Corporate Crime Reporter, a weekly print newsletter,  
was launched.

 From the beginning, the most popular feature of Corporate Crime  
Reporter has been a question/answer format interview.

Over the years, we’ve interviewed hundreds of prosecutors, defense  
attorneys, law school professors, reporters, and activists.

Our first interview, which appeared in Volume One, Number One on April  
13, 1987 was with the premier corporate crime prosecutor of his day.

That was Rudolph Giuliani, then U.S. Attorney in the Southern District  
of New York.

At the time, he was prosecuting the likes of Michael Milken, Ivan  
Boesky and Marc Rich.

President Clinton later pardoned Marc Rich.

Apparently Marc Rich’s wife was dumping big cash into the Clinton  
library.

Rudy is now solidly in the hands of the corporate crime lobby. He  
prosecuted corporate crime as a way to achieve higher office. Then he  
learned one of the key lessons of corporate crime prosecution.

You can achieve higher office by prosecuting corporate crime. But as  
you move up the ladder, you have to make nice with the corporate  
powers that be. And so you turn your attention and rhetoric to various  
forms of street crime.

Now, Rudy is ready to be President.

So, corporate crime lesson number one – prosecute corporate crime to  
achieve higher office, then prosecute street crime to protect your  
political position.

Or to simplify it, corporate crime is all about power politics.

And the corporate crime game is a bi-partisan affair – it is played  
the same by Democrats and Republicans alike.

Eliot Spitzer, the former Attorney General of New York, prosecuted  
corporate crime to achieve higher office.

And now as Governor of New York, Spitzer is making nice with Wall  
Street.

To celebrate the 20th anniversary of Corporate Crime Reporter, I  
present to you the Top 20 Things You Should Know About Corporate Crime.

With a tip of the hat to David Letterman, let us proceed.




Number 20

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 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 – swamp the losses from all street robberies and  
burglaries combined.

Health care fraud alone costs Americans $100 billion to $400 billion a  
year.

The savings and loan fraud – which former Attorney General Dick  
Thornburgh called "the biggest white collar swindle in history" – cost  
us anywhere from $300 billion to $500 billion.

And then you have your lesser frauds: auto repair fraud, $40 billion a  
year, securities fraud, $15 billion a year – and on down the list.



Number 19

Corporate crime is often violent crime.

Recite this list of corporate frauds and people will immediately say  
to you: but you can't compare street crime and corporate crime –  
corporate crime is not violent crime.

Not true.

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.



Number 18

Corporate criminals are the only criminal class in the United States  
that have the power to define the laws under which they live.

The mafia, no.

The gangstas, no.

The street thugs, no.

But the corporate criminal lobby, yes. They have marinated Washington  
– from the White House to the Congress to K Street – with their  
largesse. And out the other end come the laws they can live with. They  
still violate their own rules with impunity. But they make sure the  
laws are kept within reasonable bounds.

Exhibit A – the automobile industry.

Over the past 30 years, the industry has worked its will on Congress  
to block legislation that would impose criminal sanctions on knowing  
and willful violations of the federal auto safety laws. Today, with  
very narrow exceptions, if an auto company is caught violating the  
law, only a civil fine is imposed.



Number 17

Corporate crime is underprosecuted by a factor of say – 100. And the  
flip side of that – corporate crime prosecutors are underfunded by a  
factor of say – 100.

Big companies that are criminally prosecuted represent only the tip of  
a very large iceberg of corporate wrongdoing.

For every company convicted of health care fraud, there are hundreds  
of others who get away with ripping off Medicare and Medicaid, or face  
only mild slap-on-the-wrist fines and civil penalties when caught.

For every company convicted of polluting the nation's waterways, there  
are many others who are not prosecuted because their corporate defense  
lawyers are able to offer up a low-level employee to go to jail in  
exchange for a promise from prosecutors not to touch the company or  
high-level executives.

For every corporation convicted of bribery or of giving money directly  
to a public official in violation of federal law, there are thousands  
who give money legally through political action committees to  
candidates and political parties. They profit from a system that  
effectively has legalized bribery.

For every corporation convicted of selling illegal pesticides, there  
are hundreds more who are not prosecuted because their lobbyists have  
worked their way in Washington to ensure that dangerous pesticides  
remain legal.

For every corporation convicted of reckless homicide in the death of a  
worker, there are hundreds of others that don't even get investigated  
for reckless homicide when a worker is killed on the job. Only a few  
district attorneys across the country have historically investigated  
workplace deaths as homicides.

Corporate crime prosecutors are underfunded by a factor of say – 100.

White collar crime defense attorneys regularly admit that if more  
prosecutors had more resources, the number of corporate crime  
prosecutions would increase dramatically. A large number of serious  
corporate and white collar crime cases are now left on the table for  
lack of resources.


Number 16

Beware of consumer groups or other public interest groups who make  
nice with corporations.

There are now probably more fake public interest groups than actual  
ones in America today. And many formerly legitimate public interest  
groups have been taken over or compromised by big corporations. Our  
favorite example is the National Consumer League. It’s the oldest  
consumer group in the country. It was created to eradicate child labor.

But in the last ten years or so, it has been taken over by large  
corporations. It now gets the majority of its budget from big  
corporations such as Pfizer, Bank of America, Pharmacia & Upjohn,  
Kaiser Permanente, Wyeth-Ayerst, and Verizon.


Number 15

It used to be when a corporation committed a crime, they pled guilty  
to a crime.

So, for example, so many large corporations were pleading guilty to  
crimes in the 1990s, that in 2000, we put out a report titled The Top  
100 Corporate Criminals of the 1990s. We went back through all of the  
Corporate Crime Reporters for that decade, pulled out all of the big  
corporations that had been convicted, ranked the corporate criminals  
by the amount of their criminal fines, and cut it off at 100.

So, you have your Fortune 500, your Forbes 400, and your Corporate  
Crime Reporter 100.


Number 14

Now, corporate criminals don’t have to worry about pleading guilty to  
crimes.

Three new loopholes have developed over the past five years – the  
deferred prosecution agreement, the non prosecution agreement, and  
pleading guilty a closet entity or a defunct entity that has nothing  
to lose.


Number 13

Corporations love deferred prosecution agreements.

In the 1990s, if prosecutors had evidence of a crime, they would bring  
a criminal charge against the corporation and sometimes against the  
individual executives. And the company would end up pleading guilty.

Then, about three years ago, the Justice Department said – hey, there  
is this thing called a deferred prosecution agreement.

We can bring a criminal charge against the company. And we will tell  
the company – if you are a good company and do not violate the law for  
the next two years, we will drop the charges. No harm, no foul. This  
is called a deferred prosecution agreement.

And most major corporate crime prosecutions are brought this way now.  
The company pays a fine. The company is charged with a crime. But  
there is no conviction. And after two or three years, depending on the  
term of the agreement, the charges are dropped.


Number 12

Corporations love non prosecution agreements even more.

One Friday evening last July, I was sitting my office in the National  
Press Building. And into my e-mail box came a press release from the  
Justice Department.

The press release announced that Boeing will pay a $50 million  
criminal penalty and $615 million in civil penalties to resolve  
federal claims relating to the company's hiring of the former Air  
Force acquisitions chief Darleen A. Druyun, by its then CFO, Michael  
Sears – and stealing sensitive procurement information.

So, the company pays a criminal penalty. And I figure, okay if they  
paid a criminal penalty, they must have pled guilty.

No, they did not plead guilty.

Okay, they must have been charged with a crime and had the prosecution  
deferred.

No, they were not charged with a crime and did not have the  
prosecution deferred.

About a week later, after pounding the Justice Department for an  
answer as to what happened to Boeing, they sent over something called  
a non prosecution agreement.

That is where the Justice Department says – we’re going to fine you  
criminally, but hey, we don’t want to cost you any government  
business, so sign this agreement. It says we won’t prosecute you if  
you pay the fine and change your ways.

Corporate criminals love non prosecution agreements. No criminal  
charge. No criminal record. No guilty plea. Just pay the fine and leave.


Number 11

In health fraud cases, find an empty closet or defunct entity to plead  
guilty.

The government has a mandatory exclusion rule for health care  
corporations that are convicted of ripping off Medicare.

Such an exclusion is the equivalent of the death penalty. If a major  
drug company can’t do business with Medicare, it loses a big chunk of  
its business. There have been many criminal prosecutions of major  
health care corporations for ripping off Medicare. And many of these  
companies have pled guilty. But not one major health care company has  
been excluded from Medicare.

Why not?

Because when you read in the newspaper that a major health care  
company pled guilty, it’s not the parent company that pleads guilty.  
The prosecutor will allow a unit of the corporation that has no assets  
– or even a defunct entity – to plead guilty. And therefore that unit  
will be excluded from Medicare – which doesn’t bother the parent  
corporation, because the unit had no business with Medicare to begin  
with.

Earlier, Dr. Sidney Wolfe was here and talked about the criminal  
prosecution of Purdue Pharma, the Stamford, Connecticut-based maker of  
OxyContin.

Dr. Wolfe said that the company pled guilty to pushing OxyContin by  
making claims that it is less addictive and less subject to abuse than  
other pain medications and that it continued to do so despite warnings  
to the contrary from doctors, the media, and members of its own sales  
force.

Well, Purdue Pharma – the company that makes and markets the drug –  
didn’t plead guilty. A different company – Purdue Frederick pled  
guilty. Purdue Pharma actually got a non-prosecution agreement. Purdue  
Frederick had nothing to lose, so it pled guilty.


Number 10

Corporate criminals don’t like to be put on probation.

Very rarely, a corporation convicted of a crime will be placed on  
probation. Many years ago, Consolidated Edison in New York was  
convicted of an environmental crime. A probation official was  
assigned. Employees would call him with wrongdoing. He would write  
reports for the judge. The company changed its ways. There was actual  
change within the corporation.

Corporations hate this. They hate being under the supervision of some  
public official, like a judge.

We need more corporate probation.


Number 9

Corporate criminals don’t like to be charged with homicide.

Street murders occur every day in America. And they are prosecuted  
every day in America. Corporate homicides occur every day in America.  
But they are rarely prosecuted.

The last homicide prosecution brought against a major American  
corporation was in 1980, when a Republican Indiana prosecutor charged  
Ford Motor Co. with homicide for the deaths of three teenaged girls  
who died when their Ford Pinto caught on fire after being rear-ended  
in northern Indiana.

The prosecutor alleged that Ford knew that it was marketing a  
defective product, with a gas tank that crushed when rear ended,  
spilling fuel.

In the Indiana case, the girls were incinerated to death.

But Ford brought in a hot shot criminal defense lawyer who in turn  
hired the best friend of the judge as local counsel, and who, as a  
result, secured a not guilty verdict after persuading the judge to  
keep key evidence out of the jury room.

It’s time to crank up the corporate homicide prosecutions.


Number 8

There are very few career prosecutors of corporate crime.

Patrick Fitzgerald is one that comes to mind. He’s the U.S. Attorney  
in Chicago. He put away Scooter Libby. And he’s now prosecuting the  
Canadian media baron Conrad Black.


Number 7

Most corporate crime prosecutors see their jobs as a stepping stone to  
greater things.

Spitzer and Giuliani prosecuted corporate crime as a way to move up  
the political ladder. But most young prosecutors prosecute corporate  
crime to move into the lucrative corporate crime defense bar.


Number 6

Most corporate criminals turn themselves into the authorities.

The vast majority of corporate criminal prosecutions are now driven by  
the corporations themselves. If they find something wrong, they know  
they can trust the prosecutor to do the right thing. They will be  
forced to pay a fine, maybe agree to make some internal changes.

But in this day and age, in all likelihood, they will not be forced to  
plead guilty.

So, better to be up front with the prosecutor and put the matter  
behind them. To save the hide of the corporation, they will cooperate  
with federal prosecutors against individual executives within the  
company. Individuals will be charged, the corporation will not.


Number 5

The market doesn’t take most modern corporate criminal prosecutions  
seriously.

Almost universally, when a corporate crime case is settled, the stock  
of the company involved goes up.

Why? Because a cloud has been cleared and there is no serious  
consequence to the company. No structural changes in how the company  
does business. No monitor. No probation. Preserving corporate  
reputation is the name of the game.


Number 4

The Justice Department needs to start publishing an annual Corporate  
Crime in the United States report.

Every year, the Justice Department puts out an annual report titled  
"Crime in the United States."

But by "Crime in the United States," the Justice Department means  
"street crime in the United States."

In the "Crime in the United States" annual report, you can read about  
burglary, robbery and theft.

There is little or nothing about price-fixing, corporate fraud,  
pollution, or public corruption.

A yearly Justice Department report on Corporate Crime in the United  
States is long overdue.


Number 3

We must start asking – which side are you on – with the corporate  
criminals or against?

Most professionals in Washington work for, are paid by, or are under  
the control of the corporate crime lobby. Young lawyers come to town,  
fresh out of law school, 25 years old, and their starting salary is  
$160,000 a year. And they’re working for the corporate criminals.

Young lawyers graduating from the top law schools have all kinds of  
excuses for working for the corporate criminals – huge debt, just  
going to stay a couple of years for the experience.

But the reality is, they are working for the corporate criminals.

What kind of respect should we give them? Especially since they have  
many options other than working for the corporate criminals.

Time to dust off that age-old question – which side are you on? (For  
young lawyers out there considering other options, check out Alan  
Morrison’s new book – Beyond the Big Firm: Profiles of Lawyers Who  
Want Something More.)


Number 2

We need a 911 number for the American people to dial to report  
corporate crime and violence.

If you want to report street crime and violence, call 911.

But what number do you call if you want to report corporate crime and  
violence?

We propose 611.

Call 611 to report corporate crime and violence.

We need a national number where people can pick up the phone and  
report the corporate criminals in our midst.

What triggered this thought?

We attended the press conference at the Justice Department the other  
day announcing the indictment of Congressman William Jefferson (D- 
Louisiana).

Jefferson was the first U.S. official charged with violating the  
Foreign Corrupt Practices Act.


Federal officials alleged that Jefferson was both on the giving and  
receiving ends of bribe payments.

On the receiving end, he took $100,000 in cash – $90,000 of it was  
stuffed into his freezer in Washington, D.C.

The $90,000 was separated in $10,000 increments, wrapped in aluminum  
foil, and concealed inside various frozen food containers.

At the press conference announcing the indictment, after various  
federal officials made their case before the cameras, up to the mike  
came Joe Persichini, assistant director of the Washington field office  
of the FBI.

“To the American people, I ask you, take time,” Persichini said. “Read  
this charging document line by line, scheme by scheme, count by count.  
This case is about greed, power and arrogance.”

“Everyone is entitled to honest and ethical public service,”  
Persichini continued. “We as leaders standing here today cannot do it  
alone. We need the public's help. The amount of corruption is  
dependent on what the public with allow.

Again, the amount of corruption is dependent on what the public will  
allow.”

“If you have knowledge of, if you've been confronted with or you are  
participating, I ask that you contact your local FBI office or you  
call the Washington Field Office of the FBI at 202.278.2000. Thank you  
very much.”

Shorten the number – make it 611.

Number one.

And the number one thing you should know about corporate crime?

Everyone is deserving of justice. So, question, debate, strategize, yes.

But if God-forbid you too are victimized by a corporate criminal, you  
too will demand justice.

We need a more beefed up, more effective justice system to deal with  
the corporate criminals in our midst.

Thank you.

(This is the text of a speech delivered by Russell Mokhiber, editor of  
Corporate Crime Reporter to the Taming the Giant Corporation  
conference in Washington, D.C., June 9, 2007.)



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see:  PM tackles chop shops, car thieves:

http://lfpress.ca/newsstand/News/National/2008/04/15/5287431-sun.html