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Most crimes done by individuals are intentional. That is most often not the case with corporations. Intentionality is an important requirement in most crimes.

Most crimes done by individuals are intentional. That is most often not the case with corporations. Intentionality is an important requirement in most crimes. That doest mean that there isn't plenty of room for more centralized civil protections against negligence and recklessness.

CogitoCogito 2y ago
I guess if our goal were to stop this sort of corporate behavior, we would remove the requirement of a crime being intentional for corporations.
- tehjoker 2y ago
  That or sharply raise the severity of lesser offenses if the perpetrator benefits financially from negligence with potential penalties including (a) corporate death penalty (revocation of charter) (b) nationalization.
- JumpCrisscross 2y ago
  > we would remove the requirement of a crime being intentional for corporations You still have the problem of punishing diffuse guilt. The correct answer is fines. Massive fines, potentially to the point of bankruptcy. We don't like to do that, however, because corporations have many stakeholders who may not deserve punishment, e.g. employees.
  - maeil 2y ago
    No, that's not why "we" don't like to do that, as there's countless way around that problem. They don't like to do that because it hurts the main stakeholders: those holding the reigns, the 0.1%. There's countless ways around the issue of "average" employees being punished. E.g. hard caps on top employee compensation for X years. Bans on dividends. Forced stock dilution, now that's a solid one. Create extra shares equivalent to 20% of market cap, given to the government who sells them on the open market. I'm sure there's holes in these but plenty of smarter people than me who can easily make them watertight.
    - JumpCrisscross 2y ago
      > countless ways around the issue of "average" employees being punished. E.g. hard caps on top employee compensation for X years. Bans on dividends How do either of these help an employee of a company that was just poofed? > there's holes in these but plenty of smarter people than me who can easily make them watertight No. There aren't. Both the caps you proposed--capping dividends and salary--have known workarounds. Stock buybacks exist because they're more tax efficient than dividends. Health insurance is tied to employment because in WWII the U.S. government capped wages. There is really one solution to corporate malfeasance: criminaly prosecuting where you have evidence of individual criminality and massive fines in every other case. We bankrupted our automakers without hurting their jobs. That's actually less intrusive than trying to fuck with their capital structure by e.g. banning dividends, which just incentivises leverage.
  - keybored 2y ago
    > You still have the problem of punishing diffuse guilt. Corporations are hierarchical. > however, because corporations have many stakeholders who may not deserve punishment, e.g. employees. Hiding behind the employees. The ones with the least stake in the company. That’s a classic. They might have their two weeks notice. What else? “There might be no other jobs around?” Class collaboration is a lie.
    - JumpCrisscross 2y ago
      > They might have their two weeks notice. What else? “There might be no other jobs around?” "Let them eat cake" isn't a winning pitch when it's your job on the line.
      - keybored 2y ago
        You are trying to turn “the corporations are committing crimes” into “the peasants are starving”. I know that this is board of diverse backgrounds, but you have to be very out of touch for that hilarious reversal to be convincing.
        JumpCrisscross 2y ago
        > You are trying to turn “the corporations are committing crimes” into “the peasants are starving” No, I'm pointing out the real limitations on the types of punishments that folks--typically on the left, with good intentions but breathlessly naively--like to propose. Ignoring the board doesn't make you a smarter player. I'm then pointing out the option that works within those limitations to exact tremendous justice. The option that when it comes up, anyone in its crosshairs will immediately start pointing to hare-brained schemes like a "corporate death penalty" to get out of. Massive. Fines. (For those who prefer jail time to fines, do you really thing Bytedance's CZ would trade his 6 months in jail for the tens of billions he's personally walked away with?)
  - Ekaros 2y ago
    I have been thinking. Maybe corporate fines should work like civil forfeiture. You do not attack the corporation, you attack the shares. You fine individual shares. And fines could be larger than value of the share. Next time it is sold the sale price goes toward the fine. And so does any dividend paid.
    - JumpCrisscross 2y ago
      > You do not attack the corporation, you attack the shares. You fine individual shares. And fines could be larger than value of the share. You're again reinventing corporate fines in a way that makes them problematic. You've not only dissolved limited liability, which makes investing in equities a rich man's game, you're proposing going after tens if not hundres of millions of Americans if a single Fortune 500 breaks a law. That's mechanically impossible. > Next time it is sold the sale price goes toward the fine. And so does any dividend paid. Poor people pay the fine. Rich borrow against their shares. None of these problems exist with massive fines. None of them add anything, procedurraly or punitively, over massive fines. The idea that shareholders are going to do legal scrutiny when many professional investors barely read public filings is laughable. Re-inventing fines is rolling your own legal system when we have centuries of good law to rely on deriving from corporations suing each other.
  - CogitoCogito 2y ago
    I agree the correct answer is fines, but I disagree that the government should concern itself with whether or not the company decides to take it out on employees who don't deserve it. It's up to the company to decide how it should be run. As long as the government disincentivizes the actions by making the fines high enough, that is good enough.
    - JumpCrisscross 2y ago
      > I disagree that the government should concern itself with whether or not the company decides to take it out on employees who don't deserve it Those employees disagree with you and they vote. Every district has large employers whose employees would, as a voting bloc, flip a primary or even general election.
      - CogitoCogito 2y ago
        I honestly don't believe this is the case. I think Americans would largely support increased fines for corporate malfeasance. I think it much more likely that the large fines aren't assessed because those in the position to be fined also as a rule have more influence over the system itself. Though the result is the same in the end I guess.
        JumpCrisscross 2y ago
        > Americans would largely support increased fines for corporate malfeasance Americans do. But every time it comes up, the discussion gets derailed with these ancilliary ideas. Just look at this thread. Fines are old and boring. > the large fines aren't assessed because those in the position to be fined also as a rule have more influence over the system There is also the practical matter of the power to levy large fines being, itself, immensely powerful. You don't want to create a fine czar only to lose control of them in a term or two.
- gruez 2y ago
  Isn't that already the case? For instance Wells Fargo was fined $185M for fraudulently opening accounts customers didn't want[1]. Wells fargo (ie. management) weren't scheming to fraudulently open accounts. They only set aggressive sales goals, and that caused some employees to go rogue and commit fraud themselves. [1] https://en.wikipedia.org/wiki/Wells_Fargo_cross-selling_scandal https://en.wikipedia.org/wiki/Wells_Fargo_cross-selling_scan...
  - wahnfrieden 2y ago
    How do you know that lacked intent? It just sounds like cover for intent
    - gruez 2y ago
      The point isn't that wells fargo management didn't scheme to intentionally defraud customers, it's that the government was able to punish wells fargo for defrauding customers without having to prove they intentionally schemed to do so.
  - rectang 2y ago
    I'm skeptical that the intentions of the Wells Fargo executives were pure and white as the driven snow. The incentives align to encourage executives to commit crimes in service of short-term gains — even in the extreme case of Wells Fargo, Carrie Tolstedt and John Stumpf have both avoided prison time and ended up money ahead to the tune of tens of millions of dollars, even after clawbacks and fines. Not only shouldn't intent matter, we should assume the worst. Whether assuming the worst is a workable enforcement regime, I don't know — but it most accurately models a reality where the most rational behavior for executives is indifference to the law.
cycomanic 2y ago
That's a big assertion to make without any evidence. There's a lot of individual crime which is not intentional (e.g. driving related) and there is a lot of corporate crime where someone clearly made a decision. In particular corporations employ lawyers so they have people qualified to decide if a crime is likely being committed.
- arcbyte 2y ago
  Interestingly, driving infractions are mostly noncriminal. Corporations are giant responsibility diffusion machines and more often than not they stumble into illegal activity rather than internally commit to it. Hence, they are not acting intentionally. Also relevant is my assertion that this bumbling illegal behavior also needs better enforcement - it's just civil in nature and not criminal.
mrweasel 2y ago
I'll disagree with the point that corporate crimes aren't intentional, they most certainly can be. There are plenty of examples of companies deciding that it's more profitable to "do crime" and just pay the fine if caught. Danske Bank famously have a post in their budget to pay fines for breaking banking laws. The problem is to prove that something is done intentional, on a "corporate level", whatever that means in the given case. Imagine having a law where breaking it would mean that the business have to shutdown. A competitor could pay off someone inside the company to break the law deliberately to have the legal system remove competition.
mikelitoris 2y ago
This is a bullshit argument that people in charge of these companies make. How do you know the "thief" that stole merchandise from a store wasn't going to come back to pay for it in an hour? You don't... you just assume the worst, which should be the case for corporations.
- arcbyte 2y ago
  It's not a bullshit argument, it is a battle tested argument with a long history.
  - dartos 2y ago
    Is it roughly the same long history as the long history of corporations getting away with crimes that individuals could not? Yknow maybe the modern day requires rethinking of some regulations regarding corporations.

CogitoCogito 2y ago

I guess if our goal were to stop this sort of corporate behavior, we would remove the requirement of a crime being intentional for corporations.

tehjoker 2y ago
That or sharply raise the severity of lesser offenses if the perpetrator benefits financially from negligence with potential penalties including (a) corporate death penalty (revocation of charter) (b) nationalization.
JumpCrisscross 2y ago
> we would remove the requirement of a crime being intentional for corporations You still have the problem of punishing diffuse guilt. The correct answer is fines. Massive fines, potentially to the point of bankruptcy. We don't like to do that, however, because corporations have many stakeholders who may not deserve punishment, e.g. employees.
- maeil 2y ago
  No, that's not why "we" don't like to do that, as there's countless way around that problem. They don't like to do that because it hurts the main stakeholders: those holding the reigns, the 0.1%. There's countless ways around the issue of "average" employees being punished. E.g. hard caps on top employee compensation for X years. Bans on dividends. Forced stock dilution, now that's a solid one. Create extra shares equivalent to 20% of market cap, given to the government who sells them on the open market. I'm sure there's holes in these but plenty of smarter people than me who can easily make them watertight.
  - JumpCrisscross 2y ago
    > countless ways around the issue of "average" employees being punished. E.g. hard caps on top employee compensation for X years. Bans on dividends How do either of these help an employee of a company that was just poofed? > there's holes in these but plenty of smarter people than me who can easily make them watertight No. There aren't. Both the caps you proposed--capping dividends and salary--have known workarounds. Stock buybacks exist because they're more tax efficient than dividends. Health insurance is tied to employment because in WWII the U.S. government capped wages. There is really one solution to corporate malfeasance: criminaly prosecuting where you have evidence of individual criminality and massive fines in every other case. We bankrupted our automakers without hurting their jobs. That's actually less intrusive than trying to fuck with their capital structure by e.g. banning dividends, which just incentivises leverage.
- keybored 2y ago
  > You still have the problem of punishing diffuse guilt. Corporations are hierarchical. > however, because corporations have many stakeholders who may not deserve punishment, e.g. employees. Hiding behind the employees. The ones with the least stake in the company. That’s a classic. They might have their two weeks notice. What else? “There might be no other jobs around?” Class collaboration is a lie.
  - JumpCrisscross 2y ago
    > They might have their two weeks notice. What else? “There might be no other jobs around?” "Let them eat cake" isn't a winning pitch when it's your job on the line.
    - keybored 2y ago
      You are trying to turn “the corporations are committing crimes” into “the peasants are starving”. I know that this is board of diverse backgrounds, but you have to be very out of touch for that hilarious reversal to be convincing.
      - JumpCrisscross 2y ago
        > You are trying to turn “the corporations are committing crimes” into “the peasants are starving” No, I'm pointing out the real limitations on the types of punishments that folks--typically on the left, with good intentions but breathlessly naively--like to propose. Ignoring the board doesn't make you a smarter player. I'm then pointing out the option that works within those limitations to exact tremendous justice. The option that when it comes up, anyone in its crosshairs will immediately start pointing to hare-brained schemes like a "corporate death penalty" to get out of. Massive. Fines. (For those who prefer jail time to fines, do you really thing Bytedance's CZ would trade his 6 months in jail for the tens of billions he's personally walked away with?)
- Ekaros 2y ago
  I have been thinking. Maybe corporate fines should work like civil forfeiture. You do not attack the corporation, you attack the shares. You fine individual shares. And fines could be larger than value of the share. Next time it is sold the sale price goes toward the fine. And so does any dividend paid.
  - JumpCrisscross 2y ago
    > You do not attack the corporation, you attack the shares. You fine individual shares. And fines could be larger than value of the share. You're again reinventing corporate fines in a way that makes them problematic. You've not only dissolved limited liability, which makes investing in equities a rich man's game, you're proposing going after tens if not hundres of millions of Americans if a single Fortune 500 breaks a law. That's mechanically impossible. > Next time it is sold the sale price goes toward the fine. And so does any dividend paid. Poor people pay the fine. Rich borrow against their shares. None of these problems exist with massive fines. None of them add anything, procedurraly or punitively, over massive fines. The idea that shareholders are going to do legal scrutiny when many professional investors barely read public filings is laughable. Re-inventing fines is rolling your own legal system when we have centuries of good law to rely on deriving from corporations suing each other.
- CogitoCogito 2y ago
  I agree the correct answer is fines, but I disagree that the government should concern itself with whether or not the company decides to take it out on employees who don't deserve it. It's up to the company to decide how it should be run. As long as the government disincentivizes the actions by making the fines high enough, that is good enough.
  - JumpCrisscross 2y ago
    > I disagree that the government should concern itself with whether or not the company decides to take it out on employees who don't deserve it Those employees disagree with you and they vote. Every district has large employers whose employees would, as a voting bloc, flip a primary or even general election.
    - CogitoCogito 2y ago
      I honestly don't believe this is the case. I think Americans would largely support increased fines for corporate malfeasance. I think it much more likely that the large fines aren't assessed because those in the position to be fined also as a rule have more influence over the system itself. Though the result is the same in the end I guess.
      - JumpCrisscross 2y ago
        > Americans would largely support increased fines for corporate malfeasance Americans do. But every time it comes up, the discussion gets derailed with these ancilliary ideas. Just look at this thread. Fines are old and boring. > the large fines aren't assessed because those in the position to be fined also as a rule have more influence over the system There is also the practical matter of the power to levy large fines being, itself, immensely powerful. You don't want to create a fine czar only to lose control of them in a term or two.
gruez 2y ago
Isn't that already the case? For instance Wells Fargo was fined $185M for fraudulently opening accounts customers didn't want[1]. Wells fargo (ie. management) weren't scheming to fraudulently open accounts. They only set aggressive sales goals, and that caused some employees to go rogue and commit fraud themselves. [1] https://en.wikipedia.org/wiki/Wells_Fargo_cross-selling_scandal https://en.wikipedia.org/wiki/Wells_Fargo_cross-selling_scan...
- wahnfrieden 2y ago
  How do you know that lacked intent? It just sounds like cover for intent
  - gruez 2y ago
    The point isn't that wells fargo management didn't scheme to intentionally defraud customers, it's that the government was able to punish wells fargo for defrauding customers without having to prove they intentionally schemed to do so.
- rectang 2y ago
  I'm skeptical that the intentions of the Wells Fargo executives were pure and white as the driven snow. The incentives align to encourage executives to commit crimes in service of short-term gains — even in the extreme case of Wells Fargo, Carrie Tolstedt and John Stumpf have both avoided prison time and ended up money ahead to the tune of tens of millions of dollars, even after clawbacks and fines. Not only shouldn't intent matter, we should assume the worst. Whether assuming the worst is a workable enforcement regime, I don't know — but it most accurately models a reality where the most rational behavior for executives is indifference to the law.

cycomanic 2y ago

That's a big assertion to make without any evidence. There's a lot of individual crime which is not intentional (e.g. driving related) and there is a lot of corporate crime where someone clearly made a decision. In particular corporations employ lawyers so they have people qualified to decide if a crime is likely being committed.

arcbyte 2y ago
Interestingly, driving infractions are mostly noncriminal. Corporations are giant responsibility diffusion machines and more often than not they stumble into illegal activity rather than internally commit to it. Hence, they are not acting intentionally. Also relevant is my assertion that this bumbling illegal behavior also needs better enforcement - it's just civil in nature and not criminal.

mrweasel 2y ago

I'll disagree with the point that corporate crimes aren't intentional, they most certainly can be. There are plenty of examples of companies deciding that it's more profitable to "do crime" and just pay the fine if caught. Danske Bank famously have a post in their budget to pay fines for breaking banking laws. The problem is to prove that something is done intentional, on a "corporate level", whatever that means in the given case. Imagine having a law where breaking it would mean that the business have to shutdown. A competitor could pay off someone inside the company to break the law deliberately to have the legal system remove competition.

mikelitoris 2y ago

This is a bullshit argument that people in charge of these companies make. How do you know the "thief" that stole merchandise from a store wasn't going to come back to pay for it in an hour? You don't... you just assume the worst, which should be the case for corporations.

arcbyte 2y ago
It's not a bullshit argument, it is a battle tested argument with a long history.
- dartos 2y ago
  Is it roughly the same long history as the long history of corporations getting away with crimes that individuals could not? Yknow maybe the modern day requires rethinking of some regulations regarding corporations.