7 ms·

The criminalisation of American business

47 points by e15ctr0n 12y ago

droopyEyelids 12y ago
This is a cool article to show anyone who argues The Economist doesn't have biases. Yes the article isn't clearly supporting a political party, but it certainly is pushing an agenda. I think it's also an interesting example of whats possible when authors don't need to have a byline.
- maxxxxx 12y ago
  What agenda is it pushing?
  - Dudelander 12y ago
    It's an op ed for economic deregulation and tort reform, as opposed to a journalistic article. Which is not to say that op-eds don't belong in journalistic publications.
    - waqf 12y ago
      Is having an opinion the same as having a bias?
      - hnnewguy 12y ago
        When that opinion is different from your own, apparently it's "bias". Judging the agenda of a (very good, imho) publication (as if it could have one) based on an op-ed is ridiculous. Where is the critical thought? The Economist has been around for 150 years, and if you felt like it you could find individual articles that would indicate any such "bias" you desired. Oh well.
    - jerf 12y ago
      I'm at a loss as to how you can read that article as calling for deregulation, short of assuming that if it's from the Economist it can simply be assumed to be calling for those things. I see an article calling for existing regulations to be enforced openly and transparently, rather than criticizing any particular regulation. Honestly, this sounds like something liberals ought to be lining up behind, not all standing around kicking dirt because they don't like who said it. In fact pretty much everyone who isn't in the government ought to asking for this. Or is everyone else here really arguing that unknown accusations being settled behind closed doors for often poorly- or un-disclosed amounts of money between the government and big corporations is just peachy keen? Honestly the tone of the most of the replies being made here sort of boggle my mind.
- gaius 12y ago
  Then it is kinda on you to rebut points like "Why a state government should get any share at all of a French firm’s fine for defying the federal government’s foreign policy is not clear" because, well, it really isn't clear.
  - deleted 12y ago
    [deleted]
- ghaff 12y ago
  What's the significance of having or not having a byline? This isn't an anonymous comment on the Internet someplace. It's a piece run by a well-respected magazine (whether or not you agree with their general worldview) that had to pass muster with editors.
- stevoski 12y ago
  > "when authors don't need to have a byline." Actually in general writers at The Economist are not _allowed_ to have a byline.
- oatmeal_coffee 12y ago
  How can anyone argue they don't have biases? From a 2013 article they ran explaining their politics: "We like free enterprise and tend to favour deregulation and privatisation. But we also like gay marriage, want to legalise drugs and disapprove of monarchy. So is the newspaper right-wing or left-wing? Neither, is the answer. . . it opposes all undue curtailment of an individual’s economic or personal freedom. But like its founders, it is not dogmatic. Where there is a liberal case for government to do something, The Economist will air it. Early in its life, its writers were keen supporters of the income tax, for example. Since then it has backed causes like universal health care and gun control. But its starting point is that government should only remove power and wealth from individuals when it has an excellent reason to do so." http://www.economist.com/blogs/economist-explains/2013/09/economist-explains-itself-0 http://www.economist.com/blogs/economist-explains/2013/09/ec...
Oletros 12y ago
Is TE saying that the corporations are not responsible for what their employees do? Am I missing the point?
- stevoski 12y ago
  Yes, I think you missed the point. The subheading starts with "Companies must be punished when they do wrong..." The point is that companies being encouraged to pay secret settlements make it hard for others to learn from precedent.
websitescenes 12y ago
It is a good thing for businesses, especially large corporations to have some level of accountability. Companies are more accountable today, than ever before and this seems to be what the author is complaining about. I don't like business as usual and I think things need to change. This author wants to ignore changing economic and political environments and go back to a time where corporations had near limitless power. This is a classic conservative/Libertarian point of view and it is not a good idea. The nature of the universe is that it is always changing and evolving. Sure it it is rhythmic and appears to have patterns but things will ALWAYS change. A conservative outlook is not compatible with the nature of the universe. A conservative wants things to stay the same or stop change from occurring. That will always be a losing battle. This is why extremists are almost always conservative. Extreme actions need to be taken to legitimize a view that is so far out of whack with the nature of existence. Think ISIS, Taliban, KKK and Tea Party.
- tormeh 12y ago
  >This author wants to ignore changing economic and political environments and go back to a time where corporations had near limitless power. Not really. Arguing for a graspable set of laws - some countries' laws are entirely contained in a textbook-size book - is not arguing against accountability. Having managers be responsible for some behavior sounds like a good idea to keep and even expand, though. Maybe Intel anti-competitive behavior wouldn't have been an issue if the Intel CEO knew that 10 years down the road he might be jailed. As it is, it is impossible to punish those who did the misdeeds. If robbing a bank is punishable by jailing, then gross corporate douchebaggery should also be likewise punishable.
  - websitescenes 12y ago
    I am just getting to the root of the issue. This article reeks of political bias and motivation. This article isn't really talking about that. I tend to look at things in grand contexts and I can't ignore that aspect of this article.
chris_va 12y ago
"Perhaps the most destructive part of it all is the secrecy and opacity. The public never finds out the full facts of the case, nor discovers which specific people—with souls and bodies—were to blame. Since the cases never go to court, precedent is not established, so it is unclear what exactly is illegal. That enables future shakedowns, but hurts the rule of law and imposes enormous costs. Nor is it clear how the regulatory booty is being carved up."
sgnelson 12y ago
I thought this was going to be an article on how there are many American businesses that are breaking laws left and right, buying congressmen and regulators, etc. Yet these businesses seem to continuously get away with these crimes (robo-signing to literally steal people's homes away anyone?), with nothing but a minor slap on the hand (even BofA's massive $17 billion fine is nothing compared to their profits over a few years) I was disappointed. Oh poor American businesses, woe to them in this period of constantly increasing profits and overpaid executives who make money on the backs of the workers and their stagnant wages. How so unfair. Maybe these businesses should move to a better business climate, like Somalia or Russia. I'm sure it'd be impossible for anyone else to create a similar to (I don't know, just spouting nonsense here) business.
- tbrownaw 12y ago
  Isn't that an example of what the article is about? BigCo does something (presumably) illegal --> BigCo gets investigated by regulators --> BigCo settles out-of-court without admitting anything. If everything's illegal and traditionally paid off out-of-court, things that are actually harmful/wrong don't get treated any worse than things that are more questionable.
  - mikeash 12y ago
    That's what it's about, but their proposed remedy is mostly reducing the number of laws and reducing the number of criminal investigations against companies. You or I might see these out-of-court settlements as a symptom of a problem with companies that can get away with (sometimes literal) murder, whereas they seem to see them as a symptom of a system that punishes companies unjustly.
- Dudelander 12y ago
  Reading the examples, I had a hard time determining that the article was not being sarcastic. (Oil spills, violation of trade embargo on genocidal regimes, lying to investors, etc.)
  - 12y ago
Retric 12y ago
Completely misses the point, company's settle because it's in their best interest to do so. If a company is clearly guilty of X, and they settle behind closed doors for 1/5 of X then 'everyone' except the public wins. Don't forget their defending 'BNP Paribas disgustingly abetted genocide' by saying they should have a public trial when it's the last thing the company wants.
rayiner 12y ago
> Most cases of corporate malfeasance are to do with money and belong in civil courts. I'm actually pretty sympathetic to the idea that business wrongdoing shouldn't carry criminal penalties. Maybe those should be reserved for violent people. But if you go down that route, you have to be consistent: no criminal penalties for the guy who embezzles money from the company, because hey that just involves money too. Indeed, crimes like embezellment are a pretty new addition to the criminal law. Prior to maybe 200 years ago, there was no way to describe a crime involving the misuse of money someone lawfully had in his possession. The big problem with the article is that it's historically myopic. Companies have spent decades whittling down the ability of people to correct corporate malfeasance through civil lawsuits. They have done this by demonizing trial lawyers and class action lawsuits. Well, shutting down one avenue of recourse just means people will seek redress through other avenues. And it turns out that this other avenue is regulatory oversight and criminal penalties. At the end of the day, peoples' complaint about the financial prosecutions mentioned in the article is this: not enough people went to jail.
- mikeash 12y ago
  I find it odd that they say that when most of their examples of big corporate penalties involve criminal acts. I say, let's stop treating companies specially. If somebody works for a company and commits a crime in the course of their job, they should be penalized just the same as if they did it on their own. If the company is somehow responsible themselves (because no individual worker had enough of a hand in what happened to hold them responsible directly), let's apply the same penalties to the company that we'd apply to a person who did what they're accused of. OK, we can't really put a company in prison. But surely we could enact similar consequences. A person in prison can't easily meet with the public, can't really communicate effectively, and can't really carry out business (or at least they're not supposed to). When appropriate, let's put companies "in prison". If their crime would put a person in prison for a year, shut the company down for a year. They can resume when they've completed their sentence, just like you or I can. Bank of America's $17 billion settlement looks huge. But it's about a year of profit for them. Imagine if you or I committed a crime of that magnitude, and all we were asked to pay for it was a year's worth of savings. Not even a year's salary, a year of our savings. No, you or I would go to prison, be cut off from our friends and family, and be prevented from working for years. Even after regaining our freedom we'd have a tremendously difficult time putting our lives back together. Let's do the same for BoA. Ten years of no business, then you can go back to doing what you were. Oh, you have a tough time resuming your business after a decade on hiatus? Boo freakin' hoo, that's how it works for the rest of us slobs. As it stands, I'd bet they made a profit on their criminal dealings even after paying the settlement.
jobu 12y ago
The article seems to paint a picture that the government is trying to keep the settlements secret, but that doesn't seem to be the case at all. The DoJ was concerned about destroying these companies and causing an even bigger fallout. As this hasn't proved true the government has gotten more and more bold - forcing larger settlements, making banks admit fault, and they even recently got Bank of America to agree to a 30-page "Statements of Fact" (https://www.documentcloud.org/documents/1278638-statement-of-facts-on-bank-of-america-deal.html https://www.documentcloud.org/documents/1278638-statement-of...) While the BofA "Statements of Fact" doesn't name any specific employees, it can theoretically be used to bear witness against people within the company that made and condoned the actions. We may soon see criminal trials of real people instead of civil trials against corporations.
mcphage 12y ago
I don't quite understand this article. The author writes "Companies must be punished when they do wrong [...]", but then lists a number of companies who got caught doing wrong, but presents their fines as somehow problematic. > The increasing criminalisation of corporate behaviour in America is bad for the rule of law and for capitalism Is it the increasing criminialization of corporate behavior that's really the problem here? Or is the the actual corporate behavior itself? > Financial firms rarely survive being indicted on criminal charges. Few want to go the way of Drexel Burnham Lambert or E.F. Hutton. For their managers, the threat of personal criminal charges is career-ending ruin. Unsurprisingly, it is easier to empty their shareholders’ wallets. > The best thing would be for at least some of these cases to go to proper trial [...]. That is hardly in the interests of the regulators or their managerial prey, but shareholders at least should push for that. So the author is concerned about government fines eroding shareholder value, but doesn't seem concerned that a lengthy public trial would also hurt stock prices or public trust. I guess I just don't understand the author's worldview. When a big company does something seriously wrong and gets fined by the government, he doesn't seem to be bothered by the company's behavior, but instead he's bothered by the fact that the company is forced to clean up their mess.
- floppydisk 12y ago
  The point isn't that the companies were or were not doing something wrong, it's the opacity of the entire process--it's almost Kafkaesque. The government accuses them of a crime, gets a payout, and everything gets settled hush-hush. No one knows what exactly about their conduct was illegal or how the fines are being used by the government. I'd say there are two reasons the status quo isn't beneficial. First, it provides no feedback to the greater business community as to what is illegal vs what is not and how enforcement is going to go about. The opacity denies the market information to adjust. Second, it allows the government to do what Microsoft did to Android and hammer people in private to great benefit without the greater public knowing the charges or claims being made. Regulation should be transparent, even more so with large amounts of cash involved.
  - mcphage 12y ago
    > The point isn't that the companies were or were not doing something wrong, it's the opacity of the entire process--it's almost Kafkaesque. The government accuses them of a crime, gets a payout, and everything gets settled hush-hush. I don't think that's really true, though. It's more like "the government accuses them of a crime, and then the company and the government come to a settlement." For instance, look at the recent eBook price fixing matter. The government accused 5 publishers and Apple of a crime. The publishers agreed to a fine and business changes, but Apple refused to settle—and it went to court. The fact that it went much more poorly for Apple through the court process shows why companies are so eager to settle. Or to put it another way: it's opaque from the outside. From the inside, it's all lawyers deciding what to settle for. > No one knows what exactly about their conduct was illegal I think the companies have a very good idea of what they did that the government disapproved of; companies don't want to find out exactly the exact legal result, because they don't want to actually be found guilty of a crime. > how the fines are being used by the government. That's not really the business's... well, business. They don't get to dictate that. * I agree with you that there should be more visibility in to these settlements, but more so companies can't hide behind "we weren't actually found guilty of a crime". But I don't think companies want that kind of public visibility into their misdeeds. With these secret settlements they can make problems just disappear. And certainly, from the public standpoint, what exactly happens to these huge settlements needs to be more visible.
acd 12y ago
It can be helpful to know the following. The magazine the economist is owned by The Economist group "The Economist Group is 50% owned by Pearson PLC via The Financial Times Limited. The bulk of the remaining shares are held by individual shareholders including the Cadbury, Rothschild, Schroder, Agnelli" source: Wikipedia The news paper will sometime push the owners selfish agenda which may or may not be in the readers best interest.
- jfasi 12y ago
  > Ad Hominem Def.: Any attempt to discredit a view by calling attention to the character, actions or personal circumstances of those who hold it rather than the reasoning they provide in support of it. "Ad hominem" is Latin for "against the person." Anything that involves an attack on a person's character we call an Abusive Ad Hominem. Anything that appeals to a person's unique circumstances we call a Circumstantial ad Hominem. These are both fallacious for the simple reason that the personal character and circumstances of the individual reasoner are logically irrelevant to the question whether the reasoning itself is any good. http://www.csus.edu/indiv/g/gaskilld/criticalthinking/Six%20Common%20Fallacies.htm http://www.csus.edu/indiv/g/gaskilld/criticalthinking/Six%20...
jfasi 12y ago
As of my writing this we're six top-level comments in and already a full third of them miss the point of the article, going on to complain about The Economist advocating not punishing companies for malfeasance. For their benefit as well as for the benefit of this comment section as a whole, here's a quick summary of some of the article's central points: * The article compares the practice of public attorneys demanding settlements in place of public indictment to extortion: "The formula is simple: find a large company that may (or may not) have done something wrong; threaten its managers with commercial ruin, preferably with criminal charges; force them to use their shareholders’ money to pay an enormous fine to drop the charges in a secret settlement (so nobody can check the details)." * It points out that this process bypasses the regular justice system, which ought to progress by both legislation and precedent-based case study: "Perhaps the most destructive part of it all is the secrecy and opacity. The public never finds out the full facts of the case, nor discovers which specific people—with souls and bodies—were to blame. Since the cases never go to court, precedent is not established, so it is unclear what exactly is illegal." * It further argues that this government-dominated settlement process places all power in the hands of the attorney, thereby undermining the rule of law by introducing an element of arbitrariness and politics to what should be governed by blind justice: "This undermines the predictability and clarity that serve as the foundations for the rule of law, and risks the prospect of a selective—and potentially corrupt—system of justice in which everybody is guilty of something and punishment is determined by political deals." * It does not argue that companies should not be liable for misdeeds, in fact it acknowledges the fact: "In many cases, the companies deserved some form of punishment:...[followed by some examples]"
- jbooth 12y ago
  These (somewhat) reasonable points are lodged in between a bunch of horribly biased wording, words like "shakedown", "supposed misdeeds", etc. If people are having a hard time getting past that to the author's point, I'd put the blame on the author.
- clavalle 12y ago
  As far as I know, all of these companies have the option to have their day in open court. I think the likes of JPMorgan can handle defending themselves legally without falling into commercial ruin. Usually, with extortion, these kinds of options are not available.
higherpurpose 12y ago
The whole American justice system has become one big extortion racket, from top to bottom, and whether it's big corporations or the little guy, who gets threatened with tens of years in prison, and must "settle" for the plea bargain, so the US gov gets an easy win.
cottonseed 12y ago
I find it terribly sad that the impetus for reforming the US "threaten and settle" criminal justice system might come from the onerous burden placed on corporations. In the same way I find it very disappointing how much of the conversation around marijuana legalization is about the economic benefits. By this calculus, we ascribe a non-trivial negative cost to NOT putting people in jail.
adventured 12y ago
Part of the point of the US economy being so burdened by laws and regulations, is that anyone can be found guilty at any time that it's convenient. Any company can be found to be in violation of numerous laws and regulations. The same holds true of the criminal justice system. It's why the NSA was compiling histories on porn etc. viewing habits related to people they might want to shut up. The point for the government, is to have that power over people at all times, and then use it when it serves their purpose/s. Such perversions of justice are about power, greed, and control. It always has been, and always will be.

47 points by e15ctr0n 12y ago

This is a cool article to show anyone who argues The Economist doesn't have biases. Yes the article isn't clearly supporting a political party, but it certainly is pushing an agenda. I think it's also an interesting example of whats possible when authors don't need to have a byline.

maxxxxx 12y ago
What agenda is it pushing?
- Dudelander 12y ago
  It's an op ed for economic deregulation and tort reform, as opposed to a journalistic article. Which is not to say that op-eds don't belong in journalistic publications.
  - waqf 12y ago
    Is having an opinion the same as having a bias?
    - hnnewguy 12y ago
      When that opinion is different from your own, apparently it's "bias". Judging the agenda of a (very good, imho) publication (as if it could have one) based on an op-ed is ridiculous. Where is the critical thought? The Economist has been around for 150 years, and if you felt like it you could find individual articles that would indicate any such "bias" you desired. Oh well.
  - jerf 12y ago
    I'm at a loss as to how you can read that article as calling for deregulation, short of assuming that if it's from the Economist it can simply be assumed to be calling for those things. I see an article calling for existing regulations to be enforced openly and transparently, rather than criticizing any particular regulation. Honestly, this sounds like something liberals ought to be lining up behind, not all standing around kicking dirt because they don't like who said it. In fact pretty much everyone who isn't in the government ought to asking for this. Or is everyone else here really arguing that unknown accusations being settled behind closed doors for often poorly- or un-disclosed amounts of money between the government and big corporations is just peachy keen? Honestly the tone of the most of the replies being made here sort of boggle my mind.
gaius 12y ago
Then it is kinda on you to rebut points like "Why a state government should get any share at all of a French firm’s fine for defying the federal government’s foreign policy is not clear" because, well, it really isn't clear.
- deleted 12y ago
  [deleted]
ghaff 12y ago
What's the significance of having or not having a byline? This isn't an anonymous comment on the Internet someplace. It's a piece run by a well-respected magazine (whether or not you agree with their general worldview) that had to pass muster with editors.
stevoski 12y ago
> "when authors don't need to have a byline." Actually in general writers at The Economist are not _allowed_ to have a byline.
oatmeal_coffee 12y ago
How can anyone argue they don't have biases? From a 2013 article they ran explaining their politics: "We like free enterprise and tend to favour deregulation and privatisation. But we also like gay marriage, want to legalise drugs and disapprove of monarchy. So is the newspaper right-wing or left-wing? Neither, is the answer. . . it opposes all undue curtailment of an individual’s economic or personal freedom. But like its founders, it is not dogmatic. Where there is a liberal case for government to do something, The Economist will air it. Early in its life, its writers were keen supporters of the income tax, for example. Since then it has backed causes like universal health care and gun control. But its starting point is that government should only remove power and wealth from individuals when it has an excellent reason to do so." http://www.economist.com/blogs/economist-explains/2013/09/economist-explains-itself-0 http://www.economist.com/blogs/economist-explains/2013/09/ec...

Oletros 12y ago

Is TE saying that the corporations are not responsible for what their employees do? Am I missing the point?

stevoski 12y ago
Yes, I think you missed the point. The subheading starts with "Companies must be punished when they do wrong..." The point is that companies being encouraged to pay secret settlements make it hard for others to learn from precedent.

websitescenes 12y ago

It is a good thing for businesses, especially large corporations to have some level of accountability. Companies are more accountable today, than ever before and this seems to be what the author is complaining about. I don't like business as usual and I think things need to change. This author wants to ignore changing economic and political environments and go back to a time where corporations had near limitless power. This is a classic conservative/Libertarian point of view and it is not a good idea. The nature of the universe is that it is always changing and evolving. Sure it it is rhythmic and appears to have patterns but things will ALWAYS change. A conservative outlook is not compatible with the nature of the universe. A conservative wants things to stay the same or stop change from occurring. That will always be a losing battle. This is why extremists are almost always conservative. Extreme actions need to be taken to legitimize a view that is so far out of whack with the nature of existence. Think ISIS, Taliban, KKK and Tea Party.

tormeh 12y ago
>This author wants to ignore changing economic and political environments and go back to a time where corporations had near limitless power. Not really. Arguing for a graspable set of laws - some countries' laws are entirely contained in a textbook-size book - is not arguing against accountability. Having managers be responsible for some behavior sounds like a good idea to keep and even expand, though. Maybe Intel anti-competitive behavior wouldn't have been an issue if the Intel CEO knew that 10 years down the road he might be jailed. As it is, it is impossible to punish those who did the misdeeds. If robbing a bank is punishable by jailing, then gross corporate douchebaggery should also be likewise punishable.
- websitescenes 12y ago
  I am just getting to the root of the issue. This article reeks of political bias and motivation. This article isn't really talking about that. I tend to look at things in grand contexts and I can't ignore that aspect of this article.

chris_va 12y ago

"Perhaps the most destructive part of it all is the secrecy and opacity. The public never finds out the full facts of the case, nor discovers which specific people—with souls and bodies—were to blame. Since the cases never go to court, precedent is not established, so it is unclear what exactly is illegal. That enables future shakedowns, but hurts the rule of law and imposes enormous costs. Nor is it clear how the regulatory booty is being carved up."

sgnelson 12y ago

I thought this was going to be an article on how there are many American businesses that are breaking laws left and right, buying congressmen and regulators, etc. Yet these businesses seem to continuously get away with these crimes (robo-signing to literally steal people's homes away anyone?), with nothing but a minor slap on the hand (even BofA's massive $17 billion fine is nothing compared to their profits over a few years) I was disappointed. Oh poor American businesses, woe to them in this period of constantly increasing profits and overpaid executives who make money on the backs of the workers and their stagnant wages. How so unfair. Maybe these businesses should move to a better business climate, like Somalia or Russia. I'm sure it'd be impossible for anyone else to create a similar to (I don't know, just spouting nonsense here) business.

tbrownaw 12y ago
Isn't that an example of what the article is about? BigCo does something (presumably) illegal --> BigCo gets investigated by regulators --> BigCo settles out-of-court without admitting anything. If everything's illegal and traditionally paid off out-of-court, things that are actually harmful/wrong don't get treated any worse than things that are more questionable.
- mikeash 12y ago
  That's what it's about, but their proposed remedy is mostly reducing the number of laws and reducing the number of criminal investigations against companies. You or I might see these out-of-court settlements as a symptom of a problem with companies that can get away with (sometimes literal) murder, whereas they seem to see them as a symptom of a system that punishes companies unjustly.
Dudelander 12y ago
Reading the examples, I had a hard time determining that the article was not being sarcastic. (Oil spills, violation of trade embargo on genocidal regimes, lying to investors, etc.)
- 12y ago

Retric 12y ago

Completely misses the point, company's settle because it's in their best interest to do so. If a company is clearly guilty of X, and they settle behind closed doors for 1/5 of X then 'everyone' except the public wins. Don't forget their defending 'BNP Paribas disgustingly abetted genocide' by saying they should have a public trial when it's the last thing the company wants.

rayiner 12y ago

> Most cases of corporate malfeasance are to do with money and belong in civil courts. I'm actually pretty sympathetic to the idea that business wrongdoing shouldn't carry criminal penalties. Maybe those should be reserved for violent people. But if you go down that route, you have to be consistent: no criminal penalties for the guy who embezzles money from the company, because hey that just involves money too. Indeed, crimes like embezellment are a pretty new addition to the criminal law. Prior to maybe 200 years ago, there was no way to describe a crime involving the misuse of money someone lawfully had in his possession. The big problem with the article is that it's historically myopic. Companies have spent decades whittling down the ability of people to correct corporate malfeasance through civil lawsuits. They have done this by demonizing trial lawyers and class action lawsuits. Well, shutting down one avenue of recourse just means people will seek redress through other avenues. And it turns out that this other avenue is regulatory oversight and criminal penalties. At the end of the day, peoples' complaint about the financial prosecutions mentioned in the article is this: not enough people went to jail.

mikeash 12y ago
I find it odd that they say that when most of their examples of big corporate penalties involve criminal acts. I say, let's stop treating companies specially. If somebody works for a company and commits a crime in the course of their job, they should be penalized just the same as if they did it on their own. If the company is somehow responsible themselves (because no individual worker had enough of a hand in what happened to hold them responsible directly), let's apply the same penalties to the company that we'd apply to a person who did what they're accused of. OK, we can't really put a company in prison. But surely we could enact similar consequences. A person in prison can't easily meet with the public, can't really communicate effectively, and can't really carry out business (or at least they're not supposed to). When appropriate, let's put companies "in prison". If their crime would put a person in prison for a year, shut the company down for a year. They can resume when they've completed their sentence, just like you or I can. Bank of America's $17 billion settlement looks huge. But it's about a year of profit for them. Imagine if you or I committed a crime of that magnitude, and all we were asked to pay for it was a year's worth of savings. Not even a year's salary, a year of our savings. No, you or I would go to prison, be cut off from our friends and family, and be prevented from working for years. Even after regaining our freedom we'd have a tremendously difficult time putting our lives back together. Let's do the same for BoA. Ten years of no business, then you can go back to doing what you were. Oh, you have a tough time resuming your business after a decade on hiatus? Boo freakin' hoo, that's how it works for the rest of us slobs. As it stands, I'd bet they made a profit on their criminal dealings even after paying the settlement.

jobu 12y ago

The article seems to paint a picture that the government is trying to keep the settlements secret, but that doesn't seem to be the case at all. The DoJ was concerned about destroying these companies and causing an even bigger fallout. As this hasn't proved true the government has gotten more and more bold - forcing larger settlements, making banks admit fault, and they even recently got Bank of America to agree to a 30-page "Statements of Fact" (https://www.documentcloud.org/documents/1278638-statement-of-facts-on-bank-of-america-deal.html https://www.documentcloud.org/documents/1278638-statement-of...) While the BofA "Statements of Fact" doesn't name any specific employees, it can theoretically be used to bear witness against people within the company that made and condoned the actions. We may soon see criminal trials of real people instead of civil trials against corporations.

mcphage 12y ago

I don't quite understand this article. The author writes "Companies must be punished when they do wrong [...]", but then lists a number of companies who got caught doing wrong, but presents their fines as somehow problematic. > The increasing criminalisation of corporate behaviour in America is bad for the rule of law and for capitalism Is it the increasing criminialization of corporate behavior that's really the problem here? Or is the the actual corporate behavior itself? > Financial firms rarely survive being indicted on criminal charges. Few want to go the way of Drexel Burnham Lambert or E.F. Hutton. For their managers, the threat of personal criminal charges is career-ending ruin. Unsurprisingly, it is easier to empty their shareholders’ wallets. > The best thing would be for at least some of these cases to go to proper trial [...]. That is hardly in the interests of the regulators or their managerial prey, but shareholders at least should push for that. So the author is concerned about government fines eroding shareholder value, but doesn't seem concerned that a lengthy public trial would also hurt stock prices or public trust. I guess I just don't understand the author's worldview. When a big company does something seriously wrong and gets fined by the government, he doesn't seem to be bothered by the company's behavior, but instead he's bothered by the fact that the company is forced to clean up their mess.

floppydisk 12y ago
The point isn't that the companies were or were not doing something wrong, it's the opacity of the entire process--it's almost Kafkaesque. The government accuses them of a crime, gets a payout, and everything gets settled hush-hush. No one knows what exactly about their conduct was illegal or how the fines are being used by the government. I'd say there are two reasons the status quo isn't beneficial. First, it provides no feedback to the greater business community as to what is illegal vs what is not and how enforcement is going to go about. The opacity denies the market information to adjust. Second, it allows the government to do what Microsoft did to Android and hammer people in private to great benefit without the greater public knowing the charges or claims being made. Regulation should be transparent, even more so with large amounts of cash involved.
- mcphage 12y ago
  > The point isn't that the companies were or were not doing something wrong, it's the opacity of the entire process--it's almost Kafkaesque. The government accuses them of a crime, gets a payout, and everything gets settled hush-hush. I don't think that's really true, though. It's more like "the government accuses them of a crime, and then the company and the government come to a settlement." For instance, look at the recent eBook price fixing matter. The government accused 5 publishers and Apple of a crime. The publishers agreed to a fine and business changes, but Apple refused to settle—and it went to court. The fact that it went much more poorly for Apple through the court process shows why companies are so eager to settle. Or to put it another way: it's opaque from the outside. From the inside, it's all lawyers deciding what to settle for. > No one knows what exactly about their conduct was illegal I think the companies have a very good idea of what they did that the government disapproved of; companies don't want to find out exactly the exact legal result, because they don't want to actually be found guilty of a crime. > how the fines are being used by the government. That's not really the business's... well, business. They don't get to dictate that. * I agree with you that there should be more visibility in to these settlements, but more so companies can't hide behind "we weren't actually found guilty of a crime". But I don't think companies want that kind of public visibility into their misdeeds. With these secret settlements they can make problems just disappear. And certainly, from the public standpoint, what exactly happens to these huge settlements needs to be more visible.

acd 12y ago

It can be helpful to know the following. The magazine the economist is owned by The Economist group "The Economist Group is 50% owned by Pearson PLC via The Financial Times Limited. The bulk of the remaining shares are held by individual shareholders including the Cadbury, Rothschild, Schroder, Agnelli" source: Wikipedia The news paper will sometime push the owners selfish agenda which may or may not be in the readers best interest.

jfasi 12y ago
> Ad Hominem Def.: Any attempt to discredit a view by calling attention to the character, actions or personal circumstances of those who hold it rather than the reasoning they provide in support of it. "Ad hominem" is Latin for "against the person." Anything that involves an attack on a person's character we call an Abusive Ad Hominem. Anything that appeals to a person's unique circumstances we call a Circumstantial ad Hominem. These are both fallacious for the simple reason that the personal character and circumstances of the individual reasoner are logically irrelevant to the question whether the reasoning itself is any good. http://www.csus.edu/indiv/g/gaskilld/criticalthinking/Six%20Common%20Fallacies.htm http://www.csus.edu/indiv/g/gaskilld/criticalthinking/Six%20...

jfasi 12y ago

As of my writing this we're six top-level comments in and already a full third of them miss the point of the article, going on to complain about The Economist advocating not punishing companies for malfeasance. For their benefit as well as for the benefit of this comment section as a whole, here's a quick summary of some of the article's central points: * The article compares the practice of public attorneys demanding settlements in place of public indictment to extortion: "The formula is simple: find a large company that may (or may not) have done something wrong; threaten its managers with commercial ruin, preferably with criminal charges; force them to use their shareholders’ money to pay an enormous fine to drop the charges in a secret settlement (so nobody can check the details)." * It points out that this process bypasses the regular justice system, which ought to progress by both legislation and precedent-based case study: "Perhaps the most destructive part of it all is the secrecy and opacity. The public never finds out the full facts of the case, nor discovers which specific people—with souls and bodies—were to blame. Since the cases never go to court, precedent is not established, so it is unclear what exactly is illegal." * It further argues that this government-dominated settlement process places all power in the hands of the attorney, thereby undermining the rule of law by introducing an element of arbitrariness and politics to what should be governed by blind justice: "This undermines the predictability and clarity that serve as the foundations for the rule of law, and risks the prospect of a selective—and potentially corrupt—system of justice in which everybody is guilty of something and punishment is determined by political deals." * It does not argue that companies should not be liable for misdeeds, in fact it acknowledges the fact: "In many cases, the companies deserved some form of punishment:...[followed by some examples]"

jbooth 12y ago
These (somewhat) reasonable points are lodged in between a bunch of horribly biased wording, words like "shakedown", "supposed misdeeds", etc. If people are having a hard time getting past that to the author's point, I'd put the blame on the author.
clavalle 12y ago
As far as I know, all of these companies have the option to have their day in open court. I think the likes of JPMorgan can handle defending themselves legally without falling into commercial ruin. Usually, with extortion, these kinds of options are not available.

higherpurpose 12y ago

The whole American justice system has become one big extortion racket, from top to bottom, and whether it's big corporations or the little guy, who gets threatened with tens of years in prison, and must "settle" for the plea bargain, so the US gov gets an easy win.

cottonseed 12y ago

I find it terribly sad that the impetus for reforming the US "threaten and settle" criminal justice system might come from the onerous burden placed on corporations. In the same way I find it very disappointing how much of the conversation around marijuana legalization is about the economic benefits. By this calculus, we ascribe a non-trivial negative cost to NOT putting people in jail.

adventured 12y ago

Part of the point of the US economy being so burdened by laws and regulations, is that anyone can be found guilty at any time that it's convenient. Any company can be found to be in violation of numerous laws and regulations. The same holds true of the criminal justice system. It's why the NSA was compiling histories on porn etc. viewing habits related to people they might want to shut up. The point for the government, is to have that power over people at all times, and then use it when it serves their purpose/s. Such perversions of justice are about power, greed, and control. It always has been, and always will be.