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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 a

by 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.
- tbrownaw 12y ago
  While they may have that option in theory, it apparently isn't viable in practice: 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. To anyone who asks, “Surely these big firms wouldn’t pay out if they knew they were innocent?”, the answer is: oddly enough, they might. First, note "indicted" not "convicted". Second, note the difference between paying with someone else's money vs risking imprisonment/etc yourself (and no, our criminal courts don't have a zero false-positive rate).
  - jbooth 12y ago
    So you're buying the line that BoA or BNP Paribas would go into bankruptcy if charges were filed? Even the author knew he couldn't make that case and resorted to a weasel-worded implication.
    - nickff 12y ago
      The problem is not that the company would go bankrupt if charges were filed, in fact the author argues that it would be less costly for the companies to go to court. The problem is that the company's officers and employees would lose their jobs, and likely become unemployable at their previous level. Because of this personal cost to the officers and employees, settlement becomes their only viable option.
      - jbooth 12y ago
        So we're talking about cases like threatening the world financial system, polluting the whole gulf of mexico, helping the sudanese government while the're committing an actual genocide.. and you're saying the legal system shouldn't act because what if some CxO who profitted from those actions loses their job? Am I misreading you?
        12y ago
mikeash 12y ago
You say "miss the point," I say "read between the lines." When they make specific recommendations at the end, those recommendations are: 1) let some cases go to trial 2) handle "most cases" of corporate wrongdoing in civil courts 3) cut down on the number of things that are illegal. These are pretty weak recommendations to start with. And then you compare them against the examples they use at the beginning of the article. They paint these examples as massive overreach. The implication is that companies should be allowed to do more and punished less compared to now, when their examples are ones where companies did pretty awful things and then basically got away with it. The punishment was close to zero. Combined with the recommendation for more civil trials and they're basically saying that the government should cut back on investigating and punishing corporate crime, and that the victims should just sue directly. Nobody would recommend that for, say, a car thief, but a big company steals your house and suddenly you have to hire your own lawyer? So, I agree with the idea that more of this stuff should be brought to trial. But I disagree that these settlements are "mind-boggling", and I disagree that the solution is to move more activity to civil courts.
burgers 12y ago
The thing this article misses is that the companies push for these settlements. If anything you could make a case that the prosecutors have more leverage than they are using and getting smaller settlements than they could have in court. That the threat of damaging the economy from a negative market reaction to a large punishment has caused the justice system to go easy on companies.
x0x0 12y ago
You didn't understand what the article is advocating. The thesis lays it out: The increasing criminalisation of corporate behaviour in America is bad for the rule of law and for capitalism. The author then uses the fact that punishment for the criminal activities by corporations has been privatized through civil courts instead of performed publicly by regulation and prosecution to attempt to gin up outrage. Yes, private enforcement instead of public enforcement is less efficient in many ways. But given the deluded republican ideology and their band of useful idiots (corporations are people, my friend! [1]) it isn't the case that we are choosing between private enforcement and public enforcement of our laws, but rather between private enforcement and no enforcement. The goal is clear: to allow corporations to not be punished. Note also the cute aside where the author attempts to shift blame for corporate activities to individual managers, who can then be charged (in lieu of any punishment of the corporation for acts done by the corporation). The modern version of "Will no one rid me of this meddlesome priest?" [1] https://www.youtube.com/watch?v=KlPQkd_AA6c https://www.youtube.com/watch?v=KlPQkd_AA6c

by jfasi 12y ago

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.

tbrownaw 12y ago
While they may have that option in theory, it apparently isn't viable in practice: 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. To anyone who asks, “Surely these big firms wouldn’t pay out if they knew they were innocent?”, the answer is: oddly enough, they might. First, note "indicted" not "convicted". Second, note the difference between paying with someone else's money vs risking imprisonment/etc yourself (and no, our criminal courts don't have a zero false-positive rate).
- jbooth 12y ago
  So you're buying the line that BoA or BNP Paribas would go into bankruptcy if charges were filed? Even the author knew he couldn't make that case and resorted to a weasel-worded implication.
  - nickff 12y ago
    The problem is not that the company would go bankrupt if charges were filed, in fact the author argues that it would be less costly for the companies to go to court. The problem is that the company's officers and employees would lose their jobs, and likely become unemployable at their previous level. Because of this personal cost to the officers and employees, settlement becomes their only viable option.
    - jbooth 12y ago
      So we're talking about cases like threatening the world financial system, polluting the whole gulf of mexico, helping the sudanese government while the're committing an actual genocide.. and you're saying the legal system shouldn't act because what if some CxO who profitted from those actions loses their job? Am I misreading you?
      - 12y ago

mikeash 12y ago

You say "miss the point," I say "read between the lines." When they make specific recommendations at the end, those recommendations are: 1) let some cases go to trial 2) handle "most cases" of corporate wrongdoing in civil courts 3) cut down on the number of things that are illegal. These are pretty weak recommendations to start with. And then you compare them against the examples they use at the beginning of the article. They paint these examples as massive overreach. The implication is that companies should be allowed to do more and punished less compared to now, when their examples are ones where companies did pretty awful things and then basically got away with it. The punishment was close to zero. Combined with the recommendation for more civil trials and they're basically saying that the government should cut back on investigating and punishing corporate crime, and that the victims should just sue directly. Nobody would recommend that for, say, a car thief, but a big company steals your house and suddenly you have to hire your own lawyer? So, I agree with the idea that more of this stuff should be brought to trial. But I disagree that these settlements are "mind-boggling", and I disagree that the solution is to move more activity to civil courts.

burgers 12y ago

The thing this article misses is that the companies push for these settlements. If anything you could make a case that the prosecutors have more leverage than they are using and getting smaller settlements than they could have in court. That the threat of damaging the economy from a negative market reaction to a large punishment has caused the justice system to go easy on companies.

x0x0 12y ago

You didn't understand what the article is advocating. The thesis lays it out: The increasing criminalisation of corporate behaviour in America is bad for the rule of law and for capitalism. The author then uses the fact that punishment for the criminal activities by corporations has been privatized through civil courts instead of performed publicly by regulation and prosecution to attempt to gin up outrage. Yes, private enforcement instead of public enforcement is less efficient in many ways. But given the deluded republican ideology and their band of useful idiots (corporations are people, my friend! [1]) it isn't the case that we are choosing between private enforcement and public enforcement of our laws, but rather between private enforcement and no enforcement. The goal is clear: to allow corporations to not be punished. Note also the cute aside where the author attempts to shift blame for corporate activities to individual managers, who can then be charged (in lieu of any punishment of the corporation for acts done by the corporation). The modern version of "Will no one rid me of this meddlesome priest?" [1] https://www.youtube.com/watch?v=KlPQkd_AA6c https://www.youtube.com/watch?v=KlPQkd_AA6c