How some crimes of the elite are not prosecuted, and why.
To the Editor:
Read the newspaper and you will see many instances of ordinary citizens going to jail when they break the law, while the elites face a mere slap on the wrist.
One shouldn’t be fooled by the perp walks of rogue traders who hid billions in losses, perpetrators of Ponzi schemes or executives who committed insider trading for their own accounts. They are prosecuted because getting rid of the bad apples is in the interests of the firms involved and the securities industry in general.
But what has never been routinely prosecuted are the crimes in which corporations benefit because, after all, Big Business runs government instead of the other way around. For example, efforts to prosecute fraud in the 2008 economic debacle have focused on homeowners who made fraudulent loan applications, not the financial institutions that encouraged these loans.
These are among the others typically not prosecuted for their crimes:
¶Stockbrokers who engage in unauthorized trading.
¶Manufacturers that sell harmful products and then lie about their safety.
¶Factory owners who ignore safety rules and thereby injure their workers.
Except in the most egregious cases or where the larger interests of the industry are involved, executives and professionals are usually charged only civilly, which means they pay a fine or lose some privilege (often just temporarily). For this purpose, an alphabet soup of regulatory agencies, whose real purpose is to protect the industries, exists.
Those in the professions—law, medicine, accounting and so on—have it even easier. Their transgressions are usually turned over to their own professional associations.
In other words, nowadays only the activities of chumps fall under the jurisdiction of the police. Everyone else has a “get out of jail free” card.
Columbus, Ohio, July 30, 2012
The writer, a lawyer, is a former special assistant to the United States attorney for the Southern District of Ohio.
Here’s my guess: the vast majority of white-collar prosecutors and defense attorneys agree with Mr. Zell that there is a double standard of justice in this country: one for you and me, and another for the rich and powerful. So why don’t more of them speak out, as Mr. Zell has?
Because they don’t want to burn their bridges to the establishment.
The typical trajectory of the top law school graduates interested in a career in white-collar law is this: work as a federal prosecutor for a couple of years, then become a partner in a white-collar defense law firm and defend corporate criminals—at 5 to 10 times the pay.
The young prosecutor understands that serious criminal prosecution of major corporations and their executives will likely jeopardize his or her career at the big white-collar defense law firms.
That’s one reason that instead of securing guilty pleas against major corporations, for example, they settle for deferred and nonprosecution agreements.
Mr. Zell spoke the truth. No way he’s going to be working for one of the corporate defense firms any time soon.
Washington, Aug. 1, 2012
The writer is the editor of the Corporate Crime Reporter.
The long history of under-punishing white-collar (suite) crime and over-punishing conventional (street) crime does not have an easy solution. As Mr. Zell correctly suggests, the dominance of government policy and the co-opting of the regulatory agencies by high finance and big business render piecemeal legislative initiatives and token criminal prosecutions more symbolic than truly effective.
Only with a broad transformation of public consciousness to fully recognize the immense harm of high-level white-collar crime can we hope for the emergence of the political will necessary to transform the basic architecture of our political economy.
Only with a finance and corporate sector organized to focus laserlike on the interests of citizens, consumers and workers, as opposed to the obscene enrichment of the 1 percent, will we see truly effective prosecution and punishment of high-level white-collar crime.
DAVID O. FRIEDRICHS
Clarks Green, Pa., Aug. 2, 2012
The writer is a professor of sociology and criminal justice at the University of Scranton and the author of “Trusted Criminals: White Collar Crime in Contemporary Society.”
Welcome to the 99 percent! It is a long tradition here that those of us who are not on top have no power. That is why you get the parking ticket for parking in a restricted zone . . . where “they” can park.
What is amazing is that the electorate allows this state of affairs, some cheering on the very legal constructs that shut down the rights of their fellow citizens.
Congress is made up of many who claim that the “job creators” will build a worker utopia only if they are not harassed by regulations and taxation. And we vote for them!
Massapequa, N.Y., Aug. 1, 2012
Of all the urgent issues pressing America today, not one is more infuriating to me and everyone I know than our government’s abject refusal to prosecute the powerful bankers and other financiers for the catastrophe their greed has inflicted on the lives of millions of innocent citizens.
Mostly products of our “elite” institutions, rather than being punished for their crimes, they walk away with millions of undeserved dollars and then add insult to injury by stashing large chunks in the Cayman Islands, Switzerland and other tax dodges.
Bill Clinton, Robert E. Rubin, Dick Armey and the other influentials who undid the Glass-Steagall Act should work to undo at least some of the damage they caused by applying their clout to restore the law’s protective separation between banking and playing the market.
Meanwhile, as the 1 percent sail blithely along, we see Congressional Republicans pressing to make drastic cuts in school lunches for our poorest children. What has happened to our great country’s sense of decency and fairness? Have we no shame?
Stonington, Me., Aug. 2, 2012
The writer was Al Gore’s national press secretary when he ran for president in 1988.
Too often, citizens mistake government as the main enemy. We see corporations built and run by those without governing powers, so we believe that they’re on our side, our swords and shields meant to fight off big government.
The truth is that big business is mostly incapable of making decisions based on good ethics. The fueling drive of business is profit, and we should never forget that.
Unfortunately, the corporations run the government, and our system does little to ensure that they make good decisions or are held accountable. They have the power to evade prosecution, as Mr. Zell points out. They also heavily steer government to benefit profit through lobbying and advertisements.
The founding fathers had no idea that big business was just as dangerous to democracy as an all-powerful government. If we don’t limit the influence of big business in government now, it’s likely that corporations will substitute oligarchy for democracy, if it hasn’t happened already.
MICHAEL PAUL CAROLIN
Tucson, Aug. 1, 2012
Mr. Zell makes the argument that members of corporations, as well as those in various professions, are given a pass when it comes to being prosecuted for crimes. There is another facet to the same argument.
If more money can buy the time and energy of better defense lawyers, and if better defense lawyers make it more likely that the defendant will be either acquitted or given a lesser sentence, then money, rather than the evidence, dictates the outcome.
Given this, it only makes sense that Lady Justice not be depicted with a blindfold (which, after all, represents objectivity).
WILLIAM VAUGHAN Jr.
Chebeague Island, Me., Aug. 1, 2012
The Writer Responds
As Mr. Mokhiber writes, lawyers know all too well the double standard that exists in the law. But precisely because their vantage point allows them to know the inner workings of the law, lawyers are sworn to secrecy. In this way, the public is kept in the dark.
Every now and then, a speck of light shines in. For example, lawyers have been disbarred for stating that a judicial decision was result-oriented rather than based on the law. According to a New York Times/CBS News Poll taken last month, the American public has figured out on its own that this is why the Supreme Court upheld President Obama’s health law.
So in answer to Mr. Hirst, the reason the 99 percent do not rise up against the law is that most of what goes on is hidden. From a former Treasury Department official’s recent Op-Ed article (“Mitt Romney’s Financial Mysteries,” July 31), even I was shocked to learn that the government, by failing adequately to audit gift tax returns, has allowed the very wealthy to transfer unlimited amounts of money to their children without paying the required taxes. Who knew?
As Mr. Carolin said, the public doesn’t even know who the enemy is. The people see the government showering the country’s resources upon favored individuals to aid private enterprises and build up private fortunes, and so they “mistake government as the main enemy.” But as he and I pointed out, Big Business runs the government.
To find the solution Mr. Friedrichs and Mr. Schardt seek, we must force the government to treat everyone equally.
Instead of giving the government discretionary power to do whatever it wants, it should be forced to prosecute all crimes for which probable cause exists, to establish standardized plea-bargaining rules, to bid all government contracts, to subsidize no private company or all of them, and to replace the often mutually exclusive legal precedents in the common law with unambiguous statutory law.
Some may say that taking away the government’s discretionary power is like taking away a sailor’s curse words. To which I would respond: Silence is golden.
Columbus, Ohio, Aug. 2, 2012
Note from KBJ: To the New York Times, diversity consists in allowing more than one progressive to discuss an issue. Can you say "echo chamber"?