December 16, 2014

Private: White Collar Crime and Justice

corporate wrongdoing, Rena Steinzor, Why Not Jail?

by Rena Steinzor, a Professor at the University of Maryland Carey School of Law and the president of the Center for Progressive Reform. For two decades, she has written dozens of articles and two previous books about the regulatory system that protects public health, worker and consumer safety, and the environment. She has testified repeatedly before Congress and has been quoted extensively in a wide range of mainstream media outlets. Cambridge University Press published her latest book Why Not Jail? Industrial Catastrophes, Corporate Malfeasance, and Government Inaction in December 2014.

One subtle and too often ignored symptom of the fundamental bias in America’s criminal justice system is its feathery embrace of white collar crime. Failure to prosecute the banks in the wake of the 2008 crash gets consistent media attention and disgusts many people, but these reactions have yet to motivate a concerted response by the Obama Justice Department. The parallel failure to prosecute the corporations and executives that kill and injure people through reckless practices in industrial contexts is barely discussed.

Just in the last few years, hundreds have died and thousands have been injured. Causes include contaminated food (think listeria in cantaloupes and salmonella in peanut paste), infected drugs (steroid injections tainted by meningitis), defective products (for example, Toyota sudden acceleration, General Motors ignition switches, Takata airbags), tainted drugs (consider meningitis-laden steroid injections administered at hospitals nationwide but manufactured by a nightmarishly inept pharmacy in Massachusetts), and absolutely preventable industrial catastrophes (oil rigs, refineries, coal mines, sugar plants, and construction sites). Less obvious is the egregious malfeasance at executive levels that enabled these outcomes. 

The cantaloupes were washed in a machine designed for potatoes, with a disconnected rinse mechanism needed to kill the listeria. The peanut paste was shipped despite a positive test for salmonella. The managers of the “clean room” used to process injectable drugs shut off the air conditioning at night, allowing fungi and bacteria to fester. At the very least, senior car company executives failed to disclose defects to federal regulators promptly, as required by the law. They dragged their feet for months on recalls and, as the GM investigation deepens, evidence is even emerging that engineers fixed the defect in 2005 without informing dealers who had stockpiles of the defective parts, many of which ended up in cars still on the road. In the workplace, employers are quick to blame line workers for human errors regardless of thousands of pages of expert reports explaining that cost-cutting, delayed maintenance, lack of trained supervisory personnel, poor safety cultures, and manic haste to extract natural resources and build structures created intolerable risk. To their credit, U.S. attorneys are just beginning to bring such cases, and recently secured felony convictions against the owner and senior managers of the peanut plant.

In my new book Why Not Jail: Industrial Catastrophes, Corporate Malfeasance, and Government Inaction, I examine the far-reaching reports written by expert investigators in the wake of five notorious disasters that took place in the workplace (the BP Texas City Refinery explosion and Massey Energy Upper Big Branch mine collapse), the marketplace (Peanut Corporation of America and New England Compounding Center), and the environment (Deepwater Horizon blow out). I also analyze how sociological studies of corporate behavior would trace the root causes of these events. The book explains why both corporations and their executives should be held criminally culpable for these events under existing law, despite conservative academia’s cramped and confused interpretation of the burden prosecutors must shoulder in proving mens rea against such defendants.

In a jacket “blurb,” Ralph Nader wrote that the book “demonstrates how the exercise of corporate power over all branches of our government has resulted in weak laws, anemic enforcement budgets, de facto immunity for corporate bosses, and increasingly more limited liability for Big Business crimes.  … The prospect of jail time is the best deterrent to corporate crime. Steinzor has made a formidable argument for lawmakers, prosecutors, and judges to focus on that truism and stand tall for enforcement strategies that will prevent ‘crimes in the suites.’”  Henry Waxman wrote that “[t]he historic events described in this book show what happens when violations and fines are accepted as a cost of doing business.  Why Not Jail? makes a compelling argument for criminal prosecutions of executives who tolerate noncompliance and endanger public health and the environment.”