Multiple Corporate Personality Disorder
by Russell Mokhiber and Robert Weissman

January 20, 2004

Send this page to a friend! (click here)



We hate to sound like your parents, but people must take responsibility for their actions.

Steal from the grocery store, go to jail.

Double park, pay the ticket.

But why doesn't this simple principle apply to corporations and their executives?

As of this writing, of all of the corporate crimes committed that have cost the United States hundreds of billions of dollars over the past couple of years, only two top level executives are in prison.

That's it -- two.

Now, ask yourself, if working class people committed crimes that cost the nation hundreds of billions of dollars -- inconceivable as it is -- how many would be in prison? The whole lot of them.

So, how is it that corporations and their executives get away with it? It's the nature of the beast.

And perhaps that's why we should consider doing away with it – the corporation that is.

After all, if a corporation means a legal structure to allow human beings to get away with wrongdoing without paying a price, then it's a machine that produces injustice.

Let's say that a corporation is caught fixing its books, committing in effect a $2.7 billion fraud. That would be a case very similar to the case of HealthSouth.

Under U.S. federal law, if a health care corporation is convicted of a serious crime, that company can no longer do business with the government, in this case the Medicare and Medicaid program. And in HealthSouth's case, that means life and death.

So, the company hires one of the nation's best corporate crime defense attorneys -- Bob Bennett and says to him, "Save us from the corporate death penalty."

And Bob goes to the U.S. Attorney prosecuting the case and says, "Hey, look, we blew it, here's my phone number, we'll give you everything you want. Just don't indict us. Please don't indict us."

And the U.S. Attorney indicts 16 top executives. And the company is on the road to getting off scot free.

That's one way a corporation morphs to get out of accepting responsibility for its sins -- blame the human beings.

But sometimes, the corporate executives say, "Hey, we don't have to take the heat. Let's cough up a defunct subsidiary to plead guilty -- and the government can ban that unit from doing business with Medicare. Who cares about a defunct subsidiary? That unit never did business with Medicare anyway."

So, there's a guilty plea, there's a corporate fine, there is a touch of adverse publicity -- but nobody's hurt. Crime without punishment.

Or let's say that the corporation wants to plea to a lesser offense, but not draw any publicity to the case. This too happens. The corporate lawyer can go to the Justice Department and cut a deal where the Department will agree not to put out a press release about the case. A number of criminal defense lawyers have told us they have done this.

The Justice Department issued a memo earlier this year titled "Federal Prosecution of Business Organization."

The memo gives prosecutors discretion to grant corporations immunity from prosecution in exchange for cooperation.

These immunity agreements, known as deferred prosecution agreements, or pre-trial diversion, were previously reserved for minor street crimes.

They were never intended for major corporate crimes.

In fact, the U.S. Attorneys' Manual explicitly states that a major objective of pretrial diversion is to "save prosecutive and judicial resources for concentration on major cases."

Since the memo was issued, there have been a rash of deferred prosecution agreements in cases involving large corporations, including a settlement with a Puerto Rican bank on money laundering charges and a Pittsburgh bank on securities law charges.

And some corporate crime defense attorneys believe that it is possible to enter these agreements with the Justice Department so as to avoid any publicity.

"This is a favorable change for companies," said Alan Vinegrad, a partner at Covington & Burling in New York. "The memo now explicitly says that pre-trial diversion, which had been reserved for small, individual, minor crimes, is now available for corporations."

Vinegrad said that while there have been a handful of publicized pre-trial diversion cases by corporations, it is conceivable that the Justice Department can cut these kind of deals with companies without filing a public document -- and therefore without any publicity to the case.

Harry Glasbeek is a professor of criminal law at York University in Toronto. He has studied corporate crime and written a book about it called Wealth By Stealth: Corporate Crime, Corporate Law, and the Perversion of Democracy.

Glasbeek says that the creation of the corporation allowed for this "fungibility of responsibility."

"Sometimes the executives plead the corporation to relieve the executives from responsibility," Glasbeek told us recently. "Sometimes the corporation causes the executives to plead, a couple of people take the fall. And it is very difficult. We have created a separate entity with separate property. So, you have multiple personalities with different legal duties and rights that the actors are allowed to take on at any one time. That allows a shifting of responsibility that we cannot control."

We call it Multiple Corporate Personality Disorder (MCPD).

Glasbeek says this disorder undermines our notion of responsibility, which "supposedly depends on the individual taking responsibility for his or her own actions."

"What we have designed is a creature that allows that responsibility to be shifted at the whim of those people who are actually operating that system," Glasbeek said. "That's an endemic design flaw."

Glasbeek has no illusions that criminal prosecution will bring corporate criminals to justice.

"My notion of prosecuting more often is to bring attention to this embedded difficulty -- it is not because I believe that this will actually change the situation in and of itself," he said.

We believe that justice can be done -- and must be done. But only two things work in bringing justice to corporations.

One is to criminally convict the corporate criminals and apply the death penalty in cases of serious wrongdoing.

And the other is to criminally prosecute high-ranking corporate executives who commit serious crimes and throw them in prison.

Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter, http://www.corporatecrimereporter.com. Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor, http://www.multinationalmonitor.org. They are co-authors of Corporate Predators: The Hunt for MegaProfits and the Attack on Democracy (Monroe, Maine: Common Courage Press; www.corporatepredators.org).


Other Recent Articles by Russell Mokhiber and Robert Weissman


* Corporations and Their Proxies Defeated in Miami, But They Refuse to Give Up
Militarization in Miami Threatening the Right to Protest

* Howard Clinton?

* Say No to Silicone

* A Dull and Largely Uncritical Recitation of Official Sources

* US Bullies Europeans on Chemical Testing

* Open the Debates

* Terry Gross, Grover Norquist and the Holocaust

* Nike Gets a Pass

* Other Things You Might Do With $87 Billion

* Corporateering

* We Had a Democracy Once, But You Crushed It

* The Two Faces of George Bush in Africa

* Corporate Crime Without Shame

* Gray Panthers’ Corporate Connections

* Throwing Precaution to the Wind

* Why Ari Should’ve Resigned in Protest








FREE hit counter and Internet traffic statistics from freestats.com