In a new book– Capital Offenses: Business Crime and Punishment in America’s Corporate Age (Norton, August 2016) — Duke Law Professor Samuel Buell makes the case that “corporate America prefers being prosecuted to being regulated.”
“Companies and their managers would of course like the government to do neither,” Buell writes. “But they also recognize that public sentiment about corporate wrongdoing and corporate harms is a powerful, lasting force in American politics. While this sentiment ebbs and flows, it has been influential since at least the late 1800s and it persists today even if the modern system of campaign finance has grown, as some argue, to essentially corrupt Washington.”
“When it comes time for American industries to pick their poison, criminal prosecution is preferred to regulation,” Buell argues. “That might seem counterintuitive. Prison is more serious than regulatory requirements and the fines for violating them. But the net effect of prosecutions on business, even if the government brought more of them than it does, will remain far less costly to business than major programs of regulation. And for corporations, the benefit of prosecutions is that they displace regulation. Punishing companies and people in the wake of a big corporate scandal — whether it be Enron, BP, GM, Exxon, Tylenol, the Ford Pinto, or any other — is an immediate, highly visible and direct salve to the public’s outrage at both corporations and the government.”
“What could the populace want more than the harshest response law can deliver? The effect is to direct attention away from structural change, including effective regulatory reform, and onto the project of punishment. Focus eyes backward and people won’t look forward. Sacrifice a group of executives, maybe even a company or two, so that business can continue more or less as usual.”
Buell warns that if federal policymakers become obsessed with corporate crime prosecutions, they will be making the same mistake at the corporate crime level than they made at the street crime level.
“Small numbers of high-impact corporate prosecutions don’t have anything to do with the great American incarceration problem,” he writes. “But becoming obsessed with the prosecution of business crime is a version of the American impulse to criminalize. While this preoccupation does not threaten to stuff our prisons, it does divert us from comprehensive policy efforts — in which criminal prosecutions would be an important but limited element — that we have also failed to pursue in areas such as drugs, immigration, guns, and domestic violence, to name a few.”