CORPORATE CRIME REPORTER
Richard
Epstein Says It’s Time to Get Rid of Corporate Criminal Liability
20 Corporate Crime Reporter 47(1), December 3, 2006
University of Chicago Law Professor Richard Epstein isn’t one to mince
words.
Now he’s saying it’s time to eliminate corporate criminal liability.
“The current position is absurd,” Professor Epstein told Corporate Crime Reporter in a wide-ranging interview. “Anytime there is a mid-level official inside a corporation that does something illegal, the corporation may be indicted for that even if it had supervised or monitored the activity in order to prevent it. That is the current law.”
Epstein also wants the Thompson memo to be put away for good.
“It is one of the most terrifying memos I have ever read in my life because of the single mindedness of its author and the utter blindness to the competing considerations of how this works,” Epstein said. “And in fact, last week Larry Thompson came out and said that he only meant for this to be used in the extraordinary case. But now it is standard. The definition of extraordinary is this case. My case is always extraordinary and therefore we always use it.”
In an op-ed piece titled “The Deferred Prosecution Racket” in the Wall Street Journal last week, Epstein argued that “a conviction carries at most a million-dollar fine, but simple indictment, which lies wholly within the prosecutor's discretion, imposes multibillion-dollar losses.”
“Faced with that kind of pressure, the indictment is all that matters,” Epstein wrote. “Yet given these weird incentives, DPAs no longer serve the public interest. The agreements often read like the confessions of a Stalinist purge trial, as battered corporations recant their past sins and submit to punishments wildly in excess of any underlying offense.”
When asked who held the balance of power – corporations or government – Epstein said “it is pretty clear that the government has more power.”
“Sarbanes-Oxley was the most massive transfer of corporate power from boardrooms to government that has taken place since the Securities and Exchange Act in the 1930s,” Epstein said.
“It’s a sad but true story that after Ronald Reagan, the impulse in this country has been largely pro-regulation,” Epstein said.
He called President Bush “a supine and uninformed Republican President.”
And “in terms of business, by far the best President has been Bill Clinton.”
“Not because he had a deep conviction in the private marketplace, but because he understands that a President to some extent is hostage to the bond market,” Epstein said. “And he was willing to let the corporate side alone if he could get some of his social objectives. And most libertarians on these corporate issues would rate George Bush II as a kind of D- and they would rate Clinton as some kind of a B.”
Epstein might be a libertarian hero, but he’s never read Ayn Rand.
Why not?
“No particular reason,” Epstein said. “She is essentially a very smart lady writing about personal character. And I’m one who is trying to put together legal institutions.”
Close family members – starting with his wife Eileen – disagree with Epstein’s politics.
“She is the executive fundraiser for the Chicago Children’s Choir,” Epstein said. “Anything that she works with on a day-to-day basis – her views are very similar to mine. But on larger political issues, she is systematically more pro-government than I.”
Epstein is one of the most prolific legal academics of his generation.
He’s currently at work writing a number of books, including one on consent decrees for the American Enterprise Institute – funded by Microsoft.
He consults for a wide range of corporate clients.
“I’m all over the lot,” Epstein says. “I have no particular speciality. Presently, I’m working on antitrust cases – some on the plaintiff side, some on the defendant side. I do work on discrimination cases, disability, food issues before the Food and Drug Administration. I have done some pharma work, but less than many people would have supposed, particularly in recent years.”
(For a complete question/answer format transcript of the Interview with Richard Epstein, see 20 Corporate Crime Reporter 47(9), December 4, 2006, print edition only.)
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