What to do about major corporate criminals?

With federal corporate crime enforcement in retreat, the burden of policing corporate conduct will increasingly fall to the states.

And GWU Law Professor Donald Braman says the states will need effective remedies to control corporate wrongdoing.

In a new law review article, Braman and his colleague Theresa Gabaldon – A Charter for Justice: Corporate Enforcement for the New Federalism – propose a novel remedy – restructuring corporations that engage in criminal conduct into public benefit subsidiaries chartered at the state level. 

“This remedy will allow states to directly address the harms of culpable corporate conduct without destroying the value corporations create for states and their residents,” they write. “Rather than relying on ineffectual penalties like fines or value-destroying remedies like dissolution, reforming corporate conduct through state-chartered public benefit subsidiaries realigns incentives with the core justification of the corporate form: not targeting the public for value extraction, but the generation of real value through fair and transparent dealings.” 

“Our proposal would have the added benefit of helping states to reinvigorate state corporate law, a field desperately in need of meaningful competition and innovation. States that wish to fully harness the power of the corporate form to spur innovation and generate value, we argue, should embrace their own power to reshape corporate purpose as a just and effective form of criminal enforcement.”

Where did you get the idea of public benefit corporations as a remedy for corporate crime?

“The remedy we propose is not one we came up with,” Braman told Corporate Crime Reporter in an interview last week. “It’s one that other corporations and prosecutors have come up with in the past. Purdue Pharma notoriously engaged in a host of practices that were found to be illegal and some of them criminal. And as part of their negotiations with state attorneys general and with the Department of Justice, they agreed to restructure into a public benefit corporation that could still profit from sales and production of vital medical and pharmaceutical products they generate and market to the public, but also to remediate the harms they have generated through their wrongful conduct.”

“We have lost most of the federal restraints on corporate conduct over the last fifty years. And as federal enforcement is collapsing, we asked – what can we do? One option is for states to exercise their sovereign power over corporations that conduct business inside the state. And where a corporation engages in conduct that a state deems to be criminal, require that corporation to incorporate as a public benefit corporation and include restraints within the corporate charter itself to prevent that kind of conduct and remediate the harm that the corporation has imposed on the public.”

The court in Purdue Pharma imposed a public benefit corporation remedy?

“There was an attempt to restructure it as a public benefit company known as Knoa Pharma. But the proposed settlement cleared the family that owned the company of various forms of liability. And the Supreme Court found that those terms could not be wrapped into this settlement. But all of the parties wanted to restructure Purdue Pharma into a public benefit corporation.” 

“There are some other opioid companies that did restructure into public benefit corporations.” 

Are there any other major corporate crimes that were resolved with a public benefit corporation?

“Outside of the opioid industry, I can’t think of any. But there are plenty of corporations that restructure into public benefit corporations all the time. And some of them are very large – like Danone and Patagonia and King Arthur Flour.” 

But those are done voluntarily. Those are led by progressive leaders who say – we want more than the bottom line, we want to benefit the public as a whole.

“Yes. They want to align their profits with the well being of the public. And that was the original intention of the corporation.” 

“We invented corporations to benefit the public. And states are the sovereign entities that grant corporations the ability to do business in the state, presumably for the benefit of the residents of the state, not to harm the residents of the state.”

“If a corporation never engages in criminal conduct, there is no need to impose a public benefit corporation. This is a very targeted reform only for corporations engaging in criminal conduct.” 

One of the reasons most corporate crime prosecutions happen at the federal level is because of the resource constraints at the state level. I remember covering the state of Indiana’s prosecution of Ford Motor Company for reckless homicide. That case was brought by a conservative DA in northern Indiana who was outraged by the deaths of two teenage girls whose Ford Pinto was rear ended and they burned to death in the car. That prosecutor was facing Ford’s well funded legal team and he had to rely on interns from Notre Dame Law School. 

At the federal level you had a Justice Department Fraud section, all of the U.S. Attorneys, the SEC and other regulatory agencies. How will the states handle these cases without the resources?

“The resource issue is real, but these are not prosecutors at the state level who will just throw up their hands and say – these corporations are too big to prosecute. They believe in the rule of law. So they are trying to figure out how to develop responsible cases in light of the resource imbalances.” 

“Public benefit restructuring in many ways offers a useful and attractive option for not just public servants at the state level, but for the corporations themselves. Corporations arguably do not lose anything by restructuring into a public benefit corporation that does not inflict harm on the public – except for responsibility for the harm they inflict on the public.” 

Braman has spent most of his career studying street crime. He says he was stunned when he learned about the far greater death toll from corporate crime.

“If you look at the numbers of deaths that result from classical homicide, from premeditated murder, to reckless or negligent homicide, every year the death total has been fairly steady in the United States,” Braman said. “Most recently it’s been around 20,000 to 30,000 deaths a year. That death toll is relatively small if you compare it to the death toll from corporate harm that many researchers and judges believe involve criminal conduct. That includes the opioid epidemic, which is estimated to cause around 80,000 deaths per year – two or three times as many people killed by violent crime.” 

“We have been reducing the pollutants from fossil fuels. But still hundreds of thousands of people die every year from particulate pollution from fossil fuels. While estimates vary, one of the most recent estimates is about 350,000 deaths per year.” 

“And then there are tobacco deaths. Those kill almost 500,000 people per year.” 

“In each of those industries, there is substantial evidence that the executives and board members of those companies, and their industry advocacy groups knew of the risks of these types of deaths. And in criminal law, if you cause a death with a culpable mental state, we call that homicide.”

“I’m very concerned about the number of deaths being generated by large corporations. And my co-author Theresa Gabaldon and I are very concerned about the potential for escalation, especially in the area of climate change. And it’s going to get worse for the foreseeable future. And it’s going to produce likely globally catastrophic effects. That’s according to an internal industry memo.” 

Your career has been focused on street crime. 

Why the shift into corporate crime?

“I see my career as an attempt to try to help people,” Braman said. “As I was researching the scale of harm from crime and the levels of incarceration related to the various harms, I sort of stumbled into the data on corporate crime. And I was stunned. I couldn’t believe how much harm corporations were getting away with knowing they were getting away with it – which makes them culpable. I started talking with federal prosecutors, former federal prosecutors about it. And the more I learned, the more shocked I was. The notion is that a corporation under investigation can hire their own third party investigator to propose a solution to the federal government that involves not just a deferred prosecution agreement, but a non prosecution agreement and some relatively minor penalty. That seemed to me to be wrong. I had not been previously aware of the benefits corporations had in the criminal context.”

“Coming from a street crime context and discovering for the first time what happened in the corporate crime context, I was just shocked. I started talking with my colleague Theresa, who is right across the hall from me, and she confirmed what was going on. And many of the corporate crime academics who study this confirmed it.” 

[For the complete Interview with Donald Braman, see 39 Corporate Crime Reporter 24(13), June 9, 2025, print edition only.]