Robert Tillman on Why Corporate Fraud Demands Criminal Time

Last month, Robert Tillman and Henry Pontell penned an op-ed in the New York Times titled “Corporate Fraud Demands Criminal Time.”

Robert Tillman St. John's University

Robert Tillman
St. John’s University

In it, they argue that despite all that criminologists know about the consequences of taking the police off the white-collar beat, governments continue to cut staffing of regulatory and law enforcement agencies.

“For example, from 2001 to 2008, the number of agents at the Federal Bureau of Investigation conducting white-collar crime inquiries declined by 36 percent,” Tillman and Pontell wrote. “It is no coincidence that by 2015 federal white-collar prosecutions were at their lowest level in 20 years, even in the wake of a major economic crisis believed by many to have been fueled by fraud.”

“Theories of deterrence are based on a simple idea: that criminals, either individuals or corporations, behave rationally, weighing their actions against possible gains and consequences.”

“To stop crime, we need to tip that calculation in society’s favor. Phil Angelides, the former chairman of the Financial Crisis Inquiry Commission, which examined the causes of the 2008 financial collapse, said the relatively small fines paid by corporations are ‘akin to someone who robs a 7-Eleven, takes $1,000 and being able to settle for $25 and no admission of wrongdoing.’ He added,’Will they do it again? Absolutely, because it pays.’”

Tillman is a Professor of Sociology at St. John’s University in New York.

If you rob a Seven-11, you are going to jail. But if you engage in white collar fraud on a massive scale — no problem. Why can’t we level the playing field?

“The Justice Department will argue that the evidentiary standards are very high here,” Tillman told Corporate Crime Reporter in an interview last week. “There is a lot of truth to that. But at the same time, they went after a lot of people at Enron and got them.”

Do you believe that the system has been corrupted by the revolving door and political influence?

“That would be one reason. Gregg Barak has written a book titled Theft of a Nation. He claims that there is collusion between Wall Street and Washington. I wouldn’t disagree. There is a revolving door at the top between the Treasury Department and Goldman Sachs. But it only goes so far.”

“But there is another factor here – the too big to jail argument. Many prosecutors, particularly in the Justice Department, are aware of the roll that some of these influential firms play in the economy. They are concerned about the impact of prosecuting people at the top or the companies. I’m not agreeing with them. That’s not my position. But they sense that.”

“If you look back at the deal that Eliot Spitzer did with the Wall Street banks in the early 2000s, he was fairly explicit as to why he worked out that deal without actually charging anybody. The reason was — we don’t want to throw employees out of work. It was better to get them to pay a large fine. We are getting something out of them and we are not hurting people who were not involved with these crimes.”

Of the criminologists in the country, how many focus on corporate crime?

“Very few,” Tillman says. “Many people like Henry Pontell and I do sociology. And the sociologists who do criminology tend to have a wider perspective than people trained in criminology or criminal justice. Of all the people who do criminology, a very small proportion focus on white collar or corporate crime.”

“There is tons of data out there on street criminals. It is readily available. Not so in the field of corporate crime. You have to learn a lot. To study burglary, you don’t have to learn a lot about burglary.

“But if you want to study health care fraud, or financial fraud or securities fraud, you are going to spend a good amount of time learning about how these industries work. And that takes time. And the other factor is that it is very hard to get grants to study white collar crime. It’s very difficult. And for those reasons, there is not that much research on corporate crime.”

For years, Ralph Nader has urged the Justice Department to require public companies to report to the FBI and the Justice Department all of their law violations. If the companies reported it, the data would be free online.

“The SEC could simply require a filing for wrongdoing. And we could aggregate it. It’s not a big technical problem. It’s a lack of will,” Tillman said.

“Yesterday I got an invitation to speak at some conference of non criminologists to summarize the current research on white collar crime. I said — that won’t take very long. There is hardly any.”

What group invited you?

“Some accounting group. They wanted to know what was going on in criminology and sociology on corporate crime.”

Who are the up and coming corporate criminologists?

“There may be a scattering of people out there. I just communicated with a graduate student in Germany. But there are not that many.”

Are there jobs for street criminologists but not for corporate criminologists?

“That’s part of it. If you look at academic job listings for criminologists, it’s mostly for people who do street crime. There are not a lot of job prospects for people interested in corporate crime.”

Are there meetings of corporate criminologists?

“No. There is the National White Collar Crime Center in West Virginia. But they don’t seem very active. I stopped going to the national criminology meetings. I had nobody to talk with. How many more papers do I have to listen to on juvenile delinquency? I don’t mean to dismiss that as an unimportant topic. But it seems like there are other things people could be looking at.”

“It is also true that people who work in the field of corporate and white collar crime tend to find themselves at the smaller universities. And the smaller schools don’t have the funds to do the research or get the grants to do the research.”

“When I cover white collar crime, I try to cover health care fraud, which is a gigantic problem. I don’t know anybody, other than Malcolm Sparrow at Harvard, who does this work on health care fraud. I look for a monograph, or a book or something, and other than Sparrow, I can’t find it.”

[For the complete q/a transcript of the Interview with Robert Tillman, see 30 Corporate Crime Reporter 31(14), Monday August 1, 2016, print edition only.]


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