Robert Reich’s Strange Twist on Corporate Crime

Ever wonder why former Labor Department Secretary Robert Reich never advocated for a strict crackdown on corporate criminals that violate worker safety laws?

Because Reich, currently a professor at the University of California Berkeley, doesn’t believe that corporations can commit crimes.

Reich came out of nowhere last week and made an argument favored by right wing corporate ideologues – a corporation has no mind, and therefore cannot commit crime.

In a column titled BP is Not a Criminal, Reich argues that to convict BP of felonies – including felony manslaughter, as the Justice Department did last week – is “nonsensical.”

“BP isn’t a criminal,” Reich wrote. “Corporations aren’t people. They can’t know right from wrong. They’re incapable of criminal intent. They have no brains. They’re legal fictions — pieces of paper filed away in a vault in some bank.”

“Mind you, I’m appalled by the carelessness and indifference of the BP executives responsible for the disaster,” Reich wrote. “But holding corporations criminally liable reinforces the same fallacy that gave us Citizens United v. Federal Election Commission, in which five justices decided corporations are people under the First Amendment and therefore can spend unlimited amounts on political campaigns,” Reich wrote.

“Can we please get a grip?” Reich asks. “The only sentient beings in a corporation are the people who run them or work for them. When it comes to criminality, they’re the ones who should be punished.”

But isn’t it Reich who has lost his grip on legal reality?

Just ask around to those who have studied and enforced the laws governing corporate criminal liability.

David Uhlmann is former chief of the Environmental Crimes Section at the Justice Department and currently a Professor at the University of Michigan Law School.

“Professor Reich’s frustration with the Citizen’s United decision is understandable but the environmental laws have allowed corporations to be criminally prosecuted since the 1970s,” Uhlmann said. “Congress always has included corporations and their officers in the definition of persons covered by the various environmental statutes. There’s nothing unusual or anomalous about the prosecution of BP for the Gulf oil spill. Indeed it would’ve been a dramatic departure from precedent if the Justice Department had declined prosecution for the reason suggested by Professor Reich.”

Kent Greenfield, a Professor of Law at Boston College, says Reich is making a mistake “that is being made in various segments of the progressive community these days – a focus on the ‘personhood’ question leads to category mistakes and distracts from more genuine issues.”

“Of course corporations are not human beings,” Greenfield said. “But the question is whether they should receive the benefits or obligations of legal status that goes by the name of ‘personhood.’”

“‘Personhood’ can be a good thing at times, even from a progressive perspective. For example, the possibility of criminal liability for corporations allows prosecutors to amalgamate the intent of various individual corporate executives and project them to the firm. So even if individuals can’t be prosecuted, the firm could. And punishment can be real, whether fines or affirmative obligations – analogous to community service – or even the ‘death penalty’ of taking away a business charter.”

“Similarly, the ‘personhood’ of a corporation means that the corporation can be sued, whether by shareholders, victims of torts caused by corporations, or those who suffered discrimination in its offices.”

“Reich is making a point for rhetorical purposes, but it’s a risky one. If one thinks that Citizens United was wrong and corporations should not receive the First Amendment rights of humans, which so many of us do, there is no need to throw out the many benefits of entity status – whatever you call it – to get there.”

Adam Winkler, a Professor at UCLA School of Law, says “corporations have been held liable for criminal conduct for decades.”

“Often this is the only way to serve justice because no one individual is likely to be criminally liable,” Winkler said. “Often, a criminal act is done by one person in the corporation, while another has the criminal intent. What we really need is more criminal liability for corporations, not less. We should consider what kinds of penalties can deter corporations and those who work for them from breaking the law. Prosecutors should consider a corporate death penalty – rescinding the corporate charter – and other forms of punishment. Too often, corporations skirt the law – and then skirt any punishment.”

And Carl Mayer, a constitutional lawyer who wrote a seminal article on corporate personhood titled Personalizing the Impersonal: Corporations and the Bill of Rights and is co-counsel in the Hedges v. Obama case, says that “although Professor Reich has written important books about controlling corporate power in America, he fundamentally misunderstands the importance of holding corporations criminally liable.”

“The root of his misunderstanding is that he proposes some equivalence between criminal law and constitutional law when none exists,” Mayer said. “We could, as a matter of legal principle, hold corporations criminally liable without conferring on them rights as persons under the constitution. Indeed, Professor Reich’s criticism that the Justice Department did not levy a sufficient fine against BP is a non sequitur.”

“The Justice Department should both sock BP with a massive criminal penalty while at the same time pursuing criminal cases against BP’s top directors and managers,” Mayer said.

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