Why should corporations get away with murder?

Defending the Double Standard -- by Russell Mokhiber and Robert Weissman

A corporation commits a crime.

A federal prosecutor has the goods on the company.

But the prosecutor chooses not to convict the corporation.

Instead, the prosecutor befriends the attorney for the corporation.

And together they turn on the individual executives.

This is the new pattern of corporate crime prosecutions.

Increasingly, corporations are getting a free pass from prosecutors who don't want to do anything to harm the corporate entity.

In fact, today it is rare that a major corporation will be convicted of a crime that it has committed.

Instead, the corporation will toss overboard a number of executives -- all in an effort to save the corporation from criminal sanction.

When asked why corporations shouldn't be convicted of crimes they clearly committed, corporate defense attorneys come up with the same explanations.

Corporations are legal fictions.

Better to convict the individuals at the helm of the corporation and save the corporation.

Mary Jo White, former U.S. Attorney in Manhattan and currently partner at Debevoise Plimpton, put it this way recently:

"There is no question that the primary focus of prosecutors is and remains guilty individuals. The entity is a corporate fiction. But it is obviously an important entity to those who work in it and those who invest in it. Prosecutors should think -- why is it that I need to do anything to this company? Why is this such a rare case of wrongdoing that it demands something on the criminal side?"

Last month, Corporate Crime Reporter released a report that profiled 34 cases where prosecutors -- confronted with solid evidence of corporate criminal wrongdoing -- have chosen instead to enter into a non-prosecution agreement or a deferred prosecution agreement with the corporation.

Seventeen of the 34 cases were settled with non-prosecution agreements.

Under a non-prosecution agreement, the prosecutor agrees not to criminally prosecute the corporation in exchange for fines, cooperation, monitors and changes in the corporate structure.

The other 17 cases were settled with deferred prosecution agreements.

Under a deferred prosecution agreement, the prosecutor charges the corporation with a crime, but agrees to drop the charges if the corporation fulfills its promises to the prosecutor.

The report finds that prosecutors have entered into twice as many non-prosecution and deferred prosecution agreements with major U.S. corporations in the last four years (23 agreements between 2002 to 2005) as they did in the previous 10 years (11 agreements between 1992 to 2001).

And it raises the question -- are these companies too big to indict, too big to convict?

Increasingly, non-prosecution and deferred prosecution agreements have become the settlements of choice for prosecutors and corporate defense attorneys.

We believe that there is a good chance that the rise of these agreements has undermined the general deterrent and adverse publicity impact that results from corporate crime prosecutions and convictions.

Being a corporate criminal carries the heavy weight of adverse publicity -- and the potential of being barred from doing business with federal, state and local governments.

Also, individual citizens might shy away from doing business with convicted companies.

And it could very well be that the rise of these deferred and non-prosecution agreement deals represents a victory for the forces of big business that for decades have been seeking to weaken or eliminate corporate criminal liability.

The antipathy of business and business lawyers toward corporate criminal liability is deep and far reaching.

Many advocates for big business openly advocate for the elimination of corporate criminal liability.

One such person is Jeffrey Parker, a Professor of Law at George Mason University.

Parker argues that corporate crime simply does not exist and cannot exist.

"Crime exists only in the mind of an individual," Parker said. "Since a corporation has no mind, it can commit no crime."

Parker argues that a since a corporation is not a living, breathing human being, it should not be treated as a living, breathing human being in the criminal law arena.

But if a corporation is not a person for purposes of the criminal law, then why should it be is a person for the purposes of constitutional law -- where it is considered a person and is granted protections, including First Amendment guarantees of political speech and commercial speech, Fourth Amendment safeguards against unreasonable searches, Fifth Amendment double jeopardy and liberty rights, and Sixth and Seventh Amendment rights to trial by jury?

A double standard is being set -- if not by law, then by prosecutorial discretion.

On the one hand, if you are a living, breathing human being who commits a crime, you will be prosecuted, convicted and sent to prison.

On the other, a large corporation will be deemed too big to convict and granted a deferred or non-prosecution agreement.

And it is a double standard that is openly defended by corporate crime defense attorneys.

Last year, we asked Joseph Savage, a criminal defense attorney at Goodwin Procter in Boston about the double standard.

"Is there a double standard?" he asked. "Absolutely. And there should be. There can be no crime of a corporation without an individual act. It can never be the other way around -- a corporate crime without individuals acting. To me, there is a double standard. There ought to be a double standard."

(Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter. Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor. Mokhiber and Weissman are co-authors of On the Rampage: Corporate Predators and the Destruction of Democracy)