Why There Are No Corporate Criminals in America

 "I'll believe corporations are people when Texas executes one."- Robert Reich

By Cory Doctorow  / Pluralistic

If (per the Gospel of St Romney), "corporations are people (my friend)," what kind of people are they? In 2003, Mark Achbar's documentary "The Corporation," made the compelling case that corporations are sociopaths (and hey, look, there's a sequel!).

Ted Chiang says corporations are a procedural version of the genocidal Skynet AI that haunts the Terminator franchise:

Or, as Charlie Stross calls them, "Slow AIs":

When I'm feeling frisky, I call corporations "immortal colony organisms that treat human beings alternately as a source of nutrients or a form of inconvenient gut flora."

In *Citizens United*, the Supreme Court declared that corporations were the sort of autonomous persons that have speech rights, and then in *Hobby Lobby*, it said that corporations were inseparable from their founders, and not autonomous at all.

Corporate personhood serves a convenient fiction, in keeping with Frank Wilhoit's observation that conservatism consists of one proposition: "there must be in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect."

Or as Robert Reich once put it: "I'll believe corporations are people when Texas executes one."

The reason Reich's quip lingered is because it expresses the obvious (but seldom acknowledged) fact that corporations are the kind of people who break the law without fear of punishment.

That's the theme of "But We Haven't Got Corporate Criminal Law!" - an important (and scorching) essay for the Journal of Corporation Law by Mihailis Diamantis (U Iowa/Law) and Will Thomas (U Mich/Business) for a symposium entitled "Imagining a World Without Corporate Criminal Law."

The authors propose that we don't have to imagine a world without corporate criminal law, because, functionally, that's just the US system, whose corporate criminal law satisfies none of the conditions of a true criminal law system.

A true criminal law system possesses one or more of the following traits: a uniquely demanding procedure; punishment for the worst conduct, the harshest penalties, and the expression of moral condemnation. The US corporate criminal system has none of these traits.

And while the US may not have a corporate criminal system, it has a fuckton of corporate crime. The FBI estimates that corporations commit 20x more crimes than natural purposes, crimes committed on a vast scale that even the most prolific human criminal can't touch, thanks to the enormous resources that corporations can mobilize to criminal ends.

Corporate crime isn't limited to "white collar" crimes like wire fraud or insider trading: in recent years, corporations have settled criminal claims for homicide, arson, drug trafficking, dumping and sexual offenses. That's even scarier when you realize the "best estimates of the dark figure of corporate crime suggest that only 5% of corporate crime ever comes to light." Worse still: governments in Europe, Latin America and Asia "are looking to the United States as a model for implementing their own corporate criminal law."

The US model is the worst possible model for international adoption. Corporate convictions are "vanishingly rare": 8.6% of US adults have been convicted of a felony, while 0.03% of US corporations have received felony convictions.

Why can't we convict corporations? For one thing, we don't try. Federal prosecutors sought a total of 39 corporate convictions in 2020 (but they sought convictions in 51% of the 90,000 instances in which employees committed misdeeds).

Those rare instances in which fed prosecutors *do* seek criminal convictions are not evenly distributed: "the larger a corporation is, the more likely it is to commit crime but the less likely it is to be prosecuted for it once discovered."

Or, as Bill Black put it: "The best way to rob a bank is to own one."

What does it mean to be too big to jail? Over the past decade, there were only 43 federal criminal trials with corporate defendants.

Rather than trials and convictions, corporate criminals get "deferred prosecution agreements" (DPAs) in which they pay small-dollar fines and (in 20% of cases) don't even have to admit their guilt.

A DPA isn't like a plea bargain: if you or I face criminal charges and opt for a plea, our punishment will be anchored to the criminal sanctions we'd face if we went to trial - but the whole point of a DPA is to avoid those sanctions.

The authors use Boeing and the mass murders it committed with the 737 Max to show that the US doesn't have a corporate criminal justice system. Boeing killed 346 people by cutting corners about safety, ignoring warnings, and pressuring the FAA to approve its faulty products.

Their sales teams misled customers, and then the company deflected blame on pilots. The crime was the result of a "deeply ingrained" corporate-wide culture of ignoring safety and prioritizing profits over human life.

Boeing was a repeat offender that had killed people before with faulty products that resulted from these corporate defects. It had already settled corporate criminal cases related to these murders.

You couldn't ask for a corporate criminal defendant more deserving of punishment. Instead, Boeing paid a fine equivalent to 3.3% of its revenues (12.7% of its profits) - if Boeing was the median American, that would be a fine of $4,315  - for killing 346 people.

If you or I plead guilty to murder, we would face some form of post-plea oversight. The Boeing settlement also included a(nother) nonbinding promise to do better, without any requirement to prove to its regulators that it was making good on that promise.

Boeing tells us what kind of person a corporation is: a person who can commit murder and get away with it. As the authors write: "we find it very easy to imagine a world without criminal law. We need only open, rather than close, our eyes.

A true system of corporate criminal law would target "the worst offenders, not just the smallest ones," and impose sanctions that would act as real deterrents to future crimes.

That means larger monetary fines, sure - but also "fines designed so that their impact is more acutely felt by key decision makers rather than by non-culpable shareholders, low-level employees, and consumers."

Romney took a lot of heat for declaring that  corporations are people, but then he became a Never Trumper Hashtag Resistance Hero, decrying Trump for insisting that the right kind of person be exempted from punishment for crimes (remember "That makes me smart"?).

But even a cursory look at the crimes committed by Bain Capital under Romney's leadership reveals that it's not the impunity that bothered Romney - it was the method.

Romney subscribes to Wilhoit's idea of "in-groups whom the law protects but does not bind." But Romney believes that the "in groups whom the law does not bind" are corporations, simultaneously autonomous (Citizens United) and inseparable (Hobby Lobby) .

Trump's sin is to commit crimes in his own person as well as the person of his many baroque mist-shrouded corporations - to insist that natural persons can join the unbound in-group without the intervening scrim of corporate personhood.

Because while the Diamantis and Thomas focus on corporate impunity, they could just have easily described the impunity of the ultra-wealthy, a phenomenon entangled with - but separate from - the corporate person's immunity to prosecution.

The kind of person who controls a corporation that escapes prosecution is also the sort of person who escapes prosecution themselves. Romney knows this, but he doesn't want us to think too hard about it.

Because actual people (unlike corporate "people") *do* have bodies the state can lay hands on. They have homes that can be picketed. They can face the shame and ruin of personal sanction.

Corporate criminal prosecutions might change insurer and shareholder tolerance for rapaciousness - but ending elite criminal impunity would actually ruin the lives of the people who benefit from these crimes.

To be clear, we should have both kinds of criminal justice: criminal sanctions against corporate crimes - but also criminal sanctions against the living, breathing human beings who direct them.