Respectfully submitted by Lawrence E. Rafferty (rafflaw)-Weekend Contributor
I guess I should not be surprised anymore, but it still saddens me to read that our old friend, Halliburton, has pled guilty to destroying evidence concerning their participation in the BP Deepwater Horizon oil rig explosion and the subsequent environmental disaster in 2010. If they pled guilty why should I be upset? I am upset that the Department of Justice agreed to a $1.1 Billion fine instead of jail time. Once again a corporate “citizen” has committed a crime and no one is going to jail.
I understand the costs involved in taking a case of this magnitude to trial, in order to press for prison time for the culpable officers. However, if this had been an individual would the Justice Department have balked at trying to get a conviction and jail time? I am not the only one concerned with the Justice Department’s soft handling of corporate criminals.
“David Uhlmann, an University of Michigan environmental law professor and former chief of the U.S. Department of Justice’s Environmental Crimes Section, said the settlement raises questions about the absence of criminal charges against the company.
“Halliburton did not admit negligence in today’s settlement but the fact that they agreed to pay over $1 billion raises anew questions about why the Justice Department did not charge the company criminally for its role in causing the Gulf oil spill,” Uhlmann said in an email reply to USA TODAY questions about the settlement.” Reader Supported News
I can’t blame Halliburton for working to get a fine instead of jail time, but how can we stop corporate criminals from breaking the law in the future when the worst case scenario for them is the payment of a fine that could be tax-deductible? Halliburton was also looking at more serious financial uncertainty if it had not reached a settlement because of its role in the Deepwater Horizon fiasco and would have had to deal with the multiple BP claimants. Wouldn’t that give the Justice Department more bargaining power to insist on some jail time?
“With the agreement, Halliburton removes itself from future liability regarding legal claims filed on behalf of thousands of fishermen, business owners and others who said their lives and livelihoods were ruined by the spill.
“Halliburton wanted out,” said LeCesne. “Since their failed cement mixture is a the epicenter of culpability in this incident, they didn’t want to take any further chances.”‘ RSN
This is not the first time that a corporate “person” has committed crimes and only had to face a fine. We have seen it in the numerous Banks who have bought their way out of criminal liability. What will it take for the Justice Department to actually push for a criminal penalty in these corporate bad actor cases?
Shouldn’t a corporation that has allegedly committed crimes run the same risk as any individual when it comes to going to jail for those crimes? This problem of allowing corporations to buy their way out of criminal prosecutions is not a new issue. According to one Harvard Law Professor, Brandon Garrett, it started after the prosecution of the Arthur Anderson case in 2002 and after the conviction was overturned on appeal, prosecutors have been hesitant to go for criminal penalties in corporate cases.
“Federal prosecutors cemented their current approach to corporate prosecutions following the Arthur Andersen trial, which took place in 2002, and which I describe in the book—the jury convicted Andersen, resulting in the collapse of the company, but the conviction was then reversed on appeal. Fearful of the backlash should more high-profile cases end in disaster, prosecutors decided to allow more companies to avoid a conviction by entering deferred and non-prosecution agreements. Those deals took off in 2003, and they first caught my attention in 2006, when just a few dozen had been entered. The new approach was firmly in place when the financial crisis hit in 2007, and perhaps as a result, some companies may have felt they could settle prosecutions as a cost of doing business.” Harvard University Press Blog
Whatever reasons the Department of Justice is relying upon to push for civil fines instead of going for criminal convictions, the result stated by Prof. Garrett above would seem to be an easy decision for large corporations. Pay some money and walk away from the crimes. With the Department of Justice playing softball on corporate crime, why should the large corporations change their ways? As you may recall, Bank of America has been cited at least 6 separate times and no one has yet gone to jail. Time for a change in the Justice Department’s approach, don’t you think?
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The ACLU believes Corporations should be involved in the election process. You know, those right wing ACLU attorneys!!
“Corporations should NOT be involved in the election process.”
But you just said that the NY Times has a I Amendment right. They have unsigned editorials clearly attributable to the corporation, and other corporations have the likes of Chris Matthews and Bill O’Reilly on them. So do they have a right to do these things, or not?
Paul, yes, closely held corporations are those in which a small group of shareholders control the operating and managerial policies of the firm. That includes about 90% of all businesses including Cargill, Koch Industries, Chrysler, GMAC Financial Services, PricewaterhouseCoopers, Mars, Bechtel, HCA, Ernst & Young, Publix. 441 companies which employ 6.2 million people and account for $1.8 trillion in revenues. (forbes) Each of these 441 companies can claim religious exemptions.
Koch Industries and Mars would probably qualify, but the others would have a hard time.
Cool. And it is also legal for my little corporation or the doctor’s incorporated practice to buy advertising to espouse our political positions. We might even “press” out a few pamphlets.
DBQ,
Can my corporation as an entity that represents many people, contribute to a Super Pac that will buy advertising?
Do labor unions have the right to express their support for candidates and buy advertising as the Teachers Union does?.
The SEIU buys campaign ads supporting candidates and positions. Can they do this?
Can I pay some of my share holders to picket, chant and hold pre-made signs advocating for or against a political position? Why or why not?.
……………..
Right now, yes. All of these things are legal. You can even set up a PAC to collect money from anonymous donors and you can use that money any way you choose, even make mortgage payments or buy a new car. Campaign financing is a free wheeling world with few, if any, rules. Go for it.
“You, as an individual, certainly have the right to lobby for whatever issues your heart desires. Your corporation also has the right to lobby/buy whatever legislators it can afford. ”
I have some questions, perhaps you can respond.
Can my corporation as an entity that represents many people, contribute to a Super Pac that will buy advertising?
Do labor unions have the right to express their support for candidates and buy advertising as the Teachers Union does?.
The SEIU buys campaign ads supporting candidates and positions. Can they do this?
Can I pay some of my share holders to picket, chant and hold pre-made signs advocating for or against a political position? Why or why not?.
DBQ – that should be “Can I pay some unemployed people to pretend to be shareholders to picket, chant and hold pre-made signs advocating for or against a political position?
DBQ, You, as an individual, certainly have the right to lobby for whatever issues your heart desires. Your corporation also has the right to lobby/buy whatever legislators it can afford.
The process of electing our (natural persons’) legislators and executives should be reserved for natural persons. Corporations should NOT be involved in the election process.
Your corporation should also be required to follow the laws of an employer. Some laws specifically exempt small businesses, whether incorporated or not. (I’m not advocating a change to these exemptions.) However, no corporation should have religious exemptions. If churches that have employees apart from those with ecclesiastical responsibilities, they should also follow the laws for employers. The whole idea that corporations are people and should have money=free speech rights or religious rights is a really, really bad idea.
bettykath – there are SC cases I disagree with and there are SC cases you will disagree with. In this case, the SC has said that ‘closely held’ corporations qualify for religious exemptions. Ford Motor and GM are not going to get them. Planned Parenthood is not going to get them. However, Hobby Lobby gets them and other closely held corporations like them.
DBQ, According to Diane Feinstein only “official press” you know the LA Times, NYT, should have 1st Amendment Rights. We have a discussion on this and some of the leftist here thought HuffPo, Koz, should be afforded First Amendment protections but Drudge, Breibart should not!! Incredible. With JT calling out their cult leader, and appearing on the hated Fox, they probably would not want this blog protection.
Raf. That is a good thought but as has been pointed out, the corporation represents a group of people, not just myself. And the corporation continues on even if I or any of the shareholders die. The liability protection is for all shareholders of the corporation. The corporation can be held liable, but the liability ends there and doesn’t extend to each and every individual shareholder. No one would want to own a mutual fund if that were not the case.
Re: bettykath. If my corporation and all associated share holders are being adversely impacted by a proposed law you are saying that we have no first amendment protections to be able to speak on behalf of the associated shareholders to protest the action that will harm us?
Freedom of the press isn’t limited to official newspapers either since “the press” in the founding father’s days meant anyone who wanted to print or press a pamphlet would be protected under the First Amendment. If I can print or press a pamphlet to espouse my views, why can’t we shareholders as a group do the same. Print pamphlets or buy space in a larger publication.
Free pics, I think I see your point. I wasn’t specific. The New York Times has first amendment freedom of the press protections. Yes, it’s a corporation so it’s protections should be limited to those related to freedom of the press. It is not a natural person and the other protections for natural persons should not be afforded the NYT.
I just released a comment of DBQ’s from the spam filter.
No Paul. It would be illegal for an individual person to hide their assets from a creditor if a lawsuit has been filed. A corporate shareholder/owner can shield his/her personal assets from corporate creditors legally.
Free pics, following your logic, the corporate person or entity can have it both ways.
The corporate protections of limiting the liability of the shareholder are not a fundamental right though, Raff, the state needn’t concede that. The reason they exist is because of the unfair extension of vicarious liability and if you think that’s a stretch, imagine if you found out that you were personally liable for Old GM’s debts because your 401(k) took money and bought GM shares with it. Without limited liability nobody would ever trade a share of stock, without limited liability I would never form a partnership with anybody because I would be exposing myself to potentially unlimited liability for the ultra vires torts committed by any partner….
Well betty two things: 1. If you say that the NY Times has a I Amendment right and in the next breadth say that corporations aren’t ‘persons’ you need to understand why that is mutually exclusive. It cannot be both because to have the I Amendment protection requires personhood, the key to having the protection of Due Process and 2. If you concede the I Amendment right and just want to quibble over the label, frankly I don’t care, but ostensibly labelling a corporation ‘not’ a person is supposed to have an effect, what effect? If the NY Times has a I Amendment right, why not Citizens United?
@rafflaw, Hobby Lobby was a statutory case. Congress wrote the statute in question which used the term ‘person’ which, because its not otherwise defined in the statute, reverts to the Dictionary Act definition of person which specifically includes ‘corporation’ 1USC1 makes the terms synonyms unless you define it specifically within that statute. Schumer who introduced this thing wrote an amicus brief saying that’s not what he meant, but you know what? He went to Harvard and I may have only gone to Seton Hall, but even I know that the Dictionary Act applies. Congress can change that statute.
sorry about the double post. I am having problems signing into wordpress.
Paul,
If you take advantage of the corporate protections to protect your personal assets, how can you have it both ways and insist that you have personal rights as in Hobby Lobby? You don’t have to be deceased for the corporate veil to protect your personal assets from creditors. I as an individual person cannot hide my assets from creditors.
Paul,
the corporate veil protects living shareholders from creditor actions against corporate debts. If corporations are truly “people” they can’t have it both ways and insist that the corporate status is fine for liability reasons, but take advantage of personal rights as in Hobby Lobby.
rafflaw – I did get an A in business law so I am somewhat familiar with the process of business models. My family was part of a ‘closely held corporation’ so I know how they work as well.
Sadly, you as an individual, can hide your assets from your creditors and people do it all the time. Not that you personally would do it, but it can and is done.
raff, Good point.
rafflaw – part of the idea of the corporation is that it has a life past the actual life of its incorporators.
DBQ,
Just for clarification, by allowing corporations to have the same rights of an individual person, don’t you jeopardize the corporate veil protections of your personal assets from creditors?