Respectfully submitted by Lawrence E. Rafferty (rafflaw) Weekend Contributor
It never ceases to amaze me that the heads of major corporations and officers of those companies just never seem to go to jail when the corporation’s fingers are caught in the cookie jar. We saw two separate examples of that concept this week. One example is simply a case of corporate greed at employees expense and the other is a brutal and deadly tragedy that caught up the corporate employees, but not their bosses.
In the past, I have written about banks getting away with fines and financial penalties for committing crimes, but today the focus is on two corporations in two different areas of endeavor. I am referring to the corporation formerly known as Blackwater and Electronics for Imaging (EFI). Blackwater as you may recall was in the private security and intelligence gathering business with many government clients, while EFI is a Silicon Valley tech firm with earnings of over $100 million in 2013. They both have one thing in common. They broke the law and one got a slap on the wrist and the CEO and founder of the other and his fellow corporate officers avoided any culpability in a brutal murder case.
Silicon Valley tech firm EFI was in the news recently when the Department of Labor alleged that they underpaid 8 foreign workers. At first glance that doesn’t sound too bad, but the specifics are more outrageous.
” A Silicon Valley company that digitizes images said Thursday that an “administrative error” led to it paying eight workers flown in from Bangalore, India just $1.21 an hour to work 120-hour weeks installing computers in the company’s headquarters.
Electronics For Imaging paid the workers $40,000 in back wages and overtime and a $3,500 fine after the U.S. Department of Labor investigated the payroll violation based on an anonymous tip, a department official told The Huffington Post.
In a statement, the company said it didn’t realize it was illegal to pay workers temporarily in the United States the same wages they earn in their home countries. The $1.21 was equivalent to what the employees made in Indian rupees.
“We unintentionally overlooked laws that require even foreign employees to be paid based on local U.S. standards,” the company said in a statement.” Huffington Post
“We unintentionally overlooked laws…”! Quite an unbelievable response, don’t you think? Here is a company that made over $100 million and has experienced Human Relations people on staff and they thought they could pay workers from India the rate of pay that they are making in India! If you believe that response, I have a swamp to sell you. What is even more puzzling is that the company only had to pay the back pay that should have been paid originally and a $3,500 fine.
You read that right. If the fine is only $3,500, why wouldn’t a greedy corporation keep trying to pay salaries like this? Of course, the suits in HR and in the Executive suite haven’t been fired, and to our knowledge they have not been disciplined, and without an anonymous tip, they would have gotten away with paying $1.21 per hour! That kind of corporate response worked for EFI because they escaped a larger fine or criminal penalties. I wonder how that would work with the IRS if an individual claimed he/she forgot to pay their taxes?
An even more disturbing example of the lack of corporate accountability in the board room is outlined for us in the recent trial of Blackwater employees for the murder of 18 Iraqi citizens. While the Blackwater employees were convicted recently, the founder and CEO of Blackwater, Erik Prince and his fellow corporate officers, have not had to worry about criminal allegations in this case. I will provide a quick review of the Blackwater murder case:
“A federal jury in Washington, D.C., returned guilty verdicts against four Blackwater operatives charged with killing more than a dozen Iraqi civilians and wounding scores of others in Baghdad in 2007.
The jury found one guard, Nicholas Slatten, guilty of first-degree murder, while three other guards were found guilty of voluntary manslaughter: Paul Slough, Evan Liberty, and Dustin Heard. The jury is still deliberating on additional charges against the operatives, who faced a combined 33 counts, according to the Associated Press. A fifth Blackwater guard, Jeremy Ridgeway, had already pleaded guilty to lesser charges and cooperated with prosecutors in the case against his former colleagues. The trial lasted ten weeks and the jury has been in deliberations for 28 days.
The incident for which the men were tried was the single largest known massacre of Iraqi civilians at the hands of private U.S. security contractors. Known as “Baghdad’s bloody Sunday,” operatives from Blackwater gunned down 17 Iraqi civilians at a crowded intersection at Nisour Square on September 16, 2007. The company, founded by secretive right-wing Christian supremacist Erik Prince, pictured above, had deep ties to the Bush Administration and served as a sort of neoconservative Praetorian Guard for a borderless war launched in the immediate aftermath of 9/11.” Reader Supported News
Blackwater and its corporate successors continued their government work even after the Bush Administration, so this issue is not a political issue. The cold-blooded brutality of this incident is troubling, but what is more troubling is that Blackwater officials, including Erik Prince, escaped the long arm of the law. The following narrative from one of the victims of that horrific day is difficult to read, but necessary to understand what the suits in the Blackwater board room allowed to happen. I apologize for the length, but it is necessary.
“What is so seldom discussed in public discourse on the use of mercenaries are the stories of their victims. After the Nisour Square massacre, I met with Mohammed Kinani, whose 9-year-old son, Ali, was the youngest person killed by Blackwater operatives that day. As he and his family approached the square in their car:
“[T]hey saw one armored vehicle and then another, with men brandishing machine guns atop each one,” Mohammed recalls. The armored cars swiftly blocked off traffic. One of the gunners held both fists in the air, which Mohammed took as a gesture to stop. “Myself and all the cars before and behind me stopped,” Mohammed says. “We followed their orders. I thought they were some sort of unit belonging to the American military, or maybe just a military police unit. Any authority giving you an order to stop, you follow the order.” It turns out the men in the armored cars were neither U.S. military nor MPs. They were members of a Blackwater team code-named Raven 23.
As the family waited in traffic, two more Blackwater vehicles became visible. Mohammed noticed a family in a car next to his—a man, woman and child. The man was staring at Mohammed’s car, and Mohammed thought the man was eyeing Jenan. “I thought he was checking my sister out,” Mohammed remembers. “So I yelled at him and said, ‘What are you looking at?’” Mohammed noticed that the man looked frightened. “I think they shot the driver in the car in front of you,” the man told him.
Mohammed scanned the area and noticed that the back windshield of the white Kia sedan in front of him was shattered. The man in the car next to Mohammed began to panic and tried to turn his car around. He ended up bumping into a taxi, and an argument ensued. The taxi driver exited his car and began yelling. Mohammed tried to break up the argument, telling the taxi driver that a man had been shot and that he should back up so the other car could exit. The taxi driver refused and got back into his vehicle.
At that point, an Iraqi police officer, Ali Khalaf Salman, approached the Kia sedan, and it started to slowly drift. The driver had been shot, and the car was gliding in neutral toward a Blackwater armored car. Salman, in an interview, described how he tried to stop it by pushing backward. He saw a panicked woman inside the car; she was clutching a young man covered in blood who had been shot in the head. She was shrieking, “My son! My son! Help me, help me!” Salman remembered looking toward the Blackwater shooters. “I raised my left arm high in the air to try to signal to the convoy to stop the shooting.” He said he thought the men would cease fire, given that he was a clearly identified police officer.
“As the officer was waving, the men on the armored cars started shooting at that car,” Mohammed says. “And it wasn’t warning shots; they were shooting as in a battle. It was as though they were in a fighting field. I thought the police officer was killed. It was insane.” Officer Salman managed to dive out of the way as the bullets rained down. “I saw parts of the woman’s head flying in front of me,” recalled his colleague, Officer Sarhan Thiab. “They immediately opened heavy fire at us.”
That’s how the Nisour Square massacre began.”
“What can I tell you?” Mohammed says, closing his eyes. “It was like the end of days.”
Mohammed would later learn that the first victims that day, in the white Kia, were a young Iraqi medical student, Ahmed Haithem Al Rubia’y, and his mother, Mahassin, a physician. Mohammed is crystal clear that the car posed no threat. “There was absolutely no shooting at the Blackwater men,” he says. “All of a sudden, they started shooting in all directions, and they shot at everyone in front of them. There was nothing left in that street that wasn’t shot: the ground, cars, poles, sidewalks; they shot everything in front of them.” As the Blackwater gunners shot up the Rubia’ys’ vehicle, Mohammed said, it soon looked like a sieve “due to how many bullet holes it had.” A Blackwater shooter later admitted that they also fired a grenade at the car, causing the car to explode. Mohammed says the Blackwater men then started firing across the square. “They were shooting in all directions,” he remembers. He describes the shooting as “random yet still concentrated. It was concentrated and focused on what they aimed at and still random as they shot in all directions.”
One of the Blackwater shooters was on top of an armored vehicle firing an automatic weapon, he says. “Every time he would finish his clip, he would throw it on the ground and would load another one in and would start shooting again, and finish the new one and replace it with another.” One young Iraqi man got out of his car to run, and as he fled, the Blackwater shooter gunned him down and continued firing into his body as it lay on the pavement, Mohammed says. “He was on the ground bleeding, and they’re shooting nonstop, and it wasn’t single bullets.” The Blackwater shooter, he says, would fire at other Iraqis and cars and then return to pump more bullets into the dead man on the ground. “He sank in his own blood, and every minute the [Blackwater shooter] would shoot left and right and then go back to shoot the dead man, and I could see that his body would shake with every bullet. He was already dead, but his body was still reacting to the bullets. [The shooter] would fire at someone else and then go back to shoot at this dead man.” Shaking his head slowly, Mohammed says somberly, “The guy is dead in a pool of blood. Why would you continue shooting him?”
In his vehicle, as the shooting intensified, Mohammed yelled for the kids to get down. He and his sister did the same. “My car was hit many times in different places. All I could hear from my car was the gun shots and the sound of glass shattering,” he remembers. Jenan was frantic. “Why are they shooting at us?” she asked him. Just then, a bullet pierced the windshield, hitting Jenan’s headrest. Mohammed shows me a photo of the bullet hole.
As gunfire rained on the SUV, Jenan grabbed Mohammed’s hair, yanked his head down and covered him with her body. “My young sister was trying to protect me by covering me with her body, so I forced myself out of her grip and covered her with my body to protect her. It was so horrific that my little sister, whom I’m supposed to protect, was trying to protect me.” Mohammed managed to slip his cellphone from his pocket and was going to call his father. “It’s customary that when in agony before death, you ask those close to you to look after your loved ones,” he says. Jenan demanded that Mohammed put down the phone, reminding him that their father had had two strokes already. “If he hears what’s happening, he’ll die immediately,” she said. “Maybe he’ll die before us.”
At that moment, bullets pierced the SUV through the front windshield. A bullet hit the rearview mirror, causing it to whack Mohammed in the face. “We imagined that in a few seconds everyone was going to die–everyone in the car, my sister and I and our children. We thought that every second that passed meant one of us dying.” He adds, “We remained still, my sister and I. I had her rest her head on my lap, and my body was on top of her. We’d sneak a peek from under the dashboard, and they continued shooting here and there, killing this one and that one.”
And then the shooting stopped.” Reader Supported News
The bad news continued for Mr. Kinani because after the shooting ended, he discovered that his 9-year-old son was dead in the car. An while some manner of justice was brought upon the shooters, the executives that were in charge of these murderers are counting their money and continuing in their mercenary trade.
We have seen a rather mundane, but almost unbelievable instance of corporate greed that only resulted in a small fine and then the Blackwater Nisour Square tragedy that resulted in employees being rightfully convicted. However, in both cases, the individuals in control of both companies have escaped any real sense of justice. I guess if you are a corporate officer, you can do no wrong.
When will corporations and their officers feel the same justice that you and I would if convicted of the same crimes? Please explain to me again, just how corporations are people too.
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41 thoughts on “Two Corporate Crimes and No Accountability for the Suits”
In both instances cited the companies were held accountable. With respect to the latter, the murder did result in convictions, on such a charge higher company executives can’t be held criminally liable based solely on normal rules of vicarious liability; there needs to be agency, in this case a conspiracy and either that exists or it doesn’t. The company as a whole remains potentially liable in civil court for the murders.
John Ewbanks……More precisely, I’m wondering why criminal prosecutions seemed to cease post-2008…I have cited numerous cases of charges/convictions against corp. execs. pre-2008.
I have yet to get a response from Mr. Rafferty, or most commentators, as to why these criminal charges seemed to cease in the wake of the “mega-bust” of 2008-2009.
Paul Schulte, to date, has been the only one to address possible reason(s).
Informative article Larry, thank you for posting.
On the first topic, I looked to see if there was a possibility to prosecute the corporation under Title 18 USC Chapter 17 PEONAGE, SLAVERY, AND TRAFFICKING IN PERSONS
Unfortunately in this case there is a required element of essentially coercion or debt peonage at the very least to qualify for enforcement under this. I am very unfamiliar with Federal Minimum Wage enforcement laws but I would venture to say most of these are civil in nature as far as enforcement goes. Yet, bringing in persons from a low wage country to work in the United States for less than minimum wage should in my view be subject to heavy fines and if protracted potentially criminal charge if the abuse is widespread. You are correct in the fact that a low fine still makes doing this financially attractive. Public shaming unfortunately is probably what the companies feared more in this respect.
This is a great article. I wonder why corporate pigs get away with such abuses. That’s one argument against unregulated labor markets.
Reblogged this on Citizens, not serfs and commented:
Mike Appleton- I can make some educated guesses, at best. But I primarily wanted to solicit the others’ opinions on this “post-2008 quirk” of shutting down prosecutions .Thanks for your post.
I have wondered the same thing. I can only conclude that Wall Street has become an uncontrollable political power.
Mike – Wall Street knows which party to donate to.
I would like to submit a question for Mr. Rafferty and any commentators. I previously noted that many corporate execs and other associated with the S&L, junk bond trading, insider trading, etc. were in fact charged, tried, convicted and sentenced in the 1980s, the 1990s, and beyond.
The full magnitude of the casino-games type of speculative excesses became fully apparent in Sept.-Oct. 2008. I think it’s fair to say that the sub-prime loans, the CDOs, the CD Swaps, etc. darn near took down our financial system.
Given that, why is it that, since the 2008 near-meltdown, few if any criminal charges were brought?
The problem with criminalizing such corporate behavior is that in the end it only serves to drive commerce abroad. Much of that is happening now, because of current criminal law efforts and due to unfavorable tax levels in the US.
Even more curious, progressives never seem to make the sme demand of state misbehaviors. Joe Biden’s coke sniffing son, for example, and the bent rules that allowed him in the military.
So again, progressive law is intent in smashing the corrupt businesses that fund the corrupt state they so love.
Pogo – Biden’s son is kicked out of the Navy for coke use, but he will not have his bar license reviewed. Nice to have friends in high places.
Mespo- My time is somewhat limited here, so I may have glossed over your “concise” filibuster-sized columns to rapidly.
I was wondering if the California State Labor Board had any jurisdiction/desire to take action in the case if the exploited, imported workers. That seem to be, at least potentially, an agency “with teeth”, if they’re serious about doing their job.
Re the Blackwater issue, I’m not sure that the CEO/top management if a corporation can be/should be held criminally libel for the crimes of employees, unless there was evidence of gross negligence or conspiracy at the top levels. I’ll re-read your column again to see if I missed any specific evidence you put forward that implicates Blackwater execs.
Finally, there was a period in the 1980s and 1990s when a number of S&L execs, speculative junk bond traders, etc. served long prison sentences. Offhand, I can also think of several corporate heads ( from Rite-Aid, Tyco, and MCI?, I believe, who were sentenced to long prison terms.
Enron execs, Martha Steward and her corporate CEO buddy, are other examples that come to mind, offhand.
So your initial question about top corp. execs not being held accountable is not entirely correct.
I was surprised too Mike.
Reblogged this on Oxygen in Use! Smoking is OK!.
Great post, rafflaw. Frankly, I found it surprising that the Blackwater employees were even prosecuted.
If only Lady Macbeth had hired Blackwater, instead…
Feudalism feeds on itself until it is dead.
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