White Collar Crooks and their Punishment

The other day I came across a unique report from U.S. District Judge Charles B. Renfrew in San Francisco. It exam­ines the sentences he imposed on several corporate executives in a criminal anti­trust case. Judges rarely follow up their sentencing decisions and even more rarely write an evaluation of them after they are carried out. But Judge Renfrew properly saw his case as different due to the unorthodox sentences given five individual defend­ants for price-fixing in the paper label industry. He combined suspended jail sentences and monetary fines with a re­quirement that the executives “speak before at least twelve civic and business groups about the offenses and the de­fendants’ subsequent experiences with the criminal justice system.”

The crimes originated in casual con­tacts at trade association meetings which expanded into exchanges of ex­plicit data about pricing decisions and policies. These exchanges led to a divi­sion of the market through pricing agreements. An industry whistle-blower revealed the illegal conspiracy. Private treble damage lawsuits and a criminal indictment followed.

THE DEFENDANTS first pleaded not guilty, then changed to a plea of nolo contendere, which meant they chose not to contest the case. Judges usually inter­pret such a plea as equivalent to an admission of guilt.

In 31 pages of analysis, Judge Ren­frew discussed both his reasons for the sentences and the responses to a ques­tionnaire he sent to antitrust lawyers, judges, law professors and businessmen who heard the defendants’ presenta­tions. Following this analysis, would he impose the same sentences again with the benefit of hindsight? “I simply do not know,” he said.

His uncertainty reflected the diffi­culty in assessing the comparative deterrent impact of fines and public speeches with jail terms on the national antitrust crime wave. The speeches, though often self-serving, were said to be embarrassing to the defendants, ex­cept for one who enjoyed filling this part of his sentence.

However, many people around the country believed that such relatively “light sentences” highlighted once again the double standard the law applies to rich and poor violators. After all, criminal antitrust violations are a form of massive theft of consumers’ money by fixing prices above market levels.

One judge responding to the question­naire wrote: “We judges tend to forget the suffering of those who are victimized by such offenses. Jail for such ‘white col­lar’ defendants is the only real deter­rent. My experience at the bar was that one jail sentence was worth 100 consent decrees and that fines are meaningless because the defendant in the end is always reimbursed by the proceeds of his wrongdoing or by the company down the line.”

STILL, THERE IS something to be said for some kinds of non-jail behav­ioral sanctions, as a supplement or an alternative sentence to incarceration. These are the behavioral sanctions that provide (1) a sensitizing experience for the criminal, (2) a sense of justice felt by the victims, and (3) a durable deter­rence of other possible violators.

It is doubtful whether Judge Ren­frew’s imaginative sentences more than begin to meet these standards. Perhaps the facts of the price-fixing violation do not lend themselves as readily to such behavioral impositions as would, say, criminal violations in the environmental or job safety area. But were more judges to send corporate executives who crimi­nally violate health and safety laws to work with or to assist the victims or their survivors, the Renfrew-type sentencing inclinations would be more effective.

Wealthy executives of coal compa­nies, nursing homes, foundries, and agribusiness, for example, would truly feel the meaning of their violations were they to work in the mines, to help the aged, to toil in the factories, or to har­vest the crops. Also, their temporary co­workers would feel that there is some­thing to the phrase “equal justice under the law,” especially if these corporate criminals also serve some time in prison. All in all, it could help the cause of prison reform.

Readers interested in obtaining a copy of Judge Renfrew’s report can write to him at the U.S. District Court, San Francisco, Calif. 94102.