Corporate Crimes

An American Bar Association Commit­tee has completed a report for the Justice Department on economic or business crimes that is sure to focus more top-level attention on tax enforcement efforts regarding these offenses. Already, sig­nals from the Carter White House and from Attorney General Griffin Bell fore­shadow a move to expand the federal government’s resources against corpo­rate crimes in the antitrust, consumer fraud, health care, pollution and product hazards areas. Consider some of the conclusions of the BA Committee report. It found that the federal government had no idea of the scope of economic crime in the country and could not even measure its own efforts against the burgeoning business times that are ascertainable. Unlike street crime categories, there is no uniform codification of “crimes in the suites.”

The FBI, presently enlarging its personnel staff on business crimes, says that many economic crimes do not come to the attention of authorities. Of course, if the authorities cannot or are not looking, the point comes full circle.

THE COMMITTEE concluded “that the total federal effort against economic crime is under-funded, undirected, and uncoordinated.” It urged an increased emphasis on punishing these offenders following their conviction not just for deterrence purposes but to reduce the historic double standard between the rich and the poor before the bar of justice. Importantly, the committee recom­mended that a sentencing judge should weigh the extent of the damage to the victims.

This latter suggestion may almost ap­pear simple-minded were it not for the actual decisions of the courts.

Allied Chemical Company’s secret dumping of the very toxic and cancer-causing pesticide into the James River for years is one such case. Kepone and other chemical wastes from the giant company’s plant have severely damaged Virginia’s fishing industry and caused long-term health risks to workers and to fish consumers beyond the James River area.

In a lengthy case brought against Allied Chemical and its officials by the Justice Department, Federal Judge Rob­ert Merhige finally decided to fine the company $5 million. This sum is the equivalent of less than a day’s gross sales by Allied. The judge reduced his original fine from $13.2 million after Allied gave $8 million in deductible con­tributions (saving $9 million in taxes) to a Virginia environmental fund.

TWO FORMER Secretaries of Com­merce, John Connor and Alexander Trowbridge, head Allied Chemical. They should be exceptionally aware and sensi­tive to the objectives of compliance with important laws. Yet an Allied plant has been accorded the unique sanction of being blacklisted by the Environmental Protection Agency for unrelenting pollu­tion. This sanction renders the plant ineligible for federal contracts and loans. Allied has admitted improper domestic payments of some $335,750 to advance its business. At the same time, the company is asking the federal taxpayer to bail out its yet-to-be completed atomic fuel re­processing installation in Barnwell, S.C., in an amount exceeding $250 million. The Barnwell unit will be recycling plutonium — a lethal substance which is also the stuff of atomic weapons. Here is a giant corporation that smeared Kepone and other chemicals over people and water­ways telling Uncle Sam it wants a subsidy to start handling plutonium.

The Allied Chemical behavior illus­trates the need for the federal govern­ment to assemble data from government regulatory agencies on a company-by­company basis for two purposes. One is to determine by these corporate offender profiles which companies are more seri­ous and systemic violators. And second, to see which companies are repeaters in what areas of criminality.