Corporate Crime Rising

In the midst of a widely publicized corporate crime wave and tens of thousands of casualities from hazardous products from asbestos to pesticides, what do you think Ronald Reagan and all too many members of Congress are doing? Toughening the laws and enforcement budgets? No. They are pushing to weaken these laws.
Item: The defendants’ lobby has joined with the insurance moguls to enact legislation in Congress that would weaken existing rights of injured people under state laws to sue the wrongdoers who caused their harm. As if it is not difficult enough to prevail over manufacturers of dangerous or defective consumer products such as motor vehicles, drugs or poor construction practices, Representatives Richardson and Shumway and Senators Kasten and Danforth want to restrict both the right of injured and sick people and the damages they can recover in court.

In a confidential memorandum by one defendant’s lobby, dated December 12, 1986, called the Product Liability Alliance, the legislators received their most recent marching orders. The components of this anti-victims’ bill would dissolve hundreds of carefully reasoned state supreme court decisions over the years. Manufacturers and sellers also would escape responsibility for injuries if their products complied with federal standards. Guess who has the largest influence in determining the weakness of federal standards? The same group of manufacturers and sellers.

Having scuttled the ability of the federal health and safety regulatory agencies to protect people from dangerous products and practices, the Reaganites now want to obstruct the victims of their policies from having their full say in court against the perpetrators of their pain and suffering.

Item: In a reversal dance to the corporate orchestra, the Reagan Administration is now trying to weaken the RICO law which gives victims of a pattern of fraud a right to sue and collect treble damages and attorneys’ fees from the lawbreakers. RICO is both a criminal and civil statute. The defendants’ lobby cannot tolerate civil RICO. Major cases against securities fraud, fradulent coal companies, banks and insurance companies have succeeded in sending a message of justice to the culprits and deterrence to other businesses so inclined.

Rep. John Conyers is fighting a valiant battle against this lobbying drive to curtail rights and remedies in civil RICO. One would think that the crimes of Ivan Boesky and numerous other fast money swindlers and inside traders would give pause to the defendants’ lobby. One would also think that tight-budgeted chief prosecutors in the Reagan government would welcome all the help that civil RICO can give them to deter crime. Not so. The White House is marching with Wall Street.

Item: Ever since Reagan became President in 1981, the corporate lobby has wanted to dilute the Foreign Corrupt Practices Act which prohibits U.S. companies from bribing overseas in order to get sales. Senator Proxmire has resisted successfully these attempts. But last month, he gave in to overwhelming pressure from members of his Senate Banking
Committee.

Currently the law prohibits payments to agents where a company “knows or has reason to know” that all or a portion of the payment will be passed on to a foreign government official. The new bill bans payments to officials through agents directed by a company “expressly or by a course of conduct.” This language change makes it even tougher for prosecutors to catch the bribers. Another provision would permit “grease payments” that the New York Times earlier charged contained loopholes for bribery “big enough to fly all of Lockheed through.”

Taking the federal copy off the corporate beat, as the RICO and foreign bribery weakening amendments would do, may pass Congress. Less likely is the Richardson bill to be adopted. What these bills reveal, however, is not just the power of the corporate lobby compared with the influence of the people on Capitol Hill. They demonstrate how the Reagan Administration can speak with forked tongue when it comes to law and order against the Big Boys.