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Ralph Nader > In the Public Interest > What About Corporate Crime?

The Reagan government did something bold last week, given its oligarchic philosophy. It issued, through the Justice Department, a report on white collar crime convictions and compared their cost to society with bank robbery losses.
First, the statistics. Federal white-collar crime convictions rose 18% from 1980 through 1985 when they totaled 10,733 defendants. The convictions in 1985 broke down to about 55 percent for fraud, 19 percent for forgery, 16 percent for embezzlement, 5 percent each for counterfeiting and for white-collar regulatory offenses.

Sixty four people were charged with offenses involving more than $10 million apiece, according to the Department. While, “in comparison, total bank robbery losses reported to police that year amounted to about $313 million,” the report observed, adding that:

“The average white-collar offender’s sentence was 29 months, compared to 50 months for other offenders, who were more than twice as likely as were white-collar offenders to receive sentences of more than 5 years and less likely to receive probation and fines.”

Missing in the Department’s classifications were data on corporate crime. This has been a gap that has persisted for decades. Without on-going information and statistics on antitrust crimes, corporate bribery, workplace safety crimes, environmental toxic chemical crimes, crimes against consumers, defense procurement crimes and many other dimensions of this epidemic, neither public attention nor prosecutorial priorities are likely to rise to the challenge.

It is corporate crime that is the big ticket item in terms of lives lost, injuries, diseases and monetary expropriation. Consider the tens of thousands of preventable casualties from dangerously built automobiles, hazardous contaminants in water, food and air, and toxic effects of prescribed drugs.

The Reagan regime has talked much about crime in the streets, but it has talked little and done less in the area of corporate crime — as has its predecessors. What is different about this decade is that the disclosures of crimes in the suites are at peak levels and far more resources and action should be committed as a consequence.

The White House is not reflecting much urgency. Its lobbyists are not requesting that Congress provide the resources. In reverse, they are pushing to weaken both the Rico law and the foreign bribery statute which are used against the crimes of commerce and industry.

In September 1986, the General Accounting Office of the U.S. Congress found that the Defense Procurement Fraud Unit of the Justice Department has produced few successful prosecutions of major military contractors, accepted many cases involving minor or no dollar loss and appeared to have lost track of some cases. This is the old story of going after little fish while the big fish swish away.

Three months ago, a House Subcommittee found “significant problems with the present criminal justice system as applied to financial institution fraud.” These firms include banks, insurance companies, finance companies and brokerage houses. The Subcommittee reported large backlogs of open FBI financial institution fraud cases. It estimated that “insider misconduct and appraisal abuse are responsible for much of the $3.75 billion in estimated Federal government insurance losses resulting from just 30 savings and loan bank failures.

The Subcommittee charged that the Justice Department put too low a priority with too few staff on these cases.

The Reagan enforcement record on workplace crimes is not any better. The Safe Workplace Institute revealed in its June 1987 study that the Labor Department “has failed to refer scores of cases in recent years that warrant prosecution because of the Justice Department’s unwillingness to take workplace calamities to court.” Indeed, since 1981, the Occupational Safety and Health Agency (OSHA) has referred thirteen cases to the Justice Department. Twelve cases never went any further. OSHA has been very meek under Reagan, so it can be presumed that when that agency refers cases to Justice, they must have some evidential strength behind them.

Nonetheless, the modest step of releasing a report on white-collar crime has to be recognized as a small glimmer of hope on the horizon. Interested readers can obtain a free copy by calling 1-800-732-3277.