What Merits the Corporate Death Penalty?

Friday, May 27, 2011

Welcome to Politics Bites, where every afternoon at It's A Free Country, we bring you the unmissable quotes from the morning's political conversations on WNYC. The Supreme Court upheld an Arizona law that allows the state to impose the "corporate death penalty" for companies who utilize illegal workers. Today on The Brian Lehrer Show, Les Leopold, executive director of the Labor Institute and author of The Looting of America: How Wall Street's Game of Fantasy Finance Destroyed Our Jobs, Pensions, and Prosperity—and What We Can Do About It, discussed the law—and what else should qualify corporations for the "corporate death penalty."

Bigger issues than immigration

Businesses operating in Arizona face a "corporate death penalty" if they are discovered to knowingly employ illegal immigrants. The threat of lost licenses returns attention to the debate about illegal immigration in the United States, but Brian Lehrer was more intrigued by the idea of death penalty as punishment for other, perhaps more damaging forms of corporate malfeasance.

Les Leopold was, too. He said that the conversation about undocumented workers distracts from the fundamental problems with our economy. Whether it's the death penalty or something less drastic, opportunities for more more government oversight and intervention should be welcomed by the public, especially in the wake of the financial crisis.

It opens up a Pandora's box about what we can actually do with recidivist corporations who are doing us in. I'd like to see the same kind of rule applied to Wall Street; the crimes involved there are so much greater in magnitude...and no one has been punished. Imagine if a hedge fund got caught involved in systematic insider trading and lost their license and could never do business again.

Undocumented workers, unsafe conditions

One caller brought up the argument that it would be consistent with last year's Citizens United ruling for corporations to face the same criminal penalties as individuals. If corporations are people and therefore have the right to free speech, then they are also people when it comes time to assess wrongdoing and dole out punishment.

"They've always had it both ways," said Leopold. "When personhood helps corporations maintain profitability and their position in society, then it's fine. When you get over into the area of criminal liability and such, then it's not fine." He points to occupational hazards and on-site deaths as potential grounds for criminal action.

There's a huge difference between a Department of Energy weapons site and, let's say, a private oil refinery. The weapons facilities literally have no deaths. They try to make sure production is safe and they're meticulous about it.

Not so in the private sector. What that tells me is that it could be meticulous in the refinery. Every time there was a near miss it would be investigated, the root cause found and you would do something about near misses before they built up and you had a massive explosion. It's doable, but there's nothing to force it to happen. The possibility of losing a whole entire business may in fact turn the regime in the private sector to look like it does in the energy department.


More in:

Comments [29]

Harrison Bergeron from Fair Lawn NJ

Mr. Leopold: "... opportunities for more more government oversight and intervention should be welcomed by the public, especially in the wake of the financial crisis".

!!! ??? !!! ??? !!! ??? !!! ??? !!! ??? !!! ??? !!! ??? !!!

That's beyond ridiculous. It's another discussion, but government set up the conditions that brought about "the financial crisis", by government monetary policy. The big banks and brokers simply played according to the government's rules.

More government does not fix anything. The government's rules just provide guidance for big business guys who will act in their own selfish interests anyway. The government's rules tell them exactly how far they can go but still stay out of jail.

Mr. Leopold: "... Every time there was a near miss it would be investigated, the root cause found and you would do something about near misses before they built up and you had a massive explosion ...".

This mechanism is already in place. Every large plant has a safety department to do exactly these types of investigations and they do so. The problem is, they never find the real causes of the problems -- because the problems are direct results of management cost savings measures, such as laying off maintenance workers so that fewer inspection rounds are made and less preventative maintenance is performed. This gives the appearance of immediate cost savings but the certainty of failure in the long run.

Back on point: If society is to meet out any punishment to corporations, it should be directed to the corporate officers, not to the employees, share holders and retirees.

May. 31 2011 08:41 AM
Todd from Albany

This one would be pretty timely: Massey Energy Co.'s Upper Big Branch

May. 29 2011 09:00 AM
Danny from Washington Heights

You'd also have to show a pattern- that the criminal behavior is the normal course of doing business- thereby equating the offending corporation with a criminal enterprise.
Seems like a fair hurdle.

May. 27 2011 11:48 AM

Here's an interesting link to a summary of this idea from 2003-4:

May. 27 2011 11:12 AM

"Your neighbor" needs to get a grip on reality. Apparently your neighbor must either be excessively wealthy or a politician who has preserved his own health benefits while trying to make sure the rest of us do not have access to affordable insurance. I cannot tell you how horrible it is to spend $30,000 per year on health insurance as someone who is self-employed only to have that so called gold plated insurance plan deny coverage for just about everything. I'd love to have a death penalty for the health insurance industry. It is amazing the ridiculous excuses they come up with for making a profit while denying me the coverage I paid for.

May. 27 2011 11:12 AM
Barbara from Greenpoint

Seems there are plenty of people who think they are doing good by attempting to put the Horse Drawn carriage industry permanantly out of business. Basically because it is not a perfect enough existance for horses. I'm glad so far our city council has had a level head about this. Watching this argument go on, is similar to the argument of hiring undocumented workers. So is everybody ready to just start wiping out small businesses because they don't behave perfectly enough, as we let aggregious horrors take place in nice big important corporations? As if aggregious horrors do not befall horses out in the perfect country barns.

May. 27 2011 10:39 AM
oscar from ny

death to the federal reserve in the us..and send those israeli mafiosis back..militarise our reserve...firget about the imigrant who want to wash apples..etc etc

May. 27 2011 10:28 AM

The equally interesting 'side-question' that the court will be dealing with the legalities of employers using the federal govt.'s e-verify system to check a potential employees legality is much more interesting when viewed in tandem with the ruling on the 'corporate death penalty'. I can't help but wonder who this truly benefits. Large agribusinesses and other large corporations will end up marking it up to the 'cost of doing business' while small businesses like restaurants and other small industries will inevitably be the ones backed against the wall fighting the law enforcement arm of the land. Inevitably it also seems this will tie up numerous individuals (legal or illegal) in legal limbo costing us all piles of money to litigate the court cases.

How will this country operate and grow, without a more open immigration law? And how is this authorization to 'kill a company' based on violations of ridiculously disingenuous laws against immigrants going to help us 'build a better economy'? I can't get my head around the dubious nature of these politics.

This country would not run 'efficiently' without the immigrant labor that we ignore, lock away, or ship back home to their own demise.

May. 27 2011 10:26 AM
Amy from Manhattan

I'd add Massey Energy to the list.

May. 27 2011 10:26 AM
Tony from Downtown Brooklyn

The very premise of this question implies that companies are "beings." Citizens United aside, that's a flawed question. The decisions that we're trying to influence with laws like this are made my human beings. A more useful question would be "should the officers of companies who are found to be negligent be held criminally responsible for the transgressions of the companies they run." I think the answer should be an emphatic YES. The BP oil spill in the gulf was likely caused by decisions that individuals made to save time and money. If we added the potential of criminal prosecution to the calculus that determined that a less safe, less time intensive, route was best; it's likely that a choice less likely to cause loss of life and income to so many in the gulf would have been made.

May. 27 2011 10:25 AM
Edward from NJ

If a corporation loses it's license under this law, is there anything to stop the owners from creating a new corporation that does the exact same thing?

May. 27 2011 10:25 AM
Jill from Manhattan

How exactly does a corporation receive the death penalty?? Is the Corp shut down? Are ceo's lethally injected??

May. 27 2011 10:24 AM
Laurie Spiegel from Chicago

Coal mines that have hundreds to thousands of safety violations year after year shouldn't have the right to go on "living". We've seen appalling mine disasters going back forever right up to the present.

Fringe benefit: Another way to shut down polluting coal mines.

May. 27 2011 10:24 AM
Mical Moser from Brooklyn

I love the idea of considering a corporate death penalty. Mass murder would be a great reason for trial.

May. 27 2011 10:22 AM

Although most folks here seem to think that Corporations are not individuals. Us Law seems to disagree. Ever since the 1870's untill 1890 US corporations have been protects as individuals. Recent decisions have supported the pro-business property rights and individual freedoms. I leave it to you all intelligent people to read HOW it came to be so :). LOL.

May. 27 2011 10:21 AM
Danny from Washington Heights

Criminality is the key. In Brians other examples, if a creative lawyer could show, not just negligence, but criminal negligence- which is a higher threshhold- he or she could bring an action under RICO. Under the right circumstances this could shut the corporation down even absent a new law.

May. 27 2011 10:20 AM
Susan from Manhattan

Can't the individual's who own the company just re-incorporate under another name and do business all over again?

Also, was there a corporate death penalty in the Ford Pinto case?

May. 27 2011 10:19 AM
Dominick from New Jersey

If corporations want to enjoy the benefits of being considered "persons" for free speech and campaign contribution purposes, they are obligated to be considered persons subject to the same laws and restrictions as the rest of us. They want the rights, they also have the responsibilities that go with it.

May. 27 2011 10:19 AM
Debra from NY

The corporate death penalty is inappropriate because it victimizes the innocent. All the people who work for are large corporation are not necessarily responsible for whatever crimes have been committed by management. Why should they lose their jobs because of that? It is more appropriate to target the individual at fault rather than throwing the baby out with the bathwater.

May. 27 2011 10:19 AM
Your Neighbor

Will we be able to apply the corporate death penalty to the Democrat Party once people start dying from sub-standard and rationed health care implemented under ObamaCare?

May. 27 2011 10:19 AM
Michael A Dobbs from brooklyn

The Supreme Court decided that corporations had many of the same rights as people. But they created no provision for punishing corporations the way we can punish people. The "corporate death penalty" is the obvious answer.

More laws like this need to be passed. And we need to figure out how to "imprison" a corporation as well. Personally, I'd like to see the board of directors and everyone with a VP title be considered a "necessary and causal" part of the corporation and they could be arrested and imprisoned for things like the BP disaster. (The question of who / what part of a corporation can go to prison is important. After all, the bacteria that lives inside you goes to prison if you do, though they don't deserve any sort of punishment. Clearly some individuals in a company are not important enough to the structure of the company to need to be imprisoned).

May. 27 2011 10:17 AM
Ken from Soho

Yes; the penalty would be cancellation of their articles of incorporation.

May. 27 2011 10:17 AM
Bill from Midtown

A corporation designated as "too big to fail" should get the corporate death penalty.

May. 27 2011 10:16 AM
Matthew from Brooklyn

Using the term 'death penalty' implies that corporations have some kind of independent life outside of the legal framework, which the state can take away. What they have is more like a license to operate, and revoking that license, as can happen to dangerous and irresponsible drivers, is not 'death', but taking back a privilege granted by the state, which the corporation has proven it doesn't deserve.

May. 27 2011 10:15 AM
David from Queens

You cant kill something that's not a living creature.

May. 27 2011 10:12 AM

Yes!! If corporations are people under the law, and have free speech rights, they should also face the same penalties under the law!

May. 27 2011 10:11 AM
Carol Davis from NJ

Does anyone else think it's inappropriate to connect the lethal injection of a criminal with the Arizona law by calling the latter the 'death penalty' of corporations?

May. 27 2011 10:11 AM
Dallas from NYC

A company that has over a given percentage of its workforce outsourced out of the country.

May. 27 2011 10:11 AM
Jeb from Greenpoint

Could we possibly model a corporate death penalty on a disbarment or medical license revocation proceeding? What are the thresholds of evidence there?

May. 27 2011 10:10 AM

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