Pubdate: Tue, 16 Jul 2002
Source: Arizona Daily Star (AZ)
Copyright: 2002 Pulitzer Publishing Co.
Contact:  http://www.azstarnet.com/star/today/
Details: http://www.mapinc.org/media/23
Author: Arianna Huffington

CORPORATE CRIME NETS VERY LITTLE PUNISHMENT

With corporate crime finally starting to register on pollsters' 
seismographs, official Washington is suddenly high on corporate punishment. 
The Big House is all the rage, with politicians on both sides of the aisle 
dancin' to the jailhouse rock.

A day after President Bush took Wall Street to the woodshed and proposed 
doubling the maximum prison term for mail fraud and wire fraud, the Senate 
did him one better, voting 97-0 to adopt stiff new criminal penalties for 
securities fraud, document shredding and the filing of false financial reports.

"Somebody needs to go to jail," Senate Majority Leader Tom Daschle intoned 
ominously. "We're going to shackle them and take them to jail," growled 
House Majority Whip Tom DeLay, sounding like he couldn't wait to slap on 
the handcuffs himself.

The new consensus along that other Axis of Evil, the one connecting 
Washington and Wall Street, is that very publicly hauling a few corporate 
crooks off to jail would be a very good thing for the market, for the 
economy - and for our political leaders' re-election prospects.

Count me in with the law-and-order crowd. The question is, how many of 
corporate America's new breed of robber barons will ever actually see the 
inside of a jail cell? If the past is indeed prologue, the answer is very, 
very few.

In the last 10 years, the Securities and Exchange Commission - which, 
despite being the government's top corporate watchdog, doesn't have the 
authority to toss even the worst Wall Street cheaters in jail - turned 609 
of its most offensive offenders over to the Justice Department for 
potential criminal prosecution. Of those, only 187 ended up facing criminal 
charges. And of those, only 87 went to jail. Eighty-seven. In 10 years. And 
most white-collar criminals land in one of those ritzy country club 
prisons, where inmates play tennis and make collect calls to their brokers 
all day.

So, despite the PR value of pumping up maximum sentences for corporate 
crimes, it's not going to make much of a dent in boardroom thievery since 
so few of the perpetrators will ever face prosecution. For a corrupt 
corporate chieftain crunching the numbers, the odds still will justify the 
crime.

And just why are most prosecutors so reluctant to take on these kinds of 
cases, passing up more than half of the ones the SEC sends their way? Well, 
for one thing, proving fraudulent intent is tricky business - and in 
criminal cases, it has to be proved beyond a reasonable doubt. For another, 
with rare exceptions, most prosecutors just don't have either the passion 
for making corporate criminals pay or the mind-set that these kinds of 
crimes are worth the hassle of pursuing them. Too busy busting prostitutes 
in New Orleans, perhaps?

Compare this tiptoeing on eggshells with the ardor with which our criminal 
justice system pursues even the lowest-level drug offenders. In 2000 alone, 
646,042 people were arrested in America for simple possession of marijuana. 
And while the Drug Enforcement Administration has a budget of $1.8 billion, 
even with the extra $100 million Bush wants to toss its way, the SEC will 
have to make do with $513 million.

What's more, the average sentence for even the biggest white-collar crooks 
is less than 36 months; nonviolent, first-time federal drug offenders are 
sent away for more than 64 months. So much for letting the punishment fit 
the crime.

The bitter truth is that, unlike the majority of nonviolent drug cases, 
corporate malfeasance is not a victimless crime. Not with tens of thousands 
of laid-off workers, $630 billion lost from corporate pension plans, and 
more than $4 trillion in shareholder assets wiped out in the scandal-fueled 
stock market swoon.

So when it comes to rooting out corrupt corporate kingpins, will the 
president's new "financial crimes SWAT team" have the stomach for the 
fight? Can we expect to see undercover "narc-accountants" infiltrating 
what's left of the Big Five accounting firms? Middle of the night no- knock 
raids on companies that restate their earnings by billions of dollars? Will 
corporate cops get to emulate their drug-fighting counterparts and be 
allowed to keep a percentage of the money they confiscate?

Here's the bottom line: Our political leaders' tough talk notwithstanding, 
are we really serious about declaring war on corporate crime? Or are we 
merely going to toss Martha Stewart in jail and move on?
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