Taking a Bite out of Corporate Crime; Prosecutions Indicate the Bush Administration Is Taking a Tougher Stance on Corporate Wrongdoing, but the States Often Are Beating Federal Agencies to the Punch

Insight on the News, April 27, 2004 | Go to article overview
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Taking a Bite out of Corporate Crime; Prosecutions Indicate the Bush Administration Is Taking a Tougher Stance on Corporate Wrongdoing, but the States Often Are Beating Federal Agencies to the Punch


Byline: Timothy W. Maier, INSIGHT

Martha Stewart's conviction certainly gave credence to the long-held liberal perception that Republican administrations spend millions of dollars chasing white-collar criminals for relatively petty offenses while letting the Big Fish swim free. The Democrats couldn't ask for a better case than that of Stewart to promote the stereotype, but is it a fair perception?

Some argue it's more than fair. "The Bush administration coddles corporate executives, fosters corruption by their anti-accountability and responsibility stance in the civil justice system, and purposefully avoids prosecution, except in the most egregious cases, because the Bush administration perceives prosecution of business executives as contrary to their political agenda," says David Boone, an attorney specializing in white-collar crime. He is a member of the Defense Resource Institute (DRI), renamed the Voice of the Defense Bar, a national organization for defense and corporate attorneys that acts as a counterpart to the Association of Trial Lawyers of America. "Frankly, from my viewpoint, it is another example of political expediency over principle," says Boone.

But hold on, says Dick Beckler, the former section chief in the Criminal Fraud Division of the Justice Department and now a top corporate lawyer. "Traditionally Republicans come down harder than Democrats because they usually have to prove they are not pro-business," he says. "This Justice Department has been pretty heavy with white-collar prosecutions. These white-collar prosecutions seem to go in waves. In the Reagan years there was the illegal government contracting, and in the 1980s the banking fraud with the savings and loans, and in the 1990s it was health care, and now it is the prosecutions involving Wall Street books and records."

Partisan prosecutions are rare, adds Cheryl Willert, former president of DRI. "Most people engaged in prosecution are career employees of the federal government" and are more interested in what they perceive is right or wrong as opposed to seeing things as either Republican or Democrat, she says. "Both Republicans and Democrats are somewhat reticent in actual prosecutions," she says. "The public outrage has driven a lot of prosecutions. It seems only when the public becomes interested are these cases pursued. If it's not on the public radar, the prosecutions may not take place."

Russell Mokhiber, editor of The Corporate Crime Reporter, a newsletter that covers legal issues, suggests that both parties are "awash in dirty money" when it comes to corporate criminals. The newsletter released a study last year showing that during the 2002 election cycle corporate criminals gave $7.2 million to Republicans, who controlled the White House and Congress, and $2.1 million to Democrats. While politicians were boasting about giving back campaign contributions from Enron and WorldCom, not one politician so far has handed back donations from two of the leading convicted corporate criminals Archer Daniels Midland, which donated a total of $1.7 million to both parties, or Pfizer, which donated a total of $1.1 million to the two parties.

A review of the statistics on political giving also suggests that independent presidential candidate Ralph Nader correctly portrayed the Clinton administration in 2000 as being soft on corporate crime. White-collar prosecutions increased during the administration of George H.W. Bush and then declined under Clinton's tenure, according to Justice Department statistics. In fact, white-collar prosecutions declined from a rate of 4,086 per 100 million population in 1992 to 3,482 per in 1998 a drop of 14.8 percent.

While all the statistics have yet to be calculated for the current Bush administration, the early figures indicate that President George W. Bush continued prosecutions for corporate crimes at about the level of his father's presidency. In fact, since its creation in July 2002, the President's Corporate Fraud Task Force has had an impressive track record with more than 660 violators charged with corporate fraud, of which more than 250 either have been convicted or pleaded guilty.

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Taking a Bite out of Corporate Crime; Prosecutions Indicate the Bush Administration Is Taking a Tougher Stance on Corporate Wrongdoing, but the States Often Are Beating Federal Agencies to the Punch
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