Do Fines Ever Make Corporations Change?
Summers, Nick, Newsweek
Byline: Number 17, NYC and Nick Summers
Not when the penalties add up to less than 1 percent of annual revenue. At scales like this, corporations can treat regulatory action as just another cost. At least three companies blamed for recent calamities have been fined over and over again, to no apparent effect.
A brief (and incomplete) history:
The Deepwater Horizon drilling rig explodes in the Gulf of Mexico on April 20, killing 11 workers. Over 87 days, nearly 5 million barrels of oil gush into the water.
How much BP--and its partners, Transocean and Halliburton--will be fined for the gulf spill is unknown. The government is investigating criminal charges as well.
In BP's most-fined year to date, it settled charges of illegally manipulating energy markets, breaking environmental laws, and anticompetitive practices. All that added up to just 0.14 percent of revenue.
In April, the SEC accuses Goldman of securities fraud for selling an investment that seemed designed to fail--helping the bank profit as the housing bubble burst. …