White- Collar AND Corporate Crime PDF

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LECTURE NOTES ON WHITE COLLAR AND CORPORATE CRIME IN SOCIETY...

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WHITE-COLLAR AND CORPORATE CRIME Newburn (2007): the sociology of C&D has tended to focus on the crimes of the powerless rather than the powerful. Timner and Eitzen (1989): criminology has tended to focus on the crimes of the streets rather than the crimes of the suits. The term ‘white-collar crime’ was first coined by Sutherland (1949) to indicate that not all crime was committed by the working class, as the crime statistics would suggest: ‘Crime committed by person of high social status and respectability in course of his occupation’. Saw crime as ‘ubiquitous’ – carried out by all members of all social classes, including the most powerful in society. Powerful groups can manipulate the definition of what is considered criminal. Only WC crime considered criminal When they commit such crimes as fraud, tax evasion, members of privileged groups often escape punishment, or suffer less severe punishment White-collar crime is underrepresented in OCS because: They are hard to detect and investigate – usually involve technical or insider knowledge, and are committed as individuals go about their daily work. They are often without direct, individual victims – the victim is often the company or the public at large. They are invisible – very often there is no awareness that the crime has been committed and it is therefore not reported. The corporations in which they occur often deal with it internally, so as to prevent damage to their public image. Sociologists strongly influenced by Marxism tend to argue that: crime is widespread across social strata crime committed by white-collar individuals and corporations does more harm than w/c ‘street’ or property crime. CORPORATE VS STREET CRIME Snider (1993): figures suggest that corporate crime costs more, in terms of both money and lives, than street crime: Street crime Typical annual death toll in the US:

20,000 from murder

Corporate crime  14,000 from industrial accidents  30,000 from unsafe and usually illegal consumer products  100,000 from occupationally induced diseases

Death in the UK

600 from murder

600 from workplace accidents 12,000 injuries

Typical annual cost of crime in the US

$4 billion

$80 billion, possibly considerably more e.g. 312 US savings and loan companies have been unable to pay their debths, due to fraudulent activities such as insider dealing, failing to disclose accurate information in accounts, and racketeering. The estimated cost of bailing out these companies is a minimum of $325 billion, probably more like $500 billion, which would cost every household in the US $5,000.

Snider argues that despite the enormous costs of corporate crime, both the penalties and the chances of prosecution for those involved in it are usually small. Evaluation Shifted focus away from ‘working-class’ forms of crime, e.g. violence, towards other types of law-breaking activity, such as fraud. Did not distinguish between types of white-collar crime, so that the concept included very different activities by many different groups. This has led sociologists to suggest different types of ‘middle-class’ crimes, carried out by those in positions of varying status and class: OCCUPATIONAL CRIME Carried out at work. Ranges from minor theft of organisation’s property to large-scale fraud. Characterised by invisibility of victim and complexity. Often occurs when person with expert knowledge uses it to steal or defraud. Difficult to catch them and victim is often unaware. White-collar criminals often given ‘soft’ punishment, given amounts of money involved. Not regarded as seriously as street crime/burglary. Marxists argue it is connected to ability of powerful to manipulate values of society. Occupational crime costs UK plc £40bn a year, a recent report estimated. Examples: Robert Maxwell, Nick Leeson, Joyti de-Lauri NICK LEESON Nick Leeson will forever be known as the "rogue trader". He earned the title a decade ago when he caused the collapse of London's oldest merchant bank, Barings, after secretly gambling away £862m of its fortune. He fled his trading desk in Singapore, but was arrested days later in Frankfurt. In his wake he had wiped out the 233 year-old Baring investment Bank, who proudly counted the Queen as a client. The liabilities he had run up were more than the entire capital and reserves of the bank. Investors saw

their savings wiped out and some 1,200 of Leeson's fellow employees lost their jobs. Leeson then spent more than four years sharing a tiny cell in a notorious Singapore jail. Inside, he suffered colon cancer, his mother died and wife Lisa ran off with another trader. But the 38-year-old has rebuilt his life and now lives in rural Ireland with his new wife, 32-year-old beautician Leona. They have a 10-month-old son Mackensey and two stepchildren from her previous relationship. His rehabilitation seems to be complete. This April he landed his first proper job since leaving jail in 1999, becoming commercial manager for Galway United FC. CORPORATE CRIME Carried out by members of organisations to increase profit. Ranges from pollution to selling of harmful products. Increasingly global as capital expands. Process of corporate decision-making is complex; there is no one single person to blame STEVEN BOX: In terms of harm caused to individuals and losses to public in unpaid tax revenue, environmental costs and costs in health and welfare benefits, corporate crime is more serious than street crime/burglary. Estimated £16billion lost. Often unclear of victim in corporate crime; normally drawn from following categories: Consumers in general – false or misleading claims in ads, faulty, dangerous goods Employees – failure to employ health and safety Public – More subtle than harm to consumers e.g. tax evasion leads to higher taxes Examples: Asbestos, Bhopal, class actions brought against cigarette companies, rail crashes, Bhopal - The Dangers of Unrestricted Capitalism The events surrounding the tragedy at Bhopal provide a good case study of how capitalist enterprises can be supported by the state on a global scale. Union Carbide, an American owned multi-national company, set up a pesticide plant in Bhopal. In 1984, the plant accidentally leaked deadly gas fumes into the surrounding atmosphere. The leakage resulted in over 2,000 deaths and numerous poisonous related illnesses including blindness. Investigations since have revealed that the company set up this particular plant because pollution controls in India were less rigid than in the USA. In Snider’s terms (1993), the Indian State supported such capitalist development in the interests of allowing profits to be made. Marxists would point out that there have been no criminal charges despite the high death and injury toll. They would see the company owners as the true criminals in this scenario.

Corporate crime is underrepresented in official statistics because: They often involve powerful people who can persuade the criminal justice system and the public that their actions are not serious or illegal They are often hard to detect because corporations use their power and networks of influence to cover them up They are often not prosecuted and dealt with as criminal acts because there is seldom an individual who can be held criminally responsible, and because they are often dealt with by regulatory bodies rather than the criminal justice system. STATE CRIME Carried out by agents of the state while pursuing often ideological ends. Range from torture of citizens to denial of human rights. Resources of state used for illegitimate purposes. State crime is underrepresented in official statistics because:

The state creates the laws, and therefore is able to define its own activities as legal. The state enforces the laws, and so can use its control of the criminal justice system to ensure that its activities are not revealed. See section on State Crime under Contemporary Approaches to C&D below. PROFESSIONAL CRIME Carried out as a lifetime career. Ranges from large-scale operations such as drug-running to petty theft. Often done in criminal organisations that are stable ‘employers’ – may have legal aspect. See section on Globalisation and Crime under Contemporary Approaches to C&D below....