Views » September 8, 2014
Trojan Hobby Horse
Courts don’t just treat corporations as people–they treat them as sweethearts.
For a horrific 2005 Texas refinery explosion arising from lax safety oversight that killed 15 workers and injured 170 more, the oil giant BP waltzed away with a nominal $50 million fine and three-year probation sentence.
Via the wondrous alchemy of our Supreme Court, the American corporation has, like Pinocchio, sprung into full-fledged life—in this case, as a campaign-funding, spiritually discerning caretaker of the national agenda. Not long after the egregious 2010 Citizens United ruling vested corporations with free-speech rights, the Roberts court discovered—mirabile dicta!—that private companies could take principled religious exception to the 2010 Affordable Care Act's provisions for the funding of the reproductive choice.
We tend to think of this animatronic line of legal reasoning as something novel. But the legal fiction of a corporation as a living, breathing Homo sapiens is a restrained chapter in our justice system’s deferential handling of business combines. Human beings, after all, can be punished and held accountable for their actions. Our finest legal minds have arranged things so that corporate offenders, by contrast, are marshaled through the portals of the justice system with nary a procedural inconvenience, thereby avoiding the stress of a trial and a prospective conviction.
For his forthcoming book, Too Big to Jail, University of Virginia law professor Brandon L. Garrett compiled a database of more than 2,000 criminal prosecutions of business organizations from 2001 through 2012. The overriding pattern of prosecutorial leniency is pronounced. Among the 273 largest publicly traded firms targeted for prosecution, 125 firms—46 percent—were convicted of a crime (fraud, most commonly). The remaining 54 percent entered into non-prosecution or deferred prosecution agreements with prosecutors—voguish “soft” accords in which prosecutors seek to alter the corporate “culture” that fostered criminal wrongdoing, as opposed to locking up individual perpetrators.
This accommodating view benefits the biggest companies. As Garrett notes, between 2001 and 2012, publicly traded firms made up 58 percent of the offenders receiving deferred-prosecution or nonprosecution deals and 6 percent of those convicted without such sweetheart agreements. Of course, these syndicate-scale bad actors—like fraud-prone investment banks, bribe-friendly government contractors, and scores of unscrupulous Big Pharma marketers—are also those capable of inflicting the greatest harm on the public weal.
The penalties visited upon the big firms who sidle up to prosecutors’ bargaining tables are small to nonexistent. Garrett reckons that criminal fines represent, on average, just .04 percent of the market capitalization of accused publicly traded firms. Forty percent of corporate parties to deferred prosecution deals paid no fines whatsoever.
Such light treatment, not surprisingly, encouraged recidivism. For a horrific 2005 Texas refinery explosion arising from lax safety oversight that killed 15 workers and injured 170 more, the oil giant BP waltzed away with a nominal $50 million fine and three-year probation sentence, without the benefit of even an official court-appointed monitor to gauge the company’s ostensible progress. This lapse was shocking, since between the original explosion and the 2009 probation sentence, four more workers had been killed in separate incidents at the BP site. In 2010, BP’s shoddy safety enforcement produced the largest marine oil spill in history, after the explosion of the Deepwater Horizon drilling rig in the Gulf of Mexico claimed the lives of another 11 workers. So much for improving BP’s corporate “culture.”
Meanwhile, American corporations continue pursuing their outrages against decent folk with mounting impunity. As Lina Khan details in an alarming Washington Monthly investigation, the high court’s pro-corporate rulings on mandatory arbitration in potential class-action suits have produced a de facto disenfranchisement of prospective consumer plaintiffs: When customers sign off on the epic user agreements on their computer accounts and cell phone plans, they also, unbeknownst to them, have indemnified the corporate party to the contract from any meaningful legal responsibility for its actions.
All of which puts the otherwise outlandish Hobby Lobby ruling in a different light: Clearly the Roberts court affirms the sovereignty of the corporate religious conscience because, in the majority’s view, the only authority who outstrips corporate America is God himself.
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Chris Lehmann, is editor-in-chief at The Baffler and a former managing editor of In These Times. He is the author of The Money Cult: Capitalism, Christianity, and the Unmaking of the American Dream (Melville House, 2016).
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