The Real Bad Guys
A few years ago I came up with an estimate that the costs of white collar and corporate crime to more than $1.5 trillion each year. This is in contrast to an estimated $18 billion for robbery, burglary, larceny-theft, motor vehicle theft and arson (according to the FBI). We all know about the most recent scandals involving Bernie Madoff and a few others that have made the headlines. However, these stories are merely the proverbial tip of the iceberg. Consider the following news items:
· Robert Rubin, the former Treasury secretary in the Clinton administration, went to work with Citigroup and left after the company lost $65 billion (largely through investing in subprime mortgages), but was given a nice bonus of $126 million in cash and stock.
· A New York-based “investment club” for billionaires called Tiger 21 provides a place to “to share experiences about the opportunities and challenges of living with money.” Membership costs $30,000 per year.
· Need a yacht? A designer in Fort Lauderdale has a “giga-yacht” for you; “a 656-foot, five-decker scheduled to be ready for sale in 2010 — at $500 million.” Multinational Monitor, Jan/Feb, 2009. http://www.multinationalmonitor.org/mm2009/012009/greed.html.
· Between 1998 and 2008, corporations within the financial sector “spent more than $5 billion on U.S. federal campaign contributions and lobbying expenditures.” http://www.multinationalmonitor.org/editorsblog/
· Among the” ten worst corporations” for 2008 was AIG, which has already received $150 billion in taxpayer bailout moneys. http://www.multinationalmonitor.org/editorsblog/index.php?/archives/105-The-10-Worst-Corporations-of-2008.html#extended.
· There is a growing trend for federal prosecutors to engage in “deferred prosecution agreements” (aka “pre-trial diversion”) with certain corporate criminals. Among the companies receiving this agreement in 2005 was KPMG, “one of the remaining big four accounting firms, admitted to criminally engaging in a fraud that generated at least $11 billion dollars in phony tax losses which cost the United States at least $2.5 billion dollars in evaded taxes.” Russell Mokhiber, “Crime without Conviction: The Rise of Deferred and Non-Prosecution Agreements.” Corporate Crime Reporter, December 28, 2005. http://www.corporatecrimereporter.com/deferredreport.htm.
“One Merrill Lynch trader apparently gambled away more than $120 million in the
currency markets. Others seemingly lost hundreds of millions on tricky credit
But somehow all this red ink did not spill into plain view until after Merrill earmarked billions for bonuses and staggered into the arms of Bank of America.” New York Times, March 6, 2009. http://www.corpwatch.org/article.php?id=15318. Retrieved April 8, 2009.
· “Countrywide Financial made risky loans to tens of thousands of Americans, helping set off a chain of events that has the economy staggering. So it may come as a surprise that a dozen former top Countrywide executives now stand to make millions from the home mortgage mess, buying up delinquent home mortgages that the government took over, sometimes for pennies on the dollar, at newly-formed PennyMac.” New York Times, March 3, 2009. http://www.corpwatch.org/article.php?id=15309. Retrieved April 8, 2009.
· “UBS AG, the Swiss bank battered by massive write-downs and its role in a U.S. tax-evasion scheme, announced the surprise departure of chief executive Marcel Rohner. Mr. Rohner's sudden departure comes after UBS agreed earlier this month to a $780 million settlement with the U.S. Justice Department of a criminal inquiry into the bank's role in the tax evasion.” Wall Street Journal, February 26, 2009. http://www.corpwatch.org/article.php?id=15304. Retrieved April 8, 2009.
· “In the wake of the Bernard Madoff Ponzi scheme scandal, the SEC has brought cases involving losses of over $200 million since the beginning of October last year, including one against the disgraced Democratic donor Norman Hsu and North Carolina-based Biltmore Financial.” New York Times, January 27, 2009. http://www.corpwatch.org/article.php?id=15281. Retrieved April 8, 2009.
· “Why do U.S. oil companies -- some of the most profitable corporations on the planet -- receive 20 to 40 billion dollars a year in subsidies from the U.S. government?” Inter-Press News Service, September 30, 2008. http://www.corpwatch.org/article.php?id=15222. Retrieved April 8, 2009.
· “Hundreds of tons of waste still languish inside a tin-roofed warehouse in a corner of the old grounds of the Union Carbide pesticide factory here, nearly a quarter-century after a poison gas leak killed thousands and turned this ancient city into a notorious symbol of industrial disaster. More than 500,000 people were declared to be affected by the gas and awarded compensation, an average of $550. Some victims say they have yet to receive any money. Efforts to extradite Warren M. Anderson, the chief executive of Union Carbide at the time, from the United States continue, though apparently with little energy behind them.” New York Times, July 7, 2008. http://www.corpwatch.org/article.php?id=15123. Retrieved April 8, 2009.
· “A tax loophole could let the ten largest paper companies rake in a whopping $8 billion. Where's the outrage?” Chris Hayes, “Stunning Government Billion-Dollar Giveaway to Paper Companies in the Works.” AlterNet, April 4, 2009. http://www.alternet.org/workplace/134985/stunning_government_billion-dollar_giveaway_to_paper_companies_in_the_works/. Retrieved April 12, 2009.
Want more? Here's a web site that reads like the white collar and corporate crime equivalent to the FBI Uniform Crime Report: http://lawprofessors.typepad.com/whitecollarcrime_blog/. What is revealed here (and within the pages of the web sites noted above) is rampant criminality in the highest places.
© 2009, Randall G. Shelden. All rights reserved. No part of this may be reproduced without permission from the author.