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Justice for Sale: How Rich Corporations Get Away with Murder

Justice for Sale: How Rich Corporations Get Away with Murder
Thu, 12/3/2015 - by Matt Stannard

Legal activists have long observed that there are two systems of law in America, one for the rich and one for the poor. Typically, this critique is applied to individuals in the criminal justice system, where millionaires are almost never convicted of crimes they actually commit, and poor people are frequently convicted of – and more often plead guilty to – crimes they have either not committed, or would not be convicted of committing if they could afford the kind of legal representation that the wealthy folks get.

This classism also divides American businesses, and the result is an economic system where the value of life itself is dependent on how materially powerful and widely esteemed individual corporations are. When people die because of corporate deception, justice is applied differently for small and large businesses, just as it is applied differently for millionaire murderers and poor assailants.

The contrast between two cases of criminal corporate deception illustrates this division.

Peanut Corporation of America

Until 2008, the relatively small Georgia-based [Peanut Corporation of America](http://www.usatoday.com/story/money/business/2015/09/21/peanut-executive... supplied about 2.5 percent of the nation’s peanuts. Because they grow in the ground, unroasted peanuts may contain pathogenic bacteria such as salmonella. Peanuts must be roasted to kill that bacteria. Peanut processors must ensure that raw peanuts don’t mix with roasted ones set for shipping. Some bacteria can even travel through air, remain trapped in water, or transfer via insects and rodents. For all these reasons, peanut processing facilities must be regularly and reliably tested.

For several years, however, the owners and key employees of PCA ignored testing requirements, lied to their clients about test results, and instructed their subordinates to take shortcuts and falsify results. The executives left a damnable, rather stupid trail of emails incriminating themselves. One such email read: “Truthfully if a customer called and needed [documentation of a safe batch of peanuts, the company] would create one. Most of the time smaller people will accept one produced with your company heading on it that looked professionally done. The girl in TX was very good at white-out.” Another email instructed workers to “air hose the top” of a pile of peanuts prepared for shipping, because “they are covered in dust and rat crap.”

In 2008, nine people died from the salmonella poisoning that resulted from PCA’s criminal acts. In 2015, the company’s CEO and his brother were each sentenced to over 20 years in prison. Other employees received shorter sentences. While the terms may seem light for killing nine people, it was the first time in America that corporate executives had been convicted of federal felony charges related to food poisoning.

General Motors

Now take case number two. Going back to the early 2000s, engineers at General Motors noticed a serious defect in the ignition switches of many of their cars. Ignition switches must have sufficient force to remain in the right position after the driver turns the key. These defective switches did not, and were liable to switch off if the driver inadvertently brushed against his or her keychain. If a driving car stalls, say, on the highway, that also means the airbags of the car will not inflate, thus denying drivers and passengers airbag protection in the event of a collision – a scenario which, in fact, repeatedly happened.

But instead of recalling the automobiles after learning about numerous fatal accidents related to the switch stalls, engineers at GM covered up the story. In particular, one engineer changed the defective part in 2005, but still left hundreds of thousands of faulty cars out on the road, without saying a word. When information about the defect became more widespread, GM lawyers conspired to delay a recall.

As a result of GM’s willful failure to disclose the faulty switches, and subsequent failure to authorize a recall, 124 people died – almost 14 times more than those killed by PCA’s dirty peanuts. Nobody at GM will go to jail, though. Instead, GM executives were offered a deferred prosecution agreement. The company will pay $900 million and allow the government to monitor its production for three years. An outraged Ralph Nader accused the government of “letting off” a “homicidal fugitive from justice.”

Relatively small peanut company does terrible illegal things, nine people die, and company executives face time in federal prison. Huge American multinational auto company does terrible illegal things, 124 people die, but nobody goes to jail. Seem like justice?

I posed this question to Clarence Ditlow, director at the Center for Auto Safety, and Rena Steinzor, Professor of Law at the University of Maryland and the author of "Why Not Jail? Industrial Catastrophes, Corporate Malfeasance, and Government Inaction". The policy experts minced no words, saying the two corporate criminals received different treatment because of money. Their explanations suggest we live in a country where justice and the rule of law are commodities to be bought and sold at the corporate level as much as the individual level.

“Auto companies are so big and so rich,” Ditlow said, “that when confronted by the Justice Department they take out their check books and ask how big the check should be. There is no problem too big for money to solve at GM.” What allows GM to presume against criminal prosecution is the 1966 National Traffic and Motor Vehicle Safety Act, which authorizes the regulation of the automobile industry but lacks the teeth of comparable regulatory provisions in other industries. “GM has paid millions of dollars to its lobbyists to keep criminal penalties out of the Vehicle Safety Act since 1966,” Ditlow said.

Steinzor, who wrote a recent article that called for the jailing of auto executives using federal and state laws other than the toothless Vehicle Safety Act, said the problem isn’t just that these companies are rich, but that our legal system suffers from a culture of wealth-worship.

When GM's CEO Mary Barra began negotiating with the federal government via the forum of public opinion, “the Justice Department [was] star struck,” Steinzor said. Barra is the second most powerful woman in the world, according to Fortune magazine, and she apparently knows how to play for the cameras, too. “Barra was smart and hired a smart PR firm. They counseled her to apologize, early, often, and for as long as it took,” Steinzor said.

It worked. GM’s penalties are painfully out of step with the body count of their crimes. Toyota personnel likewise did not see any jail time last year for their continuous lies to Congress about the glitches in their accelerator systems that caused 37 deaths. The company got off with a $1.2 billion fine – but that’s only money, hardly a deterrent given the magnitude of Toyota’s deception. “And now VW! These folks are on a crime spree,” Steinzor exclaimed, referring to the newest case of auto company malfeasance, Volkswagen’s covert installation of devices that evade emissions inspections.

On paper, all citizens – who now include corporations – are equal under the law: equally likely to be prosecuted for crimes, equally entitled to constitutional due process, and equally entitled to protection from bad actors. In practice, though, in a system that actualizes those rights according to material privilege, some defendants will matter more than other defendants, and some victims will matter more than other victims. Because of this, the struggle to universalize the rule of law must be a struggle against classism.

When the Peanut Corporation of America executives were sentenced to prison, U.S. Attorney Michael J. Moore declared: “The sentence that was handed down today means that executives will no longer be able to hide behind the corporate veil.” But this is not quite true. Classism remains toxically ensconced in the American legal system, and the wealthiest corporations and individuals can buy their way out of the rule of law. Life under capitalism is for sale, by effect if not by design.

Matt Stannard is Policy Director at Commonomics USA and a member of the Board of the Public Banking Institute.

 

 

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