News Release

Corporate Crime: A Major Law Enforcement Role?


Editor of Corporate Crime Reporter, Mokhiber said today: “Henry Paulson, the chairman of Goldman Sachs, is quoted on the front page of The New York Times today: ‘I cannot think of a time when business over all has been held in less repute.’ Why is that? Because corporate and white-collar crime inflict far more damage on society today than all street crime combined. With a jury about to decide whether Andersen will become the nation’s most recent corporate criminal, it’s time to take stock.” Mokhiber, who produced a list of the Top 100 Corporate Criminals of the 1990s, added: “Health care fraud alone costs the nation more than $100 billion a year in damage, while, according to the FBI, burglary and robbery inflict $4 billion. The FBI estimates that there are 15,000 homicides in the United States every year. Compare that to the more than 40,000 Americans who die every year on the job or from occupational diseases. And yet, the prisons are filled with street criminals. In its March 18, 2002 cover story, Fortune magazine summed it up this way: ‘It’s time to stop coddling white-collar crooks. Send them to jail.’ … The bandaid reforms being put forth by the likes of Paulson and Securities and Exchange Commission chair Harvey Pitt seek to shore up investor confidence, which is lagging badly, and stave off irreparable damage to the market. But only fundamental structural change in corporate form and regulation will get the job done, and few Democrats or Republicans are serious about fundamental structural change.”
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Editor and publisher of Business Ethics Magazine and author of the recently-released book The Divine Right of Capital, Kelly said today: “I’m heartened that the head of Goldman Sachs is making these comments in public. Ethics has clearly gotten lost in the rush for profits. But I think fundamental reforms are needed. For example Ralph Estes has proposed that we have a corporate accountability commission, which would audit companies and be funded by a tax on corporations. We need to change the business of auditing in a fundamental way to ensure genuine independence. It’s very hard for someone to police your books when you’re the one hiring them. Another suggestion, put forward by the Project on Government Oversight, is that companies with a history of law-breaking be prohibited from government contracts.”
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Professor of law at the University of Alabama, Bucy is author of the book White Collar Crime. She has suggested in her writings that the civil False Claims Act, which currently applies to government contracting, be expanded to other areas of law, specifically securities and environmental law. She said today: “If we had something like the False Claims Act applied to securities law, those Enron VPs who wanted to blow the whistle would have had a mechanism.”

For more information, contact at the Institute for Public Accuracy:
Sam Husseini, (202) 347-0020; David Zupan, (541) 484-9167