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Sideswiping the White-Collar Crime Wave

Amidst a rising tide of corporate crime in the United States, “white collar” criminal prosecutions and convictions are at their lowest levels in decades.

Appeared in: Volume 13, Number 3 | Published on: November 20, 2017
James S. Henry, a contributing editor, is an investigative economist and lawyer who has written widely about corporate crime, tax havens, kleptocracy, and pirate banking. He is a senior fellow at the Columbia University’s Center on Sustainable Investment, a Global Justice Fellow at Yale, a senior advisor at the Tax Justice Network, and a member of the New York Bar.
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  • QET

    Maybe it’s just me, but “crime” is a conclusion and not a premise. You may lament that prosecutions have declined, but in their absence, how can you pronounce that there is a “corporate crime wave”? How can you just know that crimes have occurred absent conviction (or guilty plea) in a court of law?

    I hold no brief for bankers etc., but it strikes me as wrong–more wrong than the lining of pockets–to insist that we first believe that crimes are rampant in order to produce the political pressure necessary to prosecute people and thereby generate the proof. It may be, and this is a bit counter intuitive, that the lavish proliferation of laws and regulations, which have made it possible to take any act or sequence of actions and allege many dozens of “crimes” committed therein, has actually operated as a disincentive to prosecution. Such a regime makes it as expensive and time-consuming to prosecute one person today for 2 dozen separate crimes as it was to prosecute 10 people 50 years ago for, say, 3 or 4 separate crimes each. Just a thought.

    • Joe Eagar

      Right. The old English “bloody code” was like that, so this seems to be a recurring problem in Anglo Saxon countries.

  • Joe Eagar

    This article doesn’t strike me as compliant with AIs editorial policies. AI criticism of corporate behavior is usually much better than this; that they do so from a level headed neoliberal position makes their criticism far more effective. I mean seriously, I felt like I should have donned a tin foil hat before reading this.

  • Fat_Man

    The writer is either caught up in his own hype and intoxicated by his own vapors or a cynical politician who thinks he can gull the voters into supporting him by vilifying people they do not who do things they do not understand. I read the first graf above, then the footnote, and I quit.

    Take the following: “the … largest corporate tax dodgers—in history”. If you have ever been involved in tax compliance for a mufti-billion dollar corporation, you know that they prepare their returns with scrupulous honesty in full compliance with the law. They must because there are full time teams of IRS auditors sitting in their offices going over every entry and its supporting documents. Further, corporate tax managers never make enough to put them amongst those who might be tempted to cheat. The said corporations may or may not be paying as much tax as you think they should, but they are in full compliance with the law as it is and cannot be labeled as tax dodgers.

    The United States has many problems, and they may yet tear it apart. But, “corporate criminals” don’t make the list. Out of control entitlements, public and private debts too large to ever be paid, insolvent retirement systems, lunatic dictators with nuclear weapons, an underfunded and exhausted military, heroin addiction, gang warfare in our Zones urbaines sensibles. I could go on and on, but you get the idea, this author’s hobby horse will finish 13th in a 12 horse race.

    • Fat_Man

      Re tax dodging: I am reminded of this:

      The aptly named Federal Circuit Judge Learned Hand (1872-1961) wrote:

      “Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.”

      Gregory v. Helvering 69 F.2d 809, 810 (2d Cir. 1934)

      Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.

      Comm’r v. Newman, 159 F.2d 848, 850–51 (2d Cir. 1947) (Hand, J., dissenting).

  • Psalms13626

    What the hell is this? Leftwing lunatic rantings about the evil corporations? Come on TAI, don’t turn into Salon.

  • FriendlyGoat

    White collar prosecutions may be at a low now, but the ones you might hope for against the most egregious activities are going lower in the future.

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