DoJ Wrist Slaps, Corp. Cost of Doing Business

And predictably, Warin [F. Joseph Warin] as mouthpiece for the corporations who prefer settling their dirty laundry, defends the practice:

And what of critics who say the deals don't really deter bad corporate behavior because big companies just consider the fines a necessary cost of doing business?

"That's nonsense," retorts Warin. "I am in boardrooms and senior management meetings frequently, and no one perceives these matters as a cost of doing business."

Besides being costly and damaging to a company's reputation, a serious investigation is a huge distraction from the mission of the corporation, Warin said.

A former Federal prosecutor disagreed. Via e-mail:

The "losses" for the fines need to be put into perspective of the profits that are being earned off of the criminal behavior. If they are significantly less than the profits, than no matter what anecdotal advice given by the source quoted, the incentive is to commit more crime and make more money. Also, it is of course individuals who profit off of the crimes, and if you do not punish/deter them (and why would a billion dollar fine deter a single executive if he/she got to keep theirs), then what meaning will it have from a deterrence perspective.

So while it is better to have some fines than no fines, the fact that the numbers are at record highs might just mean that there is record fraud and record willingness on behalf of DoJ to allow those responsible (and who profited) for the fraud to buy their way out with other people's money (that is, shareholders).

via Yes, Virginia, the Department of Justice Really Believes It has Been Tough on Corporate Fraud

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  • Tom Usher

    About Tom Usher

    Employment: 2008 - present, website developer and writer. 2015 - present, insurance broker. Education: Arizona State University, Bachelor of Science in Political Science. City University of Seattle, graduate studies in Public Administration. Volunteerism: 2007 - present, president of the Real Liberal Christian Church and Christian Commons Project.
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