Corporate Crime Group Members: Lauren Raulerson Katy Bailey

What is Corporate Crime? Corporate crime refers to criminal practices by individuals that have the legal authority to speak for a corporation or company. These can include presidents, CEOs, managers, directors and chairmen, sales people, agents, or anyone within a company that has authority to act on behalf of the firm. Examples of criminal behaviour in most jurisdictions include: fraud, damage to the environment in violation of environmental legislation, exploitation of labor in violation of labor laws, and failure to maintain a fiduciary responsibility towards shareholders. Corporate crime refers to criminal practices by individuals that have the legal authority to speak for a corporation or company. These can include presidents, CEOs, managers, directors and chairmen, sales people, agents, or anyone within a company that has authority to act on behalf of the firm. Examples of criminal behaviour in most jurisdictions include: fraud, damage to the environment in violation of environmental legislation, exploitation of labor in violation of labor laws, and failure to maintain a fiduciary responsibility towards shareholders.

Corporate Crime Causes Bottom line mentality (make money) Bottom line mentality (make money) Greed Greed Power Power Decline in Ethics Decline in Ethics Lack of regulation / prosecution Lack of regulation / prosecution Lack of oversight Lack of oversight

Corporate Crime is White Collar The defining characteristics of white collar crimes must include the following two items. 1. The persons involved must be of a respectable and high social status attained in the course of the occupation. (CEO, doctor, lawyer). 2. The occupational mechanism by which the crime was committed must be business related.

Examples of Corporate Crime Environmental Environmental Fraud Fraud False Statements False Statements Anti-trust Anti-trust Campaign Finance Campaign Finance Food and Drug Food and Drug Financial Crimes Financial Crimes Tax Evasion Tax Evasion Public Corruption Public Corruption

Key Players in Corporate Crime Corporations Corporations Government Government Victims of Corporate Crime Victims of Corporate Crime → Employees → Employees → Consumers → Consumers

Legislation Americans perceive that Corporate Crime is trying to be regulated with legislation. The problem is that the people who make law (bills) are also the same people who have to endure constant lobbying by corporations who possess endless resources.

Problems with Current Regulation Pervasiveness Pervasiveness Names like Enron, Exxon, General Electric, Hyundai, IBM, Mitsubishi, Tyson Foods top the list of this decades leading corporate criminals. Non -”Technical” Violations Non -”Technical” Violations Criminal prosecution only happens when intentional or reckless acts become noticed. Many of the top 100 companies premeditate, plan and consciously design criminal acts. Insufficient Penalties Insufficient Penalties Fines, even in the millions, do not stop corporate crime from paying.

Consequences of Corporate Crime Loss of Social Moral Loss of Social Moral Loss of Ethics Loss of Ethics Shift to Monopolization Shift to Monopolization Economic Disparity between Employee / Management Economic Disparity between Employee / Management

Prevention of Corporate Crime Education of the Public Education of the Public Ethics Training Ethics Training Legal Reform Legal Reform

Popularized Media Examples Enron Enron All employees lost 90% of retirement and Enron is the largest United States Corporation bankruptcy of all time.  Martha Stewart To save 44,000 dollars in stock in a company that was about to sink, she sold that stuck without the public knowing the same thing.  WorldCom Lied about 3.9 Billion dollars of ordinary expenses as capital expenditures. Stock plummeted to 20 cents and executives left with over 104 million in bonuses as they ran out the door.

Examples not on the news. Exxon – 125 Million dollar environmental fine. Exxon – 125 Million dollar environmental fine. Sears – 60 Million dollar fraud fine. Sears – 60 Million dollar fraud fine. Eastman Chemical (Kodak) – 11 Million dollar antitrust fine. Eastman Chemical (Kodak) – 11 Million dollar antitrust fine. Copley Pharmaceutical – Million dollar food / drug fine. Copley Pharmaceutical – Million dollar food / drug fine. Royal Caribbean Cruises – 9 Million dollar environmental fine. Royal Caribbean Cruises – 9 Million dollar environmental fine. Empire Sanitary Landfill – 8 Million dollar campaign fine. Empire Sanitary Landfill – 8 Million dollar campaign fine. Chevron – 6.5 Million dollar environmental fine. Chevron – 6.5 Million dollar environmental fine. Blue Cross Blue Shield of Illinois – 4 Million dollar fraud fine. Blue Cross Blue Shield of Illinois – 4 Million dollar fraud fine. Tyson Foods – 4 Million dollar public corruption fine. Tyson Foods – 4 Million dollar public corruption fine.

The End Corporate Crime Lauren Raulerson Katy Bailey