1. Crimes of the Powerful: White Collar, Corporate, and Organized Crime
Understanding Criminology
10th March 2009

2. Lecture Outline White Collar Crime Corporate Crime
Definitions
Typologies
Corporate Crime
Impact of White Collar Crime
(In)Adequacy of mainstream criminological theories

3. White Collar Crime General sense: Specific Sense
A variety of offences committed by powerful people or organizations
Offences are enabled by legitimate activities
Specific Sense
Offences carried out by individual people in the course of their employment, often against employers

4. Edwin Sutherland (1941) White Collar Crime
“crime committed by persons of high social status and respectability”
a critiques of criminology’s focus on low-status criminality:
‘hidden’ / non-crime status of middle class criminality
crime defined in terms of harm on victims / society
Questions raised about criminal status and social class

5. Types of White Collar Crime
Individual offences
Against employer
Theft, fraud
Against customer
Overcharging, fraud, identity theft, various “e-crimes”
Against employee
Theft, embezzlement
Against other companies
Insurance fraud
Against the State
Tax evasion, benefit fraud

6. Corporate Crime
Illegal actions, or omissions, resulting from deliberate decision making, or culpable negligence on the part of a company
Organizational Goals central to understanding corporate crime
Indifference to outcome of action often contributes

7. Jeffrey Reiman “The Rich Get Richer: The Poor get Prison”
The Social Construction of Crime
The construction of ‘crime’ focuses attention onto the social harm perpetrated by the poor, and away from those (more damaging) harms perpetrated by corporations
“Typical” criminal: young, urban, poor and ethnic minority
A distortion of harms: “a carnival mirror”

8. How is this social construction achieved?
Legislative definitions of crime
Police and prosecutor priorities
Judges and jury decisions
Sentencing
Media reporting of ‘crimes’ and ‘accidents’
Each of these stages are inter-related

9. Impact of corporate crime?
Occupational Disease and Injury
Crime (x ½)
Death
54,928
8,250
Other Physical Harm
2,300,000
425,000
Source: Bureau of Labor Statistics 2003; National Crime Victimisation Survey
Note: Crime Rate halved to enable direct comparisons: workforce accounts for half the general population

10. Victims of Corporate Crime
Employees
Customers
The Environment

11. Ford Pinto

12. BENEFITS (OF RECALLING AND RETRO-FITTING)
Ford Motor Company internal memorandum: "Fatalities Associated with Crash-Induced Fuel Leakage and Fires"
BENEFITS (OF RECALLING AND RETRO-FITTING)
Savings: 180 burn deaths, 180 serious burn injuries, 2,100 burned vehicles. Unit Cost: $200,000 per death, $67,000 per injury, $700 per vehicle.
Total Benefit: 180 X ($200,000) X ($67,000) + $2,100 X ($700)
= $49.5 million.
COSTS
Sales: 11 million cars, 1.5 million light trucks. Unit Cost: $11 per car, $11 per truck.
Total Cost: 11,000,000 X ($11) + 1,500,000 X ($11)
= $137 million.

13. Variety of corporate crime
Against consumers
Mis-selling: providing goods and services
Car-clocking, counterfeiting, dangerous goods
Health and safety offences
Employee, consumer and environment
Financial Fraud

14. Impact of Corporate Crime
Lethal Corporate Crime
A ratio of 7:1 – seven times as many work-placed deaths than homicides (once figures adjusted for risk)

15. Injuries resulting from Corporate Crime
Thalidomide
Chemie Grunenthal deliberately falsified test data, and concealed the dangers of the drug
Lung Cancer and Passive Smoking
Asbestos

16. Financial Costs of Corporate Crime
Mirror Pensioners
£440 million missing from Daily Mirror pension funds : 30,000 employees / former employees of Mirror Group affected
Levi (1987)
- Cost of fraud reported to fraud squads: £2113 million
- Twice the cost of theft, burglary and robbery that year

17. Other Harms Health Care Chemical Warfare Poverty Consumer Safety
negligence, injuries and deaths, drug reactions and interactions
Chemical Warfare
pollution, toxic wastes, smoking, food additives, pesticides
Poverty
Higher infant mortality, lower rates of health, shorter life expectancy
Consumer Safety
Defective Products

18. Problems with “Hidden” Corporate Crime
Construction of Official Statistics
Media Constructions of the Criminal: ‘Respectable’ v ‘Criminal’
CJS focus on “conventional” crime
Corporate crime largely outside control of Criminal Justice
Most cases emerge from campaigning / whistle-blowing
Crime is seen as individualistic, inter-personal, and finite: much corporate crime does not fit the model

19. Organized Crime
The production, supply and financing of illegal markets in good and services
Organizations established with criminal intent, though the divide from corporate crime is not always clear
Much organized crime is “governmental”: threatening the State’s monopoly of coercion, protection and extraction

20. Range of Organized Criminality
Organized theft and sale of stolen goods
Protection rackets
Markets covering prohibited goods and services
Drugs, illegal drinking, illegal arms, prostitution, people trafficking, gambling, pornography
Money Lending
Money laundering

21. Themes in the study of organized crime
Globalization
Localised ‘firms’ replaced by globalized enterprises
Relationship to legitimate businesses
Legitimate business as a “front”
Provision of services to businesses
Legitimate businesses providing services to organized crime (consciously or unconsciously)
Opportunities provided by criminalization

22. Problems for Criminology
Conceptual
Most of the ‘crimes of the powerful’ challenge mainstream assumptions of what crime is (e.g. victim/offender)
Empirical
Evidence of these crimes are much harder to obtain
Explanatory
Mainstream theories need adapting, though many can retain relevance
Direct and Indirect Causes
Theoretical
Is ‘crime’ the model? Harm?