1. WHITE COLLAR CRIME Lecture 11: Law and the Social Control of White Collar Crime

2. Origins of WCC Laws Industrialization. o Expanding capitalist economy o Vulnerability of workers, consumers, and investors. Anger over harmful working conditions, dangerous products, fraudulent sales, and environmental damage.

3. Target: Monopolistic Trusts Around the late 19 th century, monopolies were establishing strangleholds on major sectors of the economy. Expanding corporations discovered that it was more profitable to collude than to compete. The culmination of this assault on the free market was the formation of national trusts,

4. through which various companies (e.g., Standard Oil, DuPont) would fix prices or pool their operations under a single administration in order to eliminate competition. Resulting Law: Sherman Antitrust Act of 1890, the first federal statute to limit cartels and monopolies.

5. Target: Unsanitary Meat Packing Practices In 1905, Upton Sinclair published The Jungle, an expose of unsanitary practices inside the meat-packing industry.

6. A brief excerpt from The Jungle: There was a trap in the pipe, where all the scraps of meat and odds and ends of refuse were caught, and every few days it was the old man’s task to clean these out, and shovel their contents into one of the trucks with the rest of the meat! Sinclair further described how the spoiled meat was sold, how slaughtered livestock were piled into decaying storerooms overrun with rats, how sausages were stuffed with feces.

7. Sinclair also reported that workers sometimes would fall into rendering vats and be overlooked for days, until only their bones could be fished out. The rest of their remains would end up in containers of lard, which were then sold to consumers. The Jungle served as a catalyst for the enactment of tougher federal laws.

8. Resulting laws: o The Meat Inspection Act – (1906) set strict cleanliness requirements for meatpackers and created a program of federal meat inspection o The Pure Food and Drug Act – (1906) halted the sale of contaminated foods and medicines and required truth in labeling and advertising

9. Target: Dangerous Drugs and Devices Although drugs were covered by the 1906 Food and Drug Act, many drugs of dubious quality were still sold to the public. The event most responsible for more rigorous protection was the deaths in 1937 of 107 children who were poisoned by a “cure-all” known as Elixir Sulfanilamide.

10. Resulting Law: 1938 Federal Food, Drug, and Cosmetic Act, which required that companies perform safety tests on their proposed new drugs and submit the data to the FDA before being allowed to market their product.

11. Role of Muckrakers Muckrakers investigated and exposed social, political, and economic corruption and problems through their publications. They brought the issues to the public’s attention so that action could be taken to reform the problems.

12. In addition to Upton Sinclair, noted muckrakers include: Ida M. Tarbell (The History of the Standard Oil Company): Tarbell exposed the corruption in John D. Rockefeller’s Standard Oil Company which led to significant reforms in government oversight of big business. The book inspired the trustbusting campaigns of Presidents Roosevelt, Taft, and Wilson. Lincoln Steffens (The Shame of the Cities): Steffens exposed political corruptions and voter fraud at the local, state, and national level. His writings inspired the reforms instituted in many cities (city commissions, city managers, and city councils) and states (secret ballot, initiative, referendum, and recall).

13. Other Sources of WCC Laws U.S. Constitution o Established federal courts o Bill of Rights Case law o Clarifies ambiguities in statutory laws

14. Executive Lawmaking o Investigates, enforces, and prosecutes crime. Administrative Law o Many WCC crimes are violations of administrative law. o Administrative courts are an attractive alternative for prosecution of some forms of WCC.

15. Civil Law vs. Criminal Law Civil LawCriminal Law Intent play a lesser roleIntent plays a greater role Focuses on actual harmFocuses on the creation of risk Lesser evidentiary certainty (e.g., preponderance of the evidence) Greater evidentiary certainty (e.g., reasonable doubt) Informal proceedingsLess tolerant of procedural informality Goal is to compensateGoal is to punish