“More than in most criminal law areas, prosecution of corporate criminals has a significant element of general deterrence,” the Department of Justice’s new strategic plan for 2007-2012 suggests.
Yet everyday we see more evidence that the Bush administration’s Department of Justice has no interest in deterring the ongoing epidemic of corporate crime.
During yesterday’s House Oversight and Government Reform Committee hearing on Blackwater, for instance, we heard about how a drunk Blackwater employee killed one of Iraqi Vice President Abdul-Mahdi’s bodyguards in the Green Zone on December 24.
Not only was the unnamed Blackwater employee almost immediately flown out of Iraq to avoid prosecution under the Iraqi legal system, but 10 months after the case was referred to the Department of Justice, he apparently has yet to face any charges. In fact, not one Blackwater or other private military contract employee has been charged for crimes committed in Iraq.
It’s obvious that problems like that are the inevitable result of the use of private contractors. And rather than try to regulate them (as Rep. Price has proposed in his bill — an approach that I previously endorsed but now do not because, as Jeremy Scahill has pointed out, the law would be virtually unenforceable), we need to push for a reversal of the privatization of war. More on that soon.
But what escapes this discussion so far, is how the Blackwater case fits the broader pattern of the Bush administration’s almost total failure to enforce the law against corporations.
Take the many False Claims Act cases filed by whistleblowers against the U.S. companies contracted in Iraq. As attorney Alan Grayson has testified numerous times before Congress:
“the administration has not actively litigated one single case of fraud, or even breach of contract, against any contractor in Iraq. Iraqis have looked on in disbelief, and then in anger, as one botched Iraq reconstruction job after another has been paid in full, and they see that this Administration won’t even protect our own troops from cheating and overcharging. Many Americans feel the same anger.”
Indeed, David Rose reports in the November issue of Vanity Fair that whistleblowers have filed dozens upon dozens of lawsuits, trying to prod the Bush administration to fight contractor fraud. The response: The administration has obtained court order after court order barring the filers and their attorneys from even discussing the cases - i.e. to keep the American people from knowing how bad the cronyism and corruption really is.
Grayson, who has handled many of the cases says “the Defense Department itself has been vigorous in its efforts to protect its troops from war profiteering. … The problem has been that the Bush administration Justice Department won’t do anything to recover the stolen money, much less punish the wrongdoers.”
Grayson cited the role of Peter Keisler, Assistant Attorney General of the Civil Division, who not only stifled the cases, but was also responsible for reducing settlement payments with the tobacco industry from $130 billion to $10 billion.
The point is that when it comes to corporate crime, the Department of Justice has become a major sinkhole, where cases of alleged fraud and corruption are routinely referred, and where they often disappear or are “settled” for pennies on the dollar, ending any chance of bringing the war profiteers to justice. (After four years, the Bush administration recovered just $14 million through settlements of whistleblower cases — which will pay for about half an hour’s cost of the war).
The problem goes well beyond the war profiteers. Other corporate crime cases that have been tossed into the prosecutorial blackhole include:
* The Department still has not cleared Halliburton of any charges resulting from a grand jury investigation into the company’s decision to conduct business in Iran in violation of Treasury Department regulations.
* The Department has failed to complete an investigation into one of the biggest cases of corporate bribery in history — the Halliburton Nigeria case — which extends back to Dick Cheney’s tenure as CEO of the criminogenic company.
* According to the Corporate Crime Reporter, the House Judiciary Committee has begun to ask why the Justice Department abruptly dropped a federal criminal probe into allegations of insurance fraud at Berkshire Hathaway’s General Reinsurance (Gen Re) unit.
Meanwhile, the Justice Department is rolling over as leading business groups push legislation that would weaken key enforcement tools against corporate crime. A campaign orchestrated by the Chamber of Commerce, the Business Roundtable, the Association of Corporate Counsel and their allies at the ABA and ACLU seeks to pass the so-called “Attorney-Client Privilege Protection Act,” which would limit the government’s power to pursue corporate fraud by prohibiting federal agencies (including the Department of Justice and the SEC) from demanding that companies cut off legal support for employees under investigation - a policy established by the Justice Department’s guidelines for corporate cases, a policy that was key to the prosecution of prominent corporate criminals such as WorldCom’s Bernie Ebbers. The Department of Justice has gone on record in opposition to this policy, but has done little to stop the legislation, which members of both parties are supporting.
It also appears that some U.S. attorneys who have tried to do their job and pursue corporate criminals have been subject to political retaliation. According to the Washington Post, for example, John Brownlee, the U.S. attorney responsible for handling the OxyContin case was called by Michael Elston, chief of staff to deputy attorney general McNulty (the person supposedly responsible for leading the Department’s efforts to crack down on corporate crime), the night before he secured a guilty plea from Purdue Pharma. Eight days later, Brownlee’s name appeared on a list compiled by Elston of prosecutors that officials suggested be fired.
It could be said that a few anecdotes don’t paint a complete picture, and I don’t doubt that there are still some sincere, adept people laboring long hours within the federal government to crack down on corporate crime. But their numbers are clearly dwinding and there has been little evidence that they have received much support, or that in the aggregate, the Department’s efforts are adequate to the scale of the problem.
Moreover, the few reports where the enforcement data has been crunched suggest that things are getting worse.
Experts at the Transactional Records Access Clearinghouse at Syracuse University track federal enforcement data, and say that white collar crime prosecutions credited to the FBI (the nation’s lead agency for cracking down on white collar crime) have dropped from 5,031 in FY 2001 to an estimated 2,693 for FY 2006.
And government employee watchdogs at Public Employees for Environmental Responsibility crunched the data and recently reported that EPA’s pursuit of criminal cases against polluters has dropped off sharply during the Bush administration, with the number of prosecutions, new investigations and total convictions all down by more than a third.
The same story has been told about occupational safety (OSHA), mine safety (MSHA), product safety (CPSC) and so forth. The cops are not only off the corporate crime beat. They’re at the bar getting wasted.
And those who follow the issue closely say weakened enforcement efforts have emboldened corporate criminals such as major polluters, who have begun to flout U.S. environmental laws, threatening progress in cleaning the air, protecting wildlife, eliminating hazardous materials, and countless other endeavors overseen by the EPA.
“You don’t get cleanup, and you don’t get deterrence,” says Eric Schaeffer, who resigned as director of the EPA’s Office of Civil Enforcement in 2002 to protest the administration’s approach to enforcement and now heads the Environmental Integrity Project, a watchdog group. “I don’t think this is a problem with agents in the field. They’re capable of doing the work. They lack the political support they used to be able to count on, especially in the White House.”
They say that “fish rot from the head” just like corporations and governments. The problem is that when the corruption becomes systemic as it has in recent years, simple decapitations are not enough.
A major overhaul is needed. Until we get that, Congress should be pressed to investigate the Department’s handling of the worst corporate crime cases, including Blackwater, and use his nomination process as an opportunity to grill Judge Michael MuKasey about what he will do to make corporate crime the priority it should be.
Charlie Cray is the director of the Center for Corporate Policy in Washington, DC. He helped establish Halliburton Watch, and is co-author of The People’s Business: Controlling Corporations and Restoring DemocracyMultinational Monitor magazine. (Berrett-Koehler), and is a former associate editor of Multinational Monitor magazine.
Copyright © 2007 HuffingtonPost.com, Inc.
THIS WORLD NEEDS TO GET A STRANGLEHOLD ON BLACKWATER AND NOT TURN LOOSE.THE PEOPLE OF IRAQ ARE RAMPING UP THE WATTAGE,OVER THIS ISSUE…two countries at war find commonground..help the people of iraq,in their fight against blackwater and we will be helping all americans,as well.the ironic development is that iraq has become an ally in the struggle against mercenaries…harness this power,now or this opportunity will quickly pass us by……
Corporate “criminals” run the Government, shooting oneself in the foot isn’t healthy.
Corporations do push and shove for a bigger piece of the pie, it rarely gets to prosecution. This won’t change at all when Chimp leaves, you’ll have the same players.
This is an excellent article.
Corporate crime starts at the lowest of business levels.
It seems you would have to be somewhat of a thug to start a business.
How far you are willing to circumvent the law for success, and how many cronies you can recruit in the industry and high places determines how far you can get.
For some people, any way.
And then the higher you get, the more you are above the law.
That is why a web site like this means everything.
Everyday people have to take back the system.
Currently the system only serves the haves.
Kind of like a third world country, isn’t it?
The use of mercenaries is always a sign of the imperial end—in our case because the politics of a military draft will destroy the GOP, and no less likely the timid Democrats, in a word the American ruling class. This is a LIFESTYLE WAR—We’re killing and dying to defend our delusionary rights as first consumers of the world from the oil on up….
BANE RICHTER,believe me,i know that and have lived that as the truth.my parent(a priest and civil rights leader) worked closely with martinlutherking and when mlk and the kennedy’s were killed,he told me it was hoover.(geo.bush) and the cia,that done the deeds and to watch(out) them for the rest of my life….i traveled and worked for baby doctor and political activist dr.benjamin spock,a very outspoken critic of the cia,hoover and bush…and had my life turned insideout and upside down from jail..faceoff..geo.sr.HARDLY ANYBODY KNOWS BETTER THAN ME,THAT THIS IS THE VERY SAME ENEMYWITHIN,and the very same gang,PEOPLE SUCH AS ME HAVE BEEN RAILING AGAINST FOR 40 YEARS !
whitewatersally, you are so right. My father was one of Hoover’s boys who was enough of a non-joiner to also warn me of the same people and institutions. He supported the draft dodgers and hoover critics in his own way.
He was a firm believer in the Warren Commission Report until he read classified Bureau files and recognized the name of the Special Agent in Dallas whom he knew of personally as a completely unethical and amoral human being. He said then that he changed his mind and further research which he would not divulge until his dying day, convinced him that the WCR was a fabrication.
Jack37 October 4th, 2007 2:45 pm
“The use of mercenaries is always a sign of the imperial end…”
Right on and every country in every civilization that tracks down this well worn path ends in disaster…Totally unbeknown to this current Bu$hCo Kleptocrats. For the very same reason that befallen the ‘Illegal Iraq Occupation’ [not ‘WAR’ which is incorrect nomenclature] The Military establishment loses strategic control and or tactical control and or legal control of the ‘defense parameters’ in the Conflict Zone….which is exactly what has happened.
That’s it! “They Lose Control” in other words, goes-to-hell-in a-hand-basket. All Mercenary Armies are a law unto themselves. What happens when the conflict is over; they go to the highest bidder…It’s a dangerous military construct and precedent Bu$hCo have given birth to. Dangerous for the integrity and future of American Democracy; which is then tearing at America’s Character..
Just as the military industrial complex kept self-perpetuating, even when any respectable enemy could not be found, it is apparent that the enriched and empowered mercenary companies will lobby and influence and do what it takes to continue even after Iraq. Bush is creating a new monstrous mouth to feed, with its own inertia, which could be as dangerous as or more dangerous than all the monsters the US government has created in the past.
Do Blackwater employees wear flag pins?
emily anne,blackwater wears the official(pin) badge of the bush regime..you can view it for yourself at probush.com the official slogan reads:”youre with us or youre with the enemy”
To Emily Anne: Even if the Blackwater USA mercenaries DID wear flag pins…so what??!!
Look at all the assholes we have running around this country who DO wear them!!! Certainly doesn’t make THEM patriotic Americans who are working to “protect and defend the Constitution of the United States of America”, now does it????
yess..and i knew we were headed for big troubles.. several years ago,when first i noticed my fourth of july americanflag pin said’made in china’
And just wait ’til our currency is tied to the euros or yuans.
The oligarchy makes the Sopranos look like Boy Scouts.
Confidential Agent (1945)
Brief Synopsis:
A Spanish spy and an American heiress battle fascists in England.
http://www.tcmdb.com/title/title.jsp?stid=1870
Help get this movie out on DVD. VOTE at
http://www.tcmdb.com/title/title.jsp?stid=1870
curmudgeon99–”… further research which he would not divulge until his dying day.”
I for one am very curious as to what your dad said on his dying day.
For corporate crime, the Corporate Crime Reporter is the place to go for info, http://www.corporatecrimereporter.com/
Let’s face it folks, we’re not just talking about a vast criminal conspiracy here, we talking and talking about a vast, on-going criminal enterprise.
Is a criminal a criminal if he/she is immune from prosecution?
Go figure.
A “reversal of the privatization of war” is a good way to put it, but only Congress can do this. A too small volunteer army, an exhausted national guard: what’s this administration to do? Simple, ask Congress for money to buy a private army and, can you believe it, it isn’t answerable to anybody or any law? And you believe these mercenary outfits are the brainchild of some former low-ranking military guy with money and contacts? Once and for all, give us a break on that one.
What is amazing to me is that there are progressive minded people (though not so many here on CD
) who actually believe that Hillary Clinton or Barack Obama would change this. Revolutionaries they ain’t, establishment politicians is what they are, and maintaining the status quo is what they will do. It is beginning to look like fascism in America is here to stay, albeit a kinder gentler sort of fascism under the dims 
It is certainly appalling that the DOJ does not zealously prosecute corporate crime, because it is a partner in corporate crime.
But pardon me if I observe that it is also appalling that we can’t seem to put that stupid “-gate” suffix away for good. It stopped being clever about thirty years ago, and has become unbearably tired and cliched.
meanwhile, the people’s courts have been turned into corporate boardrooms. we will continue to live under corporate rule for many years with the only difference-Rep. or Dem.-the degree of authoritarianism we’re subjected to under each regime.
Were there any crimes committed on 9/11/2001 in the U.S.?
I think the answer is yes, but there have been no trials, no indictments and no subpoenas issued.
None.
Why?
One place to start would be in indicting those responsible for hauling the evidence away from a crime scene before an investigation was complete.
We need a Justice Department that will investigate that and follow it up the chain of command until it is determined who ordered that massive obstruction of justice. Remember the oft repeated phrase from the Watergate era, “It’s the cover up that gets gets you.”
If there was dirty work that day other than by hijackers you can be pretty sure it was by trusted mercenaries and only trusted mercenaries. The same kind of people who are commiting murder in Iraq every day with no conscience.