[ql06] CRIMINAL: "White Collar Crime"
- From: "Ken Campbell -- LAW'06" <2kc16@xxxxxxxxxxxxxxxx>
- To: <ql06@xxxxxxxxxxxxx>
- Date: Wed, 15 Oct 2003 18:03:01 -0400
Stan Corbett has been banging the drum about the speaker in Room 202
tonight. (7 pm)
Any in attendance are welcome to provide the list with a "news report."
Be a list correspondent! :)
Here's a column on the history of that speaker's subject, from this
morn's WSJ.
Ken.
--
It is the wretchedness of being rich that you have to
live with rich people.
-- Logan Pearsall Smith
--- cut here ---
A Thirties Revelation: Rich People Who Steal Are Criminals, Too
DEJA VU
By CYNTHIA CROSSEN
WALL STREET JOURNAL
Wednesday, October 15, 2003
Before Edwin Sutherland, most criminologists believed that theft was a
pathological reaction to poverty.
But in 1939, Mr. Sutherland, a widely respected sociology professor at
Indiana University, coined a new term: white-collar crime.
People of "respectability and high social status," Mr. Sutherland
asserted, broke laws as often as members of the lower classes, but the
government, media and public didn't think of them as criminals. Until
scholars accepted that affluent and reputable people also steal, Mr.
Sutherland argued, they would never truly understand the criminal mind.
Mr. Sutherland had begun his study of the "criminals of the upper world"
by counting the adverse legal decisions against 70 of America's largest
corporations since their founding.
Not a single one had an unblemished record. Two -- Armour & Co. and
Swift & Co. -- had 50 violations each for offenses such as financial
fraud, restraint of trade and false advertising. The average was 14.
The pervasiveness of law breaking in corporate America convinced Mr.
Sutherland that the conventional wisdom about economic crime was wrong.
If poverty was the primary risk factor, why were so many successful
professionals doing it? Furthermore, he discarded the notion that
white-collar criminals were "rotten apples," individuals born with a
predisposition to steal. White-collar crime is learned behavior, Mr.
Sutherland argued, a consequence of corporate cultures where regulation
is regarded as harassment, and profit is the measure of the man.
Quoting the 19th-century white-collar scoundrel Daniel Drew, Mr.
Sutherland wrote: "A prickly conscience would be like a white silk apron
for a blacksmith. Sometimes you've got to get your hands dirty, but that
doesn't mean the money you make is also dirty. Black hens can lay white
eggs."
Until the 20th century, a person who bilked the public without using
force was rarely prosecuted. Caveat emptor -- buyer beware -- was the
prevailing ethic. Or as one early-20th-century judge said, "We are not
to indict one man for making a fool of another." The so-called robber
barons of the 19th century, such as Daniel Drew, who literally invented
the term "watered stock," didn't even get a slap on the wrist.
Then came the Sherman Antitrust Act (1890), the Federal Trade Commission
(1914), the Securities and Exchange Commission (1934), and a host of
other laws and regulations that attempted to set limits on what people
can do in the name of profit. Yet, while white-collar infractions were
deemed illegal, they still weren't necessarily criminal.
"Most of the defendants in antitrust cases aren't criminals in the usual
sense," wrote Wendell Berge, an assistant U.S. attorney general, in
1940. "There is no reason why antitrust enforcement requires branding
them as such."
It wasn't until 1961 that any business executives convicted of violating
the Sherman Act actually went to prison.
In the decades since Mr. Sutherland classified white-collar crime,
criminologists have argued fervently about his work. Some believe that
only cases adjudicated by criminal courts are crimes. Others say there's
an obvious difference between staring down a gun barrel and losing some
retirement savings. White-collar crime has "diffuse victimization," as
it's described: There are usually many victims over a long period of
time. The thief and victim almost never come face to face. The crimes
are complex and difficult even for other business executives to
understand.
That helps explain why, in a single day recounted by Christopher Stone
in his 1975 book, "Where the Law Ends," two cases being decided in a
Georgia court ended so differently. In one case, an embezzler had stolen
$4.6 million from a bank. In the other, three men had robbed a bank of
about $14,000. The embezzler was sentenced to 10 years in jail; the
robbers received 16 years each.
However they're punished, white-collar criminals are clearly different
from other criminals because they usually have good salaries and hefty
bank balances. The question of why a rich person steals has also been
the subject of lively debate. One psychiatrist theorizes that such
people have a "fantasy of omnipotence," and are guided by the "common
business ideal of success at any price." Another sociologist has
suggested that because many business people are ambitious, competitive
and aggressive, they experience a feeling of tension that must be
relieved somehow, sometimes by stealing.
Still another posits that business people face contradictory
expectations: As a citizen, they're supposed to obey the law, but as an
executive, they're supposed to resist the law whenever possible. C.
Wright Mills blamed white-collar crime on "structured immorality," an
impersonal corporate culture and a lack of personal responsibility among
executives.
Mr. Sutherland never pinpointed the reason why some business executives
steal, and others don't. But he did lament the costs of such crimes, and
not just the economic ones. "White-collar crimes," he wrote, "violate
trust and thus create distrust, and this lowers social morale and
produces social disorganization on a large scale."
E-mail comments to cynthia.crossen@xxxxxxxx
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