Tuesday, February 17, 2009

Pay the big fine but deny any and all wrongdoing!!

Here's one for you: Large corporation does a bad thing and the government investigates. Government finds sufficient grounds to support its claims that the offending corporation has in some way broken the law and defrauded the consumer so it begins the "negotiation" process to "resolve " the dispute. Negotiations usually result in a big fine (never big enough) being assessed and the corporation paying the "get out of jail" fine, admitting no guilt and insisting it did nothing wrong. Sound familiar?

A few weeks ago I was reading the WSJ and noticed that over an area of two pages of stories, various companies were identified as having paid over 1.3 billion dollars in fines to "settle" government allegations of wrongdoing. What? That's right, do wrong and just pay a relatively small fine to sweep the crime under the rug. It happens almost weekly. A big company defrauds you and the government settles the dispute by "working out" a fine that lets the perpetrator completely off the hook.

Unlike drug busts where the cops seize any assets (house(s), cars, boats, planes, cash etc.) you own that "might" have been associated with ill gotten profits from dealing in illegal drugs, big pharmaceutical companies (the biggest of the world's drug dealers) pay relatively small fines for breaking civil law and they NEVER have their "crime producing" assets seized. So small are most government imposed fines that they barely make a dent in the ill gotten profits resulting from these breaches of the law. The DEA seizes assets even before a suspect is ever found guilty. For the big corporations, life on the dark side is much more manageable.

No jail time (in the overwhelming majority of cases), no public trial, no witness testimony, no real embarrassing disclosures and NO asset forfeitures. Just a small fine to be negotiated between well heeled friends.

Imagine if you could agree to pay your traffic fine but admit no wrongdoing. There would be no record of your offense, no DMV demerit points and no ensuing increase in your insurance premiums. Alas, this option is only reserved for corporations.

I believe that ANYTIME anyone agrees to pay a fine for WHATEVER REASON, the law should be such that you have to plead "guilty" to committing the offense as charged. As a result of pleading guilty, a criminal record is established whether you're an individual or a corporation. Enough is enough.

Why should corporate crime punishment boil down to paying fines that are usually not even high enough to deny the offending company the ill gotten profits it generated from its transgression let alone punish them for doing so? THIS MUST STOP!

You commit the crime, you plead guilty AND you pay the fine or, in America, you always retain the right to fight the charges in court and let a judge or jury decide the outcome. If you did nothing wrong, you pay nothing - what a concept! If you are found guilty, then you pay the fine.

Don't be fooled: NO ONE EVER CASUALLY PAYS A FINE FOR AN OFFENSE THEY DID NOT COMMIT. They pay the fines because its a good way of doing business. It's cheaper than going through a trial and no one has to admit any wrongdoing. You even get to keep all the money you made defrauding people by your planed actions. What a deal!!!!

Just today we heard that the top executives at RIM the maker of Blackberry phones committed fraud over several years by manipulating and back dating huge stock options that enabled them to make millions in illicit gains. They agreed to pay more than $1 milliuon in fines but were never compelled to admit any wrongdoing whatsoever!!!!!!!

I say enough is enough. No more letting the bad guys off the hook so easily. If you agree to pay the fine, you must also plead guilty as charged! What do you think?

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