“The increasing criminalization of corporate behavior in America…”

by Walter Olson on September 1, 2014

“…is bad for the rule of law and for capitalism,” opines The Economist, saying regulation-through prosecution has become “an extortion racket,” from hundreds of millions in Google drug-ad settlement money spread among Rhode Island police departments, to New York Gov. Andrew Cuomo’s muscling in to extract money from BNP Paribas in a settlement of legal offenses against U.S. foreign policy as distinct from New York consumers:

Who runs the world’s most lucrative shakedown operation? The Sicilian mafia? The People’s Liberation Army in China? The kleptocracy in the Kremlin? If you are a big business, all these are less grasping than America’s regulatory system. The formula is simple: find a large company that may (or may not) have done something wrong; threaten its managers with commercial ruin, preferably with criminal charges; force them to use their shareholders’ money to pay an enormous fine to drop the charges in a secret settlement (so nobody can check the details). Then repeat with another large company. …

Perhaps the most destructive part of it all is the secrecy and opacity. The public never finds out the full facts of the case, nor discovers which specific people—with souls and bodies—were to blame. Since the cases never go to court, precedent is not established, so it is unclear what exactly is illegal. That enables future shakedowns, but hurts the rule of law and imposes enormous costs.

{ 3 comments }

1 Chris Hoey 09.01.14 at 1:48 pm

Makes one nostalgic for the doctrine of mens rea as a predicate for guilt in criminal law.

2 Roman 09.01.14 at 5:24 pm

I think this fits with the practice of criminalizing normal political and governance behaviour. Witness the indictment of Governor Perry of Texas. Who is going to stop this?

3 John Cunningham 09.01.14 at 8:08 pm

this is far wider than looting of businesses. consider the confiscation of cash by police depts, usually without any arrest or charges. the cops keep the bulk of the funds. this is literally highway robbery,

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