In
criminologyCriminology is the scientific study of the nature, extent, causes, and control of criminal behavior in both the individual and in society...
,
corporate crime refers to crimes committed either by a
corporationA corporation is created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter...
(i.e., a business entity having a separate legal personality from the
natural personVariously, in jurisprudence, a natural person is a human being, as opposed to an artificial, legal or juristic person, i.e., an organization that the law treats for some purposes as if it were a person distinct from its members or owner...
s that manage its activities), or by individuals acting on behalf of a corporation or other business entity (see
vicarious liabilityThe legal principle of vicarious liability applies to hold one person liable for the actions of another when engaged in some form of joint or collective activity.-History:...
and
corporate liabilityIn criminal law, corporate liability determines the extent to which a corporation as a legal person can be liable for the acts and omissions of the natural persons it employs...
). Some negative behaviours by corporations may not actually be criminal; laws vary between jurisdictions. For example, some jurisdictions allow
insider tradingInsider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
.
Corporate crime overlaps with:
- white-collar crime
Within the field of criminology, white-collar crime has been defined by Edwin Sutherland as "a crime committed by a person of respectability and high social status in the course of his occupation" . Sutherland was a proponent of Symbolic Interactionism, and believed that criminal behavior was...
, because the majority of individuals who may act as or represent the interests of the corporation are white-collar professionA profession is a vocation founded upon specialized educational training, the purpose of which is to supply disinterested counsel and service to others, for a direct and definite compensation, wholly apart from expectation of other business gain....
als;
- organized crime
Organized crime or criminal organizations are transnational, national, or local groupings of highly centralized enterprises run by criminals for the purpose of engaging in illegal activity, most commonly for monetary profit. Some criminal organizations, such as terrorist organizations, are...
, because criminals may set up corporations either for the purposes of crime or as vehicles for launderingMoney laundering is the process of disguising illegal sources of money so that it looks like it came from legal sources. The methods by which money may be laundered are varied and can range in sophistication. Many regulatory and governmental authorities quote estimates each year for the amount...
the proceeds of crime. The world’s gross criminal product has been estimated at 20 percent of world trade. (de Brie 2000); and
- state-corporate crime
In criminology, the concept of state-corporate crime refers to crimes that result from Public-private partnership and inherent distorted relations of the state and the policies and practices of commercial corporations surfacing as budget-bonus crime. The term was coined by Kramer and Michalowski ,...
because, in many contexts, the opportunity to commit crime emerges from the relationship between the corporation and the stateA state is an organized political community, living under a government. States may be sovereign and may enjoy a monopoly on the legal initiation of force and are not dependent on, or subject to any other power or state. Many states are federated states which participate in a federal union...
.
Legal person
An 1886 decision of the United States Supreme Court, in
Santa Clara County v. Southern Pacific RailroadSanta Clara County v. Southern Pacific Railroad Company, was a United States Supreme Court case dealing with taxation of railroad properties...
, has been cited by various courts in the US as precedent to maintain that a corporation can be defined legally as a 'person', as described in the Fourteenth Amendment to the U.S. Constitution. The Fourteenth Amendment stipulates that,
- "No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws."
In
English lawEnglish law is the legal system of England and Wales, and is the basis of common law legal systems used in most Commonwealth countries and the United States except Louisiana...
, this was matched by the decision in Salomon v Salomon & Co [1897] AC 22.
In Australian law, under the
Corporations Act 2001 (Cth), a corporation
is legally a 'person'.
Enforcement policy
Corporate crime has become politically sensitive in some countries. In the
United KingdomThe United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
, for example, following wider publicity of fatal accidents on the rail network and at sea, the term is commonly used in reference to
corporate manslaughterCorporate manslaughter is a criminal offence in English law, being an act of homicide committed by a company or organisation. In general, in English criminal law, a juristic person is in the same position as a natural person, and may be convicted for committing many offences...
and to involve a more general discussion about the technological hazards posed by business enterprises (see Wells: 2001).
The Law Reform Commission of New South Wales offers an explanation of such criminal activities:
- "Corporate crime poses a significant threat to the welfare of the community. Given the pervasive presence of corporations in a wide range of activities in our society, and the impact of their actions on a much wider group of people than are affected by individual action, the potential for both economic and physical harm caused by a corporation is great."
Similarly,
Russell MokhiberRussell Mokhiber is the editor of Corporate Crime Reporter, a legal newsweekly based in Washington, D.C. and founder of Single Payer Action.He is the author of Corporate Crime and Violence: Big Business Power and the Abuse of the Public Trust....
and Robert Weissman (1999) assert:
- "At one level, corporations develop new technologies and economies of scale. These may serve the economic interests of mass consumers by introducing new products and more efficient methods of mass production. On another level, given the absence of political control today, corporations serve to destroy the foundations of the civic community and the lives of people who reside in them."
Criminalization
Behavior can be regulated by the
civil lawCivil law, as opposed to criminal law, is the branch of law dealing with disputes between individuals or organizations, in which compensation may be awarded to the victim...
(including
administrative lawAdministrative law is the body of law that governs the activities of administrative agencies of government. Government agency action can include rulemaking, adjudication, or the enforcement of a specific regulatory agenda. Administrative law is considered a branch of public law...
) or the
criminal lawCriminal law, is the body of law that relates to crime. It might be defined as the body of rules that defines conduct that is not allowed because it is held to threaten, harm or endanger the safety and welfare of people, and that sets out the punishment to be imposed on people who do not obey...
. In deciding to criminalize particular behavior, the
legislatureA legislature is a kind of deliberative assembly with the power to pass, amend, and repeal laws. The law created by a legislature is called legislation or statutory law. In addition to enacting laws, legislatures usually have exclusive authority to raise or lower taxes and adopt the budget and...
is making the political judgment that this behavior is sufficiently culpable to deserve the stigma of being labelled as a crime. In law, corporations can commit the same offences as natural persons. Simpson (2002) avers that this process should be straightforward because a state should simply engage in
victimologyVictimology is the scientific study of victimization, including the relationships between victims and offenders, the interactions between victims and the criminal justice system — that is, the police and courts, and corrections officials — and the connections between victims and other social groups...
to identify which behavior causes the most loss and damage to its citizens, and then represent the majority view that
justiceJustice is a concept of moral rightness based on ethics, rationality, law, natural law, religion, or equity, along with the punishment of the breach of said ethics; justice is the act of being just and/or fair.-Concept of justice:...
requires the intervention of the criminal law. But states depend on the business sector to deliver a functioning economy, so the politics of regulating the individuals and corporations which supply that stability become more complex. For the views of
Marxist criminologyMarxist criminology is one of the schools of criminology. It parallels the work of the functionalist school which focuses on what produces stability and continuity in society but, unlike the functionalists, it adopts a predefined political philosophy...
, see Snider (1993) and Snider & Pearce (1995), for
Left realismLeft Realist Criminology emerged out of Critical Criminology as a reaction against what was perceived to be the Left's failure to take a practical interest in everyday crime, leaving it to the Right Realists to monopolize the political agenda on law and order...
, see Pearce & Tombs (1992) and Schulte-Bockholt (2001), and for
Right RealismIn criminology, Right Realism is the ideological polar opposite of Left Realism...
, see Reed & Yeager (1996). More specifically, the historical tradition of
sovereignSovereignty is the quality of having supreme, independent authority over a geographic area, such as a territory. It can be found in a power to rule and make law that rests on a political fact for which no purely legal explanation can be provided...
state control of
prisonA prison is a place in which people are physically confined and, usually, deprived of a range of personal freedoms. Imprisonment or incarceration is a legal penalty that may be imposed by the state for the commission of a crime...
s is ending through the process of privatisation. Corporate profitability in these areas therefore depends on building more prison facilities, managing their operations, and selling inmate labor. In turn, this requires a steady stream of prisoners able to work. (Kicenski: 2002)
BriberyBribery, a form of corruption, is an act implying money or gift giving that alters the behavior of the recipient. Bribery constitutes a crime and is defined by Black's Law Dictionary as the offering, giving, receiving, or soliciting of any item of value to influence the actions of an official or...
and
corruptionPolitical corruption is the use of legislated powers by government officials for illegitimate private gain. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is not considered political corruption. Neither are illegal acts by...
are problems in the developed world, and the corruption of public officials is thought to be a serious problem in developing countries, and an obstacle to development.
Edwin Sutherland's definition of white collar crime also is related to notions of "corporate" crime. In his landmark definition of white collar crime he offered these categories of crime:
- Misrepresentation in financial statements of corporations
- Manipulation in the stock market
- Commercial bribery
- Bribery of public officials directly or indirectly
- Misrepresentation in advertisement and salesmenship
- Embezzlement and misappropriation of funds
- Misapplication of funds in receiverships and bankruptcies
See also
- Accounting scandals
Accounting scandals, or corporate accounting scandals, are political and business scandals which arise with the disclosure of misdeeds by trusted executives of large public corporations...
- Anti-globalization movement
The anti-globalization movement, or counter-globalisation movement, is critical of the globalization of corporate capitalism. The movement is also commonly referred to as the global justice movement, alter-globalization movement, anti-globalist movement, anti-corporate globalization movement, or...
- Business ethics
Business ethics is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations.Business...
- Corporate abuse
- Corporate Accountability International
Corporate Accountability International is a non-profit organization, founded in 1977. Their campaign headquarters are in Boston, Massachusetts and they have offices in Oakland, California, Seattle, Washington, and Bogotá, Colombia...
- CorpWatch
CorpWatch is a research group based in San Francisco, California, USA. The group's mission is non-profit investigative research and journalism to expose corporate malfeasance and to advocate for multinational corporate accountability and transparency...
- Enron
Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately 22,000 staff and was one of the world's leading electricity, natural gas, communications, and pulp and paper companies, with...
- Industrial espionage
Industrial espionage, economic espionage or corporate espionage is a form of espionage conducted for commercial purposes instead of purely national security purposes...
- List of companies convicted of felony offenses in the United States
- Misleading financial analysis
Financial analysis of an organization is misleading when it is used to misrepresent the organization, its situation or its prospects....
- Multinational Monitor
The Multinational Monitor is a bimonthly magazine founded by Ralph Nader in 1980. It is published by Essential Information. Although its primary focus is on analysis of corporations, it also publishes articles on labor issues and occupational safety and health, the environment, globalization,...
- Mark Thomas
Mark Clifford Thomas is a left-wing English comedian, presenter, political activist and reporter from south London. He first became known as a guest comic on the BBC Radio 1 comedy show The Mary Whitehouse Experience in the late 1980s. He is best known for political stunts on his show, The Mark...
and Billy BraggStephen William Bragg , better known as Billy Bragg, is an English alternative rock musician and left-wing activist. His music blends elements of folk music, punk rock and protest songs, and his lyrics mostly deal with political or romantic themes...
- British campaigners for corporate accountability and manslaughter laws
External links
- Corporate Crime Reporter
- WhiteHouse.gov - 'Corporate Responsibility: The President’s Leadership in Combating Corporate Fraud', The White House
The White House is the official residence and principal workplace of the president of the United States. Located at 1600 Pennsylvania Avenue NW in Washington, D.C., the house was designed by Irish-born James Hoban, and built between 1792 and 1800 of white-painted Aquia sandstone in the Neoclassical...