750 words; about 3 minutes to read

Previous posts on this blog have discussed the issue of what counts as a crime.  Prof.  Melissa Hamilton wrote about how some criminal laws are about whether an action harms another person, but others are about whether an action offends people even if there is no real harm (think many drug charges or charges for things like loitering or vagrancy).

Harm and disapproval may be two main bases of criminal law, but they don’t tell the whole story either.  Another post, largely based on work by Prof. Douglas Husak, pointed out that many actions that create harm are not crimes, and many things that offend people deeply are also not crimes – for example most lying, cheating of many kinds, and most kinds of obnoxious behaviour.

Crimes are not always about harm

On the harm side, an employer can close a business throwing people out of work and eliminating their pensions and benefits.  A government policy can systematically disadvantage or penalize whole groups of people.  A factory can pollute lakes and rivers.  A faulty product can injure or poison large numbers of people.  These actions create plenty of damage but are rarely prosecuted as crimes.

In the end, politics determines which actions end up in the criminal law, and political decisions are rarely firmly based on clear principles but much more on what has made people angry at some point. In addition, whatever law may say, police and prosecutors have a great deal of discretion about who they decide to arrest and to charge.

White collar crime

One interesting example of how inconsistent our approach to crime is concerns what is typically known as ‘white collar crime’.  This would include things like fraud, stealing from a business, falsifying securities information, cheating on taxes, and so on.  The evidence suggests that these actions are more common than most of us think, create a lot of harm, yet are often not prosecuted.

An interesting example was the uproar in Canada last year about SNC Lavalin and deferred prosecution agreements.

Information about the extent of white collar crime in Canada is not all that readily available.  A recent article in the Huffington Post by Michael Hobbes explores the degree to which white collar crime is now rarely prosecuted in the U.S.

Tax evasion and fraud

In January, 2019, white-collar prosecutions fell to their lowest level since researchers started tracking them in 1998. Even within the dwindling number of prosecutions, most are cases against low-level con artists and small-fry financial schemes. Since 2015, criminal penalties levied by the Justice Department have fallen from $3.6 billion to roughly $110 million. Illicit profits seized by the Securities and Exchange Commission have reportedly dropped by more than half. In 2018, a year when nearly 19,000 people were sentenced in federal court for drug crimes alone, prosecutors convicted just 37 corporate criminals who worked at firms with more than 50 employees.”

According to the FBI and Internal Revenue Service, “Tax evasion siphons 10,000 times more money out of the U.S. economy every year than bank robberies.”  “Even though auditing millionaires and billionaires is one of the most cost-effective government activities imaginable—an independent report estimated in 2014 that it yielded up to $4,545 in recovered revenue per hour of staff time—the IRS investigated the returns of just 3 percent of American millionaires in 2017.”  “In 2017, researchers estimated that fraud by America’s largest corporations cost Americans up to $360 billion annually between 1996 and 2004. That’s roughly two decades’ worth of street crime every single year.”

Defective products

And another source estimated that tens of thousands of people a year are killed in the US as a result of product-related accidents or failures or deficiencies not including pollution deaths.  Yet only very rarely do such deaths lead to criminal charges, in comparison with, say, someone who dies as the result of a drunken brawl in a bar.  “In 2016, the CEO whose company experienced the deadliest mining disaster since 1970 served less than one year in prison and paid a fine of 1.4 percent of his salary and stock bonuses the previous year… because overseeing a company that ignores warnings and causes the deaths of workers, even 29 of them, is a misdemeanor.

Hobbes concludes: “American law is incapable of prosecuting crimes in which elites use their legitimate power for nefarious ends.”

Is the Canadian situation different?  Not very much, as revealed in the next post.



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