White Collar Crime In this paper the exciting criminal phenomenon known as white-collar crime will be discussed. Corporate Crime and Computer Crime will be discussed in detail. Crime preventative agencies such as the NCPC (National Crime Prevention Council) will also be researched. White Collar Crime The late Professor Edwin Sutherland coined the term white-collar crime about 1941. Sutherland defined white-collar crime as “a crime committed by a person of respectability and high social status in the course of his occupation” (Siegel 337) White-collar crime includes, by way of example, such acts as promulgating false or misleading advertising, illegal exploitation of employees, mislabeling of goods, violation of weights and measures statutes, conspiring to fix prices, evading corporate taxes, computer crimes, and so on. White-collar crime is most distinctively defined in terms of attitudes toward those who commit it.
These crimes are punishable by law, however it is generally regarded by the courts and by sections of the general public as much less reprehensible than crimes usually punished by the courts. The other types of crime are blue-collar offenses, which are predominately crimes of the under-privileged. White-collar crimes are punished far less harshly than blue-collar crimes, which shows societies attitudes towards the two sections of society. White-collar crime is attractive to criminals because it brings material rewards with little or no loss of status. (Taft & England 201) For some, white-collar crime is not viewed as a “crime” at all, because of its non-violent nature. Violent crime has an immediate and observable impact on its victim which raises the ire of the public, whereas white-collar crime frequently goes undetected or is viewed as a bending of the rules. Yet white-collar crime can create the greater havoc.
The victim of an assault will recover; however, the impact of a fraud can last a lifetime. This is especially true when the elderly are victimized, as they have little or no hope of re-establishing themselves in financial terms. Contrary to the popular belief, white-collar criminals are thieves and the methods used to conceal their offenses are both artful and ingenious. Concealment of the crime is always an objective of the offender, and it becomes an element of the crime itself. Because it is an artful form of deceit, which is skillfully disguised, the investigation itself is often long and laborious as far as proving criminal intent is concerned. The offence itself may be disguised in a maze of legitimate transactions, which are quite proper if viewed in isolation; however, the cumulative effect is the commission of a criminal offence.
From the standpoint of the criminal, the ideal white- collar crime is one that will never be recognized or detected as a criminal act. (Radzinowicz 325-335) Corporate Crime Corporate crime is the type of crime that is engaged in by individuals and groups of individuals who become involved in criminal conspiracies designed to improve the market share or profitability of their corporations. ( Siegel 338) Corporations are legal entities, which can be and are subjected to criminal processes. There is today little restriction on the range of crimes for which corporations may be held responsible, though a corporation cannot be imprisoned. The most controversial issue in regard to the study of corporate crime revolves around the question of whether corporate crime is “really crime.” Corporate officials, politicians, and many criminologists object to the criminological study of corporate criminality on the strictest sense of the word. The conventional and strictly legal definition of crime is that it is an act, which violates the criminal law and is thereby punishable by a criminal court.
From this perspective a criminal is one who has been convicted in a criminal court. Given these widely accepted notions of crime and criminals, it is argued that what is called corporate crime is not really crime and should not be considered as such by either the public or criminologists. (Hochstedler 22) It does appear that now in recent times society has had a growing concern about white-collar and corporate crime. Studies have indicated that the public now judges white-collar criminality to be more serious than it had been in the past, people now have lost confidence in the people running major companies, and most American corporate executives are believed to be dishonest. The public’s concern with corporate crime has grown recently, but has been evident for several years. I will use one of the most memorable corporate crime cases in history; The Ford Pinto Case to prove my statement. (Cullen/Maakestad/Cavender 43) The product liability lawsuit and appeal titled Grimshaw v. Ford Motor Company is a case in point and ought to be read by everyone. Grimshaw is an example of the type of thing that can happen when an industry insolates itself from competition.
The Pinto affair has very important lessons for us all. Its story can teach us much about the power of huge corporations and what corporations can do when they face no real competition. It carries an important lesson about how the minds of those who run the world’s colossal corporations work. In November of 1971 the Grays purchased a new 1972 Pinto hatchback manufactured by Ford in October of 1971. The Grays had trouble with the car from the outset.
During the first few months of ownership, they had to return the car to the dealer for repairs a number of times. Their car problems included excessive gas and oil consumption, down shifting of the automatic transmission, lack of power, and occasional stalling. It was later learned that the stalling and excessive fuel consumption were caused by a heavy carburetor float. On May 28, Mrs. Gray, accompanied by 13-year-old Richard Grimshaw, set out in the Pinto from Anaheim for Barstow to meet Mr.
Gray. The Pinto was then six months old and had been driven approximately 3,000 miles. Mrs. Gray stopped in San Bernardino for gasoline, got back onto the freeway (Interstate 15) and proceeded toward her destination at 60 – 65 miles per hour. As she approached the Route 30 off-ramp where traffic was congested, she moved from the outer fast lane to the middle lane of the freeway.
Shortly after this lane change, the Pinto suddenly stalled and coasted to a halt in the middle lane. It was later established that the carburetor float had become so saturated with gasoline that it suddenly sank, opening the float chamber and causing the engine to flood and stall. A car traveling immediately behind the Pinto was able to swerve and pass it but the driver of a 1962 Ford Galaxie was unable to avoid colliding with the Pinto. The Galaxie had been traveling from 50 to 55 miles per hour but before the impact had been braked to a speed of 28 to 37 miles per hour. At the moment of impact, the Pinto caught fire and its interior was engulfed in flames.
According to the plaintiff’s expert, the impact of the Galaxie had driven the Pinto’s gas tank forward and caused it to be punctured by the flange or one of the bolts on the differential housing so that fuel sprayed from the punctured tank and entered the passenger compartment through gaps resulting from the separation of the rear wheel well sections from the floor pan. By the time the Pinto came to rest after the collision, both occupants had sustained serious burns. When they emerged from the vehicle, their clothing was almost completely burned off. Mrs. Gray died a few days later of congestive heart failure as a result of the burns.
Grimshaw managed to survive but only through heroic medical measures. He has undergone numerous and extensive surgeries and skin grafts and was expected to have to undergo additional surgeries over the next 10 years. He lost portions of several fingers on his left hand and portions of his left ear, while his face required many skin grafts from various portions of his body. This graphic account of these events is needed to grasp the full impact of this tragic situation which could have been avoided by Ford for very minimal cost. Each Pinto could have been repaired for $4-$8 a piece.
Management knew of these defects but still decided to produce and release the Pinto to the public. The idea for the Pinto, as has been noted, was conceived by Mr. Iacocco [sic], the Executive Vice President of Ford. The feasibility study was conducted under the supervision of Mr. Robert Alexander, Vice President of Car Engineering. Ford’s Product Planning Committee, whose members included Mr.
Iacocca, Mr. Robert Alexander, and Mr. Harold MacDonald, Ford’s Group Vice President of Car Engineering, approved the Pinto’s concept and made the decision to go forward with the project. Harley Copp, a former Ford engineer and executive in charge of the crash testing program, testified that the highest level of Ford’s management made the decision to go forward with the production of the Pinto, knowing that the gas tank was vulnerable to puncture at low rear impact speeds creating a significant risk of death or injury from fire and knowing that fixes were feasible at nominal cost. He testified that management’s decision was based on the cost savings, which would inure from omitting the fixes.
This was the corporation’s outright trade of human life for profit. The jury in this case brought in a verdict for the plaintiffs in excess of $128 million of which $125 million were punitive damages. There is another very important point to be made by this case. Ford knew that the Pinto was going to kill or burn people because of its design, but, because of the “cost savings which would inure from omitting the fixes,” Ford decided to let it go. Consider carefully exactly what Ford Motor Company was doing here.
One could argue that Ford was conducting cost-benefit analysis. To the Ford executives, the benefits were clear, calculable, and immediately available. Ford would save a few dollars on each Pinto manufactured. The costs would accrue in the future and would not be paid by Ford. Unfortunately, the costs were the lives and permanent injuries of nameless and faceless future consumers. The Pinto would appear to be a prime example of laying off costs.
The suffering, the destroyed lives and families apparently were of minor consideration in the calculations when Ford performed the cost-benefit analysis. Corporate crime has also been linked to political leaders in this country. Corporate crime is a crime of power and profit for the offenders. Large and powerful corporations who have the support of prominent political leaders can be difficult to prosecute in corporate crime cases. At the Progress & Freedom Foundation conference held at the Mayflower Hotel in Washington, D.C., Speaker of the House Newt Gingrich (R-Georgia) was asked why he spent so much time addressing the issue of street crime and violence, while ignoring the issue of corporate crime and violence. Gingrich answered, “If I went around the country and said, ‘Vote for us and there will be no more white-collar fraud,’ the average voter will say, ‘I don’t think he gets it.'” But corporate crime is more than just white-collar fraud.
And one reason that Gingrich doesn’t address the issue of corporate crime might be because one of the corporations that has brought him to power is Southwire Co. of Carrollton, Georgia. Southwire has close ties to Gingrich, it dominates the political economy of Carroll County, where Gingrich’s political career was launched, and it is a corporation with a criminal record. Individuals affiliated with Southwire Co., including its chief executive officer, Roy Richards, and its president, James Richards, have donated more than $18,000 to Gingrich’s campaigns for Congr …