Edward Sutherland’s original definition of white-collar crime still holds resonance: white-collar crime is ‘a crime committed by a person of high respectability and high social status in the course of his (or her) occupation’. (Note the use of the word ‘high’ on two occasions.) This relic of my old sociology days in Ponders End Polytechnic was rediscovered this week, after I was invited to say a few words about white-collar crime for the new BBC-OU Thinking Allowed series.
The problem with white-collar crime is that it is seldom black or white, and a significant minority of it is far from petty. It is all around us and it is a rather complex phenomenon. It appears to be far more tolerated in society than other forms of crime.
Get out of jail free? A white collar
Sutherland’s 1947 definition could, I believe, be applied to two actions, in their different ways both criminal, that have generated some of the worst carnage in the history of the world – the 1984 Bhopal disaster in India, and the invasion of Iraq. For, however we define it, white-collar crime seems to be a particularly grubby, devious and, at times, sinister and nasty activity, which often has extremely damaging human, and far-reaching societal impacts.
White-collar crime is ‘a crime committed by a person of high respectability and high social status in the course of his (or her) occupation'.
Many white-collar criminals escape punishment, and more often than not, their misguided gains are not redeemed. Where justice does follow white-collar criminals – as in the recent US prosecution of Bernie Madoff for fraud – it seems the exception rather than the rule; mainly because the costs of prosecuting are so prohibitive, and the justification for prosecuting is often so complex and morally dense, very few legislators bother.
There is an old saying: where there is money to be made, fraud is not far behind, like bees to honey. White-collar crime is enormously costly for society. In the UK, a report from the Association of Chief Police Officers revealed that, in 2007, fraud, for example, was costing the UK a huge sum – between £14bn and £20bn each year, equivalent to a loss of £330 for every UK inhabitant every year. So in the last three years, white-collar fraudsters have done me, and you, out of approximately £2,000! And mostly got away with it!
White-collar criminals are in the main sentenced, punished and perceived by the public differently to other types of criminals. The length of criminal penalties tend to be related to the degree of physical force or violence involved in a crime – rather than to the amount of monetary loss – though this does not always mean that the punishment fits the crime, as one of my examples might reveal.
For many, too, the opportunity for fraud, bribery, insider trading, embezzlement, identity theft, illegal waste dumping, forgery, fiddling expenses (all MPs note) are activities differentially distributed in society. In the age of new technologies, more and more of us are at it, and in increasingly more sophisticated and difficult to detect ways. Who has not illegally downloaded music or a movie, for example? But there are contradictions.
Some people are more vulnerable to prosecution than others. For example, each year over 700 people, mostly women, are imprisoned for not paying their TV licence fee, while our prisons remain relatively free of tax evaders. Most are living offshore anyway. In the US, in 2007, the latest figures I could find revealed that Americans owed, in tax, the equivalent of 14 per cent of federal revenues – $345bn.
In the UK, our Serious Fraud Office (SFO) has a deplorable history of failed prosecutions. And yet, in UK society, benefit fraudsters are far more likely than income tax evaders to face justice, while individuals indulging in occupational crime are more likely to face justice than corporations acting criminally, and prosecutions for state-sponsored corporate crime are very rare indeed.
Justice is still chasing those responsible for the world’s worst industrial environmental disaster – the Bhopal gas leak in India – which killed over 7,000 people, poisoned a further 500,000 and the impacts of which are still being felt today. The Indian Government estimate that a further 15,000 people have since died, and that each month 15 more people die because of the fatal legacy of toxic contamination.
In June 2009, The Congress of the United States wrote to the Chief Executive Officer of Dow Chemical Company (Dow now own Union Carbide who ran the Bhopal site at the time of the 1984 disaster):
This coming December marks the twenty-fifth anniversary of the chemical disaster in Bhopal, India. It is with urgency that we write to urge Dow Chemical Company – which wholly owns Union Carbide – to immediately take steps towards remediation and redress. We request that Dow ensures that a representative appear in the ongoing legal cases in India regarding Bhopal, that Dow meets the demands of the survivors for medical and economic rehabilitation, and cleans up the soil and groundwater contamination in and around the factory site …
Despite repeated public requests and protests around the world, Union Carbide has refused to appear before the Bhopal District Court to face the criminal charges pending against it for the disaster. Union Carbide was served with a summons to appear in Bhopal District Court in 1992 and publicly stated it would not respond to the summons. Although Dow Chemical set aside $2.2 billion in 2002 to put towards Union Carbide's pending asbestos liabilities in the United States, it has continued to evade the liabilities it inherited from Bhopal.
So it seems the innocent victims of the worst of corporate excess imaginable can still find justice elusive.
Of course, one reason for prevarication and lack of action is that more benign treatment is possible because it is difficult to assign blame, and because prosecuting corporations can be damaging to innocent employees and shareholders, who play no part in events that could result in prosecution.
In the UK, those institutions established to protect us from white-collar crime, however mundane, have rather blemished track records. The SFO’s authority was further undermined when Tony Blair controversially decided to terminate its investigations into BAE, thus ensuring that any allegations about corporate bribery and corruption between BAE and Saudi princes could not be substantiated in law. You might want to consider this, while assessing whether you think Tony Blair is a fit and proper person when it comes to the Presidency of the European Union; he does have what might be called ‘white-collar baggage’. Even the Premier League in football seems to have more rigorous ‘fit and proper person’ tests, though even these can be circumscribed.
I was thinking about Sutherland’s definition and Tony Blair’s rumoured bid for the European Presidency afresh today, when I read about how protestors in the Medway area had defaced British Legion Poppy Appeal posters.
The poster shows Ms Wright, from Mansfield, Nottinghamshire, who became one of the public faces of the Poppy Appeal after her husband, Damian, died in a roadside explosion in Afghanistan in 2007, aged 23. Of course, the nation is divided on whether Britain should be conducting a war in Afghanistan, and in this instance the message ‘prosecute Blair’ might have been better employed in reference to the invasion of Iraq – an invasion which, lacking any UN Security Council mandate, had no strict legal justification. It was not an invasion of self-defence, no matter how hard Blair tried to fudge the weapons of mass destruction issue. No weapons of mass destruction have ever been found, and the subsequent deaths, of between 100,000 and a million people (so far), is a very high price to pay for regime change. Six years after the invasion, the scars still plague the Iraqi people.
On October 26th, Foreign Secretary David Milliband, backing Blair for EU President, said the EU needed a President who was ‘a big hitter who could stop the traffic’. Blair’s role in the invasion of Iraq certainly exhibited big hitting and it did stop the traffic in many places. The bombs still destroy lives and stop the traffic across Iraq. Over 700 people were killed this week in the Green Zone in Baghdad. The traffic was not so much stopped as blown to smithereens.
Within the UK, there are, as yet, no means for bringing charges against Blair, even if a strong case could be made on legal grounds for the Iraq invasion. Yes, Blair will be called to testify at the public inquiry into the war, which begins on November 24th this year, but he will not face any retribution. In 2006, the Law Lords decided that international crimes of aggression had not been enshrined in our domestic laws
The higher your social status...the more likely you are to get away with it
But Blair would run the risk of arrest in those countries that have now incorporated international crimes of aggression under their domestic laws. So far within the EU, two countries, Latvia and Estonia, have done so. Given the cloud that still surrounds the reasons for going to war in Iraq, it might be rather risky to elect a person as President of the European Union, who could be vulnerable to prosecution within member states. Perhaps Blair should stick to being Middle East envoy, where he has made little progress, and where, after all, there is far more important work to do.
So, thinking aloud about white-collar crime can take you on a long and difficult journey, from Bhopal to Iraq, and you might conclude, like me, that not only does the punishment seldom fit the crime, but that the higher your social status, no matter how heinous the act, the more likely you are to get away with it. I mean look at Blair’s only definite ally for President among European leaders, Italy’s Silvio Berlusconi…no don’t tempt me.