Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
Keep CounterPunch ad free. Support our annual fund drive today!

Business Groups Take Left Flank


On corporate crime, business executives, corporate think tanks, business magazines and newspapers are starting to take the left flank of both the Republican and Republican parties.

No leaders of the Republican or Democratic Party are calling for tougher sanctions against corporate criminals. In fact, you will rarely find a politician on the national stage from either party using the term “corporate crime.”

No leaders of the Republican or Democratic Party are calling for the return of Glass Steagall, the depression era law that separated the investment from the commercial units of banks.

But business executives, free market think tanks and business magazines are starting to say yes – crack down on corporate crime, bring back Glass Steagall.

Last week, the Economist magazine ran a long article and editorial calling for tougher sanctions against corporate crime.

“At the moment, it seems, some corporate crimes pay handsomely,” the Economist declared in an editorial last week asking Is Crime Rational?

“Banks, drug companies and weapons makers have all been stung with record fines recently,” the Economist wrote. “But while fines keep going up, corporate rule breaking – for example, the LIBOR banksters – seems to be booming. Why aren’t high fines deterring bad behavior?”

“One reason could be that the fines, which can be seen as the price of crime, are too low. The economics of crime would support this idea. Many crime economists use a framework set out by Gary Becker of the University of Chicago. The idea is that would-be criminals rationally weigh up the expected costs and benefits of breaking the rules. If the probability of being caught or the level of fine is too low, then the expected costs might be outweighed by the benefits.”

Similarly, earlier this month, USA Today editorialized for more criminal prosecution of corporate executives.

In an editorial titled Fight Corporate Crime with More than FinesUSA Todayconcluded with this – “The way to change criminal behavior is with criminal penalties. In the finance and drug industry scandals, they’ve been too scarce.”

Eamonn Butler, director of the Adam Smith Institute, a free market think tank in London, took to the pages of the Wall Street Journal last week with a startling lead sentence – “More readers of this paper ought to be in jail.”

In an opinion article titled Charge the Criminals, Not the Companies, Butler quotes former New York Attorney General Eliot Spitzer as saying – “The only thing that will work is CEOs and officials being forced to resign and individual culpability being enforced.”

And Butler would give shareholders much more power to run the companies they own – and he would hold them accountable for corporate wrongdoing.

“I would like to see much greater power given to shareholders to run their companies. It is their money,” Butler told Corporate Crime Reporter in an interview last week. “They are the ones who profit from it. And therefore they should have the power to run it without heavy handed regulation from the state which robs shareholders of a great deal of power.”

Then you have the case of Sandy Weill, the former CEO of Citigroup, who engineered the repeal of Glass Steagall, the Depression era law that led to the consolidation of the big banks.

Last week, Weill called for the breaking up of the big banks.

Then you have Phillip Purcell, former chairman and CEO of Morgan Stanley, taking to the pages of the Wall Street Journal arguing that breaking up the big banks will make them better investments for shareholders.

Last week, Purcell wrote an op-ed article in the Journal titled Shareholders Can Cure Too Big to Fail.

“I spent the better part of 20 years aggregating financial businesses to achieve the benefits that can come from institutions that have a variety of products and services,” Purcell wrote. “The benefits were considerable and they still are. However, the market is now discounting the stock prices of financial institutions with investment banking and trading. Breaking these companies into separate businesses would double to triple the shareholder value of each institution.”

“The five obvious too-big-to-fail institutions – Bank of America, Citigroup, J.P. Morgan Chase, Morgan Stanley and Goldman Sachs – have a median stock-market value of considerably less than the values of those component businesses they own that have predictable earnings streams, strong franchises and established client bases,” Purcell wrote.

“Breaking up these banks and isolating their investment banking and capital-markets businesses solve the shareholder-valuation problem. And by not allowing investment banks to fund the assets on their balance sheets with insured deposits, the risk to taxpayers is largely reduced.”

Recently retired Citigroup chairman Richard Parsons put the blame on the financial crisis on the repeal of Glass-Steagall.

“To some extent what we saw in the 2007, 2008 crash was the result of the throwing off of Glass-Steagall,” Purcell said earlier this year. “Have we gotten our arms around it yet? I don’t think so because the financial-services sector moves so fast.”

I’m not sure the words “corporate crime” or “Glass Steagall” have ever publically crossed the lips of President Obama or Mitt Romney during this campaign.

My guess is they haven’t.

But their corporate buddies are starting to pay attention.

Maybe they should too.

[For the complete transcript of the Interview with Eamonn Butler, see 26 Corporate Crime Reporter 30, July 30, 2012, print edition only.]

Russell Mokhiber edits the Corporate Crime Reporter.

Russell Mokhiber is the editor of the Corporate Crime Reporter..

More articles by:

2016 Fund Drive
Smart. Fierce. Uncompromised. Support CounterPunch Now!

  • cp-store
  • donate paypal

CounterPunch Magazine


Weekend Edition
October 28, 2016
Friday - Sunday
John Pilger
Inside the Invisible Government; War, Propaganda, Clinton & Trump
Andrew Levine
The Hillary Era is Coming: Worry!
Gary Leupp
Seven World-Historical Achievements of the Iraq Invasion of 2003
Paul Street
Standing Rock Water-Protectors Waterboarded While the Cleveland Indians Romped
Stanley L. Cohen
Israel: 1984 Everlasting
Michael Brenner
American Foreign Policy in the Post-Trump Era
Luciana Bohne
Crossing the Acheron: Back to Vietnam
Robert Hunziker
The Political Era of Climate Refugees
Stephen Cooper
Alabama’s Last Execution was an Atrocity
Pete Dolack
Work Harder So Speculators Can Get More
Joyce Nelson
Canadians Launch Constitutional Challenge Against CETA
John Laforge
US Uranium Weapons Have Been Used in Syria
Paul Edwards
The Vision Thing ’16
Arshad Khan
Hillary, Trump and Sartre: How Existentialism Disrobes the Major Presidential Candidates
Peter Lee
It’s ON! Between Duterte and America
Joseph Grosso
Starchitects in the City: Vanity Fair and Gentrification
Patrick Carr
Economic Racial Disparity in North Carolina
David Swanson
Public vs. Media on War
Chris Gilbert
Demo Derby in Venezuela: The Left’s New Freewheeling Politics
Binoy Kampmark
Nobel Confusion: Ramos-Horta, Trump and World Disorder
Stephen Cooper
Alabama’s Last Execution Was an Atrocity
Binoy Kampmark
Nobel Confusion: Ramos-Horta, Trump and World Disorder
Russell Mokhiber
Lucifer’s Banker: Bradley Birkenfeld on Corporate Crime in America
Ron Jacobs
Death to the Fascist Insect! The SLA and the Cops
Cesar Chelala
Embargo on Cuba is an Embarrassment for the United States
Jack Smith
And the Winner Is….
Ken Knabb
Beyond Voting: the Limits of Electoral Politics
Matt Peppe
An Alternate Narrative on Hillary Clinton and Donald Trump
James Rothenberg
Water Under the Bridge
Louis Yako
Remembering Rasul Gamzatov: The Poet of the People
Brian Cloughley
The US, NATO and the Pope
Louis Proyect
The Outsider-Insider: Isaac Babel’s Big Mistake
Martin Billheimer
Now and Then, Ancient Sorceries
October 27, 2016
Paul Street
An Identity-Politicized Election and World Series Lakefront Liberals Can Love
Matthew Stevenson
Sex and the Presidential City
Jim Kavanagh
Tom Hayden’s Haunting
CJ Hopkins
The Pathologization of Dissent
Mike Merryman-Lotze
The Inherent Violence of Israel’s Gaza Blockade
Robert Fisk
Is Yemen Too Much for the World to Take?
Shamus Cooke
Stopping Hillary’s Coming War on Syria
Jan Oberg
Security Politics and the Closing of the Open Society
Ramzy Baroud
The War on UNESCO: Al-Aqsa Mosque is Palestinian and East Jerusalem is Illegally Occupied
Colin Todhunter
Lower Yields and Agropoisons: What is the Point of GM Mustard in India?
Norman Pollack
The Election: Does It Matter Who Wins?
Nyla Ali Khan
The Political and Cultural Richness of Kashmiriyat