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February
21, 2002
David
Vest
Reagan
Clone Project?
February
20, 2002
Kay Lee
The
Prison Guard Who Never Owned Up to His Crimes
February
19, 2002
David
Orr
Waylon
Jennings, the Duke,
and the Navajo
John Chuckman
The
Devil and Georgie Bush
Prudence
Crowther
Giblet
Gravitas
Ramzi
Kysia
Caught
in the Iraq DMZ
February
18, 2002
Ron Jacobs
The
US and Iran
George
Lewandowski
Empire
in Declline
Lenni
Brenner
Life
and Death of a Folk Hero
February
17, 2002
Robert
Fisk
Lost
in a Pit of Desperation
February
16, 2002
Phillip
Cryan
Colombia
in War Time
February
15, 2002
C.G. Estabrook
From
New York to Porto Alegre
Robert
O'Brien
The
View from Porto Alegre
Mokhiber/Weissman
Resisting
the Assassins
February
14, 2002
Levy and
Easton
Ante
Pavelic
Real Butcher of the Balkans
Joan Claybrook
Dear
Jeb Bush,
About You and Enron
John Chuckman
Time
for a Woman Prez
Alexander
Cockburn
Banning
the Koran
February
13, 2002
Sen. Russ
Feingold
War
Powers and
the War on Terror
Tom Turnipseed
Bush's
Folly
George
Monbiot
American
Imperialism
February
12, 2002
Uri Avnery
The
Great Game:
Oil, Sharon and Iran
Tommy
Ates
Black
Land Loss
February
11, 2002
Walt Brasch
The
Synergizing of America
John Troyer
Enron's
Deep Throat?
February
9, 2002
John Blair
Criticize
Cheney, Go to Jail
A Photographic Journal of Life
in an Afghan Refugee Camp
By Judith Mann
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Cockburn
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The New Crusade:
America's War on Terrorism
By Rahul Mahajan
The Memphis Blues Again:
Six Decades of Memphis Music Photographs
Photos by Ernest Withers
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Edited by Roane Carey
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February 20,
2002
Rotten to the Core
By Russell Mokhiber and
Robert Weissman
Frank Easterbrook and Daniel Fischel are University
of Chicago law professors who believe that, when it comes to
making profits, nothing -- not even the law -- should stand in
the way. (For almost two decades, Easterbrook has also been a
federal appeals court judge.)
Twenty years ago, writing about antitrust
crimes in the Michigan Law Review, Easterbrook and Fischel, then
both professors at the University of Chicago, wrote that managers
not only may, but should, violate the rules when it is profitable
to do so. And it is clear that they believed that this rule should
apply beyond just antitrust.
In a nutshell, this is the Chicago School
view of corporate law that has taken hold over the past 20 years.
Under this view, if a Fed Ex truck needs
to double park to make a delivery -- double park. No problem.
Pay the $20 fine. Just as long as you are still making money,
violate the law.
Or course, when it comes to corporate
crime and violence, we aren't talking about just double parking.
We're talking about fraud, corruption,
pollution, price-fixing, occupational disease, and bribery.
The Chicago School says these are "externalities"
and related fines and penalties should simply be viewed as the
"costs of doing business."
We call these activities crimes, and
we believe society imposes penalties for committing these crimes
to deter and socially sanction those who would violate society's
proscription.
Lawmakers of both parties are shamelessly
portraying Enron and Arthur Andersen as rotten apples, even though
those same lawmakers were just until recently on the take from
both corporations, and doing the dirty work of defeating laws
that would have governed both.
But of course we are not talking about
a couple of rotten apples here.
As Easterbrook and Fischel so clearly
show, the corporate world is now governed by an ideology that
is rotten to the core. After all, as the great Chicago professors
teach us, it is the duty of managers to violate the law when
it is profitable to do so.
Now, the stink has risen. And slowly,
but surely, and hardly noticed, a counter-Chicago movement in
corporate law is bubbling up from law schools around the country.
At Boston College Law School, Professor
Kent Greenfield points out that it used to be that corporations
were created by the state to achieve specified public goals.
The corporation was created to build a canal, for example. And
then it was to go out of business.
If the corporation decided to sell hot
dogs instead, it was acting beyond its powers, and a shareholder
or the attorney general could file an injunction under the "ultra
vires" (beyond its powers) doctrine -- forcing the company
to drop the dogs.
Then, the states started to compete with
each other for more corporate business -- the infamous race to
the bottom. As a part of that race, states stopped imposing strict
limitations on corporate powers.
The corporate lawyers set up Delaware
as the Las Vegas of corporate chartering. And as a result, virtually
no corporate activity was beyond a company's defined activity.
Ultra vires was dead, was the common view.
Greenfield steps in and says -- wait
a minute -- illegal activity is still "beyond the power"
of corporations. State incorporation statutes and articles of
incorporation almost invariably charter corporations only for
"lawful" purposes.
He wants attorneys general and trial
lawyers to look carefully at the possibility of bringing ultra
vires lawsuits against officers and directors of corporate criminals.
At Washington and Lee University, law
professor David Millon says that underlying the assorted debates
over the nature of the corporation are differences of political
opinion.
So, those who see the corporation as
a creation of the state do so because we want to see strong public
control.
Those who see in a corporation nexus
of private contracts (the Chicago School) see it that way because
they want to defeat public regulation. (The charter of incorporation
is like a birth certificate, and nothing more, they argue.)
This new breed of corporate law reformers,
represented by the likes of Greenfield, Millon and Lawrence Mitchell
of George Washington University Law School, does not go as far
as we would in sending the corporation back to the public woodshed.
But it is good to note that, after years
of bowing in subservience to the giant corporatists of the Midwest,
a handful of law professors are beginning to agitate against
the regressive theories of their Chicago School colleagues.
Their task is simultaneously difficult
and easy. Difficult, because the Chicago School has been so successful
in winning the academic -- and eventually legal -- debate about
what corporations are and how they should be governed. Easy,
because the Chicago School claims are so extreme that the reformers
can win the debate -- or at least significantly shift the pendulum
in the field -- by convincingly arguing simply that corporations
should follow the law.
Russell Mokhiber
is editor of the Washington, D.C.-based Corporate Crime Reporter.
Robert Weissman is editor of the Washington, D.C.-based
Multinational Monitor.
They are co-authors of Corporate
Predators: The Hunt for MegaProfits and the Attack on Democracy
(Monroe, Maine: Common Courage Press, 1999)
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