The Truth About White Collar Crime

Last month, the New York Times ran an article titled ? “Steady Decline in Major Crime Baffles Experts.”

The article baffled David Friedrichs.

Friedrichs is a criminologist at the University of Scranton.

From his perspective, major crimes ? corporate and white collar crimes ? were on the increase, not in decline.

So, for the first time in his illustrious career, he dashed off a letter to the editor.

And lo and behold, last week, the Times printed it.

“Your article reinforces a widely held but fundamentally wrongheaded way of thinking about crime,” Friedrichs wrote.

“The apparent decline in crime refers only to conventional forms of crime, like murder, rape, robbery and burglary. The relevant crime statistics tell us nothing about trends related to white-collar crime, broadly defined. Although it is far more challenging to measure such crime, there are reasons to believe that it is not in decline, and may well be rising.”

“This type of crime ? ranging from corporate price fixing to polluting the environment to insider trading to bank-related fraud ? has devastating consequences. Those who have long been concerned about the disproportionate amount of attention to conventional crime in relation to white-collar crime can only hope that a decline in conventional crime will inspire more attention to white-collar crime.”

Friedrichs is a professor of criminal justice at the University of Scranton.

It was his first ever letter to the editor.

“In the case of the New York Times, which I read daily, I assumed the odds of a submitted letter getting published were poor,” Friedrichs told Corporate Crime Reporter in an interview last week.

“So, I prefer not to spend my time on such a long-shot proposition. But in this case I dashed off a letter somewhat impulsively. I was irritated once again by an article that said that major crime is in decline. The premise is ? we all understand what major crime is ? it’s conventional crime, murder, rape, robbery, burglary, auto theft and other such illegal activities.”

“These are the kind of crimes that the FBI tracks every year.”

“The article noted that some criminologists had anticipated that in the context of a deep recession conventional crimes would increase ? reasons were suggested for why it had in fact not increased.”

“I was irate about it. The article totally ignored white collar crime, broadly defined. And it is far from clear that white collar crime is declining. There are some reasons to believe it may well be increasing.”

“There has been a huge amount of criminological attention to low level drug dealing, to vandalism, to fairly petty forms of juvenile crime, shoplifting and the like. I’m not pretending that this kind of activity isn’t harmful,” Friedrichs said.

“But by any reasonable measure, the cost of corporate crime has been monumental ? and not simply the devastating financial losses of late, by some measures not in the billions but in the trillions of dollars. No amount of conventional crime even begins to approximate those kinds of financial losses.”

“And then of course, there is the substantial physical harm of corporate polluting, unsafe workplaces and unsafe products and the like.”

“In huge numbers of cases, people are not aware that they have been victims of white collar crime, for example, subjected to illegally spewed out pollution, or that they have purchased products that are unsafe, or that they have been subjected to corporate price fixing, or to the consequences of commodity speculation, which is believed to be one significant factor in driving up the cost of gasoline at the pump.”

“Even when people are aware of being victims of white collar crime, it is far less clear to them to whom to report this crime. When you are assaulted, when you walk outside and find that your car has been stolen, when you come home and discover that your home has been burglarized, you know that you have been a victim of a crime. You know to whom to report it.”

“But in the whole range of white collar crimes, it is far less clear whether you should report this to some kind of regulatory agency, to the Better Business Bureau, to a private lawyer to initiate a civil lawsuit, or to some other entity.”

“So, there is no centralized reporting. It is also true that in the case of white collar crime, the lines of demarcation between sharp business practices, unethical business practices, and clearly illegal business practices is sometimes blurred ? more so than is the case in regard to conventional forms of crime.”

“So we simply do not have a centralized source of reliable information on the incidence of white collar crime. And the government historically hasn’t taken much initiative in this regard.”

Friedrichs says that the number of criminologists studying conventional crime far outnumbers those studying white collar and corporate crime.

“The amount of criminological attention to a form of crime varies inversely with the amount of harm,” he says dryly.

“This may be a little exaggerated, but it captures an essential truth.”

[For a complete transcript of the Interview with David Friedrichs, see 25 Corporate Crime Reporter 23(10), June 6, 2011, print edition only.]

Russell Mokhiber edits the Corporate Crime Reporter.



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