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Politics Markets and Corporate Probation

Digging through the Corporate Crime Reporter archives earlier this month, we came across a 1992 University of Delaware PhD dissertation titled Crafting Corporate Crime Controls: The Development of Organizational Probation and Its Implication for Criminology.

The author is William Lofquist, currently a professor at SUNY Geneseo.

In his dissertation, Lofquist uses Charles Lindblom’s 1977 classic Politics and Markets as a jumping off point to study corporate crime control.

A market approach to control corporate crime would be less intrusive and result in fines and criminal prosecution of individuals.

A politics approach would be more intrusive and lead to criminal prosecution of the corporation and probation – public intervention.

At about the time that Lofquist wrote his dissertation, the Justice Department was facing a fork in the road.

It could criminally prosecute corporations to conviction, create an office of corporate probation, and make sure that the corporation had put in place policies to prevent similar conduct in the future.

Or it could fine the corporation as part of less intrusive deferred and non prosecution settlements.

Deferred and non prosecution agreements and fines it was.

Today, it’s rare to see corporate probation in major corporate crime cases. The corporate crime bar sees probation as “too intrusive.”

“Corporate probation is a more independent judicial form of supervision, while the role of the court is more limited in deferred prosecution agreements,” says University of Virginia Law Professor Brandon Garrett, author of Too Big to Jail.“Corporate probation is still standard in many types of corporate criminal cases, such as environmental cases, and in the more recent prosecutions of banks that pleaded guilty and then received probation.”

“The more pressing question today, as larger and more complicated cases have been prosecuted against corporations, is whether some corporate probation office or function can be created,” Garrett says. “Supervising corporate prosecutions is far beyond the capabilities of a regular probation officer, and outsourcing this work to monitors has not always been successful.”

After publishing his dissertation, Lofquist went on to edit a book with Mark Cohen and Gary Rabe titled Debating Corporate Crime.

That book presented different viewpoints – a corporate probation point of view, but also law and economics authors writing against the idea of corporate crime and probation.

How did that book come about?

“Gary was a graduate student colleague of mine at Delaware,” Lofquist told Corporate Crime Reporter in an interview last week. “I also wanted to include somebody who had more of a law and economics background and who could help us recruit authors. I knew Mark Cohen I think through conferences and shared interests. He agreed to co-edit it with us.”

You went straight to SUNY Geneseo in 1992. When you went to Geneseo, did you anticipate that you would be focusing your research and teaching on corporate crime?

“Yes. It was perfect. The Sentencing Guidelines had just been enacted. I had just written my dissertation on the enactment of those sentencing guidelines. The opportunity to follow them into enforcement seemed like the perfect project for me.”

Did you work on corporate crime when you first got to Geneseo?

“Yes.”

How long did it last?

“I don’t recall the details. I probably floundered around for two years or so. I worked on some other projects related to other areas of crime. Probably by 1995 or 1996, I came to the pretty solid conclusion that that wasn’t going to be place where I was going to be able to focus my research.”

“I do remember that there were some people who responded to my early inquiries by saying –  you don’t have the cache to get the access that you want for this research.”

Your research was groundbreaking. You were touching a nerve. One of the things we hear from academics is that this area is starved for funding. That’s a big issue as to why it doesn’t develop. There seems to be more funding in other areas. And that also could be a political question. The Justice Department did fund some research by Clinard and Yeager, but there hasn’t been much funding since.

You say you didn’t have the cache and you couldn’t get access to the power centers.

“Yes. I was told I didn’t have the letterhead.”

How did you proceed?

“Around that time, Mike Radelet, who is a prominent death penalty scholar, he came to Geneseo to give a lecture. I didn’t know him at the time. New York had just reintroduced the death penalty after many decades without it. That was a big issue. He came here to consult with the local death penalty defense people. He spoke on campus. While he was here, I met him and talked with him. And he had all of these wrongful conviction files that he was doing research on. And he said — if you want to help out with these, I will send you the files. And these were mostly newspaper clippings that he had on wrongful conviction cases. He had written a book and a Stanford Law Review article that had brought the issue of wrongful convictions into the death penalty debate for the first time. There was a lot of attention to that issue at the time. He had these other cases that he had collected materials on that he wanted to bring to publication. He said — if you want to get involved with these cases, I will send you the files. And so he did.”

“I had a cart full of death penalty files. And I was reading through them and I remember thinking — these are corporate crimes. The dynamics that are producing these wrongful convictions are very similar to the dynamics producing corporate crimes.”

What do you mean?

“I had worked with Dave Ermann at Delaware. And Dave had done a lot of research and had developed this idea of what he referred to as escalating commitments, the way in which organizations blunder into corporate crimes, not through the traditional rational actor model, but rather through this organizational process model. I saw the same thing in looking at these wrongful convictions. It wasn’t that they framed, so to speak, these defendants from start to finish, but rather through a whole series of decisions, they came to focus in many cases on these defendants who hadn’t done it. But the investigators had developed a particular commitment to that line of investigation that led them to continue with that even as the evidence emerged that this probably wasn’t the right person.”

“It just looked like corporate crime. I remember sitting at my living room at home thinking — these are corporate crimes. I worked with Mike and others to publish that set of cases. And then spun off one of those cases into a fuller investigation that I did. I published that separately, where I developed this idea of wrongful convictions as organizational crimes.”

It wasn’t – let’s go out and convict poor black kids?

“Right. It was instead – this guy looks like a likely suspect, we are going to focus on him, make commitments to this particular investigation and we are going to continue that even as evidence to the contrary emerges.”

You have spent your career looking at wrongful convictions?

“No. On and off, I have done wrongful conviction related research up until the last couple of years. And I may again in the future. I have the opportunity now as a tenured full professor to go where my interests take me. And so I have done a variety of different death penalty projects. I have developed a particular interest in race in criminal justice – race and the death penalty. I’m working mostly on that.”

The corporate crime research stayed with you. It rang a bell when you started your death penalty research. As corporate crime flared in the public media, did you look back on it and ask yourself why the academic research is so paltry when it is such a big deal in the public arena?

“I don’t I guess because I pretty much understand why. It’s much of my own experience why there isn’t more academic attention to it. The resources are just not there. The exigencies of the tenure process, the publication process are such that it’s not going to receive the kind of attention that more traditional issues are. I feel some regret about that. I realize that I am a part of the problem that I’m critiquing. I ultimately bowed to those pressures.”

Was this a pure calculation on your part – this is a political question, I’m not going to get tenure at any university if I continue to do this, therefore I’m not going to do it?

“It was that effectively I guess. I didn’t think I was going to be able to be successful, that I was going to be able to develop the research agenda that I wanted to.”

When I’m interviewing corporate defense counsel and raise corporate probation, you can feel the blood pressure rise. Did you think at the time that you had something special and were disappointed that it didn’t go anywhere?

“I thought that the inclusion of corporate probation in the Sentencing Guidelines was anomalous. I asked – how did this happen? We have included in the guidelines corporate probation, which has the potential to challenge corporate power. How did that manage to make its way through?”

“That’s one of the questions I asked in my dissertation. From the beginning, I’ve certainly been skeptical of what would happen with organizational probation. It’s latent. It has the potential to be disruptive and intrusive. And I was interested in the fact that it made it into the guidelines and survived the process of public hearings. Implicit in that is the recognition that in practice, this potential probably wasn’t going to be realized. Maybe the politics of this developed in such a way that allowed it to be used in some kind of important imaginative way, but probably not. It sounds as if that has been the case, that its potential has not been fulfilled.”

Because Wells Fargo keeps getting into trouble with the law, the New Republiclast week ran an article titled Give Wells Fargo the Death Penalty.

When people start searching for answers for egregious corporate conduct, they are going to look to this research and start looking into this possibility of corporate probation – which is still in the Sentencing Guidelines.

“I’m encouraged to hear that corporate probation is still in the Sentencing Guidelines. But I guess it might also mean that corporations are so unconcerned about the prospect of corporate probation that they haven’t bothered to get it removed from the guidelines.”

“And people are generally reluctant to consider something like the corporate death penalty because they would be concerned about the job losses and collateral consequences, as much as they might understand the case against Wells Fargo.”

“And corporate probation might be a middle ground. But until that death penalty case is made more vociferously, there is no need for that compromise position.”

For the complete q/a format Interview with William Lofquist, see 31 Corporate Crime Reporter 33(14), August 28, 2017, print edition only.

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

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