Public Comment

Government & The Corporate Culture: Crime Does Pay

Harry Brill
Friday March 09, 2018 - 02:40:00 PM

It is no surprise to us when we learn about the unscrupulous and even criminal conduct of many of the big corporations. But what the public needs to become more aware of is the complicity of the federal government. General Motors (GM) installed a defective ignition switch in over 2 1/2 million cars, which caused, according to the official estimate, at least 124 deaths and many serious injuries. When the ignition switch failed it prevented the air bags, power steering, and power brakes from working. 

A federal investigation revealed that the company was aware that the switch was defective, and it attempted to hide the defect from regulators and consumers. Clearly, in the interest of protecting profits, the company engaged in a criminal act. 

However, the federal government's only punishment was imposing a large fine. From GM's perspective, that's the cost of doing business. No GM executive faced prosecution. Moreover, the corporation executives were not even required to admit guilt. That was a gift from the federal government because without a verdict of guilt GM was able to treat the fine as a tax deduction.  

Separately, GM made an out of court financial agreement to compensate the injured and the families of those who lost their lives. However, a federal judge ruled that the agreement, which would have required the corporation to pay $1 million in stock to car owners who sued the company, was not enforceable! 

Incidentally, those who purchase foreign cars because they believe that foreign based executives have more integrity are probably unaware that Toyota also paid a fine to settle a similar case involving defective cars. Among the automobiles that had to be recalled because of defects included autos manufactured by Chevrolet, Chrysler, Ford. and Honda. Also recalled were defected tires manufactured by Firestone and airbags manufactured by the Takata Corporation, which is based in Japan. Incredibly, some of the airbags when activated exploded, causing injury as well as death. None of the executives in any of these companies suffered criminal penalties. 

In contrast, the laws of the federal government can be quite harsh to those who occupy the lower rungs of the class ladder. Many African Americans, for example, are serving jail sentences between one to three years for only possessing marijuana. That's Incredible. There are not even any victims.  

Generally speaking, the executives of the major corporations correctly assume that they can violate the law with impunity even if their conduct threatens the health and safety of the public. It seems, then, that a major function of the federal government is to protect the guilty.