If I end up in court convicted of a serious offence I can expect tough treatment. If I was there because of wide-scale fraud, or evading the law for years to hide criminal activities, I’d be facing hard time.
Being found guilty in court means everything else in life is on hold. It doesn’t matter if I volunteer at church, drive the handicapped to the doctor, serve at food banks and give lots of money to the poor. A conviction means punishment even if that will hurt those who love and depend on me. As far as the law is concerned, it’s their bad luck to have hooked up with a bad character like me.
That’s the way the courts work. Guilt, especially for pre-meditated evil, means punishment is on the way regardless of other circumstances. While some jurisdictions allow the gathering of brownie points prior to sentencing for all the good things I’ve done in life, they are only exchangeable for a modicum of leniency. They are not get-out-of-jail points.
When the judge hands down the sentence, I go to jail. All the good things in society that I was doing (when I wasn’t breaking the law) stop while I am behind bars. The relationships with those who placed their trust in me are put under great stress and some of those bonds will be broken forever. My punishment isn’t just my own; it’s a pain that spreads but the court has to see that as necessary collateral damage in order to punish serious offences. The judge can only focus on the offence and the necessary corrective measures.
In western nations, corporations became ‘persons’ a long time ago. They exist independently of their owners and employees. They pay taxes, own property, enter into contracts, take on debt and live and die like the rest of us. Corporate ‘personhood’ is fundamental to our way of life and our economic success. But when corporations go rogue, what happens to those ‘persons’? When they commit wide-scale fraud, or evade the law for years to hide criminal activities, what punishment faces them upon conviction?
Do corporations, like convicted persons, go to jail? Do they lose their freedoms and their ability to associate? Do they become embarrassed and humiliated (a PR disaster in corporate-speak) and do those unlucky enough to have put their faith in a convicted corporation suffer in the same way that friends and family of individual ‘persons’ do when behind bars?
If the law sends me to jail as punishment, regardless of other considerations, why aren’t corporate persons, let’s say banks, sent to jail too?
For years HSBC laundered Mexican drug money. If I had laundered and smuggled dirty cash across borders I would be going to the pen for a long time. So, what about HSBC? Obviously putting the company’s incorporation papers behind bars achieves little. Yet, since the bank claims the rights and privileges of ‘personhood’ perhaps it should be punished as if it was in the penitentiary. What would jail look like for a corporation?
Like other convicted persons it should lose its freedom for a period of time. That could perhaps be a ban on all business, yet employees must still be paid. It could mean only allowing withdrawals but no deposits, or a forced three/four week closure of all branches and offices. Maybe confiscation of all profits for one or two quarters. Or a ban on all investment activity for six months. Or…
Like real persons who go to jail the costs of this incarceration would be huge. The loss of friends (clients) and the embarrassment. The damage to prestige and difficulty in finding new employment (clients) upon parole. There would be substantial financial hardship, just as is the case when individual ‘persons’ are sent to jail.
The shadow cast by incarceration is dark and damaging. But just as the law ignores secondary effects when sentencing a real person, should it not ignore them when sentencing corporate persons?
Why does one set of ‘persons’ (i.e. HSBC, Barclay’s bank/LIBOR fixing, Standard Chartered/breaking U.S. sanctions law, Goldman Sachs/sex trafficking, JPMorgan Chase/manipulating ISDAfix-interest rate swaps and on and on…) get away with paying fines that often only represent a portion of the net benefit they derived from their crimes?
By that logic I should be able to commit fraud, net $10 million, pay a fine of $2 million upon conviction and then continue with business-as-usual? And why not?
Are we not all ‘persons’ in the eyes of the law? Or is it a case of some ‘persons’ being more equal than others?