15. Crimes of the Powerful
15.7 Challenges Related to White-Collar Crimes
Michael Brandt, MA
The events described in this chapter — the crimes of the powerful — are responsible for enormous financial and physical harm, including widespread injury and death. While the financial and physical damages these events cause may shock you, they have been well-documented (e.g., Reiman & Leighton, 2013). Nonetheless, these and similar events pose unique challenges for the criminal justice system, victims, marginalised groups, academics, and other stakeholders. The following section reviews these challenges.
Officially Labelled Crimes are Not What is Causing Most Harm
A central problem relates to the role of the powerful in determining what is defined as a crime in the first place. A person who sells a drug on a street corner is defined as a criminal, a “drug trafficker”; a pharmaceutical company that spends millions of dollars advertising addictive drugs, and convincing physicians to prescribe these drugs, is not. A man who intentionally injures his wife is defined as a “wife batterer” and a criminal; a company that manufactures a dangerous birth control product (e.g., the Dalkon Shield) responsible for serious injuries to thousands of women is not. A person who kills multiple people is defined as a “serial killer”; a person elected to lead a country who initiates an illegal war resulting in the deaths of hundreds of thousands is not. These comparisons indicate that “criminal law categories are artful, creative constructs ” (Box, 1983, p. 7). The result is that we pay more attention to some harms than others, namely those more likely to be committed by the marginalised in society than those more likely committed by individuals in the highest positions in government, private industry, and those that work with them. Most of this harm escapes the definition of crime.
Victims are Not Always Aware of Victimisation
The victims of crimes of the powerful are much less likely to realise they are victims compared to victims of street crimes. The case of price-fixing is illustrative. A recent case in Canada involved seven Canadian companies (Loblaws, Metro, Sobeys’, Weston Bakeries, Canada Bread, Walmart and Giant Tiger) and is estimated to have cost consumers across the country millions of dollars. An average consumer, purchasing one loaf of bread a week for a year lost $400 to price-fixing “theft” (Markusoff, 2018; Russell, 2018). Because price-fixing conspiracies have become a standard operating procedure in many industries, virtually everyone in Canada has likely been victimised without their knowledge, and likely will be again. In a sense, many crimes by the powerful could be considered “perfect crimes” in that they are often undetected and remain invisible to the general public.
Racial Minorities are More Likely to be Victims
In terms of white-collar offences, racial minorities have sometimes been specifically targeted by white-collar offenders. The Wells Fargo Bank provides a case study: They settled a lawsuit in 2012 for $175 million dollars for directing Blacks and Latinos to take out loans with higher fees and interest rates attached to them than loans offered to white customers (Mui, 2012). People of colour are also more likely to be the victims of “environmental racism” (see 13 Green Criminology). This refers to “[a]ny policy, practice, or directive that differentially affects or disadvantages (whether intended or unintended) individuals, groups, or communities based on race or color” (Bullard, 1993, p. 23). Governments decide where highways are to be built, where industry is permitted to operate, and where toxic materials are disposed (Bullard, 1993; Bullard et al., 2007). The proximity of toxic waste sites to racial minority neighbourhoods has been documented, both in the United States and Canada. See the location of toxic waste sites and their proximity to traditionally Black and Indigenous communities.
The Netflix documentary There’s Something in the Water (Page & Daniel, 2019) investigates the situation in Pictou County, Nova Scotia. There, pulp and paper mill effluents have polluted Boat Harbour (known in the Mi’kmaq language as A’’se’k) with toxic chemicals. Originally used by Indigenous peoples as a food source, toxic substances dumped into the waterways have created an environmental and human catastrophe. Not only has it killed marine life, but local residents who use the water for bathing and cooking have been diagnosed with extremely high rates of cancer.
Less Developed Countries are at High Risk
Consumer products found to be hazardous in North America may be shipped to less developed countries where a combination of lax regulatory regimes, higher rates of illiteracy, and widespread poverty means the most marginalised are at higher risk. The list of dangerous products and substances “dumped” into less developed countries from more developed, industrialised countries is long. One of the most notorious products dumped was the Dalkon Shield. It was an intra-uterine device responsible for “uterine infections, blood poisoning, spontaneous abortion in pregnant women and perforation of the uterus” and was responsible for the injury of thousands and the death of at least 17 women (Simon, 2012, pp. 184-185). There are many more examples: Pesticides known to cause serious injury and death that have been banned in the United States or Canada have been exported to less-developed countries and unsuspecting consumers, and many of these pesticides return to Canada and the United States on imported food (Rosoff et al., 2020, p. 143). Companies that produce toxic pesticides, as well as other harmful substances like asbestos, have closed down factories in the United States and re-opened them in Taiwan, South Korea, Venezuela, and Brazil. Also the high cost of disposing of hazardous waste in North America has led to it being dumped into Mexico, the Philippines, Zaire, Guinea, and Sierra Leone (Rosoff et al., 2020).
Economic Costs Exceed Street Crimes
Many years ago, Sutherland concluded that the financial costs of the crimes of the powerful were likely “several times as great as the financial costs of all the crimes which are customarily included in the ‘crime problem,’” such as theft and robbery (Sutherland, 2009, p. 422). Just one type of white-collar crime — securities fraud — costs Americans about $1 million an hour (Snider, 2001). Reiman and Leighton (2013) estimate the cost of crimes of the powerful in the U.S. at about $610 billion annually. Even the lowest estimates mean the costs of the crimes of the powerful exceed the costs of all street crimes combined (Reiman & Leighton, 2013).
No Systematic Collection of Data on Crimes of the Powerful
Detailed information on conventional street crimes, including characteristics of the offender, the victim, and the time and location the crime occurred, are contained in Uniform Crime Reports. These reports are an invaluable resource for criminologists as they allow comparisons across cities, provinces, and countries as well as comparisons of crime from year to year (see 5 Methods and Counting Crime). While some crimes of the powerful are captured by these reports, most are not. Instead, if a crime researcher in Canada wants to research the injuries and deaths discussed in this chapter, their task is considerably more difficult. They would have to contact and request data from a multitude of different federal government agencies, including the Competition Bureau, the Canada Revenue Agency, the Security Investigations Service, and the Canada Food Inspection Agency. Furthermore, in many cases, those responsible for enforcing regulations at these agencies come from the same industries they are supposed to be overseeing. This can lead to the problem of regulatory capture. This is when the government agency responsible for enforcing regulations serves the commercial and financial interests of those they regulate and not the public.
Lack of Research Attention
There is a definite lack of research attention devoted to crimes of the powerful. Indeed, only between 3.6% and 6.33% of published criminological research has examined these behaviours (Lynch & Michalowski, 2006; McGurrin et al., 2013). This is due, in part, to the training criminologists receive which has tended to focus on conventional street crimes rather than corporate or government criminality (McGurrin et al., 2013). As of the writing of this chapter (in 2022), none of the colleges in B.C. that offer credentials in criminology have courses devoted to white-collar crimes and only two universities in B.C. have a course devoted to white collar crimes: Kwantlen Polytechnic University and Vancouver Island University. While we are by far more likely to be injured, killed or suffer economic losses as a result of the harmful behaviours of those occupying the highest socio-economic strata — those that head governments, the military, corporations, or those who work closely with them — when it comes to studying crime, most research attention has focused on the street criminal (Reiman and Leighton, 2013; Shelden et al., 2008, pp. 19-20) and theorising about the causes of street crime rather than theorising about the causes of the crimes of the powerful (Hillyard & Toombs, 2004, p. 25).
Patrolling in all the Wrong Places
Police officers patrol city streets for crime; they do not patrol corporate boardrooms or government offices or the private islands of the most affluent looking for crime. “In fact, for all practical purposes, the criminal justice system ignores the crimes of the very wealthy and the crimes committed by the state itself” (Shelden, 2001, p. 13). It is the harms perpetrated by young, racialised males from the lowest socio-economic strata that are the most visible to scrutiny by others, including the police, and that therefore get processed through the criminal justice system and contribute to a distorted image of crime and what harms us the most. The harms perpetrated by the most affluent members of society are obscured in the process, and are subject to far less social control. Relying on official crime statistics to try to understand harm is like looking at a funhouse or carnival mirror that magnifies some harmful behaviours (those most likely perpetrated by the marginalised) while minimising others (those more likely perpetrated by the most affluent) (Reiman & Leighton, 2013). As Hedges (2019, p. 266) points out:
“We live in a two-tiered legal system, where poor people are harassed, arrested, and jailed for absurd infractions, such as selling cigarettes — which led to Eric Gardner being choked to death by the New York City police in 2014 — while crimes of appalling magnitude by the oligarchs and corporations, from oil spills to bank fraud in the hundreds of billions of dollars, which wiped out 40 percent of the world’s wealth, are dealt with through tepid administrative controls, symbolic fines and civil enforcement that give these wealthy perpetrators immunity from criminal prosecution.”
Inadequate Laws
Laws and regulations aimed at the crimes of the powerful are inadequate and often do not exist; if they do, they frequently result in fines or monetary payouts awarded after civil litigation. They usually do not result in prison. Canada’s first antitrust law targeting price-fixing and illegal monopolies, the Combines Investigation Act of 1889, “was so inadequate that no successful prosecutions under the monopoly provisions were ever registered” (Snider, 2003, p. 219). Under the current law, the Competition Act (R.S.C. 1985, c. C-34), a corporation found guilty of price-fixing faces a fine of up to $25 million and prison time up to 25 years; however, prison is rarely handed out as a sentence (Powell, 2018). When 22 people died in Canada after consuming listeriosis tainted meat produced by Maple Leaf Foods, the corporation had to pay $27 million to settle civil lawsuits (CBC/Radio Canada, 2009). No one went to prison. No one went to prison for the deaths of 26 miners at the Westray Mine either, which was clearly a foreseeable tragedy.
Deferred prosecution agreements (DPAs) will result in even fewer criminal prosecutions. DPAs allow a corporation guilty of a criminal offence to avoid criminal prosecution, and pay a fine instead. DPAs made headline news after the former minister of justice and attorney general, Jody Wilson-Raybould, revealed that she had been pressured by the Prime Minister’s Office to enter into one such agreement in a case involving SNC-Lavalin. When Wilson-Raybould refused, arguing it was inappropriate, she quickly lost her job and was eventually ejected from the Liberal Party.
After the Westray Mine disaster that killed 26 miners, section 217.12 of the Criminal Code was passed and came into effect in 2004. It instituted new duties on corporations to ensure workplace safety and backed this up with penalties, including prison for violations. Nonetheless, prosecutions have been extremely rare, and when they have occurred, they have tended to be against smaller companies, not large corporations (Bittle, 2012). While white-collar crime convictions can result in significant financial penalties for offenders, corporate leaders often see fines as a small price to pay, simply a “cost of doing business” (Friedrichs, 2007, pp. 74-75).
Less Money to Police, Prosecute, and Imprison
There is less money to police, prosecute and imprison crimes committed by the powerful. While budgets to police, prosecute, and imprison perpetrators of conventional street crimes have increased over the years (Griffiths, 2018), agencies responsible for investigating and prosecuting the crimes of the powerful have frequently faced budget cutbacks. Recent budget reductions resulted in the closing of the B.C. RCMP specialised unit devoted to financial crimes in 2013 (RCMP, 2016) and, in 2020, the RCMP shut down the specialised unit devoted to financial crimes in Ontario (Oved, 2020). In the United States, the situation is similar: Budget cutbacks to the F.B.I have resulted in significant drops in investigations against white-collar offenders (Pontell et al., 2014).
State crimes are even more rarely prosecuted than corporate crimes because the perpetrators (government officials) can exert control over the state’s investigatory and prosecutorial apparatuses and have the power to hide incriminating information from the public. For example, investigators of U.S. president John F. Kennedy’s assassination in Dallas, Texas in 1963 report key witnesses were prevented from testifying and no action was taken against senior intelligence agents who committed perjury when questioned under oath (Fonzi, 2013). Former U.S. president Nixon ordered his staff to “use the C.I.A. to impede the F.B.I. investigation” of the Watergate scandal that had implicated him in illegal surveillance and a break-in of the offices of his political rivals at the Watergate Hotel in Washington, D.C. (Rosoff et al., 2020, p. 369). Former president George W. Bush “fought tooth and nail against an independent investigation” of the September 11, 2001 terrorist attacks on the United States; and when an investigation was finally begun, it was severely under-funded (Wallechinsky, 2013, para.6). Bush and his vice president, Dick Cheney, refused to meet with the investigators of the September 11, 2001 attacks unless they could meet and testify together. Both also refused to testify under oath or allow the interview to be recorded or transcribed (Wallechinsky, 2013, para. 7).
Revealing the Crimes of the Powerful Can Be Dangerous
Revealing the crimes of the powerful can be dangerous. In the 1960s, (GM) hired people to surveil and harass consumer rights advocate Ralph Nader after he published Unsafe at Any Speed (Nader, 1965). The book documented design failures in automobiles causing injuries and deaths and the cavalier attitude automobile executives had towards their customers safety while they drove their cars. GM executives, furious at his harsh critique of the industry, and the effect it might have on auto sales, hired underage girls in an attempt to lure Nader into illicit sexual encounters (American Museum of Tort Law, n.d.). After the popular talk show host Phil Donahue began voicing criticisms of the U.S. invasion of Iraq, he was fired from the MSNBC television network. MSNBC is owned by General Electric, a major defence contractor that stood to lose financially if war was averted. Whistle-blowers Chelsea Manning, Edward Snowden, and Julian Assange were all labelled traitors after releasing classified documents revealing war crimes, widespread illegal internet surveillance, and other harmful and criminal acts of the very rich and powerful. Both Manning and Assange have been imprisoned; Snowden has had to remain in Russia to avoid being charged with allegedly aiding the enemy.
Publicising harms wrought by the powerful can even be deadly. Before being executed along with several others in 1994 by the Nigerian government, Ken Saro-Wiwa was a member of the Movement for the Survival of the Ogoni People. He had been a vocal critic of Royal Dutch Shell for the extreme environmental damage the corporation’s oil extraction had caused to the Niger Delta and the Nigerian government’s refusal to hold the corporation accountable for this damage. This is what Saro-Wiwa had to say about the Nigerian government:
“The slow destruction of the Ogoni’s livelihood by the ecologically careless policies of Shell is of little concern to the Federal government of Nigeria — it’s secondary to the need to safeguard the vital oil revenues that provide 90% of Nigeria’s foreign exchange earnings. Thus to protest against this devastation is to protest against ‘national security priorities’. The instruments for enforcing national security — the armed forces — are turned on law-abiding citizens, because the survival of communities like the Ogoni is effectively judged inimical to the survival of the nation” (Chunn, Boyd, & Menzies, 2002, p. 15).
Families of those executed launched a civil suit against Royal Dutch Shell accusing the corporation of colluding with the Nigerian government in human rights abuses, torture, and murder, and of hiring government troops to shoot at those protesting against them (BBC News, 2009). Royal Dutch Shell, rather than go to trial, agreed to an out-of-court settlement of $15.5 million to the victims’ families but never accepted liability for the charges against them (Ken Wiwa et al v. Royal Dutch Petroleum et al., 2009). For an interactive map of the oil spills see Amnesty Oil Spills.
The struggle against the environmental degradation caused by oil giants, like Royal Dutch Shell, and other corporations that disregard environmental laws and dump dangerous toxins into the air and land continues. While these protests do not always get the publicity they deserve, protest against the environmental damage caused by corporations are occurring all across the globe. The push back from corporate interests has been severe, and has led to threats, harassment and, in 2020 alone, the murder of 212 protestors (Qureshi, 2020). Most of these murders are undocumented and not published by the mainstream (corporate-funded) media; so, the actual number of killings is thought to be significantly higher (Greenfield & Watts, 2020, para. 3). For a map of these killings see Record 212 land and environment activists killed last year.
Something that exists due to human interaction.
the process by which groups of people are designated as being part of a "race" and subjected to differential or unequal treatment on that basis
a member of a small, ruling faction, that possesses significant social and economic power and is able to use it to influence the political system.