Capital Offences
Business Crime and Punishment in America's Corporate Age
Samuel W. Buell
What shocked me in this book was the radical (and trustworthy) approach of the author who addresses as a kick-off in the introduction a controversial non-business crime in which the driver ended up killing her boyfriend.
After a long lawsuit and heavy pressure from the prosecutor office, Candice (the driver) who was 21 at the time of the accident was sentenced to five years and was marked for life as the felon who killed Gene (her boyfriend).
The truth was that actually who “killed” her boyfriend was General Motors, after investigation there was a discovery that the Ion (model of a car manufactured in 2004) had a mechanical starter cheaper (and prone to malfunction), this was Candice's car. In summary, Candice lost control of the vehicle crashing a tree and killing her boyfriend because GM sold her a car with dangerously bad parts.
Did any GM top executive go to jail? Nop.
The company paid a 1 billion USD fine in a prosecution deferred agreement.
That is it! End of history…
Moral question in this case which involves business crime and punishment:
i) Did the GM (as a legal entity) commit a crime? Several controversies lead to different answers;
ii) Did an employee of GM decide to reduce costs knowingly aware of the potential quality assurance risks? Yes.
No GM employee was in prison and the book discusses exactly how business law and limited liability veil was intended exactly to reduce personal risks to entrepreneurs who must have their heritage minimally protected. Fine, but moving out from civil issues, meaning and about crimes?
My favorite quote of the book is at the beginning of the chapter called “loopholing”:
"Crimes and disasters produce regulation. Regulation produces ways of doing business. New ways of doing business produce new problems. And we seem to end up more or less back where we started".
My lesson learnt as a compliance officer is that laws also have flaws and we must act on behalf of companies to help them to strive not to bypass the law in order to find gaps which knowingly are going to generate more disasters and crimes.
Of course, law is politics and this is a cat-and-mouse game, as the author says:
“Ambivalence about innovation and aggressive wealth creation intersects with exceptional American commitment to law and legalism as a basis for social organization. A dilemma resides in this intersection. On one hand, we arbor crafty loopholes who thumb their noses at the state's efforts to prohibit their conduct. On the other hand, we encourage or at least allow, businesspeople to seek out legal advice, pay handsomely for it, and design innovative transaction and business processes that comply with (or choose your word: evade, avoid, undermine) regulatory regimes”
The great challenge is performing an attorney (and compliance officer) role with ethics and minding this dilemma which is being innovative and creating wealth without evading the law.
As the old saying always confirms: “Integrity is more valuable than income”.
Highly recommend this book!
João Pedro Paro - October 2024
Conclusion
My lesson learnt as a compliance officer is that laws too have flaws and we must act on behalf of companies to help them to strive not to bypass the law in order to find gaps which knowingly are going to generate more disasters and crimes. Of course, law is politics and this is a cat-and-mouse game, as the author says:
“Ambivalence about innovation and aggressive wealth creation intersects with exceptional American commitment to law and legalism as a basis for social organization. A dilemma resides in this intersection. On one hand, we arbhor crafty loopholes who thumb their noses at the state's efforts to prohibit their conduct. On the other hand, we encourage or at least allow, businesspeople to seek out legal advice, pay handsomely for it, and design innovative transaction and business processes that comply with (or choose your word: evade, avoid, undermine) regulatory regimes”
The great challenge is performing an attorney (and compliance officer) role with ethics and minding this dilemma which is being innovative and creating weathness without evading the law. As the old say always confirms: Integrity is more valuable than income.
João Pedro Paro
Global Director of Governance, Risk & Compliance | PhD Candidate | Internationally Qualified Attorney
