In 1886 the Supreme Court declared corporations to be “fictional persons” with the same rights and protections as you and I. Since then, the Court has steadily expanded the rights of corporate “persons” up to and including last year’s Citizens United decision granting them the right to spend unlimited amounts of money to buy elections.
When it comes to crime and punishment, these corporate “persons” actually have rights which are far different from ours, particularly the biggest ones.
When a corporation is found breaking the law, it’s usually the corporation — the fictional person — which gets punished meaning, the stockholders pay a fine. The actual flesh and blood persons who oversaw or ignored the criminal behavior are left alone. It’s like you and I having an avatar which goes to jail for us every time we rob a bank.
Actually, since 2003, the government doesn’t even bother prosecuting. Instead, they offer “deferred prosecution agreements” whereby the corporate criminal pays a fine and agrees to certain behaviors in lieu of a trial. “Fictional persons” which have recently avoided prosecution in this way include AIG, AOL, Barclays Bank, Boeing, BP, Daimler Chrysler, Halliburton, Health South, Merrill Lynch, Pfizer, and UBS.
It gets worse. Since the actual fines involved are generally pretty small, why shouldn’t executives decide to keep on breaking the law and treat the fines as a cost of doing business? If profits gained from illegal activities exceed the fines, why not?
Serious fraud in our biggest banks and brokerage firms damaged millions of lives, yet not a single executive has been put on trial, much less gone to jail. Instead, they’ve been given bailouts and bonuses.
The way it stands, “fictional persons” get to be “fictional criminals” as well, and they enjoy a very different criminal justice system than the one that punishes you and me.