September, 2020.

versão em português

Your book “Capital Offenses: Business Crime and Punishment in America’s Corporate Age” reports that Criminal Law doesn’t respond to corporate crime the way American society expects. How companies in the modern economic and social order contribute to this deficient response?

I believe that it is in the nature of the very large business organization, and how wrongdoing occurs and evidence is generated within complex firms, that traditional notions of individual criminal responsibility either do not fit well or are extremely difficult to impose because of problems of proof.  Ironically, the larger and more complex the firm, the greater the potential for widespread and undetected harm, but the harder it becomes to impose legal liability on responsible individuals, especially at senior levels.  Corporations do not purposely make this problem worse—they are only doing what society expects and allows them to do, which is to be competitive and creative, and grow larger, and thus make the project of prosecution and punishment more difficult for government enforcers.  I do believe that corporations contribute to the overall problem of public frustration with corporate wrongdoing by using lobbying and campaign contributions to actively oppose and undermine non-criminal forms of regulation and legal control that, if more effective, would prevent much corporate wrongdoing from occurring in the first instance.

What’s your opinion about the idea of corporate crime punishment naturally leading to the bankruptcy of the company?

Whether criminal prosecution is likely to put a corporation out of business or render it insolvent is largely a function of what kind of business the corporation conducts.  It used to be thought that almost all companies in the service industries, especially financial services, would be highly vulnerable to collapse in the face of criminal prosecution because the reputational effects of being branded criminal would cause customers to abandon such businesses.  But this has not quite turned out to be true.  Certainly a law or accounting firm is unlikely to survive a criminal prosecution.  But many large banks have now pled guilty to criminal offenses and continued to do business.  The real threat of collapse is for firms that operate in industries in which the government may or must bar them from further business in the event of conviction.  For example, some large firms in the health care industry face the prospect of failure if they are prevented, because of conviction, from participating any longer in government-funded health care programs such as Medicare and Medicaid.

Your research on white collar crimes considers the evolution of behavior in order to avoid legal control. You also point the deficiency of the law and, also, of certain institutions as an element that would have favored the environment that led to the 2008 financial crisis. In Brazil, we are facing the debate around the difference between mere non-payment  of taxes and tax evasion, as business leaders have been accused of declaring taxes to the Public Treasury, but of not collecting the values ​​intentionally, which would make fraud and, therefore, the crime of tax evasion.  In your view, what measures could be taken to minimize this aspect in corporate crime?

I do think tax offenses is an area in which we perhaps need to look at reforming the substantive definitions of the offenses in our criminal law.  In the United States, because tax law is viewed as exceptionally complex and there is longstanding anxiety about giving tax enforcement authorities too much power, our standards for conviction for a tax offense are extremely high.  It is one of the few areas of law in which an “ignorance of the law” defense can actually succeed.  I have never found particularly sympathetic the idea that we should make it especially hard for prosecutors to convict someone for cheating on their taxes, and thus have specially demanding requirements for proof of mental state in such cases.  Still, the problem with tax compliance in the US is probably as much a result of how few enforcement resources are devoted to tax cases—the probability of being audited by the Internal Revenue Service, much less prosecuted by the Department of Justice, is much too low in my view for effective deterrence.