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RANGKUMAN

CORPORATE AND WHITE COLLAR CRIME (Cases and Materials), 2nd Editionby Kathleen F. Brickey, James Carr Professor of Criminal Jusrisprudence,Washington University

Lord Chief Justice Holt (Anonymous, 12 Modern 559), in BlackstonesCommentaries, chapter 18 12, stated:

A corporation cannot commit treason, or felony, or other crime in itscorporate capacity, though its members may in their distinct individualcapacities.

Mr. Chief Justice Field said: We hink a corporation may be liable criminally forcertain offenses of which a specific intent may be a necessary element. There isno more difficulty in imputing to a corporation a specific intent in criminalproceedings than in civil. A corporation cannot be arrested and imprisoned ineither civil or criminal proceedings, but its property may be taken either as

compensation for a private wrong or as punishment for a public wrong.

The application of criminal sanctions to corporate entities, primarily on twogrounds. First, they callenge the detterent effect of the sanction essentiallybecause corporations dont commit crimes, people do; second, they questionthe retributive function because corporate criminal sanctions may actuallypunish innocent shareholders (by reducing the value of their shares) andconsumers (by increasing the costs of goods and services).

The critics first objection that people, not corporations, commit crimes ignores the reality that the labyrinthian structure of many modern corporationsoften makes it extremely difficult to pinpoint individual responsiblity forspecific decisions. When individual offenders can be identiified they often turnout to be lower-level corporate employees who never made a lot of money, whonever benefited personally from the transaction, and who acted with either thereal or mistaken belief that if they did not commit the acts in question their jobsmight be in jeopardy. It because they (the lower level corporate employees)beliefed that their superior was aware [of] and approved of the crime,but could not honestly testify to a specific conversation or other act of thesuperior that would support an indictment of the superior.

The exsistence of corporate criminal liability also provides an incentive for topofficers to supervise middle- and lower- level management more closely.

The second objection that the cost of corporate criminal fines is actually borneby innocent shareholders and consumers also seems unfounded. With regardto shareholders, whether individual or institutional, incidents of corporatecriminal behavior may give the owners the right to redress the diminution oftheir interest by filing a derivative suit against individual officers and/ormembers of the board of directors.Opinion of Stephen Yoder said that the economic system allows consumers toexert a type of indirect , collective control. If we assume that competition existsin the offending corporations industry, the firm cannot simply decide to raise itsprices to absorb the fin or the costs related to the litigation. If it does, it risksbecoming less competitive and suffering such concomitant problems asdecreased profits, difficulty in securing debt and equity financing, curtailed

expansion, and the loss of investors to more law-abiding corporations.

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Criminally proscribed harm is unwanted in the sense that typically we do notregard crimes neutrally, as merely compensable acts. The infliction of criminalharm is unwanted even if the victim receives full compensation.

A corporate liablity provision in the Model Penal Code. Section 2.07creates a trifurcated scheme of corporate liablity that draws intersecting linesbetween acts and omissions, between true crimes and regulatory offenses, andbetween the operatives who are the hands of the corporation and the policymakers who constitute its mind.

A corporation may be convicted of the commission of an offense if:a. The offense is a violation or the offense is defined by a statute other than

the Code in which a legislative purpose to impose liability on corporationsplainly appears and the conduct is performed by an agent of thecorporation acting in behalf of the corporation within the scope of hisoffice or employment;

b. The offense consists of an omission to discharge a specific duty of

affirmative performance imposed on corporations by law;c. The commission of the offense was authorized, requested, commanded,

performed or recklessly tolerated by the board of directors or by a highmanagerial agent acting in behalf of the corporation within the scope ofhis office or employment.

When absolute liability is imposed for the commission of an offense, alegislative purpose to impose liability on a corporation shall assumed.