Corporate Crime

A Corporate Crime is an organizational crime associated with a corporation.

• Context:
  • It can (typically) involve illegal or unethical actions committed by a corporation or individuals within a corporation for financial gain or other benefits.
  • It can (often) overlap with white-collar crime, organized crime, and state-corporate crime.
  • It can range from being a minor regulatory violation to being a major criminal offense with significant impacts.
  • It can result in penalties such as fines, lawsuits, and even judicial dissolution of the corporation.
  • It can include activities like financial fraud, environmental violations, bribery, and health and safety violations.
  • It can affect various stakeholders, including investors, employees, customers, and the general public.
  • It can be subject to different legal standards and enforcement practices depending on the jurisdiction.
  • ...
• Example(s):
  • Environmental Violations, such as:
    • the BP Oil Spill (2010), where BP ignored safety procedures, resulting in extensive environmental damage and significant fines.
    • the Volkswagen Dieselgate (2015), where Volkswagen installed illegal software to cheat emissions tests, leading to environmental harm and substantial fines.
    • the PFAS Contamination: North Carolina: DuPont and Chemours have been implicated in extensive PFAS (per- and polyfluoroalkyl substances) contamination in North Carolina. The UN has criticized the companies for disregarding human rights and environmental protections, leading to significant health and environmental issues.
    • ...
  • Financial Fraud, such as:
    • the Enron Scandal (2001), where Enron used deceptive accounting practices to hide debt and inflate profits, resulting in a major bankruptcy.
    • the WorldCom Accounting Scandal (2002), where executives manipulated financial statements, leading to the company's collapse.
  • Health and Safety Violations, such as:
    • the Union Carbide Bhopal Disaster (1984), where a gas leak caused thousands of deaths and long-term health issues due to severe safety lapses.
    • the DuPont Chemical Accidents, where multiple incidents led to fines and legal actions for chemical releases and worker deaths.
  • Corporate Consumer Frauds, such as:
    • the Big Tobacco (1950s-1990s), where companies misled the public about the dangers of smoking, causing prolonged public health crises.
    • the Theranos Scandal (2015), where false claims about blood test devices led to financial losses and endangered patient health.
  • Corporate Bribery and Corruption, such as:
    • such as the Siemens Bribery Scandal (2008), where Siemens engaged in global bribery to win contracts, resulting in one of the largest corporate fines.
    • such as the Rite Aid Bribery (2014), where Rite Aid offered gift cards to Medicare and Medicaid patients to influence prescription transfers.
  • State-Corporate Crime, such as:
    • the Iran-Contra Affair (1980s), where U.S. officials facilitated illegal arms sales involving corporate entities, highlighting state and corporate crime intersections.
    • the Space Shuttle Challenger Disaster (1986), where NASA officials ignored safety concerns under pressure, leading to the shuttle's explosion and deaths.
  • ...
• Counter-Example(s):
  • Corporate Social Responsibility (CSR) initiatives, which involve corporations voluntarily implementing ethical practices and contributing positively to society and the environment.
  • Corporate Philanthropy, where companies donate resources to charitable causes and support community initiatives without any illegal or unethical activities.
  • Governemnt Crime.
  • Military Organization Crime.
  • Criminal Organization Crime.
• See: State (Polity), English-Speaking World, Vicarious Liability (Criminal), Corporate Liability, Whistleblower Protections.

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References

2024

• (Wikipedia, 2024) ⇒ https://en.wikipedia.org/wiki/Corporate_crime Retrieved:2024-5-28.
  • In criminology, corporate crime refers to crimes committed either by a corporation (i.e., a business entity having a separate legal personality from the natural persons that manage its activities), or by individuals acting on behalf of a corporation or other business entity (see vicarious liability and corporate liability). For the worst corporate crimes, corporations may face judicial dissolution, sometimes called the "corporate death penalty", which is a legal procedure in which a corporation is forced to dissolve or cease to exist.

    Some negative behaviours by corporations may not actually be criminal; laws vary between jurisdictions. For example, some jurisdictions allow insider trading.

    Corporate crime overlaps with:

    • white-collar crime, because the majority of individuals who may act as or represent the interests of the corporation are white-collar professionals;
    • organized crime, because criminals may set up corporations either for the purposes of crime or as vehicles for laundering the proceeds of crime. The world's gross criminal product has been estimated at 20 percent of world trade. (de Brie 2000); and
    • state-corporate crime because, in many contexts, the opportunity to commit crime emerges from the relationship between the corporation and the state.

2024

• Perplexity
  • Corporate crime, a subset of organizational crime, involves illegal or unethical actions committed by corporations or individuals within a corporation for the benefit of the organization. Here are some well-known examples of corporate crime across different industries and time periods:
  • Environmental Violations
    1. **BP Oil Spill (2010)**: The Deepwater Horizon oil rig explosion led to the release of millions of barrels of oil into the Gulf of Mexico, causing extensive environmental damage. BP was found to have ignored warning signs and failed to implement proper safety procedures, resulting in billions of dollars in fines[2].
    2. **Volkswagen Dieselgate (2015)**: Volkswagen installed illegal software in millions of its diesel vehicles to cheat emissions tests, falsely advertising them as environmentally friendly. The scandal resulted in significant environmental harm and billions in fines[2].
  • Financial Fraud
    1. **Enron Scandal (2001)**: Enron used deceptive accounting practices to hide debt and inflate profits, leading to one of the largest bankruptcies in U.S. history. The scandal resulted in billions of dollars in losses for investors and employees, and the dissolution of Arthur Andersen, Enron's auditing firm[2][19].
    2. **WorldCom Accounting Scandal (2002)**: WorldCom's executives manipulated financial statements to hide expenses and inflate profits, leading to the company's collapse and significant losses for investors[2].
  • Health and Safety Violations
    1. **Union Carbide Bhopal Disaster (1984)**: A gas leak at a Union Carbide plant in Bhopal, India, released toxic methyl isocyanate gas, killing thousands and causing long-term health issues for the local population. The incident highlighted severe safety lapses and inadequate maintenance[19].
    2. **DuPont Chemical Accidents**: DuPont has faced multiple fines and legal actions for chemical accidents, including a 2014 incident at its La Porte, Texas, facility that resulted in the release of toxic chemicals and the deaths of four workers[1].
  • Consumer Fraud
    1. **Big Tobacco (1950s-1990s)**: Companies like Philip Morris and R.J. Reynolds conducted a disinformation campaign to mislead the public about the dangers of smoking, despite knowing the health risks. This resulted in prolonged public health crises and numerous lawsuits[19].
    2. **Theranos Scandal (2015)**: Theranos, a health technology company, falsely claimed its devices could conduct comprehensive blood tests with a single drop of blood. The fraud led to significant financial losses for investors and endangered patients' health[8].
  • Bribery and Corruption
    1. **Siemens Bribery Scandal (2008)**: Siemens was involved in a global bribery scheme to win contracts, resulting in one of the largest corporate fines in history. The company paid over $1.6 billion in fines to U.S. and European authorities[9].
    2. **Rite Aid Bribery (2014)**: Rite Aid was fined $2.99 million for offering gift cards to Medicare and Medicaid patients to influence them to transfer their prescriptions to Rite Aid pharmacies[1].
  • State-Corporate Crime
    1. **Iran-Contra Affair (1980s)**: During the Reagan administration, U.S. officials facilitated illegal arms sales to Iran, with some proceeds diverted to support Contra rebels in Nicaragua. This involved corporate entities in the arms trade and highlighted the intersection of state and corporate crime[12].
    2. **Space Shuttle Challenger Disaster (1986)**: NASA officials, under pressure to meet deadlines, directed Morton Thiokol to ignore safety concerns about the O-ring seals, leading to the shuttle's explosion and the deaths of seven astronauts[12].
  • Citations:

[1] https://study.com/academy/lesson/corporate-crime-definition-types-examples.html
[2] https://www.businessanalystlearnings.com/business-matters/2023/1/3/6-well-known-cases-of-corporate-crime
[3] https://criminal-justice.iresearchnet.com/types-of-crime/organizational-crime/
[4] https://www.corporatecrimereporter.com/top100.html
[5] https://www.ojp.gov/ncjrs/virtual-library/abstracts/corporate-crime-organizational-perspective-white-collar-and
[6] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=978883
[7] https://en.wikipedia.org/wiki/Organized_crime
[8] https://www.nu.edu/blog/common-white-collar-crimes/
[9] https://www.investopedia.com/terms/w/white-collar-crime.asp

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