Tuesday, March 20 , 2018, 3:13 am | Fair 51º


Randy Alcorn: Volkswagen, Johnson & Johnson, and Confronting Conscienceless Corporate Criminality

The discovery that Volkswagen, the world’s largest auto company, has deliberately deceived the market by programming its diesel engines to perform at legal emission levels only when smog tested is extraordinary only in its breathtaking brazenness. Such corporate criminality is hardly unusual. We have seen it over and over again.

Indeed, the same week VW’s fraud was exposed, The Huffington Post reported on how Johnson & Johnson Corp. illegally promoted its powerful psychotropic drug Risperdal as an effective treatment for autism and for certain age-related maladies, and then continually covered up the terrible side effects suffered by deceived patients.

Johnson & Johnson reportedly earned $30 billion over 20 years engaging in this criminal behavior. When finally caught, the company faced a $6 billion fine — leaving it with a $24 billion return. Who says crime doesn’t pay?

Consider for a moment the mentality of those corporate decision-makers who knowingly inflict horrible harm on others in order to enrich themselves. Their callous disregard for human life and the welfare of others is no less egregious than that of common murderers and thieves, yet few of them are ever prosecuted by the judicial system.

Without consequences there is no deterrence. Levying fines on corporations while allowing their guilty employees to escape prosecution for their criminal behavior has clearly proven to be ineffective in stanching corporate crime. When corporations engage in unethical behavior, it is because people in that company direct it, approve it and continue it. They are guilty and should be held accountable under the law.

Now consider the economic culture in which we live. We are barraged nearly every waking moment by advertisers who promise that their products or services are safe, reliable, and will enhance our lives and solve our problems. It is all reminiscent of carnival snake oil salesmen, and too often is just as deceitful. Clever marketers have created an illusory world in which happiness and satisfaction are just a purchase away.

But, when companies such as Volkswagen blatantly lie about the environmentally friendly properties of its diesel engines, and Johnson & Johnson dissimulates over the appropriateness and risks of one its drugs, it is a safe bet that many other companies are also preying upon and endangering the public for a buck.

It is a buyer-beware world we live in, but few individuals have the time or resources to determine the truth about and safety of products and services. The public is left to rely on government to police the markets and to protect it from mercantile miscreants.

And while there are those who howl that the markets are overregulated, more accurately markets are misregulated. Under the pretense of public safety, state and local governments have abused regulatory powers to generate fee revenue or to benefit special-interest clients by obstructing competition. Meanwhile, federal government regulators are often outmatched by conniving corporations that manipulate or omit reporting data, or that have persuaded politicians to put a short leash on regulators.

For instance, the Food and Drug Administration, which the nation entrusts with ensuring the safety of its food and medicine, is not staffed with an army of white-coated research experts testing everything from meat to medicine. It relies on scattered inspections of, and reporting data from the business communities it monitors.

Regulation is more an honor system than a comprehensive surveillance system, and is no more reliable in protecting the public than is the IRS in catching all tax cheats. 

Typically, regulatory response is after the fact — after corporate transgressions result in terrible harm to the public, e.g. a gas pipeline breaks and burns down a neighborhood, or people get sick or die from some prescription drug or tainted food. That response is usually fines and provisional monitors on the offending company.

Such wrist slaps are not enough to protect the public. And, even if offending corporations were fined into insolvency, those most punished would be shareholders and employees, not the truly guilty.

This situation will not improve until people, not legal fictions, are punished for their criminal behavior. Every major infraction by a corporation should result in the indictment and prosecution of the perpetrators — and there are always perpetrators. If the only punishment of the guilty is to resign with a lavish severance package, there is no real consequence for the criminal behavior.

The most fitting punishment for crimes of greed is economic proscription under which the convicted reprobate would have all of his or her wealth confiscated, and for a period of time, depending on the severity of the crime, be prohibited from earning anything above the minimum wage or receiving aid from anyone.

Criminal acts that resulted in the deaths of others would be punished by lifetime proscription. Why should taxpayers house, feed and provide medical care for these scumbags in one of our already overcrowded prisons?

We must insist that regulation include prosecution of corporate criminals. Otherwise, it will be business as usual.

— Randy Alcorn is a Santa Barbara political observer. Contact him at .(JavaScript must be enabled to view this email address), or click here to read previous columns. The opinions expressed are his own.

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