MAY 1987 - VOLUME 8 - NUMBER 5
T H E C A S E A G A I N S T C O R P O R A T E C R I M E
|Judge Miles W. Lord has been crusading for public justice for nearly 40 years. Appointed to the federal bench in 1966 by President Johnson, Lord has authored milestone opinions in such cases as US. v. Reserve Mining Co. involving the pollution of Lake Superior; US. v. Sperry Corp. and Katt and La Forge, involving fraud in government contracts; and the A.H. Robins' Dalkon Shield litigation. His insistence that officers of corporations are personally responsible for the actions of those corporations has caused an uproar in America !s corporate boardrooms. Lord is now with the Minnesota law firm of Sieben, Grose, and Von Holtum, Ltd. The Monitor recently spoke with Lord about corporate crime.|
Multinational Monitor: Why do criminal laws treat corporations differently than individuals?
Judge Miles Lord: Almost 150 years ago we started saying that a corporation was a person for the purposes of owning land. Then we gave the corporation all the attributes of a person: the Fifth Amendment, the right to counsel, the right to privileged communication with counsel - all those things which a group of people who gathered together to commit a crime may not have had. So a corporation is a person for every purpose except to prosecute for a conspiracy.
Monitor: There is a debate in the legal and sociological literature on the definition of corporate crime. Some legal experts say that we can't label actions by corporations that injure or kill criminal, because for an action to be called a crime it must be prosecuted. Sociologists, on the other hand, say such a narrow definition is ridiculous. How do you define corporate crime?
Lord: As soon as you [accuse a corporation of committing a crime] they give the kind of answer that their defenders give: "it isn't a crime until it's prosecuted." So a guy who rapes a hundred women and gets away with it would not have committed any crimes. Murder is a crime whether it is prosecuted or not.
Monitor: What are some examples of non-prosecuted corporate murder?
Lord: Let's talk about Robins, let's talk about Johns Manville, let's talk about the other asbestos mining companies - people are dying from their products. All of those outfits went bankrupt because somebody called them what they were.
Murder is thought of as killing [people] right away. Sometimes that is the legal definition: If they don't die within a year of the act there is no murder. But [these companies] give them the long-term poisoning. Maybe the traditional definition of murder - that they must be dead within a year of the time of the act - needs a bit of revision. But the prospect of getting it revised is rather remote.
Monitor: How costly is corporate crime to our society?
Lord: It is very expensive when you think about the women that are running around with cancer of the cervix and men with no testicles, whose mothers took DES - the second and third generations of malformed sex organs are coming out of that mess; thalidomide; blood pressure tablets that blinded instead of cured; the 40,000 poisonous dump sites in America; and the Dalkon Shield - 350,000 women have claimed [injury] but that's only the beginning, women in Central America and Africa who have gotten this thing through the Agency for International Development are still wearing this explosive device in their womb.
Monitor: Cost-benefit analysis has become the new religion in some courts. What are its ramifications?
Lord: The whole cost-benefit analysis is warped. They say, well you can kill so many people if the benefits are great enough. Then they can take the benefits and circulate them through the given industry, they circulate them through the oil company, through the gasoline station, through the garage, the hardware store, the drugstore, the shoemaker, the grocery store, and if they don't have enough statistics there they just circulate them through a bunch of other businesses. Once they put a price on human life, all is lost. Life is sacred. Life is priceless.
Monitor: Most of the criminal prosecutions of corporations that are now underway are related to workplace deaths. Do you think these can be attributed to the Reagan administration's lax enforcement of federal health and safety regulations for workers?
Lord: There is no protection for people. The Food and Drug Administration, the Federal Aviation Administration, the the Occupational Safety and Health Administration, the Consumer Product Safety Commission, none of them protect people. And worker's compensation is an alternative to safety. When they can take a woman and work her till her arms and hands go numb and pay her $375 for a carpal tunnel operation and $350 if she has to have an operation on the other arm, they have bought both that woman's arms and her comfort for life for about $700. So why should they put in a safe machine?
The only protection is to make it too expensive to kill. Only the courts can make it too expensive to kill. It is the only place that [corporations] haven't been able to buy into government. And now they are trying to cut off the contingent fee, and put limits on liability to make it more difficult to recover damages. Corporations seek a license to kill. If they are small, they may get prosecuted, but nobody has threatened to prosecute the A.H. Robins company for what they did or any of these other big drug companies or chemical companies, they are just too big, no one is responsible.
Monitor: That brings up an important point. Ford Motor Company was prosecuted in Indiana and it was prosecuted by a Republican prosecutor, so why is it that although there were deaths from the Dalkon Shield, A.H. Robins is not being prosecuted for homicide nor are the companies that manufactured thalidomide and DES?
Lord: It is because it is too hard to pinpoint the responsibility. If you are big enough, they can't find out "who done it." There's a blending of responsibility when each person does just one thing. They used to call it a conspiracy if two or more people got together to commit either a legal act by an illegal method or an illegal act by a legal method. Now they have a process of deniability: the underlings do the dirty work and the top man can deny he knew about it.
Monitor: But in some cases, the crimes and risks are not that clear cut are they?
Lord: Not always, but very often corporations continue on in the same course of conduct long after the risk is apparent, just as Robins did after they got death reports from doctors. They still carried on. To this day they haven't admitted they have killed anybody. If murder is only confined to America, that may be so, but how about the people dying in Central America that haven't gotten the word from Robins that it has planted a bomb in their wombs.
Monitor: What about cases like DES or Agent Orange? Aren't those cases less clear cut? Are those deserving of criminal investigation?
Lord: It depends on what the people knew. I think the reason we can prosecute two entrepreneurs from Chicago [the Film Recovery Systems' case] is that they had to know what was going on, so the corporate shield didn't protect them. [With] the bigger outfits you have to prove knowledge on the part of someone. That is one of the problems an ordinary prosecutor has: getting a hold of the documents. It took 10 years to get a hold of the tens of thousands of letters from doctors complaining about what they were doing - even to know that they existed in Robins - and they have never been produced. So there is such a thing as using the corporate shield and the attorney-client privilege to hide liability.
Monitor: Are you writing off the possibility of criminal sanctions to control corporate illegality, or can we look at things like a strong federal homicide statute so that federal resources can be used to enforce the law?
Lord: We can look at that possibility. Then we can look at the facts. We find that corporations paid more than half of what it took to elect the House of Representatives in the last election. [The money] came right out of corporate pockets, which they use as subterfuge [claiming] that it is from individual contributions. So one begins to despair of Congress ever taking effective action. But we can fight for it, and we can hope for it.
Monitor: What is the most effective deterrent to corporate wrongdoing?
Lord: The only thing that is deterring them is the personal injury lawyer, who literally takes the victims out of their bed or their grave, goes with them to court, and asks for retribution and punitive damages. The big drive by corporations now through their PACs [political action committees] and through their lobbyists is to do away with the contingent fee; to cut down on punitive damages, do away with them or say they can only be done once per incident; or to put caps on pain or suffering awards.
Monitor: What are the ramifications of the campaign by corporate lobbies and the insurance industry to limit victims' rights in civil law suits?
Lord: It will be easier [for corporations] to get the 007 [license to kill] after their name, so they can kill with impunity.
Monitor: Are there other ways to deter corporate wrongdoing?
Lord: There is a provision - in the Minnesota law at least - for taking away the corporate charter for misconduct.
Monitor: Do you think that would be effective?
Lord: If they make them pay their assets all back to their shareholders and take the building apart. Otherwise they will just transfer [their assets] to another corporation. You see the big sanctuary is that thing which I have often called the largest black hole in our economic universe - bankruptcy. It all goes in and the only thing that comes out is a viable corporation. The creditors are all scraped up on the sides.
Monitor: Are corporations inherently unaccountable?
Lord: There are many good corporations that strive never to violate the law and do not violate it. The problem is that when one corporation is attacked, the attacker is immediately called "anti-business" no matter how bad that corporation is. The attack on the corporation gets to be a series of individuals attacking the corporation and the possibility of networking is rather remote. The attacker is labeled anti-business and the corporations draw together like the musk ox fighting off the wolves - with their horns out.