Federal corporate prosecutions are never fair fights. Mindless companies are stripped of their right against self-incrimination and pummelled by respondeat superior into accepting plea deals. The government then uses evidence coerced from them to prosecute their employees. For fans of the Fifth Amendment and the presumption of innocence, it isn’t pretty.
In an essay cited on the White Collar Crime Prof Blog here and available from SSRN here, Northwestern’s Albert Alschuler, left, (BA and LLB Harvard) exposes the increasingly illogical practices behind corporate enforcement.
Corporate defendants must produce incriminating documents even when the act of producing these documents would tend to incriminate them. Moreover, to ensure that corporations will not benefit from the privilege, the Supreme Court requires corporate officers to produce these records even when the act of production would incriminate them personally. The exception to the privilege for corporations swallows the rule applicable to individuals, and the tail wags the dog.
All corporate prosecutions are a weird fiction, he says — there’s “no soul to damn, no body to kick,” quoting Baron Thurlow, an 18th century Lord Chancellor of England. So, Prof Alschuler writes:
Innocent shareholders pay the fines, and innocent employees, creditors, customers, and communities sometimes feel the pinch too. The embarrassment of corporate criminal liability is that it punishes the innocent along with the guilty.
Because corporations are “mindless,” the goal of punishing them should be to encourage compliance by their employees. That’s not happening, he says, because of respondeat superior. It allows companies to be convicted for acts by single errant employees. And it doesn’t recognize any defense based on good-faith attempts by the corporate body to obey the law.
Why is respondeat superior allowed to continue? Prof Alschuler says:
Neither John Ashcroft nor any other Attorney General in the past century has sought a narrowing of the respondeat superior standard of corporate liability. Although half the states employ narrower standards, Congress seems very unlikely to follow their lead. An alliance of Ralph Nader, the Justice Department, and most Members of Congress could be expected to resist any effort to deny prosecutors an important “tool” in the fight against corporate crime. Like the rest of the federal criminal justice system, the respondeat superior standard transforms prosecutors into czars while the politicians stand and say “yes, yes, yes.” This standard serves its real purpose marvelously.
That real purpose, Prof Alschuler says, is the power of prosecutors to impose whatever sanctions they like for whatever conduct they wish to punish.
Not everyone agrees that corporate prosecutions are harmful or ineffective. Sara Sun Beale from Duke law school addresses Prof Alschuler directly in her upcoming article, “A Response to the Critics of Corporate Criminal Liability.” It’s scheduled to appear in the American Criminal Law Review and is available now on SSRN here.
So the debate continues.
Albert Alschuler’s essay, ” Two Ways to Think About the Punishment of Corporations” (October 19, 2009), appears in the American Criminal Law Review and on SSRN here.
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