(2) white-collar and corporate crime

What is a “white-collar crime”?

• coined by Edwin Sutherland

• he defined it "crime committed by a person of high social status + respectability in the course of his occupation”

• felt that sociology neglected crimes committed by middle-/upper-class people as opposed to “blue-collar” crime of WC

How have sociologists increasingly begun to distinguish between white-collar crime committed for personal gain and crimes committed by organisations?

• Slapper + Tombs (1999): the term “white-collar crime” should be reserved to describe crime by the “individually rich or powerful” committed in the “furtherance of their own interests”

• “corporate crimes” = crimes committed by corporations, furthering interest of corporation rather than individual employee

How may the distinction between “white-collar crime” and corporate crime be blurred in practice?

• corporations cannot “act”; individuals within corporations must make decisions

• in promoting the interests of the corporation by legal means, individuals are likely promoting their own interests (pursuing bonuses, promotions etc.)

What are examples of white-collar crime?

• fraud

• bribery

• insider trading

• individual tax evasion

To what extent are white-collar crimes publicised?

• generally hidden from public view

• on the infrequent occasions when perpetrators are caught, usually only receive significant media attention if involving politicians, celebrities etc.

What is an example of a widely publicised white-collar crime?

• House of Commons + House of Lords expenses scandal

• 2009: Daily Telegraph got hold of published details of expenses claimed by MPs (inc. claims for a duck house of over £1,500)

• many MPs were required to repay excessive claims though actions not deemed illegal

• 4 MPs + 2 members of House of Lords charged with false accounting + sent to prison for fraud

How do Pearce and Tombs define corporate crime?

illegal acts or omissions as the result of “deliberate decision making or culpable negligence within a legitimate formal organisation”

Who defined corporate crime as illegal acts or omissions as the result of “deliberate decision making or culpable negligence within a legitimate formal organisation”?

Pearce + Tombs

How is corporate crime generally considered by the public?

• under-reported in news media

• when reported, rarely treated as criminal but framed as “errors of judgement” “oversights”or at worst “scandals”

• recent campaigning of anti-austerity groups eg. Occupy + UK-uncut —> wider publication of some corporate wrongdoings eg.:

  • tax avoidance (Google, Starbucks)

  • unethical employment practices (Amazon)

  • phone-hacking (The Mirror)

Who identifies 4 types of corporate crime?

Tombs (2013)

What 4 types of corporate crime did Tombs (2013) identify?

1. FINANCIAL OFFENCES

   • illegal share dealings; tax evasion; bribery; illegal accounting practices

   • US company Enron (major electricity, natural gas, communications etc. company) found guilty when revealed (2001) that reported financial position was sustained by fraudulent accounting practices

   • company forced into bankruptcy & had to sell assets to try to meet claims of creditors who were owed around $50 bil.

2. OFFENCES AGAINST CONSUMERS

   • sale of unfit goods; conspiracies to fix/ carve up prices; false labelling

   • pharmaceutical company Chemie Grünenthal of Germany manufactured drug Thalidomide (used as sleeping pill/ tranquiliser) in late 1950s

   • the use of the drug by pregnant women —> >10,000 seriously deformed babies born

   • drug wasn’t tested for effects during pregnancy before being launched but was advertised as “completely safe”

3. OFFENCES AGAINST EMPLOYEES

   • discrimination; violation of wage laws; violation of right to organise industrial action; health + safety offences

   • 1984: poisonous gas from pesticides plant at Bhopal, India killed nearly 3,000 people (inc. employees + locals) & caused injury to further 20,000 ~ some claim 20,000 have since died from effects

   • caused by inadequate safety procedures

   • plant owned by subsidiary of US multinational corporation Union Carbide which paid $470 mil. in compensation to victims + families

4. OFFENCES AGAINST THE ENVIRONMENT

   • illegal emissions to air, water, + land; hazardous waste dumping

   • revelation in 2015 that Volkswagen had been using special software to cheat emissions-testing checks on diesel cars, hence allowing them to emit nitrogen oxide pollutants up to 40x above legal limits

What conclusions does Tombs draw about corporate crime?

two “unequivocal conclusions”:

1. corporate crime entails huge physical + financial costs which outweigh those associated with “conventional” or “street” crime

2. corporate offending not rare product of a few “bad apples” but “routine + pervasive”

KEY TERM

an alternative label for the working class based on the typical colour of shirts worn by manual workers in the past

blue collar

KEY TERM

theft or misappropriation of funds placed in one’s trust or belonging to one’s employer

embezzlement

KEY TERM

making use of confidential information to buy or sell stocks and shares illegally

insider trading

KEY TERM

a failure to do something that is legally required eg. protecting employees from health hazards

culpable negligence