Rather unpleasant news today regarding the Justice Department and corporate accountability: In Justice Shift, Corporate Deals Replace Trials

Here’s a clip:

“In a major shift of policy, the Justice Department, once known for taking down giant corporations, including the accounting firm Arthur Andersen, has put off prosecuting more than 50 companies suspected of wrongdoing over the last three years.

“Instead, many companies, from boutique outfits to immense corporations like American Express, have avoided the cost and stigma of defending themselves against criminal charges with a so-called deferred prosecution agreement, which allows the government to collect fines and appoint an outside monitor to impose internal reforms without going through a trial. In many cases, the name of the monitor and the details of the agreement are kept secret.”

I am sure there is a slight possibility that this less public and less invasive method of evaluating potentially fraudulent or otherwise criminal activity by corporations, and the subsequent nearly invisible and prone-to-abuse-and-self-dealing mechanism for monitoring them thereafter, might actually prove successful in holding them accountable…

Um, NO.

Be sure to read the full article. The following is just a whiff of how meaningless this approach really is:

“Firms have readily agreed to the deferred prosecutions, said Vikramaditya S. Khanna, a law professor at the University of Michigan who has studied their use, because ‘clearly it avoids a bigger headache for them.’

“Some lawyers suggest that companies may be willing to take more risks because they know that, if they are caught, the chances of getting a deferred prosecution are good. ‘Some companies may bear the risk’ of legally questionable business practices if they believe they can cut a deal to defer their prosecution indefinitely, Mr. Khanna said.

“Legal experts say the tactic may have sent the wrong signal to corporations — the promise, in effect, of a get-out-of-jail-free card.”

TAGS: CSR | Social Responsibility | Monsanto | Ethics | Fraud | Justice Department

This entry was posted on Wednesday, April 9th, 2008 at 8:07 am and is filed under Business Ethics, Corporate Governance, Corporate Social Responsibility. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.