Chapter 3 Flashcards
What is corporate crime?
Offenses committed by corporate officials for their corporation and the offenses of the corporation itself
What was one of the first corporations?
East India Company in 1612
What was the South Sea Company?
London in 1711 to engage in slave trade and commerce in South America
How did investors lose large fortunes?
The enterprise was fraudulent, driven by bribery, false financial statements, and stock manipulation
What did the Industrial Revolution do?
Gave rise to immensely powerful and wealthy capitalist corporations, although during this period and into the 20th century relatively little regulation of those enterprises was effective
What were the robber barons involved in?
Every manner of bribery, fraud, stock manipulation, predation against competitors, price gouging, exploitation of labor, and maintenance of unsafe working conditions, but these corporations were largely invulnerable to legal controls
Who helped inspire the Sherman Antitrust Act?
The monopolistic practice of huge trusts (holding companies for a chain of corporations) such as Standard Oil
What are corporations regarded as?
The center piece of a free-market capitalist economy and as a powerful manipulation of entrepreneurial initiative and creativity
What are the important benefactors from corporations?
Large number of charities, public events, institutions of higher learning and scientific enterprises.
What did Karl Marx do?
Regarded the corporation (joint-stock company) as one of the instruments of a capitalist system that exploits and dehumanizes workers and deprives them of a fair return on their labor.
What was Marxist view?
The stockholder is a small-scale capitalist who has lost much control over his capital to those who actually manage the corporations
What is the pathological pursuit of profit?
Some of the large corporations adds up to more than $100 billion a year, with sales exceeding the economies of many countries
What are Oligopolies?
Replacing classical monopolies that were outlawed due to the Sherman Antitrust Act.
What are Conglomerates?
A combination of centrally owned and controlled firms operating in different markets, have also become more common, especially because of multibillion-dollar mergers in the 80’s and 90’s.
What are corporate transgressions?
Harmful although not necessarily illegal actions.
What are the 4 approaches?
- Adopt a typology emphasizing the primary victims (gen. public, consumers, employees)
- Focus on the nature of the harmful activity (violence, corruption)
- Emphasizes the size or scope of the corporate entity (Crimes of transnational crimes)
- Classified corporate crime according to the type of product or service involved (Auto industry, pharmacy)
What are the 4 different ways corporate violence differs from conventional interpersonal violence?
- It is indirect in the sense that victims are not assaulted by another person
- The effects are typically quite removed in time from the implementation of the corporate policy or action that caused the harm, and the casual relationship between the corporate action and the injury to health cannot be clearly and definitively established
- Large number of indiv. acting collectively, rather than a single or very few indiv., are responsible for the actions that result in physical injury or death.
- Motivated by the desire to maximize corporate profits (or survival) and minimize corporate overhead
Toxic Waste: What was the Bhopal case in India?
A massive poisonous chemical cloud was emitted from a Union Carbide plant in December ‘84
How does the water get polluted?
Dumping of toxic wastes by cruise ships
What happened to RC?
Pleaded guilty to routinely dumping toxic waste and paid a fine of $18 million
Air Pollution: What is an example that has generally has unheathful air conditions?
LA
What was the thalidomide case?
Some 8,000 babies whose mother had taken the prescribed tranquilizer during their pregnancies were born grossly deformed in the early ’60s
What was DES?
A drug discovered in the 30’s marketed by Eli Lilly as an effective agent in preventing miscarriages
What did they develop after DES?
Sometimes fatal vaginal and cervical cancer for women and testicular abnormalities and fertility problems for guys
What has the FDA relied on?
Pharmaceutical tests rather than their own tests
What was sold in the 1960’s by the A.H. Robins Company?
The Dalkon shield was an intrauterine birth-control device
What happened because the device was defective?
Bacteria were able to travel up the device’s wick and into the womb
What did the Merck company get in trouble with?
Their painkiller Vioxx and their cholesterol drug Zetia
What were they charged with such popular products like OxyContin?
Having misrepresented research results or engaged in deceitful marketing practices
What was the common element in all the pharmaceutical product cases?
The corporations put the pursuit of profits ahead of scrupulous concern for the health and safety of their products’ users
What were wrong with Firestone 500 radials?
Unsafe and defective
What has the airline been accused of?
Flying planes with safety defects and of falsifying airplane maintenance records
What happened with ValuJet?
Contributed to a plane crash in ‘96, that killed 105 passengers and 5 crew members
What has been the single greatest cause of disability and premature death in the US?
Work-related accidents and diseases
What was black lung?
Resulting from exposure to dangerous mine dust
What was brown lung?
Inhalation of dust
What were the typical penalties to corps. for safety violations?
Token fines, criminal prosecutions, even for intentional wrongdoing by employers are rare
What are included in corporate fraud?
Restraints of trade;rebates; patent, trademark, and copyright violations; misrepresentations in advertising; unfair labor practices; financial manipulations; and war crimes
What wrong things did corporate contractors do?
Charged unreasonable prices, collected tens of millions on cost overruns, falsified test data, double-billed the gov. and billed it for costs related to commercial contracts, and delivered defective products or systems
Who else was involved in incidents?
Lockhead Martin, Rockwell International, Boeing, Unisys, and GE. They overcharged, double-billed, and defrauded the Def. Dept. of hundreds of millions of dollars on contracts for transport planes, jet engines, and battlefield computer systems
Who was involved in defrauding the govt. or billions of dollars annually through Medicaid and Medicare programs?
Hospitals, mental hospitals, rehab. centers, testing labs, and other med. facilities
What is price fixing?
When competing corporations join together and agree to fix prices at a certain level
What is parallel pricing?
Industry “leaders” set inflated prices and supposed competitors adjust their own prices accordingly
Explicit price fixing was prohibited by what?
The Sherman Antitrust Act of 1890 as a form of “restraint of trade”
Where has price fixing occured?
Gasoline, vitamins, seeds, diamonds, soft drinks, food preservatives, infant formula, cardboard cartons, and airline tickets
What are the 2 companies that conspired over a period of decades to fix prices on their products?
GE and Westinghouse
What were Southeby’s and Clinton’s charged with?
Collusion on commission fees charged to art sellers and on buyer’s fees
What is price gouging?
Systematic overcharging
What was Astra-Zeneca?
Pharm. company that pleaded guilty to felony charges for having provided financial inducements to hundreds of doctors to prescribe its prostate-cancer drug
What are some of the corporations found guilty of false advertising?
Wheaties, Morton’s salt, Palmolive soap, Bayer’s aspirin, Elizabeth Arden cosmetics, Encyclopedia Britannica, Goodyear tires and Quaker State oil
What else have had false claims?
Sears’ dishwashers, Thompson Medical’s Aspercreme, Sunoco 260 octane gas, Listerine mouthwash, Mobil’s Hefty bags, and General Electric’s incadescent light bulbs.
What was involved with the Beech-Nut Corporation?
Pleaded guilty to mislabeling as apple juice a cheap mixture of beet sugar, cane sugar, and corn syrup that contained little real apple juice
What was Wal-Mart charged with?
The specifically criminal act of hiring illegal immigrant workers as a cost-saving measure
What was Wal-Mart accused of?
Cheating employees out of hundreds of millions of dollars by requiring them to work after clocking out, with no additional pay
What was the Haliburton Company accused of?
Using a legal loophole to reduce pension payouts to employees, urging them to take pensions early.
Is corporate surveillance a form of corporate violence or crime?
no
What happened with the Exxon Corporation?
Their gas stations did not receive promised fuel discounts from the corporation
What was Wal-Mart found guilty of?
Engaging in predatory pricing to undercut competing retailers
What did IBM get accused of?
Perpetrator of anti-competitive practices and a victim of corporate theft
What is strategic bankruptcy
Did it to avoid meeting certain burdensome financial obligations, including in some cases, obligations to creditors
