corporate crime - saint leo universitywhat’s $50 million to bp? the maximum possible penalty is...
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Corporate CrimeWhat’s $50 Million to BP?
What Happened?
Antiquated installation• Not up to code• Grand-fathered in• Manager complains to
London office• Safety budget cut
Photo 1: NASA. (n.d.). Refinery. [Photograph].Retrieved November 10, 2010. (http://commons.wikimedia.org/wiki/File:Refinery.jpg)
What Happened?
Antiquated installation• Not up to code• Grand-fathered in• Manager complains to
London office• Safety budget cut
Photo 2: Sullivan, Jon. (October 16, 2004). Explosions.[Photograph]. Retrieved fromhttp://commons.wikimedia.org/wiki/File:Explosions.jpg.
Explosion• Unit overflowed• Series of explosions• 15 died• Hundreds injured
What Happened?
Antiquated installation• Not up to code• Grand-fathered in• Manager complains to
London office• Safety budget cut Photo 3: Ammodramus. [June 30, 2010]. Nuckolls
County Courthouse courtroom 3. Retrieved fromhttp://commons.wikimedia.org/wiki/File:Nuckolls_County_Courthouse_courtroom_3.JPG.
Explosion• Unit overflowed• Series of explosions• 15 died• Hundreds injured
Lawsuit• Crime Victims Act of
2004• Proposed settlement:
− $50 million fine− 3-year probation
• Victims outraged
What’s $50 Million to BP?
The maximum possible penalty is $3.4 billion.
What’s $50 Million to BP?
The maximum possible penalty is $3.4 billion.
The deal asks for 1.5% of this sum, or $50 million.
What’s $50 Million to BP?
The maximum possible penalty is $3.4 billion.
The deal asks for 1.5% of this sum, or $50 million.
During the first quarter of 2008 (when the settlement was proposed), BP’s quarterly profits were $7.6 billion(or $30.4 billion for the whole year).
What’s $50 Million to BP?
The maximum possible penalty is $3.4 billion.
The deal asks for 1.5% of this sum, or $50 million.
During the first quarter of 2008 (when the settlement was proposed), BP’s quarterly profits were $7.6 billion(or $30.4 billion for the whole year).
What would be the equivalent fine for an individual?
What would be the equivalentfine for an individual?
Let’s divide these figures by 1 million and bring the case down to an individual who has an income of $30,400/year.
What would be the equivalentfine for an individual?
BP Individual
Income $30.4 billion $30,400
Maximum fine $3.4 billion $3,400
Proposed fine
(1.5% of maximum)$50 million $51
Let’s divide these figures by 1 million and bring the case down to an individual who has an income of $30,400/year.
Questions to Consider
What would you do if you were fined $51?
Questions to Consider
What would you do if you were fined $51?Do you think the penalty is enough?
Will this cause BP to change its practices?How is this possible?
Questions to Consider
What would you do if you were fined $51?Do you think the penalty is enough?
Will this cause BP to change its practices?How is this possible?
What do you think would have happened if someone had gunned down 15 people in a killing spree, instead of 15 people dying at the refinery?
Street Crime
• Committed by an individual or a group for immediate personal gain
• Direct personal interaction
• Often violent and graphic
• Triggers emotional public response
• Heavily sanctioned in court
Corporate Crime
This is a crime committed by a business in the course of normal activities.
Corporate Crime
This is a crime committed by a business in the course of normal activities.
Who is responsible?
Corporate Crime
This is a crime committed by a business in the course of normal activities.
Who is responsible?It is difficult to assign blame to one person.
Corporate Crime
This is a crime committed by a business in the course of normal activities.
Who is responsible?It is difficult to assign blame to one person.
Who benefits?
Corporate Crime
This is a crime committed by a business in the course of normal activities.
Who is responsible?It is difficult to assign blame to one person.
Who benefits?A specific person cannot be identified.
BP as a Corporate Criminal
BP as a Corporate Criminal
The company failed to update its refinery to comply with new safety regulations. At best, BP was negligent.
BP as a Corporate Criminal
The company failed to update its refinery to comply with new safety regulations. At best, BP was negligent.
Diffuse benefit: BP executives and all shareholders gained as the company’s negligence lowered production costs, but they were not necessarily the same people as the ones who implemented any of the condemnable actions.
Diffuse Responsibility
Who has ultimate responsibility?
Diffuse Responsibility
Who has ultimate responsibility?• The technician who did not report the problem?
Diffuse Responsibility
Who has ultimate responsibility?• The technician who did not report the problem?• The supervisor or manager who did not follow the new standards?
Diffuse Responsibility
Who has ultimate responsibility?• The technician who did not report the problem?• The supervisor or manager who did not follow the new standards?• The CEO who did not send a memo requiring that all plants be
compliant?
Diffuse Responsibility
Who has ultimate responsibility?• The technician who did not report the problem?• The supervisor or manager who did not follow the new standards?• The CEO who did not send a memo requiring that all plants be
compliant?• The stockholders who did not demand that their corporation
comply with the law?
Diffuse Responsibility
Who has ultimate responsibility?• The technician who did not report the problem?• The supervisor or manager who did not follow the new standards?• The CEO who did not send a memo requiring that all plants be
compliant?• The stockholders who did not demand that their corporation
comply with the law?
So no one goes to jail, but why was the fine so low?
Why was the fine so low?
Conflict Theory
Corporate criminals are wealthy, connected, and powerful.
They have resources to:• Influence the laws to keep
penalties low• Get good legal
representation• Give a favorable image in
the media
Others face harsher punishment for lack of resources.
• Lower class• Racial minorities