Workplace Deviance White Collar Crime

1. Workplace DevianceWhite Collar Crime Kelly Cheeseman Dial AJ 325

2. Organizational Deviance Definition Crime committed in working life How does this differ from WCC Harmful but does not always technically break a law Involves the entire org., not just an individual

3. Org. Deviance Breaks social norms Members are socialized to be deviant Mgmt. aware, permits, or encourages Org. norms support deviance Causes Perception of profits falling Lack of regulation decentralization

4. Retail Deviance Misuse of discount Taken store merchandise Get paid for more hours Under-ring purchase Borrow/take $$ Extra reimbursement Damage merc. to buy it Total 28.9% 6.6% 5.8% 3.2% 2.7% 2.1% 1.3% 35%

5. Hospital Sector Deviance Take Hospital Items Take meds. for patients Get paid more hours Take equip./tools Extra re-imbursement Total 27.3 7.8 6.1 4.7 1.1 33.3

6. Manufacturing deviance Take raw materials Get paid more hours Take company tools/equip. Extra re-imbursement Take finished prod. Take precious metals Total 14.3 9.2 8.7 7.7 3.1 1.8 28.4

7. 3 Sectors production deviance R H M Long lunch break 56 57 72 Leave early/arrive late 32 29 44 Use sick when not sick 17 33 38 Slow/sloppy work 15 11 3 Work alc./drugs 8 2 3

8. Group ProjectAssessment of workplace deviance in other environments Military Police University Business Office Waiters Nursing homes Your work environment

9. Government Deviance Abuse of power of govt. officials Bribes Kickbacks Mismanagement of public funds Privilege of sending free mail

10. Government Deviance Campaigns Stealing competitor ads Rumor/innuendo (smear campaign) Campaign finance abuses who is contributing? How much?

11. TDC � Andy Collins Vita-pro Contracted with Vita-pro to provide for TDC Soy based meat substitute Contract was for 5 years 33.7 million When Collins retired went to work for Vita-pro $1,000 a day consultant Broke contract laws etc.

12. White Collar Crime Definition Occupationally related, carried out by a respected upper class individual Sutherland (1949) Difference between white v. blue Skill Sophistication Power Influence Respectability Attitude in criminal justice community

13. 3/18/2012 Ford Pinto Case: A Classic Example of �WCC� August 10, 1978: 3 teenage girls had their Pinto struck in the rear by a van. Car blew-up (Van going less 30 mph) Ford put the gas tank in the in the rear of the Pinto Had already paid ($) civil suits

14. The Ford Pinto Fuel Tank �Safety Doesn�t Sell� $11 per car to fix the Problem $5.08 to add rubber bladder to fuel tank to eliminate problem Design change would have decreased trunk space

15. 3/18/2012 Mark Dowie (1977) �Pinto Madness� Article that alleged that Ford had knowledge of Pinto�s defects. Alleged that Ford opted NOT to fix. Ford endangered its victims not inadvertently but intentionally Executives knew that hundreds of people would needlessly die.

16. 3/18/2012 Evolution of Ford Pinto Strong competition for the lucrative small car market. IE: Volkswagen (VW Beetle) Discovered defect in pre-production crash tests (ignored) Ford lobbied against governmental safety standards

17. 3/18/2012 �Smoking-gun memo� Calculated a life as $200,000 and a burn injury as $67,000. Ford executives decided it would be cheaper to pay civil suits than to recall the Pinto.

18. 3/18/2012 Crash-tests of the Pinto 40 different tests conducted at over 25 mph. Every test resulted in a ruptured fuel tank. Lee Iacocca, Pres. Ford

19. 3/18/2012 �Smoking-gun memo� Ford would not make an $11 dollar improvement �Cheaper� to pay liability than to modify the fuel tank This would have prevented 180 fiery deaths a year (Mark Dowie) Ford had knowledge of this defect

20. 3/18/2012 The Ford Case Ford Motor Case was the 4th largest company in the world. Hired jury expert Hans Zeisel Secured a long-time friend of the judge as co-counsel Elkhart County had very limited resources (volunteers)

21. 3/18/2012 The Ford Case Ford may have spent anywhere from $1.5 million to $2 million on its defense. Only 5% of prosecutor�s documents were admitted into evidence �Smoking gun memo� NOT admitted Co-counsel, good friend of judge

22. 3/18/2012 Recall of the Pinto Recalled 1.4 million 1971-1976 Ford Pintos (Replaced by Escort) Over 100 lawsuits against Ford Ford paid out millions of dollars At least fifty-nine people burned to death from Pinto

23. 3/18/2012 Late 1990�s - 2000 Ford Explorer and Firestone tires. More than 150 deaths around the world. Some say Ford and Firestone knew of at least 35 deaths before federal gov�t launched its probe in 2000.

24. 3/18/2012 What Does the Ford Case Tell Us... White-collar crime can kill! Public apathy towards �WCC� Shows that conservative jurors look more favorably on the rights of the defendant. Illustrates the effectiveness of the scientific selection of jurors.

25. Pharmaceutical recalls/problem drugs Vioxx� Merck known to cause heartburn, nausea, diarrhea, upper respiratory tract infection, swelling of the lower extremities, high blood pressure, itching, stomach ulcers or bleeding, fatigue, vomiting, dark urine, and black stools. Additionally, recent studies have also linked Vioxx� to an increased risk of heart attack and stroke.

26. Pharmaceutical recalls/problem drugs Bextra� Like Vioxx�, Bextra� is a nonsteroidal anti-inflammatory drug (NSAID) designed to alleviate the symptoms of rheumatoid arthritis, including joint inflammation and swelling. The drug, classified as a COX 2 inhibitor, reportedly prevents the stomach ulcers and gastrointestinal bleeding believed to be caused by other NSAIDs. However, some research shows that like Vioxx�, Bextra� can cause a number of serious side effects, from stomach bleeding to upper respiratory infection.

27. Pharmaceutical recalls/problem drugs Zyprexa� In 1996, the FDA approved Zyprexa� as a treatment for bipolar disorder, schizophrenia, and other psychotic illnesses. It effectively controls the hallucinations, delusions, withdrawal, and various symptoms typically associated with such conditions researchers linked Zyprexa�, now deemed a potentially defective drug, to diabetes, diabetic ketoacidosis, hyperglycemia, pancreatitis, and diabetes-induced heart attack or coma. Patients under age 54 - especially adolescents - are at highest risk.

28. Pharmaceutical recalls/problem drugs Crestor� designed to lower cholesterol levels by halting production of a certain enzyme in the liver. The drug has been linked to a slew of serious health problems, ranging from muscle weakness and asthenia to kidney damage and total renal failure. This possibly defective drug is particularly dangerous to pregnant or nursing mothers, although it is not on the list of drug recalls.

29. Pharmaceutical recalls/problem drugs Prempro� A hormone replacement therapy (HRT) drug prescribed to treat menopause symptoms, Prempro� was recently a subject of a drug recall. It was pulled from shelves in 2002 after the Women' s Health Initiative Study found that it increased women' s risk of stroke by 41 percent, cardiovascular disease by 29 percent, and breast cancer by 26 percent. Warnings from the American Heart Association and the Journal of the American Medical Association also prompted the recall.

30. Pharmaceutical recalls/problem drugs Accutane� Once the most often-prescribed acne medication on the U.S. market, Accutane� is now considered a defective drug, having been associated with depression, suicide, psychosis, and birth defects, namely mental retardation and physical deformities. Accutane� is still available by prescription, although women who are at risk for becoming pregnant while on the drug must sign a waiver that informs them of the risk before they are given a prescription.

31. Pharmaceutical recalls/problem drugs Oxycontin� Oxycontin� most recently made headlines when radio announcer Rush Limbaugh admitted his addiction to the powerful, heroin-like painkiller in 2003. The opiate, which is highly addictive for both legitimate and illegitimate users, is covered by most insurance plans, thereby making it significantly cheaper than illegal drugs- so cheap, in fact, that Oxycontin� has been nicknamed �hillbilly heroin� and �poor man' s heroin� on the street.

32. Pharmaceutical recalls/problem drugs Rezulin� Rezulin� is an anti-hyperglycemic drug used to treat Type II diabetes. While it is not an insulin substitute, Rezulin� helps the body better use the insulin it does produce. But this isn't without consequence - Rezulin� is rather dangerous for many patients. In fact, since its approval by the FDA in 1997 (the same year Great Britain withdrew the drug from its market), Rezulin has consistently been linked to heart failure, thickening in the left ventricular wall of the heart, severe liver damage, liver failure, an increased demand for liver treatments, and at least 63 deaths. Rezulin� was finally yanked from shelves in March 2000, but for many, the damage was already done.

33. Pharmaceutical recalls/problem drugs Fen-Phen A combination of fenfluramine (Podimin), phentermine (Ionamin), and dexfenfluramine, Fen-Phen, a defective drug, was used weight loss drug used by at least 6 million Americans until it was recalled in 1997 after reports linked it to heart valve disease, primary pulmonary hypertension (PHH), heart failure, lung failure, aortic and mitral heart valve damage (regurgitation), and other serous conditions.

34. Pharmaceutical recalls/problem drugs Paxil� Paxil� is believed to be very addictive, and many users report severe withdrawal symptoms after discontinuing use. Some experts even link Paxil� to an increased suicide risk. GlaxoSmithKline Corporation, the manufacturer of Paxil�, has been accused of misleading the public and the medical profession by downplaying side effects of the drug. In response, many victims have banded together and filed class action lawsuits against Glaxo Smithkline Corporation.

35. Pharmaceutical recalls/problem drugs Celebrex� Celebrex� is a non-steroidal, anti-inflammatory COX-2 inhibitor drug intended to treat joint inflammation and arthritis pain - but, like Vioxx�, it has been deemed dangerous: Celebrex� has been linked to at least 10 deaths, 11 cases of gastrointestinal bleeding that required hospitalization, and an increased risk of stomach ulcers. There is also some evidence that taking Celebrex� can increase or double users' risk of blood clots, heart attack, and stroke.

36. Deviance Against Environment This is prominent in American Business Why? Failure to insure emission control 3 mile Island Chernobyl Illegal dumping Love Canal

37. Anti-Trust Violations Microsoft Monopolizing office suite market Monopolizing web browser marker Netscape navigator Sun-systems Java

38. Finance Crime/Fraud Enron Over-prediciting profits Book cooking (Arthur Andersen) Martha Stewart Insider trading Worldcom Why is it difficult to catch and prosecute?

39. Embezzlers Cressey (1973) Other People�s Money Non-shareable problems 4 Types Physical isolation Relationship problems Financial problems Job-related problems Rationalizations are part of our culture

40. Conclusion Cost to society 4 billion for street cirme v. 40 billion for WCC 1975: 3.2 million cases of unnecessary surgery performed. Cost close to $5 billion/yr and killed as many as 16,000 Americans. Seldom prosecuted criminally TV/media image of a �criminal�