Political and White Collar Crime

1. Political and White Collar Crime Terrorism Crimes of the Powerful

2. Terrorism • Definitions Vary Widely • “The use of violence to influence the political, social, or religious attitudes and/or behaviors of others” • “Premeditated, politically motivated violence, designed to spread fear and perpetrated against civilians” • “Defined in the Code of Federal Regulations as “the unlawful use of force and violence against persons or property to intimidate or coerce a government, the civilian population, or any segment thereof, in furtherance of political or social objectives” (28 C.F.R. Section 0.85).”

3. “START” DATA • National Consortium for the Study of Terrorism and Response to Terrorism • University of Maryland • Convergence of several databases + new additions from media • What qualifies: • Intend to coerce/intimidate/convey message beyond immediate victims • Aimed at attaining political/social/religious goal • Context outside of legitimate warfare • Almost 100,000 terrorist incidents between 1970 and 2010 • 43,000 bombings, 14,000 assassinations, and 4,700 kidnappings

4. From START data • Terrorism events have declined substantially since the 1970s • Turbulence of late 1960s-1970s • Left Wing (Weathermen) and Right Wing (White supremacists) • The terrorist events that have occurred have been much larger in magnitude • Oklahoma city bombing • First WTC bombing • 9/11 • Roughly one half of terrorism cases world wide, and one-third in the U.S. remain unsolved

5. Terrorist attacks on U.S. soil Salmonella 1993 OK 9/11 Poison WTC bomb 1970 1980 1990 2000 2010

6. Types of Terrorism • Domestic terrorism • U.S. • Left Wing (Weathermen, Eco-Terrorism) • Right Wing (Militias, Timothy McVeigh) • International terrorism • 9/11 attack • State terrorism • Against domestic or foreign “enemies” • German atrocities against Jews circa WWII

7. Terrorism and the Media • Scholars have pointed out that there is a natural match • Terrorists depend on media • Use event to coerce larger audience: high visibility targets, graphic acts, pre-event contact with media outlets, post-event videos • Media as a natural venue for terrorism • Dramatic, violent, visual, timely (vs. wars which are protracted, highly complex…) • HIGH RATINGS

8. Response to Terrorism • Difficult balance • Aggressive response  detection, deterrence • Concern  civil rights, overreaching • Examples • USA Patriot Act • Warrantless search and seizures, wiretapping, etc. • Global War on Terror • Interrogation techniques, use of drones to assassinate, etc.

9. Situational Crime Prevention • Reduce opportunities for offending • Gains in technology, training, and enforcement techniques likely played a role in the reduction of terrorist attacks • Monitoring of bomb-making materials, airport security, FBI stings, etc.

10. Boston Bombing in Context • Domestic or Foreign? • Media Coverage • Response • Situational Crime Prevention • Pressure cooker bombs with kitchen timers • 26 mile course, densely packed with spectators

11. Crimes of the Powerful • Organized Crime • White Collar Crime • Occupational Crime • Corporate Crime

12. Organized Crime • Criminal activity committed by groups with some manner of formalized structure • Primary goal is typically money and power • Some ambiguity here • Street gangs versus drug cartels • Terrorist groups

13. Just how organized is it? • The Alien Conspiracy Model (foreign criminals) • Highly organized and centralized • Sicilian “Mafia” (La Cosa Nostra) as poster child • Mafia code (loyalty, respect, discipline), secret oaths, • Local, ethnic group model • Strong family ties and obligations related to kinship and ethnicity • Distrust of outsiders and government • Capacity for organization and cooperation among groups • Ability to cultivate good will of local residents • Influence limited to cities/geographical areas

14. Crimes of the organized • Illegal Industries • Gambling, narcotics distribution, loan sharking, extortion, insurance scams, fencing… • Violence associated with enforcement • Legitimate industry • Used to launder money + create monopolies + extort • Restaurants/food, garbage disposal, garment manufacturing, labor unions, construction… • Political • Bribery, fixing elections, coercing agents of criminal justice, etc.

15. The Mafia • Mafia is often used as general term • Usually refers to Italian Americans (Sicilian) • La Cosa Nostra (“our thing” in Italian) • Fodder for entertainment media (Sopranos, The Godfather, Goodfellas) • Famous New York crime families (Gambino, Genovese) • Joseph Valachi testimony (1963) before the Senate • The organization and crime families do exist, but the level of organization often exaggerated • Does “stand apart” because of its pervasiveness, control over illegitimate markets, and penetration into legitimate industry

16. Law Enforcement Methods • Headhunting • Target heads of organized crime families, use informants + surveillance to indict • Successful? • Fairly successful at knocking off “heads” but still organized crime • Organized Crime Control Act (1970) • Racketeer Influenced and Corrupt Organizations (RICO) Statutes • Prosecutor ability to provide witness protection

17. The Russian Mafia • The new media darling • Law and Order, more recent movies • Similar to Italian Mafia • Both began by extorting money from fellow immigrants and quickly moved into other areas, and both have reputation for violence • Differences • Less cultural/ethnic loyalty, partnerships more opportunistic • Fewer “bosses” who collect a cut of illicit ventures, greater flexibility

18. White Collar Crime • Edwin Sutherland • “A crime committed by a person of respectability and high social status in the course of his occupation” • Urged criminologists to focus on crimes of the upper class, as opposed to street crime (still an issue today) • What is “counted” counts • Sutherland’s study of 70 largest corporations: official records revealed over 980 law violations (fraud, bribery, antitrust) • Much “War Profiteering”

19. More recent typology of WCC • Occupational Crime • Crimes committed by individuals in the course of their occupation for personal gain • Theft/embezzlement, medical fraud by physicians, therapist having sex with client… • Corporate or Organizational Crime • Crimes committed by corporations (and their executives) for the benefit of the corporation • Organizations include small business and blue collar endeavors (auto repair shops)

20. Occupational Crimes • Employee embezzlement and pilferage • Collective embezzlement • Savings and Loans crime wave in the 1980s (land flips) • Professional Fraud • Lawyers, Physicians • How many hours to bill clients • Unnecessary procedures and surgeries, Medicaid/Medicare fraud

21. Organizational Crime • Many organizational crimes are “blue collar” • Auto repair, appliance repair • 20/20 and 60 minutes stings • Fraudulent businesses (roofing, blacktop) • Small businesses

22. Corporate Crime • Fraud, Cheating, Corruption • The Enron Scandal • Not alone—the most egregious of the 1990s/2000s era • Halliburton, WorldCom, Rite Aid, Adelphia… • Enron = cooking books  stocks price (overstate earnings, hide losses) + energy market • Accounting firm (Arthur Anderson) complicit the fraud • 31 people indicted (Jeff Skilling, Ken Lay) • More on the “Great Recession” and bailout

23. Corporate Crime II • Other financial • Price Fixing / Collusion (gas prices) • False advertising (bait and switch) • Corporate Violence • Unsafe work conditions (miners, asbestos) • Unsafe products (contaminated food) • FORD PINTO CASE, PHARMACEUTICAL INDUSTRY, Asbestos • Pollution

24. Cost of WCC • Cost MUCH higher than street crime • $17 billion vs. roughly $400 billion • 16,000 homicides vs. 100,000 unnecessary deaths

25. What causes WCC? • Lenience? • Double standard embedded in culture—not “real” criminals • Weak/absent regulations –rely on “ethics” and self-regulation • Difficulty in proving crime (complex, good lawyers, lack resources to prosecute) • SEC  over 10 years, 600 cases referred for prosecution, and less than 1/3 resulted in convictions with less than 1/6 resulting in jail or prison time • Weak punishment  civil settlements with no admission of wrongdoing • Fines often less than 1% of corporate PROFITS for a year

26. Irony • Conservatives cry out for punishment for street crimes, but believe that much corporate “crime” can be cured by self-regulation • Liberals decry harsh punishment, especially for non-violent offenders, but believe that WCC could be reduced greatly through prison time • Corporations more “rational” than individuals?

27. Psycho Corporations • Psychopaths: • Insensitive, Manipulative, Superficial charm, Above-average intelligence, Absence of psychotic symptoms, Absence of anxiety, Lack of remorse, Failure to learn from experience, Egocentric, Lack of emotional depth • Corporations are not supposed to be compassionate or think of long-term consequences