Published : Nov. 25, 2012 - 18:36
The Justice Department has entered into the largest criminal settlement in U.S. history with the giant oil company BP, in connection with the 2010 disaster in the Gulf of Mexico that killed 11 people and caused the worst oil spill in American history. BP pleaded guilty to 14 criminal counts, including manslaughter, and agreed to pay $4 billion over the next five years.
This is nonsensical. BP isn’t a criminal. Corporations aren’t people. They can’t know right from wrong. They’re incapable of criminal intent. They have no brains. They’re legal fictions ― pieces of paper filed away in a vault in some bank.
Mind you, I’m appalled by the carelessness and indifference of the BP executives responsible for the disaster. But holding corporations criminally liable reinforces the same fallacy that gave us Citizens United v. Federal Election Commission, in which five justices decided corporations are people under the First Amendment and therefore can spend unlimited amounts on political campaigns. Even if 49 percent of their shareholders are foreign citizens, corporations now have a constitutional right to affect the outcome of American elections.
We don’t know exactly how much corporate money was spent on the last election, but it’s a fair guess that were it not for Citizens United, the House of Representatives might now be under control of Democrats, and Senate Democrats might have a filibuster-proof majority.
The perfidious notion that corporations are people can lead to even more bizarre results. If corporations are people and they’re headquartered in the United States, then presumably corporations are citizens. That means they have a right to vote as well.
I’ll believe corporations are people when Texas executes one.
Can we please get a grip? The only sentient beings in a corporation are the people who run them or work for them. When it comes to criminality, they’re the ones who should be punished.
Punishing corporations as a whole often ends up harming innocent people ― especially employees who lose their jobs because the corporation has to trim costs, and retirees whose savings shrink because their shares in the corporation lose value.
Consider the accounting firm Arthur Andersen, convicted in 2002 of obstruction of justice when certain partners destroyed records of the auditing work they did for Enron as the energy giant was imploding. After the firm was convicted, its clients abandoned it and the firm went under.
The vast majority of its employees had nothing to do with Enron but lost their jobs anyway. Yet the real perpetrators came out fine. Andersen’s CEO moved to a lucrative job in a private-equity firm, and other senior partners formed a new accounting firm.
Likewise, the people responsible for the deaths and oil spill in the Gulf of Mexico weren’t BP’s rank-and-file employees or its shareholders. They were the executives who turned a blind eye to safety while in pursuit of their own rising stock options, and who conspired with oil-services giant Halliburton to cut corners on deep-water drilling when they knew damn well they were taking risks for the sake of fatter profits.
They’re the ones who should be punished. Failure to punish them simply invites more of the same kind of criminal negligence by executives more interested in lining their pockets than protecting their workers and the environment. (Just a day after the BP settlement was announced, an oil rig exploded off the Louisiana coast, leaving one worker dead, with one still missing and two others in critical condition.)
But the Justice Department’s criminal settlement with BP gives these top executives a free pass ― allowing the public to believe justice has been done.
Instead of going after the real criminals, the Justice Department has gone after the schleps who got caught up in the mess. It filed manslaughter charges against two BP rig supervisors for allegedly ignoring warning signs of the blowout that set fire to the rig, which later sank. The department also filed obstruction of justice charges against a former BP vice president who allegedly lied to Congress when he repeated BP’s public claim that the leak was limited to 5,000 barrels of oil per day when in fact it was more than 60,000 barrels.
The Justice Department’s $4 billion criminal settlement with BP isn’t big enough to affect the oil giant anyway. BP’s market capitalization is $128 billion. The day the settlement was announced, BP’s stock price closed at $40.30 a share, up 0.35 percent from the day before.
By Robert B. Reich
Robert B. Reich, chancellor’s professor of public policy at the University of California and former U.S. secretary of labor, is the author of “Beyond Outrage: What has gone wrong with our economy and our democracy, and how to fix it,” a Knopf release now out in paperback. ― Ed.
(Tribune Media Services)