Crimes of the Powerful:
White Collar, Corporate, and
Organized Crime
Understanding Criminology
10th March 2009
Lecture Outline
• White Collar Crime
– Definitions
– Typologies
• Corporate Crime
– Definitions
– Typologies
• Impact of White Collar Crime
• (In)Adequacy of mainstream criminological
theories
White Collar Crime
• General sense:
– A variety of offences committed by powerful
people or organizations
– Offences are enabled by legitimate activities
• Specific Sense
– Offences carried out by individual people in the
course of their employment, often against
employers
Edwin Sutherland (1941)
White Collar Crime
• “crime committed by persons of high social status
and respectability”
• a critiques of criminology’s focus on low-status
criminality:
– ‘hidden’ / non-crime status of middle class criminality
• crime defined in terms of harm on victims /
society
• Questions raised about criminal status and social
class
Types of White Collar Crime
• Individual offences
– Against employer
• Theft, fraud
– Against customer
• Overcharging, fraud, identity theft, various “e-crimes”
– Against employee
• Theft, embezzlement
– Against other companies
• Insurance fraud
– Against the State
• Tax evasion, benefit fraud
Corporate Crime
• Illegal actions, or omissions, resulting from
deliberate decision making, or culpable
negligence on the part of a company
• Organizational Goals central to
understanding corporate crime
• Indifference to outcome of action often
contributes
Jeffrey Reiman “The Rich Get
Richer: The Poor get Prison”
• The Social Construction of Crime
– The construction of ‘crime’ focuses attention
onto the social harm perpetrated by the poor,
and away from those (more damaging) harms
perpetrated by corporations
– “Typical” criminal: young, urban, poor and
ethnic minority
– A distortion of harms: “a carnival mirror”
How is this social construction
achieved?
1.
2.
3.
4.
5.
Legislative definitions of crime
Police and prosecutor priorities
Judges and jury decisions
Sentencing
Media reporting of ‘crimes’ and
‘accidents’
Each of these stages are inter-related
Impact of corporate crime?
Occupational Disease
and Injury
Crime (x ½)
Death
54,928
8,250
Other Physical Harm
2,300,000
425,000
Source: Bureau of Labor Statistics 2003; National Crime
Victimisation Survey
Note: Crime Rate halved to enable direct comparisons: workforce
accounts for half the general population
Victims of Corporate Crime
• Employees
• Customers
• The Environment
Ford Pinto
Ford Motor Company internal memorandum: "Fatalities
Associated with Crash-Induced Fuel Leakage and Fires"
BENEFITS (OF RECALLING AND RETRO-FITTING)
Savings: 180 burn deaths, 180 serious burn injuries, 2,100 burned
vehicles.
Unit Cost: $200,000 per death, $67,000 per injury, $700 per vehicle.
Total Benefit: 180 X ($200,000) + 180 X ($67,000) + $2,100 X ($700)
= $49.5 million.
COSTS
Sales: 11 million cars, 1.5 million light trucks.
Unit Cost: $11 per car, $11 per truck.
Total Cost: 11,000,000 X ($11) + 1,500,000 X ($11)
= $137 million.
Variety of corporate crime
• Against consumers
– Mis-selling: providing goods and services
– Car-clocking, counterfeiting, dangerous goods
• Health and safety offences
– Employee, consumer and environment
• Financial Fraud
Impact of Corporate Crime
• Lethal Corporate Crime
15000
10000
11436
5000
6290
5146
3291
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A ratio of 7:1 – seven times as many work-placed deaths
than homicides (once figures adjusted for risk)
Injuries resulting from Corporate
Crime
• Thalidomide
– Chemie Grunenthal deliberately falsified test
data, and concealed the dangers of the drug
• Lung Cancer and Passive Smoking
• Asbestos
Financial Costs of Corporate
Crime
Mirror Pensioners
• £440 million missing from Daily Mirror pension
funds : 30,000 employees / former employees of
Mirror Group affected
Levi (1987)
- Cost of fraud reported to fraud squads: £2113
million
- Twice the cost of theft, burglary and robbery that
year
Other Harms
• Health Care
– negligence, injuries and deaths, drug reactions and
interactions
• Chemical Warfare
– pollution, toxic wastes, smoking, food additives,
pesticides
• Poverty
– Higher infant mortality, lower rates of health, shorter
life expectancy
• Consumer Safety
– Defective Products
Problems with “Hidden”
Corporate Crime
• Construction of Official Statistics
• Media Constructions of the Criminal:
‘Respectable’ v ‘Criminal’
• CJS focus on “conventional” crime
– Corporate crime largely outside control of Criminal
Justice
– Most cases emerge from campaigning / whistleblowing
– Crime is seen as individualistic, inter-personal, and
finite: much corporate crime does not fit the model
Organized Crime
• The production, supply and financing of
illegal markets in good and services
• Organizations established with criminal
intent, though the divide from corporate
crime is not always clear
• Much organized crime is “governmental”:
threatening the State’s monopoly of
coercion, protection and extraction
Range of Organized Criminality
• Organized theft and sale of stolen goods
• Protection rackets
• Markets covering prohibited goods and
services
– Drugs, illegal drinking, illegal arms,
prostitution, people trafficking, gambling,
pornography
• Money Lending
• Money laundering
Themes in the study of organized crime
• Globalization
– Localised ‘firms’ replaced by globalized
enterprises
• Relationship to legitimate businesses
– Legitimate business as a “front”
– Provision of services to businesses
– Legitimate businesses providing services to
organized crime (consciously or unconsciously)
• Opportunities provided by criminalization
Problems for Criminology
• Conceptual
– Most of the ‘crimes of the powerful’ challenge
mainstream assumptions of what crime is (e.g.
victim/offender)
• Empirical
– Evidence of these crimes are much harder to obtain
• Explanatory
– Mainstream theories need adapting, though many can
retain relevance
– Direct and Indirect Causes
• Theoretical
– Is ‘crime’ the model? Harm?