Blog - Commentary

By Reuben Guttman on 04 August 2014

No hiding for corporate offenders

Corporate offenders should not be treated differently to other offenders

The 'Hide No Harm Act' is to be welcomed but why should corporate offenders be treated any differently from street criminals, asks Reuben Guttman of Grant & Eisenhofer.

'The Hide No Harm Act' puts a duty on a corporate officials not to knowingly conceal a corporate action that wouldpose a danger of death or injury to consumers and workers. United States Senators Richard Blumenthal (D-Conn), Tom Harkin (D-Iowa) and Bob Casey (D- Pennsylvania) have introduced legislation that, according to their press statement, 'would  make it a crime for a corporate officer to knowingly conceal the fact that a corporate action or product poses a danger of death or serious injury to consumers and workers.' The Senators call the Bill the 'Hide No Harm Act.' According to Senator Blumenthal 'this measure would criminally punish corporate officials who conceal that a product is dangerous.'  The proposed legislation would impose penalties of up to five years in prison because – as the Senators noted in their press statement – concealment by corporations has 'resulted in deaths and injuries.'

Kudos to the three Senators for introducing this legislation.  But wait just a second – I thought it was already a crime to intentionally injure or even negligently kill someone.  Do not most, if not all, of the State penal codes make negligent homicide a crime?  Surely the three Senators do not mean to say that absent this legislation, there is no vehicle – at least for some state prosecutors – to initiate a criminal prosecution of corporate officials who place revenue over safety and cause injury or death?  

Do not misunderstand what I mean; the Hide No Harm Act is needed.  In an age where we depend on corporations to provide the basic necessities of life, including food, health care, transportation and energy, the proposed legislation is an attempt to punish those who – perhaps for direct, or even indirect, economic gain – have compromised the delivery of life’s essentials and placed workers and consumers at peril.  This legislation will be a powerful tool for federal prosecutors.  And like any new tool, someone may pick it up and try it.  

Corporations are fictions

Yet, while the legislation is a positive step, it is thought provoking. Corporations, of course, are what lawyers call fictions; it is those individuals who control them that steer these global enterprises toward wrongdoing.  Often these titans of capital do so because it is in their own economic interest. In an era where multinationals from drug companies to auto makers have knowingly concealed the risks of their products or the deficiencies of their services, why have state prosecutors been reluctant to pursue individual culprits with zeal?  It is almost as if there is an unwritten rule that those who commit crimes in the course of their employment should be treated differently from the street criminal whose crime is so transparent that there actually may be a 'smoking gun'.  

Isn’t there something more nefarious about a corporate official who, with the help of analysts, marketers, and perhaps even counsel, balances the cost of consumer and worker safety against the prospect of paying remuneration to victims or their families and in the end makes life and death choices for unwitting victims?  I wonder about this.  I also wonder about corporate officials who have created a culture where dubious conduct is not questioned because from the eyes of the would-be-questioner impropriety is not plausible in his or her workplace.  Think about internal compliance programs; do these programmes really help enforce compliance and protect whistleblowers or do they exist to assuage workers who might entertain a thought or two about impropriety in the workplace.  'It can’t happen here because we have an internal compliance program?' Right.

And what does the legislation’s 'up to five year' prison term say about the state of things?  If an engineer or scientist or corporate officer knowingly sanctioned the distribution into commerce of a product that caused death, does five years really make sense?  Why should a corporate executive who causes a homicide spend less time in the big house than then a perpetrator of a homicide whose place of employment does not require a suit or provide an executive wash room?  Is killing someone through the veil of a corporate entity any less wrong than homicide on a city street?  (And as an aside, the penalty for conspiracy to commit securities fraud – where there is arguably no bodily injury -- can well exceed five years.) Perhaps these are the questions that will be asked if there is ever a hearing on this thought provoking legislative proposal.