Monday, January 31, 2011

My New Corporate Whistle-Blower Law

Originally, I had intended this to just apply to employing illegal immigrants, but I found I like the idea so much that I want to apply it to every corporate crime. My idea is that if a company violates the law (such as by polluting, employing illegal immigrants, OSHA violations, et cetera) then the company is fined, on a yearly basis, an amount equal to 100% of the salary of the person or persons responsible for the violation as long as they stay on the payroll.

...AND...this is the important bit...they are also fined, on a yearly basis, an amount equal to 100% of the salary of any persons on the payroll who are accused of complicity by the person or persons responsible. (And once those people are accused, they count as "persons responsible", so if they in turn accuse someone, those people become responsible too.) Note the phrase, "accused", not "proven". The corporation is proven guilty in a court of law like normal, but their fine is determined solely by how many people point fingers.

The logic being that too often in corporate malfeasance, there's a sort of passive "things were done" atmosphere to the whole event. The blame is shared in such a way that everyone has just enough of their fingerprints on it that nobody can really say no, and nobody really does say no because nobody wants to be the one to step in front of the slow, ponderous juggernaut that is corporate decision-making and put their career on the line when everyone else is going along to get along. This way, the momentum is reversed: Everyone has a very good incentive to speak out to stop a corporate crime, because if you don't say anything and someone gets caught, the dominos can topple all the way up to the CEO and bankrupt the company (or get plenty of upper management fired.)

Is it fair? Probably not. There's a strong, deliberate incentive for witch-hunts and backstabbing. Disgruntled former employees can always choose to simply shaft their bosses just because they're mad about being fired. But you know what? That means that maybe those bosses have one hell of an incentive to keep a close eye on the corporate practices of their subordinates, instead of turning a blind eye to them because hey, profits are up and expenses are down. It would change the culture of large corporations, something badly needed in a climate where corporations have all the rights of people, but none of the responsibilities.


Chris said...

But, weren't corporations anointed by God to hold dominion over all humankind? It says so in the Bible! Or the Constitution. I always get those mixed up.

Essentially, if corporate executives do it, it isn't a crime.

Anonymous said...

It seems to me you're creating a system in which it's profitable to "prove" the most poorly-paid person possible is solely responsible for any malfeasance, and then strongarm them into silence regarding any individuals higher up the foodchain. Or in which it is actually more profitable to say "Hello, Mr. $50k-a-year, we'll give you a million dollar severance package not to blame the VP for what you've been accused of doing."

Or, yes, in which a vindictive employee, being accused of involvement in anything illegal, can utterly destroy the company just by accusing all of management, whether or not there's any justification to the accusations.

All in all, it strikes me as massively prone to abuse.

Tyson said...

While I do thoroughly agree that some kind of change is "badly needed in a climate where corporations have all the rights of people, but none of the responsibilities", I think the solution should be much simpler: it should always be more expensive to break the law than to follow it.

For example, if a corporation is employing illegal immigrants to save money, the fine should be twice what they saved by doing that, plus the legal costs of the government. (Don't forget to include what they saved on costs other than salary, too.)

If they are violating OSHA rules, the fines should be twice the amount they saved by not being compliant, plus the legal costs of the government.

And so on.

The fines need to be expensive enough that no one can do a risk analysis and say "it's worth the risk". Two times may not be enough, and I certainly wouldn't want to go any lower than that.

Note: I include having the guilty party pay the legal costs of the government in addition to their fines because I've seen first hand, while working on healthcare fraud analyses, that often the government has to cap what level they will go after, since it's expensive to prosecute someone. If someone is innocent, they should not have to repay the government's costs, but if they are guilty, that shouldn't be a barrier to the government enforcing the law. And, for huge corporations with expensive lawyers, there needs to be a penalty for trying to outspend justice.

Anonymous said...

Chris is right the corporate heads
have been the anointed ones.
Puppet masters of those who serve below them. Horrible businesses practices have brought the US to it's knees at home and abroad.
An appraiser explained how my home value had plummeted by saying "the pendulum has swung the other way"
kind of a tough love story. Well I say the same thing to crooked executives, so deal with it. If you don't have enough integrity to play it straight I have no sympathy for you.