Corporate executive perpetrators responsibility act

At our June 29 2020 meeting the TriValley Democratic Club unanimously passed the following Resolution

Whereas: Unsafe products and services provided by corporations that harm the physical, mental, and financial health of our society are approved and promoted by company leaders, but are punished by fines—not commensurate with the profits gained— paid by corporations and ultimately customers with no consequences for those responsible. AND 

Whereas: Corporate fines have not been sufficient in changing the criminal behavior of corporate decision makers because they have not been held personally and criminally responsible for their actions. (Examples abound.) AND 

Whereas:  A corporate created opioid epidemic destroys lives, PPE price gouging during a crisis, insufficiently trained airline pilots crash unsafe planes, vaping is marketed to kids, our private information is sold to those who rig our elections, defective car airbags maim, neglectful PG&E caused fires kill 84 Californians, banks commit mortgage fraud leaving kids to live in cars – they all have two things in common:  No one went to jail and corporate executives put profit before our health, safety, privacy or the environment. AND

Therefore: The Tri-Valley Democratic Club calls for the creation of legislation that will hold corporate individuals criminally responsible for decisions that endanger the public whether they be deliberate or through negligence. Punishment including incarceration shall be patterned after sentences for other illegal and harmful actions that one individual inflicts on another. AND 

Therefore: The Tri-Valley Democratic Club will communicate to the Democratic Party, state and federal lawmakers its support for criminal penalties for executives who chose profits before health, safety, privacy or the planet. Further, the final laws should apply to all countries doing business in the U.S.   If our state California adopts appropriate legislation, it should apply to all companies doing business in California should Californians be harmed.

submitted by Ellis Goldberg

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With businesses trying to re-open this resolution has taken on immediate importance.  Most businesses will try to do the right thing and insure Covid Security, but some might be tempted to take shortcuts that put profit before safety and health.  Those decision makers who might take those shortcuts would be deterred if they considered the personal legal penalties.  Elon Musk might have not opened the Tesla plant in Fremont before the shelter in place order had ended if he was facing possible criminal penalties.  

PRESS RELEASE - for immediate release

Corporations are immune to criminal prosecution because you cannot put a corporation in jail. Corporations are fined for criminal behavior, which does not deter future criminal behaviors but instead rewards it.  Corporations fight the fines in court where they stall plaintiffs into settling or endure prolonged litigation.  If prolonged litigation fails corporations threaten to go bankrupt to shortchange the plaintiffs.  When those tactics fail, fines are passed on to the corporation’s customers which are the corporations only real source of revenue.  

The creator of the opioid epidemic Purdue Pharma offered $12B to settle 2000 law suits saying that if taken to court Perdue would declare bankruptcy and the plaintiffs would probably get about $7B. The Sackler family, the Perdue owners would pay a few billion but still would be left with many billion more.  According to the White House the cost of the opioid epidemic was estimated to be $500B in 2015, 2.8%of the entire GDP. The epidemic killed 400,000 people in the last 20 years.  Perdue made an estimated $75B in the opioid market. The families of those hurt by the epidemic would like to see the Sacklers in prison. They want to pay the fine over time with future revenue from OPIOD SALES - chutzpah.

Car makers lie about ignition problems that cause deaths, vaping suppliers market to kids, banks commit mortgage fraud driving the economy off a fiscal cliff, Facebook allows the Russians to access our personal data to influence the 2016 election, Deutsch Bank is fined $600M for money laundering, PG&E is fined for causing wildfires through its neglect, defective airbags fail – no one goes to jail. The fines are just the cost of doing business and are frequently a reason for celebration – Minutes immediately after Johnson & Johnson was fined $600M in an opioid case, the company’s stock jumped higher. The fear on the stock market was a much heftier fine.

“On August 19, 2019 the Business Roundtable issued an open letter titled “Statement on the Purpose of a Corporation.” One of the preeminent business lobbies in the United States, the Business Roundtable (BR) includes the CEOs of leading U.S. companies from Apple to Walmart.  Sandwiched between the sparse title and 181 signatures was a one-page declaration that ended as follows: “Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.” (Harvard Business Review).  The statement is contrary to statements in past years saying only shareholders value was to be considered.  They agreed but in a non-binding way to be more ethical and not necessarily put profits first.   

Legislation that requires corporations to put safety, health, privacy and environmental concerns before profits at both state and federal levels could mitigate the "profit first" paradigm. Part of breaking the paradigm is criminal penalties for executives who chose profits before health, safety and the planet. Executives make decisions that can have extreme negative effects, they not fictious entities like corporations are ultimately responsible for the results of those actions. To truly earn high executive salaries, they must assume executive liability. 

At the federal level all corporations & executives doing business in this country would have to comply. If just California passed this legislation it could apply to all those doing business here too. The only real deterrent to corporate criminality is real jail time for those who put profit before safety, health, privacy and the environment. Those who knowingly do harm because of a financial incentive must face justice and let a jury decide if what they did is deserving of prison time.