Corporate Crime

History

Corporate or organizational crime refers to crime by businesspersons or officials committed on behalf of the employing organization. The origins of the concept can be traced to the larger concept of white-collar crime, which was first introduced in the social sciences by Edwin Sutherland in a 1939 presidential address to the American Sociological Association. He defined white-collar crime as “a crime committed by a person of respectability and high social status in the course of his occupation.” Focusing on the powerful, as well as the downcast, such a concept represented a radical reorientation in theoretical views of the nature of criminality. Sutherland later published a book titled White Collar Crime (1949), which concentrated almost exclusively on corporate crime. Using official records of regulatory agencies, courts, and commissions, he found that all seventy of the corporations that he examined over a forty-year period violated at least one law or had an adverse decision issued against it for false advertising, patent abuse, wartime trade violations, price fixing, fraud, or intended manufacturing and sale of faulty goods. Many were recidivists (repeaters) with an average of eight negative decisions issued for each. Sutherland noted that, while “crime in the streets” captured the newspaper headlines, “crime in the suites” continued unnoticed. While white-collar crime was far more costly than street crime, most cases were not even covered under criminal law but were treated as civil or administrative violations.

Most criminologists divide white-collar crime into two major types: corporate crime and occupational crime. Corporate crime refers to crime committed by an individual during the course of his or her legitimate occupation for the benefit of the organization, while occupational crime involves crime committed during the course of a legitimate occupation for one's own benefit. Most corporate criminals do not view their activities as criminal since their violations are usually part of their occupational environment. Corporate offenders remain committed to conventional society and do not identify with criminality. Their inappropriate behavior is often informally approved by occupational or corporate subcultures. Despite Sutherland's pioneering study, little criminological attention was focused on the white-collar variety until the first large-scale, comprehensive investigation of corporate crime by Marshall Clinard and Peter Yeager titled Illegal Corporate Behavior (1979). This study involved a systematic investigation of administrative, civil, and criminal actions either filed or completed by twenty-five federal agencies against 477 of the largest wholesale, retail, and service organizations in the United States. Many of the same patterns that had been discovered by Sutherland some three decades earlier were found to persist. About 60 percent of the large corporations had at least one legal action initiated against them, while the most deviant firms −8 percent of the corporations—committed the majority of offenses (52 percent of all offenses). The oil, pharmaceutical, and automobile industries were responsible for almost half of all the violations. The leniency with which corporate violators were treated persisted.

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