Wednesday, April 09, 2008

All Your Bribes Are Belong To Us

Cut a check and walk away? Helluva deal, if you ask us. NYTimes (04.09.08):
"In a major shift of policy, the Justice Department, once known for taking down giant corporations, including the accounting firm Arthur Andersen, has put off prosecuting more than 50 companies suspected of wrongdoing over the last three years.

Instead, many companies, from boutique outfits to immense corporations like American Express, have avoided the cost and stigma of defending themselves against criminal charges with a so-called deferred prosecution agreement, which allows the government to collect fines and appoint an outside monitor to impose internal reforms without going through a trial."

In Justice Shift, Corporate Deals Replace Trials

Generally what happens is the company agrees to admit it was naughty and pay a fine, and the Feds agree to dismiss all charges in a couple, three years. The deal is secret so no one knows. You get a friend of a friend appointed as a monitor, and you're done.

Could there be a problem with this? "Some lawyers suggest that companies may be willing to take more risks because they know that, if they are caught, the chances of getting a deferred prosecution are good. 'Some companies may bear the risk' of legally questionable business practices if they believe they can cut a deal to defer their prosecution indefinitely, [said Vikramaditya S. Khanna, law prof at U Michigan]."

Really? Oh come now!

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