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Criminality and Corporations

Some corporations have policies which actively encourage law-breaking, Enron was one example. Rowan Bosworth-Davies’s report on the 33rd Cambridge International Symposium on Economic Crime held at Jesus College, Cambridge in September 2015 “The Limits of the Law, The role of compliance in the 21st Century”, is also illuminating. Bosworth-Davies said, “I can say with some degree of certainty now that a very large number of academics, law enforcement agencies, and financial compliance consultants are now joined, as one, in their total condemnation of significant elements of the global banking sector for their organised criminal activities. Many banks are widely identified now as nothing more than enterprise criminal organisations, who engage in widespread criminal practice and dishonest conduct as a matter of course and deliberate commercial policy.”[1] It is difficult to put the problem more clearly. The dishonesty of some global corporations, and their ability to use their power to discredit opponents and disguise their behaviour, ultimately undermines the credibility of the global economic system.

However, aside from law-breaking public corporations, it is important to understand the dynamic of openly criminal organizations, which in practice operate as special forms of business enterprise, and frequently invest their money in legitimate businesses. The fuzziness of the border between the legal and illegal enterprise is not always understood.  For example, this could clearly be seen in Russia during the 1990s, and it was impossible to tell where criminality began and ended. I remember going into one mafia-owned bank in Moscow at the time, where all the staff sported tattoos and scars, a real crooks’ den; well-worn AK47s were also in evidence, it looked like the set of a spy film. I decided against doing business there, the bank was in any case eventually closed by the Russian Central Bank. The dynamic of such criminal-corporate organizations, who in my experience often have expensive offices in the better parts of cities, is that of the gang and the sanctions they can bring may ultimately even include murder and less forms of violence.

The increasing public perception of many large corporations, particularly in the banking and finance fields, as unethical, if not downright fraudulent, has slowly undermined the reputation of large corporates. The Volkswagen emissions scandal in 2015, where the company installed a piece of software into computers on its cars that recognized when the car was being tested, a “defeat device”, further undermined the public’s trust in the motor industry, and also in German companies, which had hitherto enjoyed an excellent reputation for quality and probity.

© Andrew Palmer, 2016, not to be reproduced

[1] Bosworth-Davies, Rowan – “Will The UK Ever Have A Banking System It Can Be Proud Of?, Serious Banking Complaints Bureau, 13 September 2015, http://sbcb.org.uk/2015/09/13/will-the-uk-ever-have-a-banking-system-it-can-be-proud-of/ accessed 6 October 2015

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