It is easy to think about white collar offending as a world of luxury and glamour. We imagine highly intelligent individuals using their wits to game the system and living a sex-crazed, drug-fuelled extravagant lifestyle. Subsequently, we turn a blind eye to the severe damage to their victims and the economy, which is a huge factor in why the powerful can commit huge crimes and receive little to no consequences for their actions.
The release of Donald Trump’s tax returns this month, during a period of political unrest surrounding excessive police violence, represents a disturbing double standard in the way we treat white collar criminals compared to ‘street’ criminals. In terms of financial damage, injuries and deaths, research has shown that street crime causes only a fraction of the harm caused by white collar offending. Negligent safety practices, fraud, poor working conditions, and environmental damage happen all the time, resulting from greedy and psychopathic behaviour and an emphasis on creating profits while disregarding the wellbeing of others. While it sounds hyperbolic, white collar offending truly is psychopathic behaviour. A study involving Danish undergraduates found that students studying business were more likely to have traits such as psychopathy and narcissism, which is indicative of a tendency to crave power, lack empathy, and manipulate others.
Yet, we consistently see the much higher extent to which street crime is investigated, prosecuted, and punished while white collar offenders walk free. Take the Global Financial Crisis in 2008. Fraud and unethical business practices motivated by greed caused devastating amounts of damage: people lost their savings, homes, jobs, and businesses. However, despite the actions of hundreds of bankers and executives resulting in the financial crash, only one person ended up in prison.
According to John Stuart Mill’s ‘harm principle’, the state should only exercise power over an individual if they cause harm to others. In a world where this is the case, law enforcement would investigate bankers and executives with the resources and overzealous approach reserved for street offenders. Currently, thousands of people are locked up annually for non-violent crimes, at huge expense to the state, and this includes a disproportionate number of Māori. In the United States, mandatory minimum sentencing laws and extremely punitive three-strikes laws have resulted in minor crimes such as shoplifting being punishable by life in prison. Despite the rise in penal populism and law-and-order policies, it seems that the call for harsher punishments only applies to the poor and the marginalised.
So, why is there such a huge disparity in how we treat street crimes compared to the shady dealings of corporations and CEOs? Lisa Marriott, a professor at the University of Wellington, reviewed cases released by the Serious Fraud Office to investigate the treatment of white collar offenders in the criminal justice system. The analysis was troubling. In every case, there was reference made to the good character of the defendant. Many mentioned the quality of testimonials. Only a handful involved repayment of the stolen funds.
This is the problem. Powerful people, surrounded by other respected individuals, are never perceived as capable of committing serious offenses. ‘Good character’ is the very reason white collar offenders are entrusted to run companies, steal millions unnoticed, and if caught, simply pay a fine in lieu of prison time. Additionally, because there is no immediate victim, we rarely see financial crimes as ‘real’ crimes. Furthermore, when offenders are only required to pay fines that amount to a fraction of the total amount stolen, the so-called punishment becomes nothing more than a business expense. More concerningly, these people often have enormous sway in politics, the media, and law enforcement. When rich and powerful executives are heavily involved in political campaigns and provide funding to media corporations, it is not in the interest of lawmakers to crack down on white collar offending, or the media to report on cases involving the very people who fund them. Consequently, there is hardly any public outrage for white collar offending compared to street crimes, and without any real consequences, there is nothing to deter the powerful from continuing dodgy business practices that have wide-spread impacts on society.
In a hyper-capitalistic, competitive society, it makes sense that white collar offending is so pervasive. Clearly, we need criminal justice reform, because a system that disproportionately punishes those who cannot defend themselves is indicative of a broken society. We need to start holding the powerful to account. We need to shift our focus from benefit fraud to tax evasion, from purse-snatchers to corporations manufacturing unsafe products in order to maximise profits. The elite are dangerous people wreaking havoc on our livelihoods for their own selfish gain, and yet, the criminal justice system rarely treats them as criminals, nor provides justice for those harmed. This needs to change.
