NCJ Number
81332
Journal
Fortune Dated: (December 1, 1980) Pages: 56-58,62-64
Date Published
1980
Length
8 pages
Annotation
The article looks at the extent of corporate crime since 1970 and examines the reasons behind corporate corruption.
Abstract
The examination is limited to five crimes: bribery, criminal fraud, illegal political contributions, tax evasion, and criminal antitrust violations. Of the 1,043 major corporations in the study, 117, or 11 percent, have been involved in at least 1 major delinquency in the period covered. Some companies have been multiple offenders. All the cases resulted either in conviction of Federal criminal charges or in consent decrees (or similar administrative settlements), in which companies typically neither affirm nor deny past delinquencies but agree not to commit them in the future. Although corrupt practices are not endemic to business, they do seem endemic to certain situations and certain industries. A persuasive explanation for many violations is economic pressure -the 'bottom line philosophy.' Competitive pressures can account for kickbacks and other forms of commercial bribery, but perhaps equally significant are industry custom and structure. For example, companies in regulated industries sometimes violate the law because of the simple fact of regulation. The result of regulation in the beer and liquor industries is often illegal rebates and gifts of merchandise to persuade liquor retailers to promote a company's products. Simple economic incentives explain much illegal behavior: corruption seems to pay, at least in the near term. Although this survey leaves unanswered the question of whether corporate corruption is on the increase, its results indicate that corporate executives must establish an appropriate policing program and set the right tone to prevent further lawbreaking. A list of significant corporate offenders and offenses since 1970 is included.