Going After the Corporations?

by David Burnham

Los Angeles Times December 28, 1995

With the enthusiastic backing of the National Association of Manufacturers and a number of other business organizations, the Republican Congress has mounted an organized attack on what it claims are the unnecessary and abusive regulatory programs of the federal government.

In the face of this anti-regulatory barrage, President Clinton has indicated that he is opposed to at least some of the Republican proposals. While he thus has not bought into the full sweep of the Republican party's war on regulation, the administration's on-going efforts to reinvent and down-size the federal agencies inevitably means that many programs intended to protect the public will be eliminated or reduced.

Curiously, given the decibel level of the debate, none of the participants -- corporations, environmental groups, unions, Congress, or the Clinton Administration itself -- has sought to support their varied arguments by determining what the federal government is actually doing today to protect the health and safety of the American people.

One explanation for this failure is that measuring the regulatory enforcement effort is not easy. The National Association of Manufacturers tries to suggest the vast reach of the government's effort by citing the number of pages of regulations now on the books. But the mere existence of printed regulations, and indeed fully approved statutes, is a poor indicator of the regulatory burden. It fails, in part, because laws that are seldom enforced may be ignored.

A second explanation for the dearth of hard information is related to the complexity of the American regulatory system. Over the years, Congress has passed dozens of environmental, occupational health and consumer product laws authorizing hundreds of different administrative, civil, and criminal sanctions.

On the basis of these statutes, agencies like the Environmental Protection Agency, the Occupational Safety and Health Administration and the Food and Drug Administration publish regulations. When it is discovered that a corporation has violated one of these administrative rules, relatively small penalties sometimes are proposed. Where the agency finds a truly serious violation -- perhaps involving the loss of life -- there is a much more unpleasant option: ask the Justice Department to bring criminal charges against the offending parties.

Corporate America hates criminal prosecutions, partly because such court actions become known to the media and can become public relations nightmares. Closer to the bone, however, is the fact that in the worst situations they can result in someone doing hard time in prison.

Because the regulatory agencies go about their business in an independent ways and maintain the records of their enforcement actions on many different computers, it is extraordinarily difficult to obtain an overall view or count of their administrative enforcement actions.

But because the Justice Department is the central funnel through which all federal criminal prosecutions must flow, it is possible to obtain data tapes showing how many times the department decided to bring criminal charges for violations of the scores of environmental, occupational and consumer laws. With the help of the Freedom of Information Act and the sophisticated skills of my colleague Susan Long, a professor of quantitative methods at Syracuse University's School of Management, such data have been explored.

During fiscal year 1994, for example, the Justice Department -- which of course encompasses all of the 93 United States attorneys -- prosecuted a total of 51,253 individuals. It is hardly major news that the largest single category of these indictments --19,533 of them -- involved violations of the drug laws.

What is more surprising, given the heated rhetoric of the Republican majority in Congress and their corporate supporters about over regulation, is that Justice Department records show that one of the smallest categories of criminal cases involved the central focus of their concern.

In 1994, the Justice Department's 4,000 prosecutors, working with the thousands of trained investigators of the FBI and the EPA, FDA, OSHA and several other regulatory agencies, brought criminal charges against a grand total of 250 individuals in which the lead charge concerned serious violations of the environmental, occupational health and consumer laws. This total represented a little less than half of one percent of all the prosecutions brought last year by the federal government.

It is of course impossible to estimate how frequently corporate America violates the criminal provisions of the environmental, health and consumer laws. And surely it must be acknowledged that putting together a case against criminal violators in such matters is not easy.

But in a country the size of the United States, in a country with hundreds of thousands of business organizations, some number of whom over the years have demonstrated their willingness to cut corners in a serious way, it is ludicrous to contend that the federal government is today engaged in an over-heated war on corporate America. With only 250 notches in the Justice Department's 1994 belt, the conclusion must be the opposite: the federal government is in many ways soft on business and some executives may literally be getting away with murder.

This is not to suggest that federal regulators are free from arrogance or that federal regulation cannot be reformed. But the undeniable fact that substantially less than one percent of the nation's criminal prosecutions last year focused on this critical area shows that when it comes to its most important sanctions, the government is extraordinarily picky.

(David Burnham is the author of a forthcoming book about the Justice Department. He also is the co-director of the Transactional Records Access Clearinghouse (TRAC), a Syracuse University data research organization.)