Clockwork Corporations: A Character Theory of Corporate Punishment

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The abstract and introduction below are from the paper published in the Iowa Law Review, Forthcoming; U Iowa Legal Studies Research Paper No. 2017-32.  Link

Abstract

Retribution and deterrence currently drive the politics and scholarship of corporate criminal law. Since the potential harms and private gains of corporate crime are so large, corporate punishment under these theories must be exacting…too exacting. In fact, it is difficult under current law to punish many corporations formally without killing them. Ironically, this fact leads to the under-punishment of corporations. Prosecutors — understandably hesitant to shutter some of the country’s largest economic engines — increasingly offer corporations deferred prosecution agreements in lieu of charges and trial.

 

This Article considers corporate punishment for the first time from the framework of a third major theory of punishment — character theory. Character theories of punishment focus first and foremost on instilling good character and civic virtue. Criminal law scholars have largely marginalized character theory because it struggles as a suitable framework for individual punishment. But the practical and moral problems character theory faces in the individual context do not arise with the same force for corporations. In fact, character theory offers the possibility of punishing corporations in a way that preserves and enhances the social value they create while removing the structural defects that lead to criminal conduct. Along the way, the Article defends some heterodox proposals, including abolishing the corporate fine and allowing sentencing judges to balance the need to punish against non-criminal aspects of a corporate defendants’ “character.”

 

“How about this new thing they’re talking about? How about this new like treatment that gets you out of prison in no time at all and makes sure that you never get back in again?” ~ Anthony Burgess, “A Clockwork Orange”

 

Introduction

 

It is actually not so new. Though unpopular for the last few decades, punishing criminals by reforming them was once the predominant approach. Anthony Burgess poignantly described one prominent concern that led to its demise: Coerced reform risks turning people into “clockwork toy[s] to be wound up by . . . the Almighty State.” Forcefully changing character and personality is an affront to the self-defining freedom that is the root of human dignity.

 

While generally marginalized today, punitive reform is undergoing a resurgence for a different kind of “person”—the large, publicly-traded corporate criminal. Prosecutors are at the forefront of the movement. In the deals they cut with corporate suspects, prosecutors often require programs of reform. Implicit in how prosecutors now treat corporate defendants is the recognition that their fundamentally different nature allows for a different approach to punishment. Burgess’ complaint loses all its force in the corporate context. Corporations are not, and cannot be, free, selfdefining loci of dignity.

 

Scholars and lawmakers are still behind the curve. While prosecutors have been experimenting with reform-as-punishment, the dominant academic and political discourses on corporate crime still focus on deterrence and retribution. There is the seed of a third path in what prosecutors are doing. This article seeks to uncover the implicit logic behind corporate prosecutors’ decisions. In its present form, prosecutorial practice is focused on reform and rehabilitation. Were the logic of the practice pushed and perfected as an approach the entire criminal justice system could take toward corporate punishment, an organizing theory that is different from deterrence and retribution emerges—character theory. As argued below, character theory opens new conceptual space for solving some of the most persistent problems in corporate criminal law.

 

One of those persistent problems is the dark and unjust underbelly to the way prosecutors handle corporate criminals—criminal justice is often softer on corporate criminals than on real people. On paper, the Department of Justice officially treats corporations as ordinary people. Somehow, though, corporations are much less likely to see criminal charges. Less than .03% of corporations faced prosecution in the last quarter century. To put this in perspective, 8.6% of the U.S. adult population has a felony conviction. There are many possible explanations for this discrepancy, including over-criminalization of some forms of individual conduct and over-enforcement against certain demographics. Another possibility is that the large, public corporations that are the focus of this article receive some of the lightest treatment.

 

The perception that large, public corporations routinely escape conviction is troublingly paradoxical. These corporations are among those most likely to commit crimes, and their conduct most deeply impacts society. They have an extremely wide base of liability. Under current doctrine, they are automatically liable for almost any crime any individual employee commits on the job. This adds up to a staggering degree of exposure for large corporations—the seventy-five largest corporations in the United States employ over 100,000 potential points of liability.  Though the de jure scope of corporate criminal liability has continued to expand since the early twentieth century, the chance of conviction for large public corporations continues to shrink. This is particularly puzzling in an environment where the outrage of Wall Street Occupiers over corporate unaccountability still reverberates in public sentiment. Failure to hold corporations accountable frustrates society’s effort to condemn corporate criminality and can cast a shadow on the broader legitimacy of criminal law.

 

This discrepancy between the scope of corporate criminal liability and the infrequency of conviction is in part to due to how prosecutors go about trying to reform corporations. For every conviction of a public corporation, and with increasing frequency, there is at least one other where prosecutors decline to take the corporate suspect to trial and instead enter into a specially negotiated deal: a deferred prosecution agreement (DPA) or non-prosecution agreement (NPA). Unlike guilty pleas, these agreements do not result in a guilty verdict; they may not even require an admission of wrongdoing.  Corporate DPAs and NPAs are extremely controversial. They face a bevy of criticism from many perspectives: that they are too onerous, that they are too lenient, that they violate basic tenets of political morality, that they fail basic norms of transparency, and more. It is through these DPAs and NPAs that prosecutors frequently impose the reforms that interest this article. In addition to undermining corporate convictions, this article discusses below how poorly positioned prosecutors to be agents of corporate reform.

 

Many people blame prosecutors for the pitfalls of DPAs and NPAs, but prosecutors are hard to fault. DPAs and NPAs are a reasonable response to the legal and practical constraints prosecutors face, including, most importantly, the effects a successful conviction can have on a large public corporation. In 2004, prosecutors learned a hard lesson—their shortlived courtroom success against Arthur Andersen, one of the largest U.S. accounting firms, turned into a long-lasting catastrophe that put the company and its 75,000 employees out of business.  For many firms, including Arthur Andersen, there are life-ending collateral consequences that automatically follow conviction, such as debarment or revocation of the privilege of doing business with the government. When a successful conviction could entail massive harm to the very social welfare prosecutors are supposed to protect, DPAs and NPAs are a natural choice.

 

There is a way to keep the good without the bad—to hold corporations accountable without destroying them and to reform corporations without relying on prosecutors to do all the work through DPAs and NPAs. This article argues that the stark choice that forces prosecutors to decline corporate prosecutions in favor of DPAs and NPAs is an unnecessary feature of corporate criminal law. It draws attention for the first time to punishment theory as a potential source of problems and solutions. The article argues that low conviction rates and a host of other familiar problems with corporate criminal law are, in large part, a consequence of the focus on deterrence in scholarship and retribution in public political discourse. These drive prosecutors and corporations out of the courtroom.

 

Though prosecutors are increasingly attentive to corporate reform, scholars and lawmakers have overlooked character theory as a framework for corporate punishment. While adopting a broadly consequentialist perspective,38 the Article points out that preventing corporate crime does not necessarily require deterring it. The Article does this by introducing character theory as a systematic approach for structuring corporate punishment. Character theory would refine the sorts of reform and rehabilitation that prosecutors currently pursue and make them the exclusive mode of corporate punishment. Character theory would avoid the need for DPAs and NPAs, and ultimately do more to prevent corporate wrongdoing than deterrent approaches can. It could also bring corporate criminal law into better alignment with the goals of retributive theorists. While various actors already attempt to reform corporations at various stages of the criminal justice system, their efforts are piecemeal and ineffective because they lack any coherent, coordinating theory. Poor execution and the distorting influences of deterrence and retribution continue to hamstring any chance of success. Fixing corporate character as the sole criterion for the extent and method of corporate punishment leads to some surprising, though ultimately beneficial, recommendations, such as abolishing the corporate criminal fine.

 

After detailing the problems retributivism (Part II) and deterrence theory (Parts III) bring to corporate criminal law (Part IV), the article introduces character theory (Part V) as an alternative. With the conceptual foundation set, the article shows the work character theory could do improving a diverse range of problems in corporate criminal law (Part VI). The article closes by addressing concerns that may arise from the perspective of other theories of punishment—the character approach proposed here performs well by their metrics too (Part VII).

 

One goal of this Article is to work so far as possible within the constraints of present legal and political realities. In theory, there may be ways to promote corporate reform and solve the problems discussed in this Article without turning to character theories of punishment. Some scholars think that scrapping corporate criminal law entirely and relying only on civil liability would improve things.41 But such proposals are fanciful in the current political climate. It is also far from clear whether the sorts of corporate reform that this Article advocates could be accomplished by using non-criminal fora. As such, abolishing corporate criminal law and other similarly radical options are outside this Article’s methodological ambit. It takes the basic contours of corporate criminal law as given and shows how they can function best. Character theory can do that work.

The full paper can be downloaded without charge from the Social Science Research Network electronic library here.


Mihailis Diamantis is an associate professor of law at the University of Iowa, in the College of Law and the Department of Philosophy.  He writes about criminal law, corporate responsibility, and the philosophy of action.  He holds a PhD in philosophy from NYU and his JD from Yale.  Prior to joining the faculty at Iowa, Mihailis was an instructor and researcher at Columbia Law School.  He clerked for Judge Alex Kozinski on the Ninth Circuit Court of Appeals and worked on white collar investigations as an attorney at Debevoise & Plimpton LLP.He attended the 2016 Summer Session “Virtue & Happiness” of the project Virtue, Happiness, & the Meaning of Life. 

Register for Wojciech Giertych,”The Moral Theology of Aquinas: Is it for Individuals?” and afternoon seminar on infused virtues, Feb 8-9

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We’re pleased to share these events presented by our partner, the Lumen Christi Institute. For further information, contact Michael Bradley, Communications and Events Coordinator, mbradley@lumenchristi.org.
On Thursday, February 8, the Theologian of the Pontifical Household, Wojciech Giertych,will deliver a lecture at the University of Chicago titled “The Moral Theology of Aquinas: Is It For Individuals?” The lecture is free and open to the public and will begin at 4:30pm. Registration is requested: https://www.lumenchristi.org/events/979.

On Friday, February 9, Giertych will lead an afternoon seminar for graduate students and faculty on “Grace, Free Choice, and the Infused Virtues.” The seminar will be held atGavin House, home of the Lumen Christi Institute. Registration is required. Seminar readings are available beforehand to participants. Please register here:https://www.lumenchristi.org/events/981

Fr. Wojciech Giertych, OP, is Professor of Moral Theology at the Angelicum in Rome, where he has taught since 1994. In 1975, he entered the Polish Province of the Dominican Order. He studied theology in Kraków and was ordained a priest in 1981. For a number of years Fr. Giertych was a professor of moral theology and the Student Master, a formator, in the Dominican House of Studies in Kraków. In 1998, Fr. Giertych was called to the General Council of the Dominican Order, serving first as the Socius for Central and Eastern Europe, and then as the Socius for the Intellectual Life. In 2005, Pope Benedict XVI appointed Fr. Giertych the Theologian of the Papal Household – a position he currently holds under Pope Francis.

Abstracts from “Virtues in the Public Sphere”

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Several of our scholars gave talks at the sixth annual conference of the Jubilee Centre for Character and Virtues, “Virtues in the Public Sphere,” held at Oriel College, Oxford UK January 4-6, 2018. We’re delighted to share their abstracts with you.

 

Talbot Brewer, Keynote Speaker: Liberal Education and the Common Good

Defenders of liberal education often stake their case on its contribution to reasoned public debate. There is considerable force to this argument. Yet if we set out to design a program of higher education optimally suited to enhance political deliberation, much of what we know and value under the heading of liberal education would be omitted as irrelevant.  This is because the telos of the liberal arts is not the full development of citizens; it is the full development of human beings. The virtues of the university are those qualities and practices that conduce to this comprehensive human good.  Does this mean that liberal education has no claim to public subsidy?  No. The sort of thought that forms and deepens human beings is a public good, one that withers without public investment. Investment in such thought is especially important today, when the social order has become deeply hostile to it.

 

 

John Haldane, Keynote Speaker: Responding to Discord: Why Public Reason is Not Enough

Difference and disagreement, contest and dispute are common features of human interactions and relationships. Insofar as they are confined to the private sphere the inability to resolve them may be a matter for regret, but there are strategies for containing, coping with or evading them. Matters are not so easy when these occur in the public sphere since they generally concern matters of broad public interest and bear on public values and policies, and they tend to ramify and lead to further divisions and sectionalisation. The evidence of this is everywhere to be seen in disputes about beginning and ending of life issues, education, sexual identity and practice, political and cultural identity, even human nature itself. Since these are all closely connected with questions of public values and policy, the scope for containment, coping or evasion is severely limited, and such strategies are themselves contested as instances of resistance to due change. Against this background, we must think more and better about the nature of the private-public contrast, and about the nature of the resources available in the making of arguments about ethical, existential, social and cultural issues. The intention and value of recently advocated norms of ‘public reason’ are themselves matters of contest and we need to think more deeply about what is and what is not reasonable. Beyond that we need in private and public life to identify relevant intellectual and practical virtues and give priority to the advocacy and inculcation of these.

 

 

David Carr, Moral Character and Public Virtue in Public, Professional, and Political Life

There is a strong case for the virtuous professional practitioner especially in relation to occupations where the professional role involves being an example to others of how to be of good character. Perhaps the most conspicuous examples of such occupations are those of teaching and religious ministry. While such exemplification cannot be guaranteed to have the desired modelling effect on others, it increases the likelihood that such modelling may occur and is the only course consistent with the overall aims of teaching and ministry.

In this context, this paper will focus on politics, arguing that there is a compelling case for virtue and character exemplification by professional politicians and that bad political examples can have a deleterious effect on the general moral tone of the societies that politicians of bad character are elected to lead or represent.

 

Nancy Snow, Hope as a Democratic Civic Virtue

I argue for a conception of hope as a civic virtue that is most valuable when democracy faces significant challenges.  In Part I, I sketch an initial conception of hope as a democratic civic virtue.  In II, the stage is set for further theorizing of this conception in the present American context.  In III, I flesh out what hope as a democratic civic virtue could look like in the U.S. today.  Part IV concludes with comments about theorizing civic hope in the context of a modified pragmatism.

 


The Conference Programme and the Oratory School Schola concert programme are accessible by clicking the links  below:

Conference Programme: http://jubileecentre.ac.uk/userfiles/jubileecentre/pdf/conference-papers/Virtues_in_the_public_sphere/Virtues_in_the_Public_Sphere_Programme.pdf

Concert Programme: http://jubileecentre.ac.uk/userfiles/jubileecentre/pdf/conference-papers/Virtues_in_the_public_sphere/TheLondonOratorySchoolProgramme.pdf

The next Jubilee Centre conference will be “Educating Character Through the Arts,” and will be held at the University of Birmingham Conference Centre, July 19th through July 21st, 2018. The call for abstracts for the conference can be found here:

http://www.jubileecentre.ac.uk/1743/conferences/educating-character-through-the-arts

 

 

 

 

Virtues in the Public Sphere, Oriel College, Oxford

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Oriel College Chapel

Our Primary Investigator Candace Vogler recently returned as a delegate to the sixth annual conference of the Jubilee Centre for Character and Virtues, “Virtues in the Public Sphere,” held at Oriel College, Oxford UK January 4-6, 2018. Several of our scholars spoke at the conference, including Talbot Brewer, David Carr, John Haldane, and Nancy Snow. Below is a brief summary of the conference and its purpose that appeared on the conference site; in the next few blog post, we will present abstracts of the talks given by our scholars at the event.

In recent years, we have witnessed increased polarisation, not only between, but within societies, and the breakdown of civic friendships, in particular as a result of ‘political earthquakes’ that have hit both sides of the Atlantic. Questions have emerged about the relationship between public and private virtues. Do ‘sinners’ perhaps make better politicians than ‘saints’ – and are certain private vices, such as duplicity, necessary in order for the public sphere to function?

The main aim of this conference was to explore the role of virtues in the public sphere. Is there a virtue of ‘civic friendship’ and how can it be cultivated? Is the language of virtue apt for carving out a discursive path between illiberal radicalism and post-truth relativism? More specifically, does the language of virtue indicate an ethical and political approach that calls into question both extreme illiberal and liberal habits of mind – or does it carry an individualistic and moralistic bias that makes it inapplicable to political disagreements? What are the virtues of a ‘good’ politician or civil servant? Should we care whether a skilled diplomat or surgeon is also a good person? Can virtue be ascribed to collectives and institutions such as universities and schools and, if yes, what would, for example, a ‘virtuous school’ look like? Are character education and civic education comrades or competitors? What is the relationship between an ethos of good character in a school and the ethos of the neighbouring community? How, if at all, does virtue guide civic engagement and a pedagogy towards the public good? How do public virtues inform a social ethos of moral responsibility? And, at the most general level, what does it mean to talk about the ‘politics of virtue’?

The aim of the 2018 Jubilee Centre annual conference was to bring together experts from a range of disciplines to explore those questions and many more.

The London Oratory School Schola Cantorum performed in the Oriel College Chapel on the evening of 4th January.

The Jubilee Centre Conference site can be found here:

http://jubileecentre.ac.uk/1723/conferences/virtues-in-the-public-sphere

The Conference Programme and the Oratory School Schola concert programme are accessible by clicking the links  below:

Conference Programme: http://jubileecentre.ac.uk/userfiles/jubileecentre/pdf/conference-papers/Virtues_in_the_public_sphere/Virtues_in_the_Public_Sphere_Programme.pdf

 

Concert Programme: http://jubileecentre.ac.uk/userfiles/jubileecentre/pdf/conference-papers/Virtues_in_the_public_sphere/TheLondonOratorySchoolProgramme.pdf

 

 

The next Jubilee Centre conference will be “Educating Character Through the Arts,” and will be held at the University of Birmingham Conference Centre, July 19th through July 21st, 2018. The call for abstracts for the conference can be found here:

http://www.jubileecentre.ac.uk/1743/conferences/educating-character-through-the-arts

 

 

Save the date! March 26: Charles Taylor, “Democratic Degeneration: Three Easy Paths to Regression”

We’re pleased to share this upcoming event sponsored by our partner the Neubauer Collegium for Culture and Society.

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Charles Taylor at a news conference after receiving the Templeton Prize, 2007. AP

 

Director’s Lecture with Charles Taylor

Monday, March 26
5:00 pm – 7:00 pm

Regenstein Library
1100 East 57th Street
Chicago, Illinois 60637

“Democratic Degeneration: Three Easy Paths to Regression”

Charles Taylor (Professor Emeritus of Philosophy at McGill University) is the author of many influential books, including Sources of the SelfA Secular Age, and, most recently, The Language Animal: The Full Shape of the Human Linguistic Capacity. Professor Taylor has been honored with numerous awards, including the Templeton Prize (2007), the Kyoto Prize for Thought and Ethics (2008), the John W. Kluge Prize for Achievement in the Study of Humanity (2015), and the Berggruen Prize for Philosophy and Culture (2016).

This event is free and open to the public. Persons with disabilities who need an accommodation in order to participate should contact the Neubauer Collegium at collegium@uchicago.edu or 773.795.2329.

Congratulations, James Arthur of the Jubilee Centre!

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James Arthur, the Director of our partner organization The Jubilee Centre for Character and Virtues, has had bestowed upon him by the Queen in the 2018 New Year Honours List (page N10), the title of Officer of the Most Excellent Order of the British Empire, for services to education.
In accepting the honor, James acknowledged the contribution of the Jubilee Centre team: ‘I am very honored to be recognized in this New Year’s Honours List. To be awarded an OBE for my work in character education is also an acknowledgement of the incredible team in the Jubilee Centre at the University of Birmingham.’
James will attend a ceremony at Buckingham Palace in 2018 to receive the award from the Queen.
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(from left) Panagiotas Paris, James Arthur, Cardinal Blase J. Cupich, Candace Vogler,  Kristján Kristjánsson at our Capstone Conference in October 2017.

Video: Candace Vogler and Rev. Lola Wright at the Chicago Humanities Festival

Candace Vogler spoke with Reverend Lola Wright about about her work as principal investigator of our project on self-transcendence as the key to the connections between virtue, happiness, and the meaning of life, for the Chicago Humanities Festival Fallfest17: Belief! on Sunday, November 12, 2017 at the Chicago Sinai Congregation.

Research suggests that individuals who feel they belong to something bigger than just themselves—an extended family, a spiritual practice, work for social justice—often feel happier and have better life outcomes than those who do not. This sense of connection has a name in academia: “self-transcendence.”

Learn more about RevLo and Candace and this event here.