Contrary to the view presented by Brooklyn Law Professor Miriam Baer that we should get rid of corporate criminal law, Washburn University School of Law Professor Mary Kreiner Ramirez, a former federal prosecutor, believes we should preserve it and enforce it.
And get rid of a few corporate criminals in the process.
And in a little noticed 2005 law review article in the Arizona Law Review titled The Science-Fiction of Corporate Criminal Liability: Containing the Machine Through the Corporate Death Penalty, Ramirez argues that it may be time to “kill” a few corporations “in order to deter the rest.”
Ramirez argues that the present approach to corporate criminality is “systematically impotent.”
Ramirez proposes a Corporate Death Penalty Act that incorporates a graduated sanctions approach to corporate criminality that intended to “spur action rectifying internal corporate misconduct.”
Ramirez’ proposed law would subject a corporation to be “involuntarily dissolved” if it incurs three or more violations.
“Just as a foul ball in baseball may be counted as a strike, this approach permits negotiated civil settlements for some misconduct to be counted as strikes,” Ramirez writes. “The third strike must be a pure strike — that is, it must be a serious violation of criminal law.”
“This approach maximizes opportunities for remediation prior to the ultimate penalty of involuntary dissolution and assures that this penalty is finally triggered only upon serious criminal conduct.”
What about all of the jobs that would be lost?
“Even though the dissolution would end the corporate existence, the trustee could liquidate the business or negotiate the sale of the business, as a whole or in part, on behalf of the stakeholders,” Ramirez writes. “The business entity could arise anew, keeping the jobs of employees and the assets of the entity in place.”
“If the trustee determines that the dissolution would be harmful to the public interest, the trustee could alternatively act to remove the directors and officers of the corporation,” she writes.
“Although a corporate death penalty may sound draconian, it is a modest step for dealing with management that may not directly violate laws but that is willing to book profits from criminal conduct by turning a blind eye or worse,” she concludes.
The focus of the Corporate Death Penalty Act is simply to divorce management “that is demonstrably promiscuous regarding crime from the assets of the corporation,” she writes.
“The business can be sold intact,” she says. “The corporate assets can be sold wholesale. Or management can be merely ousted and replaced.
Given corporate influence in the political process, one might question whether corporations would support any politician that supported Ramirez’ corporate death penalty law.
“Of course, this is precisely the point,” she writes. “If corporate dominance is such that laws cannot pass to stem that authority, then we are too late. The machine has already won. The use of government authority to finally restrain and deter criminal conduct is crucial to achieve the good corporate citizen and restrain the soulless machine. The Corporate Death Penalty Act can be that final restraint.”