Sins Of The Children: Punishing Businesses For Employees' Crimes
Recorded on August 16, 2006
Location: The Heritage Foundation's Lehrman Auditorium
prosecutions of business organizations such as Arthur Andersen and
the Milberg Weiss law firm have become more common. The federal
indictment itself destroyed Arthur Andersen - an
89‑year‑old firm with annual worldwide revenues of $9.3
billion and 28,000 employees. Justice was served when the U.S.
Supreme Court overturned Andersen's subsequent conviction. But by
then, it was far too late to piece the venerable accounting firm's
fragments back together.
Hasnas, author of Trapped: When Acting Ethically Is Against the
Law, argues that the standard for assigning criminal
responsibility to corporations is inappropriate. In short, American
law took a wrong turn when it began to hold businesses vicariously
liable for the crimes of their agents. To assert this in the
post‑Enron, post-Worldcom environment will strike some as
heresy. But just because business organizations are treated as
persons for some legal purposes, is it right to do so
for criminal punishment? Does it really make sense to
prosecute a business for the alleged crimes of one or a few
us and our panel of white-collar criminal law experts as we
consider whether and how to change the legal standards for
vicarious criminal liability for business organizations.