Are white collar crime & blue collar crime treated equally? - By David Jenson
Hillary Transue was a good student with a clean record, so she never imagined she'd hear a judge sentence her to three months in juvenile detention. What heinous act did this young Bonnie Parker do to invoke the court's wrath? The 15-year-old merely spoofed her assistant principal on MySpace. (If Skinner only knew it could be that easy to lock up Bart Simpson.)
Tragically, this is not an isolated incident. In this particular Pennsylvania county, a 14-year-old got nine months for lifting change from unlocked cars and a 13-year-old got put away for trespassing in an empty building. What did all these delinquents have in common? Judges Michael Conahan and Mark Ciavarella sentenced them and about 5,000 other teens in a scam involving cash for kids.
The scheme dates back to 2002, when Conahan exercised his judicial authority to shut down the government-run youth facility and use tax dollars to redirect teens to privately owned detention centers. For their efforts, the judges received $2.6 million in kickbacks. While it's hard to believe that Alberto Gonzales never tapped these guys for DOJ, it's even more remarkable how little time the judges will serve. The total time served by the kids they sentenced could add up to centuries, but Conahan and Ciavarella will serve only 87 months in federal prison. Mid Atlantic Youth Services, who own and operate the centers, face no punishment at all.
When the government hires Halliburton to build prisons and spends nearly $50 billion a year on corrections, it's no surprise that America incarcerates the highest percentage of its citizens. While these numbers are ridiculously high, white-collar criminals like these two judges make up just a fraction of the inmates.
Many researchers have argued that there's a double standard when it comes to white-collar crimes. Socially upward criminals are wealthier and more connected, and they can hire the best lawyers and preemptively influence lawmakers to imploring focus on street crimes. That's why a whistleblower like Harry Markopolos can spend a decade the SEC to stop Bernie Madoff, and the government acted only after the loss of tens of billions of dollars. Maybe he'd have gotten a quicker response if he reported two guys trying to get married or a 13-year-old file-sharing the new Metallica album.
I am not suggesting that we pardon the people who steal our cars or break into our homes, but we should treat the inside trader who stole $100,000 from shareholders with the same scales of justice as the guy who steals your wallet.
Consider the recent cast of villains. There's Allen Stanford (the Texas billionaire who allegedly crafted his own Ponzi scheme), Enron's Ken Lay, former senator Ted Stevens, lobbyist Jack Abramoff and former governor Rod Blagojevich. Even with something as tragic as Hurricane Katrina, there were countless dirt bags juicing FEMA with fake charges and pocketing money that was raised for victims.
For every white-collar crime, there are also ethically gray acts that technically don't break any laws. Richard Fuld helped drive Lehman Brothers into the ground as he raked in nearly $500,000,000. While that's merely a moral crime, selling his $14 million house to his wife for $100 might be something more. There's also the military analysts on cable news networks that supported the war without disclosing they're lobbyists for contractors that ultimately made out like bandits. Sadly, the spotlight has even turned to nonprofit companies.
In a study of nearly 500 nonprofit hospitals, the IRS discovered that top executives make nearly $500,000 year, while 20 of these so-called nonprofit execs make nearly $1.5 million. Gloria King of the United Way of Central Carolinas rakes in about $1.2 million as the Chief Executive, and she's just one of eight charity-based execs making seven figures. According to Charity Navigator, there are over a hundred others making $500,000-plus.
In the late 19th Century, the Gilded Age started during Reconstruction as wealth rocketed to the top with help from questionable politicians (e.g. Boss Tweed) and financial manipulations. This era, featuring opulent wealth displays by the upper class, eventually led to the Panic of 1893, when the railroad bubble burst and a credit crisis sunk the country into an economic depression. It certainly sounds familiar (except that the 1890s crisis ironically gave tax-raising Republicans a landslide victory over the free market Democrats).
Today, America has its own panic. While there is much to be done, there's a populist outcry for a level playing field. America needs to prosecute criminals regardless of their social status and political contributions and enforce white-collar crimes with the same zeal that they tackle blue-collar offenses. Whether it's Ponzi schemers or corrupt judges, there needs to be real enforcement and punishment for financial misdeeds. The white collars need to become too afraid to take the risks.
America has the honor of being history's great democracy where all men are created equal. To continue fulfilling that promise, we must shake off the shackles that bind Lady Liberty's hands and truly start treating all men equally.
Tragically, this is not an isolated incident. In this particular Pennsylvania county, a 14-year-old got nine months for lifting change from unlocked cars and a 13-year-old got put away for trespassing in an empty building. What did all these delinquents have in common? Judges Michael Conahan and Mark Ciavarella sentenced them and about 5,000 other teens in a scam involving cash for kids.
The scheme dates back to 2002, when Conahan exercised his judicial authority to shut down the government-run youth facility and use tax dollars to redirect teens to privately owned detention centers. For their efforts, the judges received $2.6 million in kickbacks. While it's hard to believe that Alberto Gonzales never tapped these guys for DOJ, it's even more remarkable how little time the judges will serve. The total time served by the kids they sentenced could add up to centuries, but Conahan and Ciavarella will serve only 87 months in federal prison. Mid Atlantic Youth Services, who own and operate the centers, face no punishment at all.
When the government hires Halliburton to build prisons and spends nearly $50 billion a year on corrections, it's no surprise that America incarcerates the highest percentage of its citizens. While these numbers are ridiculously high, white-collar criminals like these two judges make up just a fraction of the inmates.
Many researchers have argued that there's a double standard when it comes to white-collar crimes. Socially upward criminals are wealthier and more connected, and they can hire the best lawyers and preemptively influence lawmakers to imploring focus on street crimes. That's why a whistleblower like Harry Markopolos can spend a decade the SEC to stop Bernie Madoff, and the government acted only after the loss of tens of billions of dollars. Maybe he'd have gotten a quicker response if he reported two guys trying to get married or a 13-year-old file-sharing the new Metallica album.
I am not suggesting that we pardon the people who steal our cars or break into our homes, but we should treat the inside trader who stole $100,000 from shareholders with the same scales of justice as the guy who steals your wallet.
Consider the recent cast of villains. There's Allen Stanford (the Texas billionaire who allegedly crafted his own Ponzi scheme), Enron's Ken Lay, former senator Ted Stevens, lobbyist Jack Abramoff and former governor Rod Blagojevich. Even with something as tragic as Hurricane Katrina, there were countless dirt bags juicing FEMA with fake charges and pocketing money that was raised for victims.
For every white-collar crime, there are also ethically gray acts that technically don't break any laws. Richard Fuld helped drive Lehman Brothers into the ground as he raked in nearly $500,000,000. While that's merely a moral crime, selling his $14 million house to his wife for $100 might be something more. There's also the military analysts on cable news networks that supported the war without disclosing they're lobbyists for contractors that ultimately made out like bandits. Sadly, the spotlight has even turned to nonprofit companies.
In a study of nearly 500 nonprofit hospitals, the IRS discovered that top executives make nearly $500,000 year, while 20 of these so-called nonprofit execs make nearly $1.5 million. Gloria King of the United Way of Central Carolinas rakes in about $1.2 million as the Chief Executive, and she's just one of eight charity-based execs making seven figures. According to Charity Navigator, there are over a hundred others making $500,000-plus.
In the late 19th Century, the Gilded Age started during Reconstruction as wealth rocketed to the top with help from questionable politicians (e.g. Boss Tweed) and financial manipulations. This era, featuring opulent wealth displays by the upper class, eventually led to the Panic of 1893, when the railroad bubble burst and a credit crisis sunk the country into an economic depression. It certainly sounds familiar (except that the 1890s crisis ironically gave tax-raising Republicans a landslide victory over the free market Democrats).
Today, America has its own panic. While there is much to be done, there's a populist outcry for a level playing field. America needs to prosecute criminals regardless of their social status and political contributions and enforce white-collar crimes with the same zeal that they tackle blue-collar offenses. Whether it's Ponzi schemers or corrupt judges, there needs to be real enforcement and punishment for financial misdeeds. The white collars need to become too afraid to take the risks.
America has the honor of being history's great democracy where all men are created equal. To continue fulfilling that promise, we must shake off the shackles that bind Lady Liberty's hands and truly start treating all men equally.
This article is copyright
