In 2010, an explosion on the BP-leased Transocean Deepwater Horizon oil rig killed 11 workers and spilled an estimated 4.9 million barrels, or 208.5 million gallons, of oil into the Gulf of Mexico. According to a recent report by a researcher at Texas A&M-Corpus Christi, the explosion damaged small creatures residing on the sea floor “for about 57 square miles around the blown-out BP oil well, with severe damage in about nine square miles of that area,” CBS News reported. Because the ice-cold, mile-deep seawater makes it difficult for oil to decay, recovery could take a generation or longer. Unsurprisingly, the BP oil spill has been deemed the worst environmental disaster in U.S. history.
Halliburton, the company employed to provide cementing services for BP at the oil rig, recently pled guilty to charges that it destroyed evidence regarding the explosion. Halliburton allegedly instructed BP to use 21 “centralizers,” or plugs, on the metal casings of the oil rig, a suggestion BP chose to ignore in favor of only using six. Halliburton conducted two computer simulated tests of the plugs, and both showed that the explosion would have occurred even if BP had used the recommended amount of plugs. These simulations were then destroyed by employees at the command of then-Halliburton manager Anthony Badalamenti. The guilty charge requires Halliburton to endure a three-year probation term, and – wait for it – pay a measly $200,000 fine, the agreed-upon maximum amount for the charge.
The lesson? Large corporations like Halliburton can have a hand in creating the largest environmental catastrophe in U.S. history and walk away with misdemeanor charges. In this case, the resulting fine is equivalent to what Halliburton makes in 23 seconds, and no one goes to jail. The Department of Justice has already agreed not to pursue further criminal charges against the company.
Halliburton is just one example of the many companies that have engaged in criminal activity and have not paid, or most likely will not pay, the appropriate price. For example, the Department of Justice recently decided to bring civil charges against Bank of America for allegedly making false statements about the quality of home loans it sold to investors in 2008. According to an NPR report, Bank of America supposedly told investors the loans were of prime quality when in fact, “more than 40 percent of the mortgages did not comply with the bank’s own quality control standards and had, quote, ‘glaring problems’ – overstated income, fake employments, [and] inflated home value appraisals.” Subsequently, investors lost millions of dollars when homeowners defaulted on these loans in the midst of what the International Monetary Fund (IMF) called “the largest financial shock since the Great Depression.”
Bank of America committed fraud on an inordinate scale, a crime usually punishable by jail time. Except no one from Bank of America will be going to jail. Maybe they’ll settle, strike some sort of plea deal, pay a chump change fine and, when it’s all over, continue to commit mortgage and foreclosure abuses.
Let’s not kid ourselves: If I could, as one person, wreak as much illegal havoc as BP or Bank of America has, I would be going to prison for a long time. So why then, does it seem as though big banks, like Bank of America, are above the law, even rewarded with backdoor bailouts long after the financial crisis has ended? Why do corporations like Halliburton get, at worst, a slap on the wrist, when far more extreme sentences are warranted?
According to Attorney General Eric Holder, they’re just too darn big. In comments he attempted to backtrack in May, Holder said he was “concerned that the size of some of these institutions becomes so large that it does become difficult to prosecute them. … When we are hit with indications that if you do prosecute, if you do bring a criminal charge it will have a negative impact on the national economy.”
Apparently, once a company grows to a certain size, it’s immune to criminal charges. And, if criminal charges are brought against a company, as in Halliburton’s case, they result in sentences that grossly undermine the seriousness of the crime. This is evidence of a criminal justice system that will send actual, living human beings to jail for their criminal offenses, but will allow illegal, fraudulent and corrupt corporate behavior to go unpunished.
For a long time, the Securities and Exchange Commission (SEC), one of the United States’ federal law enforcement agencies, had practiced a ridiculously forgiving “neither admit-nor-deny” policy with criminal corporations, allowing them to settle cases without admitting or refuting guilt. Companies would then agree to obey the law in the future, and sometimes pay multi-million dollar fines, mere pocket change for the big banks. More recently, however, SEC Chairwoman Mary Jo White said defendants would no longer be allowed to employ this method and would be forced to either claim or deny any wrongdoing.
This is a start. But it’s a slow start and certainly not enough to incentivize corporate criminals away from what they’ve done for years: lie, cheat and break the law, all to make a quick buck— even if it comes at the cost of American’s tax dollars. Corporate crime must be handled with equal review, investigation and punishment as civilian crime, or the legitimacy of the Justice Department will be at further risk.
Jillian Correira is a Collegian columnist and can be reached a [email protected].
