White collared

I was genuinely quite shocked this morning to hear that the FBI have made 400 white collar arrests for credit fraud, with more promised. Not shocked that fellow white collar workers are now under lock and key you understand, but that this is the first time I can remember where the authorities have made mass arrests over this kind of crime.

When describing the arrests of hundreds of real estate agents in the US “Section chief for Financial Crimes, Sharon Ormsby, said... [they] were just a "good start".” Which I found slightly chilling and heartening at the same time. She went on to explain; "We've initiated investigations into 19 corporations. We are precluded from talking about them. But we are looking at individuals related to mortgage lenders, investment firms, brokerage houses, hedge funds, due diligence firms, rating agencies - the whole gamut."

Traditionally white collar crime has been an area that many have regarded as under investigated by the police and certainly when you compare the kinds of sentences and prisons that a white collar criminal might expect upon (a rare) conviction with crimes of a less respectable nature there does appear to be a large bias. Of course in general I've rather different priorities and tend to agree with Brecht when he said “What's the crime of robbing a bank compared to that of owning one?”

But I'd like to add a note of caution here. Whilst there certainly is a class bias in the law part of the assumption that this is the only factor at play rests upon the idea that the police actually solve crimes, and I think that's wrong. 95% of the crimes that come to court essentially have solved themselves, with a bit of loose end tying by the authorities. Either it's obvious who committed the crime, or the victim/witnesses name them or the perpetrator hands themselves in - that's if the police didn't actually witness the crime taking place direct.

On the other hand crimes that actually take a full on investigation do not normally turn out the way they do on Midsommer Murders, rather they tend to get dropped or go cold because they're just too difficult. It's only a minority of high profile crimes that get the kind of attention that television would lead us to believe is a day in day out operation.

Any organisation that is reasonably capable of covering up its misdeeds and makes complicity worthwhile can usually expect to avoid the attentions of the law. So it's only when the whole operation goes tits up that the police suddenly realise that there is something to investigate and might, potentially, be able to scrape together the kind of resources and expertise necessary to look into this sort of crime.

This operation is a direct result of the crisis in the financial markets (and a cynic might say the arrests could allow people to blame rotten apples rather than the barrel itself) just as the Enron scandal only broke because of financial problems in the company coupled with the willingness of some of those on the inside to go against their former employers. It had nothing to do with diligent police work.

Perhaps this comes across as a bit of a defense of the police on white collar crime, and I suppose it is. The fact that most of this kind of hanky panky goes undetected has far more to do with the way we run our economy than it does with any unwillingness on the part of the authorities to devote resources they don't have to crimes they can't possibly know about.