Tuesday, June 24, 2008

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.


Anonymous said...

They are bringing in lie detectors for benefits claimants they really really need them for the corporate capitalists.

I attended a workshop at the LRC/LEAP conference that looked at tax avoidance/tax evasion (and the stats and the whole behaviour of these people is un bloody believable). And someone rightly said "arrest the ruling class". Indeed.

Oh, you mention Midsomer Murders (would you wanna live there...you will either get bumped off or be a murder suspect or both)...Though when Inspector Barnaby was Bergerac he didn't do a good job of exposing the bribery and corruption in that well known tax haven, Jersey...
(Sorry, bit off topic there).

Leftwing Criminologist said...

I think you've summed up the dilemma of white collar crime quite well - however, i think it's important to differentiate between white collar crime (for an individuals benefit) and corporate crime (for the company's benefit)

John B said...

Not that I wholly disagree - but being mugged or burgled isn't just financially inconvenient, it's also horrible and traumatising. Losing a small percentage of your potential share price gains because someone else has done a bit of insider trading isn't.

(yes, this obviously applies to shoplifting and benefit fraud too, and yes, I believe society should indeed pay less attention to those and focus on crime that's actually harmful...)

Jim Jay said...

HM - it might be slightly off topic but it's an interesting discussion to have the way that agencies that are not part of the law enforcement mileau are becoming increasingly drawn into that kind of paradigm.

Whilst welfare payments are meant to help those in most distress the organizations in charge of this more and more treat people as if they are not entitled to benefits, etc. and treat people like criminals (asylum seekers being the most extreme cases of this)

LWC - I suspect this is a useful distinction, did you have anything specific in mind when you made the point?

John B - I agree that mugging and other face to face crimes can be personally traumatising, or at least unpleasant, but I'd also say that some corporate crime can be just as bad if not worse. The effect on workers lives could be phenomenal if they're laid off, or put at risk because of illegal practices.

Leftwing Criminologist said...

not, just that my reading of these issues has drawn out the importance - however, thinking about it i wonder as to which of the two this report refered to?

@ John B - i agree with what jim jay said to you - also for myself this kind of crime can act as a precipitating factor in face to face crimes occuring for the reasons jimjay pointe dout too.

but you are right there is a difference between crimes that are invasive (ie. where you feel in some way violated - this can range from burglary to mugging to rape) and more impersonal things (such as this, benefit fraud, shoplifting etc.)