Corporate Sins and Corporate Longevity

[ClydeR]

People have to live with the consequences of sin for their entire lives. Should the same be true of corporations? Unlike us, corporations can exist for multiple centuries. For corporations that did something wrong sixty years ago, the people who caused the corporation to commit the sinful act are no longer involved with the corporation.

Our country's Supreme Court recently said that corporations have some of the same rights as real people (http://forum.gsplayers.com/showthread.php?t=49692). That raises the issue of whether or not corporations should be punished for past sins to the same extent that a real person would be punished for past sins.


A California lawmaker wants to give officials something new to think about when awarding massive contracts for the state's high speed rail system - whether the bidder transported Nazi victims to death camps during World War II.

Legislation would give the High-Speed Rail Authority the legal right to disqualify a French firm or other railway companies from construction contracts for their role in wartime atrocities committed more than six decades ago.

Assemblyman Bob Blumenfield, D-Woodland Hills, said he hopes that his Assembly Bill 619 will persuade a French company to disclose the extent of its involvement in Nazi death-camp transportation and to pay reparations or make other amends.

More... (http://www.sacbee.com/2010/06/22/2839250/bill-seeks-scrutiny-of-any-rail.html)


Under AB 619, bidders for high-speed rail contracts would be required to disclose any direct involvement in transporting people to extermination, work, concentration, prisoner-of-war or other such camps between January 1942 and December 1944.

Rail firms also would have to disclose what records they keep of such travel, and whether they took remedial action or paid restitution to victims. AB 619 would give firms a chance to explain mitigating circumstances. Companies that provide false information could be sued for civil penalties of $250,000 or twice the amount of the contract for which they bid, whichever is greater.

Blumenfield's bill would not automatically disqualify firms for providing Nazi war transportation, but it would allow the high-speed rail board to do so if it concluded that the disclosures raised concerns about corporate character or responsibility.


"Companies don't have character, the people within the company have the character," Niello said. "And those people are long gone."

Niello said that casting moral judgment would be a slippery slope, raising questions about why one immoral act should be targeted but not another - for example, should train companies be punished for transporting U.S. citizens of Japanese descent to World War II internment camps?

"The more you load up high-speed rail with stuff like this, it becomes a train not to transport people but to transport everybody's particular political agenda," said Assemblyman Chris Corby, R-Fullerton.

But Mitchell Kamin, president of Bet Tzedek Legal Services, a nonprofit group that assists Holocaust victims, said California should not enrich firms that have devastated Holocaust families and done nothing about it.

"Think about the message it sends to (victims)," Kamin said.

Rudolph Loebel, 83, a retired psychologist living in Pacific Palisades, applauds AB 619 and said his father, Ephraim, was arrested for being a Jew in February 1943 and taken via SNCF train to the Auschwitz war camp, where he was murdered. "Not a day goes by that I don't think about those terrible events," he said. "You cannot bring back the dead. But (a company) can show some good will."

I can just imagine certain lefty political types trying to punish BP for years and years because of the recent natural disaster in the Gulf.

[Back]

Which is more precious? The life of a person or the life of a corporation?

[CrystalTears]

BP should be punished. They caused a catastrophic disaster and I don't see why they should be able to get away with that.

It's tragic to me that people get jail time when they murder or rape, but corporations just have to pay a fine.

[g++]

Which is more precious? The life of a person or the life of a corporation?

I dont know I think I would trade a few Rocktars for Dunder Mufflin or a cool car wash conglomerate.

[AnticorRifling]

BP should be punished. They caused a catastrophic disaster and I don't see why they should be able to get away with that.

It's tragic to me that people get jail time when they murder or rape, but corporations just have to pay a fine.

So fines aren't punishment? Or do you want every single person who works at BP in jail?

The problem with trying to put indviduals in the same basket as companies is they are different. Very different.

[TheEschaton]

The mistake was made when corporations were decided to be legal persons. Which, btw, was Supreme Court dicta (IE, off-the-record and not official), which was then used as precedence to say they were legal persons, even though it had never been argued, reasoned, or voted on.

[radamanthys]

BP should be punished. They caused a catastrophic disaster and I don't see why they should be able to get away with that.

It's tragic to me that people get jail time when they murder or rape, but corporations just have to pay a fine.

The investigation is still pending. If you know for sure that they caused it, I'll call my senator and tell them and you can go testify.

[CrystalTears]

So fines aren't punishment? Or do you want every single person who works at BP in jail?

The problem with trying to put indviduals in the same basket as companies is they are different. Very different.No I understand that they're different, but I don't feel that merely paying a fine is sufficient punishment. Corporate takeovers, break the company down and sell it off, dissolve the corporation completely. I'm not talking specifically about the individuals being held accountable, I'm saying that the corporation or company shouldn't be allowed to continue operating.


The investigation is still pending. If you know for sure that they caused it, I'll call my senator and tell them and you can go testify.
You can calm down a bit. They're not blameless either. There were security measures that were in violation. It was their operation. I don't think they would have agreed to the escrow account if they were innocent.

[ClydeR]

Or do you want every single person who works at BP in jail?

That's an innovative idea. As a conservative, I could only support it if it's a flat sentence, not a progressive one. Every employee should have to spend the same amount of time in jail, irregardless of whether the employee is the CEO or the janitor.

[AnticorRifling]

What if they use non standard words like irregardless? Would that give them additional time in jail?

[Cephalopod]

What if they use non standard words like irregardless? Would that give them additional time in jail?

Perhaps death.

[Bobmuhthol]

I'm not talking specifically about the individuals being held accountable, I'm saying that the corporation or company shouldn't be allowed to continue operating.

Go back to business school.


I don't think they would have agreed to the escrow account if they were innocent.

Go back to law school.

[radamanthys]

No I understand that they're different, but I don't feel that merely paying a fine is sufficient punishment. Corporate takeovers, break the company down and sell it off, dissolve the corporation completely. I'm not talking specifically about the individuals being held accountable, I'm saying that the corporation or company shouldn't be allowed to continue operating.

Shouldn't this be in italics or something? I hope?



You can calm down a bit. They're not blameless either. There were security measures that were in violation. It was their operation. I don't think they would have agreed to the escrow account if they were innocent.

Calmer than you are, dude.

If you were driving and some kid ran out in front of you (from between two parked cars- no time to react) and you killed her, would you do everything in your power to try and make it better, even if you weren't at all at fault? You can't determine culpability from what amends are made.

[AnticorRifling]

Damage control != guilt.

[Celephais]

Corporate takeovers, break the company down and sell it off, dissolve the corporation completely.

Guilt determination aside, who exactly are you punishing here? What stops them from reforming under a new name and ditching all this bad publicity under that plan? I understand you're angry about it and want a solution, but fines are the only punishment that works on a corporation, because it's all they care about.

[CrystalTears]

It's just my opinion regarding large corporations that apparently are too big to fail and all they do is pay a fine and are done with it. If anything, they'll feel backlash from consumers who don't purchase their products or services, then after a while people forget and it's business as usual until they screw up again. I just wish there was more culpability than an invoice.

[Parkbandit]

When a company is "Too big to fail", it's deemed in the country's economic best interest to keep them in business by granting/loaning/etc.. money/goods/services. This is not the case of the United States and BP.

[Clove]

Guilt determination aside, who exactly are you punishing here? What stops them from reforming under a new name and ditching all this bad publicity under that plan?Nothing stops a criminal from returning to crime after they're released from jail, but we hope that incarceration discourages people from crime.

I would also expect it fairly difficult for an executive to be taken seriously after they failed so entirely their company was liquidated and dissolved as a punitive measure. It doesn't seem like their prowess would inspire much confidence.


I understand you're angry about it and want a solution, but fines are the only punishment that works on a corporation, because it's all they care about.Fines work on corporations because it cuts into their profits. Nothing cuts into your profits more than losing your business.

If we are going to treat corporations as entities with the same rights as individual human beings, they ought to have similar responsibilities and face similar consequences; up to and including capital punishment.

[Clove]

If you were driving and some kid ran out in front of you (from between two parked cars- no time to react) and you killed her, would you do everything in your power to try and make it better, even if you weren't at all at fault? You can't determine culpability from what amends are made.Really Rada? Really? A more appropriate analogy would be you were driving 40 miles above the speed limit through the same neighborhood until you eventually ran over a child. BP's safety practices have been questionable for the last 8 years and shockingly a terrible accident occurred.

While it is true that remorse for a terrible accident doesn't necessarily imply guilt, let's be realistic. Given BP's safety record which is most likely? That their poor attention to safety finally caused a terrible accident? Or what? Framed by terrorists?

[Kembal]

The government has basically given the death penalty to a company before. Arthur Andersen (the auditing firm) got convicted of obstruction of justice in the Enron scandal and basically died as a corporate entity.

With that said, it was in today's Houston Chronicle that BP's cost cutting measures are part of the reason why it's been so hard to stop the leak. Here's the link: http://www.chron.com/disp/story.mpl/business/deepwaterhorizon/7067996.html


Money-saving measures BP took while designing the Macondo well in the Gulf of Mexico appear to have dogged efforts to bring the massive oil spill under control. Documents released by congressional investigators show that modifications to the well design BP made last year included a reduction in the thickness of a section of the casing — steel piping in the wellbore.

The modification included a slight reduction in the specified thickness for the wall of a 16-inch-diameter section of pipe toward the bottom of the well, according to a May 14, 2009, document.

Retired Coast Guard Adm. Thad Allen, commander of the response to the blowout and oil spill, has confirmed reports that concern about the strength of the casing led officials to stop efforts last month to plug the well from the top by injecting drilling mud and cement in a procedure called a top kill.

Another proposed spill control method, placing a blowout preventer on top of the one that failed in the original April 20 blowout, also was abandoned over concerns about well integrity. A blowout preventer is a system of shears and valves installed as a last line of defense against loss of well control.

The condition of the well also limits how much oil and gas can flow into containment systems now being used successfully to capture some of the flow. Even if a vessel could capture all the hydrocarbons gushing from the well, some would have to be released to keep well pressure under control.

Marvin Odum, president of Houston-based Shell Oil, the U.S. arm of Royal Dutch Shell, told the Houston Chronicle last week that the integrity of the well casing is a major concern. Odum and others from the industry regularly sit in on high-level meetings with BP and government officials about the spill.

If the well casing burst it could send oil and gas streaming through the strata to appear elsewhere on the sea floor, or create a crater underneath the wellhead - a device placed at the top of the well where the casing meets the seafloor - that would destabilize it and the blowout preventer.

The steel casing used in oil wells is strong, said Gene Beck, petroleum engineering professor at Texas A&M, but pressures deep in a well are powerful enough to split strong steel pipe or "crush it like a beer can."

The strength and thickness of casing walls are key decisions in well design, he said. If the BP well's casing wasn't strong enough, it may already be split or could split during a containment effort.

BP spokesman Toby Odone said the decision to reduce the pipe thickness was made after careful review. The company said it doesn't know the condition of the well casing and has no way of inspecting it.

BP is drilling two relief wells to intercept the Macondo well near the reservoir and plug it with cement. A rupture in the Macondo well casing probably wouldn't affect that effort, said Donald Van Nieuwenhuise, director of geoscience programs at the University of Houston.

"When they start the bottom kill the cement will try to follow oil wherever it's escaping, so it would actually hide a lot of sins in the well bore," Van Nieuwenhuise said.

So far there are no signs that the section of the pipe below the sea floor is leaking.

The blowout preventer has been listing slightly since the accident, but officials believe that may have happened when the Deepwater Horizon sank while still attached to the well via a pipe called a riser.

A report from the National Oceanic and Atmospheric Administration on Monday noted research vessels found natural gas seeping from the sea floor several miles away from the well. Those appear to be pre-existing seeps that occur naturally, a NOAA spokeswoman said, and unrelated to the spill.

But the longer the well flows uncontrolled the more likely it is that the well casing could be damaged or the blowout preventer damaged further. Sand and other debris that flows through the pipes at high velocity can wear through metal over time, said Van Nieuwenhuise.

The chances of the well eroding from underneath and the blowout preventer tipping may seem unlikely.

"But everything about this well has been unlikely," said David Pursell, an analyst with Tudor Pickering Holt & Co.

[TheEschaton]

The problem is, Arthur Andersen is still in business under another name, Accenture, which did 21.58 billion in business last fiscal year. Well, not really, they do two different things, but the same people can be found throughout.

[Deathravin]

Well to be fair, they aren't just an 'auditing firm'. They have several divisions, mainly in outsourcing and technology. But they did change their name because of the Enron thing. But Accenture's a much better name anyway, so I'm okay with it ><.

[Kembal]

Correct, the consulting and other parts of the company survived under a new name, but the auditing portion is dead. Some of those offices got sold to KPMG and so on, but there are no auditors working for Arthur Andersen or a successor entity with the same owners.

[radamanthys]

Really Rada? Really? A more appropriate analogy would be you were driving 40 miles above the speed limit through the same neighborhood until you eventually ran over a child. BP's safety practices have been questionable for the last 8 years and shockingly a terrible accident occurred.

While it is true that remorse for a terrible accident doesn't necessarily imply guilt, let's be realistic. Given BP's safety record which is most likely? That their poor attention to safety finally caused a terrible accident? Or what? Framed by terrorists?

You want to unemploy thousands of innocent people because, in essence, 'you think they deserve it'? I supppose that's why we have courts. I'm not saying that they're not guilty. It's possible they were speeding. But you don't know for sure. You're taking an anti- role because, basically, you want to. Not because it's the truth.

Sound like you're saying that deepwater drilling is inherently dangerous and shouldn't be done evar and people are guilty because they're doing this thing that's legal but they should burn for it anyway? Regardless if they actually had some sort of negligence or hand in the cause of the accident?

I dunno. I think you're jumping the gun and burning witches here.

[TheEschaton]

They've had the worst safety record in the drilling industry for a long time. Where's that common sense approach you conservatives supposedly espouse? If it quacks like a duck, if it looks like a duck....it's a duck.

(Unless it's a witch.)

As to whether the consideration of loss of jobs for innocent employees matter, it's always a balancing test. Sure, those things are important, but this company has a record of recklessly endangering the wellbeing of a whole geographical region.

-TheE-

[Clove]

You want to unemploy thousands of innocent people because, in essence, 'you think they deserve it'?When did I say that? I said that BP has failed entirely and deserves whatever reaction it gets from consumers and/or punishment from our government, up to its dissolution. There are consequences like unemployment, however, would it be better to allow a business capable of creating such messes the opportunity to create more?


Sound like you're saying that deepwater drilling is inherently dangerous and shouldn't be done evar.It doesn't sound anything like that. It sounds like what I've simply stated; that BP has a decade-long record of piss-poor safety practices which have lead to this most recent disaster and I frankly won't shed a tear for them if it ruins them, even if it costs us something extra. Frankly I consider a company that accounted for 829 of the 851 willful OSHA violations among all US refiners between 2007 and 2010 pretty compelling, particularly when OSHA classified 760 of them as "egregious and willful". That alone ought to have bought them a ticket to drill, refine and otherwise practice their business somewhere else. This isn't a witch hunt, BP earned its reputation and ire.

[Celephais]

When did I say that? I said that BP has failed entirely and deserves whatever reaction it gets from consumers and/or punishment from our government, up to its dissolution. There are consequences like unemployment, however, would it be better to allow a business capable of creating such messes the opportunity to create more?

It doesn't sound anything like that. It sounds like what I've simply stated; that BP has a decade-long record of piss-poor safety practices which have lead to this most recent disaster and I frankly won't shed a tear for them if it ruins them, even if it costs us something extra. Frankly I consider a company that accounted for 829 of the 851 willful OSHA violations among all US refiners between 2007 and 2010 pretty compelling, particularly when OSHA classified 760 of them as "egregious and willful". That alone ought to have bought them a ticket to drill, refine and otherwise practice there business somewhere else. This isn't a witch hunt, BP earned its reputation and ire.

All that tells me is OSHA is all bark and no bite. If the fines aren't enough to discourage unsafe practices, then the fines aren't enough, it's about money for them (yes revoking a license costs money, but it's not like they wouldn't have branches/divisions/ways around it).

[Clove]

All that tells me is OSHA is all bark and no bite. If the fines aren't enough to discourage unsafe practices, then the fines aren't enough, it's about money for them (yes revoking a license costs money, but it's not like they wouldn't have branches/divisions/ways around it).I agree the government is culpable for the lack of safety as well. Like I said, there's no larger fine than bankruptcy. Consumer protest is also a fine.

Speaking of fines, OSHA isn't entirely without teeth; BP just didn't care.

http://www.osha.gov/dep/bp/bp.html

[Celephais]

I agree the government is culpable for the lack of safety as well. Like I said, there's no larger fine than bankruptcy. Consumer protest is also a fine.

Speaking of fines, OSHA isn't entirely without teeth; BP just didn't care.

http://www.osha.gov/dep/bp/bp.html

I'd say if a company can "not care" when OSHA delivers the biggest bite in their history, it meets the colloquial definition of being without teeth.

It's an $87M fine to a company that makes > $1B in profit a month. As always fight club is right, you just apply the formula. If the cost of a recall is greater than the cost of the average out of court settlement times chance of failure, they just don't do it. Just replace recall with safety improvements and out of court settlement with ecological disaster.

[CrystalTears]

And that's the problem, is that most things are handled as cheaply as possible, instead of as effective as possible.

[Clove]

I'd say if a company can "not care" when OSHA delivers the biggest bite in their history, it meets the colloquial definition of being without teeth.

It's an $87M fine to a company that makes > $1B in profit a month. As always fight club is right, you just apply the formula. If the cost of a recall is greater than the cost of the average out of court settlement times chance of failure, they just don't do it. Just replace recall with safety improvements and out of court settlement with ecological disaster.Yup. And if we approach this equation from the cheapest cost perspective we'll get the cheapest results. Punishment costs. Ask any warden. BP's next tactic will be to argue their culpability in this and appeal every judgement up to the Supreme Court to pay as little as possible as late as possible.

Hitting their executives and investors as hard as possible economically is the most effective message we can send to other businesses that would apply the Fight Club formula. Shutting them down entirely is about as hard as you can possibly hit them. Of course that's not the only way, I've also suggested controlling their profits until the damages are paid; I wouldn't mind making them a non-profit for the next few years. Having some sort of lien on their assets is another way to go. And actually the escrow account was a damned good move; but I'll believe it when the money is out of their control and disbursed.