Remember Mitt Romney’s comment at the 2011 Iowa State Fair: “Corporations are people, my friend?” How about Democratic National Committee Chairwoman Debbie Wasserman Schultz’s violent reaction to the position?
Funny, reading all the crowing from Eric Holder’s DOJ this week, it seems they agree with Romney.
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Headlines on point:
- SAC Capital has agreed to plead guilty to a single count of wire fraud plus four counts of securities fraud and pay $1.8 billion to put criminal insider trading allegations behind it. U.S. Attorney for the Southern District of New York, Preet Bharara, said, “No institution should rest easy in the belief that it is too big to jail,” and discussing the penalty itself, “steep but fair…commensurate with the breadth and duration of the charged criminal conduct…” Founder/CEO Steve Cohen or any of the top people running SAC weren’t named as defendants in the case and will go on managing Mr. Cohen’s $9 billion fortune.
- Johnson & Johnson pleaded guilty to a misdemeanor and paid $2.2 billion to slide by what AG, Holder said, “displayed a reckless indifference to the safety of the American people…it constitutes a clear abuse of public trust, showing a blatant disregard for systems and laws designed to protect public health.” The prosecutors accused J&J of kickbacks to pharmacists related to pushing drugs that could prove life threatening to the elderly and the growth of breasts on young boys. In what I read it was likely a large number of J&J employees being reckless and abusing the public trust yet no one was arrested.
- J.P. Morgan is in discussions to pay $13 billion to resolve allegations that the bank knowingly sold securities made up of low-quality mortgages in the lead-up to the 2008 financial crisis. It has been reported that the potential deal would expunge multiple government probes and that the DOJ proposed the bank plead guilty to making false statements. Again, I didn’t notice any discussion of people to be indicted.
I imagine a good portion of the American public must be as puzzled as I am. Broadly speaking, the foregoing misdeeds the DOJ alleges to have occurred seem pretty serious – economic disaster and human disregard. And the firm above that could try to argue they didn’t cause either of these harms, SAC, seems to qualify as a classic case of a criminal concept called “willful blindness” – based on the government’s chest-thumping quotes anyway.
Yet no one got arrested? Instead it appears “Uncle Sam” will collect piles of cash to fund the deficit. Maybe the DOJ has IRS-envy?
On top of being puzzled, I’m astonished. Let me explain why.
From 1994 to 2002, I worked for what is known today as Monster Worldwide. At the time I exited Monster I was President and Chief Operating Officer. I was around at the birth of Monster.com and a key player in creating the online recruiting sector of our economy, one which bettered people’s lives. I also played a big part in helping create an S&P 500 company from not much, benefiting many a shareholder.
Then in 2009 -- seven years after I left Monster -- the federal government spent countless hours and taxpayer dollars to jail me related to my time at Monster. (I continue to strongly maintain my innocence.) The charges related to non-cash, stock option accounting under meaningless and impossibly vague financial standards that were tossed aside by the Financial Accounting Standards Board in 2005. In effect a nonsensical, zero-dollar, victimless crime.
Armed with coerced cooperators on the heels of the 2008 financial meltdown and Bernie Madoff-mania my government convicted me and off I went to prison for two years.
My saga is water under the bridge but you’ll have to forgive my current case of DOJ head scratching. To my amazement it looks like “corporations are people” indeed. And a ‘donation’ to the U.S. Treasury from that “too big to jail” person -- after all, what prison can you find companies in -- can buy the individuals who pull the corporate levers continued liberty. Looks like up to $17 billion for stay-out-of-jail cards just this week. American Justice?
Mr. Treacy is the former COO of Monster Worldwide.