Police Ignoring Laws in Florida: A Case of Systemic Corruption

Systemic corruption means not only that a department or agency has an organizational culture that allows for and may even laud corruption, but also that a city hall, as well as larger jurisdictions such as member-states and even federal agencies may be enabling the corruption by looking the other way and even lying to cover-up the lower-level corruption. A study at Florida Atlantic University published in the Journal of Criminal Justice identifies 24 categories of police misconduct in Florida from 2012 to 2023. Even though it is tempting to highlight violent illegal acts by police employees, lying regarding criminal law and refusing to take reports of criminal activity may be more detrimental because such misconduct is probably more common than is the violent sort. If so, the extent of corruption and the underlying false sense of entitlement by police patrol-employees and even their supervisors may be vastly understated in the United States.

The full essay is at "Local Police Enabled in Florida."

The U.S. Department of Justice: Big Banks May Legitimately Be above the Law

The Financial Times reported in 2013 that lawmakers in the U.S. Congress were claiming that the Department of Justice had been “too soft on big banks and their executives by failing to bring criminal cases related to the financial crisis.”[1] In the five years following the financial crisis of 2008, no Wall Street executive was criminally charged with fraud. The U.S. Justice Department chose not to go after the bankers for their lack of due diligence regarding their purchases of sub-prime mortgages from mortgage originators. This in spite of the fact that at Citibank, for example, a manager in the bank’s due diligence department estimated that 50% to 80% of the approved mortgages did not meet the bank’s credit policy, and yet Robert Rubin, the CEO at the time, did not act on the manager’s email. This suggests that a criminal complaint could have been lodged against the bank itself, but then what would be the implications for the financial system should Citibank had gone under after being found criminally guilty? Does it even hold that a guilty verdict would mean bankruptcy? Simply stated, a company can be so large that its failure due to a guilty verdict could harm innocent third parties, including stockholders, employees, suppliers, and even the general public if the bankruptcy triggers a systemic collapse of the financial system. Such concerns are called collateral consequences. After the collapse of Lehman Brothers in September 2008, systemic risk became a particularly salient concern for criminal prosecutors at the U.S. Department of Justice. Swayed by a desire to minimize the potential disproportionate harm to innocent parties from a verdict-triggered major bankruptcy, the prosecutors believed they were obligated to consider collateral consequences even if that meant that the really big banks would be immune from criminal prosecution. To such banks, this could be used as a competitive advantage because keeping within the constraints of law in making money would not apply. I contend, therefore, that the U.S. Government should not have taken collateral consequences into consideration. 

The full essay is "Big Banks above the Law."

 Mythili Raman testifying before Congress. mainjustice.com

1. Shahien Nasiripour and Kara Schannell, “Holder Says Some Banks Are ‘Too Large’,” The Financial Times, March 7, 2013.

Bankers or the Bank: Which Is Responsible?

Along with paying $2.6 billion to settle criminal and civil charges for having “failed, and failed miserably” to notify the SEC of warning signs that could have short-circuited Bernie Madoff’s $17 billion Ponzi operation, J.P. Morgan Chase only had to acknowledge that its actions were improper.[1] No criminal prosecution ensued. The electronic evidence against Madoff's operation was too damning for JP Morgan Chase to have missed it. Indeed, according to USA Today, “JPMorgan had suspicions about Madoff’s operation as early as December 1998, when a bank fund manager warned the investment returns were ‘possibly too good to be true.’”[2] Without submitting any “suspicious activity reports” to the U.S. Government as required by law, the bank had pulled $275 million of its own “feeder funds” from Madoff’s fund two months before Madoff’s financial services firm collapsed.[3] In other words, the bankers connected the dots well enough for the bank's financial interest and perhaps even their own, yet strangely  enough no one at the bank could manage to let the outside world  know, even though federal law mandated reporting the suspicions to the SEC.  and responsibility urged it.

The full essay is at "Bankers or the Bank: Which is responsible?"

J.P. Morgan hitting a man. Was he demonstrating that criminal law applies to human beings rather than to organizations themselves?  Image Source: Wikimedia Commons

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1. This was according to Manhattan U.S. Attorney Preet Bharara.Tim Mullaney and Kevin McCoy, “JPMorgan to Pay $2.6 billion in Madoff Case Settlements,” USA Today, January 8, 2014.

2. Ibid.

3. Ibid.

Saudi Arabia Beheads a Member of the Royal Family: Justice for All, Atrociously

On October 18, 2016, Saudi Arabia executed a member of the royal family for committing murder during a brawl. Prince Turki bin Saud bin Turki bin Saud al-Kabeer was put to death most likely by beheading in a public square—as this was the usual method at the time. As horrific as such an execution is, the point that law applies to everyone is laudable—especially “on point” for countries in which the rich can “get away with murder” by hiring the best (and most expensive) lawyers.  The atrocious means of execution coupled with the dictum that the law really does apply to everyone renders this case particularly difficult to analyze from an ethical perspective. 

The full essay is at "Saudi Arabia Beheads."