Deviance(cont) White collar crime

The concept of white-collar crime draws attention to definitions of deviance which are
determined by the powerful. Edwin Sutherland initially coined the term "white-collar crime" in
order to point out weaknesses in typical crime theory that considered social pathology as the
primary explanation behind criminal behavior. White-collar crime refers to crimes that are
committed by "respectable people" during the course of their occupation. Crimes which are
considered white-collar include embezzling, price fixing, insider buying, fraud, falsification of
expense accounts (or other records), and theft of materials. This category of crime casts doubt on
the notion that poverty breads crime.

I.     Types of White-Collar Crime

Appelbaum and Chambliss (1997) call attention to two types of white-collar crime.

A.     Occupational Crime

Occupational crime occurs when crimes are committed to promote personal interests.  Crimes
that fall into this category include altering books by accountants and overcharging or cheating
clients by lawyers.

B.     Organizational or Corporate Crime

A much more costly type of white collar crime occurs when corporate executives commit
criminal acts to benefit their company.  There are a variety of corporate crimes that include

 the creation of inferior products,

 pollution,
 price fixing. 
 tobacco companies that add nicotine to cigarettes
 when companies advertise food as "lite" when it has as many calories as regular
food.

II.     The Cost of White-Collar Crime

The dollar loss attributed to white-collar crimes, according to Sutherland, is probably greater
than the dollar loss from all other types of crimes. For example, the American business
community lost $50 billion in 1980 to white-collar crime. This was nearly 10 times more than
the monetary value of all forms of street crimes (Eitzen, 1986).

III.     The Goals of White-Collar Crime: Profit and Political Power

Money is not the only motive for engaging in white-collar crime. Often political power is the
goal. In the 1950s and 1960s, when the FBI illegally broke into offices of left-wing political
organizations, enhancing power was the objective, not money (Coleman and Cressey, 1984). The
entire Watergate affair was oriented toward enhancing power.
 IV.     Murder By Neglect

White-collar crime can describe situations where companies or individuals knowingly use
substandard building material, market untested drugs, or knowingly (and illegally) pollute the
environment. Neglect of worker safety requirements may also be considered white-collar crime.
Every year in the U.S. between 120,000 and 200,000 people die from work related illness and
14,000 die from on-the-job accidents (Charon, 1986).

V.     Penalties For White-Collar Crime

The difference in how we respond to white-collar crime and "regular" crime is dramatic. If an
individual shot and killed another individual with a hand gun, the death penalty would be
considered. What happens when people are killed because a contractor uses substandard building
material?

 Remember the Hyatt House disaster in Kansas City?

As a result of differences in perceptions between white-collar crime and regular crime, the
accident in Kansas City was seen as a misfortune while an individual who shoots another
individual is seen as a murderer. White-collar criminals almost never go to jail.

(For example)

 Former Vice President Spiro Agnew was never sentenced for bribery and tax evasion.
 President Nixon received a full pardon for his part in the planning of the Watergate
burglary, as well as its cover up.
 Oliver North became a hero while acknowledging that he lied to Congress.
 Reagan vetoed the Ethics in Government Bill in November 1988. His spokesperson said
"it was bad politics, but good government."
 Let's also not forget the 25 deaths that resulted at Hamlet, North Carolina's Emmett Roe
chicken plant. The owners had locked all the exits. The owner, who ordered the doors
locked, was sentenced to 19 years and will be paroled in 2 to 6 years.

According to the American Bar Association (ABA),

 91 percent of those convicted of bank robberies go to jail while only 17 percent of those
convicted of embezzlement of bank funds go to jail.
 Only five percent of people suspected of committing white-collar crimes were convicted. 
Only a small percent of those convicted actually went to jail.  The fact that Oliver North
was seen as a hero despite admitting to Congress that he lied about Iran-Contra.
 When building contractors use substandard material which causes injury and death, fines
result rather than jail time.  No one went to jail as a result of the Hyatt Disaster in Kansas
City.

Such statistics are indeed peculiar given that the average dollar loss that results from street crime
is much less than the dollar loss experienced from white-collar crime. In Florida, for example,
street crime amounted to $35 per crime while the average loss to white-collar criminal activities
was $621,000 (Eitzen, 1986).

The following two examples demonstrate the costs of white-collar crime, as well as the leniency
that white-collar criminals experience from the legal system.

"Jack L Clark's Nursing Home Construction Company was founded guilty of a

gigantic stock fraud that bilked shareholders of $200 million. $10 million of this
swindled money allegedly went for Clark's personal use, and prosecutors accused him
of hiding another $4 million as well. Clark apologized to the court, pleaded guilty to
one count (out of sixty-five), and was sentenced to one year in prison, eligible for
parole after four months, with no fine" (from Eitzen, 1986:427).

"C. Arnolt Smith, Chairman of U.S. National Bank, entered a plea of no contest to
charges of conspiracy, misapplication of bank funds, filing false statements, and
making false entries in his bank books. His case involved one of the largest swindles
in American history (some estimates are as high as $250 million). His penalty for this
crime was a $30,000 fine, to be paid at the rate of $100 a month over twenty-five
years -- with no interest" (Eitzen, 1986:427).

VI.     Why Don't White-Collar Criminals Go To Jail?

Clearly a double standard exists between white-collar crimes and street crimes. The following
are some reasons that explain why white-collar criminals are not more rigorously pursued.

A.     The Best Lawyers

White-collar criminals have money and can therefore afford the best legal advice.

B.     Favorable Laws

Laws are generally written in favor of the white-collar criminal. People who commit white-collar
crimes are sometimes the same people who are in a position to see to it that their crimes are not
defined too negatively.

C.     Individual Perception
Whereas the impact of white-collar criminals on the nation is great, the cost to each individual is
small. White-collar crimes do not impact individuals with the same intensity as when one
individual is victimized by a petty criminal.

D.     Little Police Effort

Virtually no police effort goes into fighting white-collar crime. Enforcement is many times put in
the hands of government agencies (like the Environmental Protection Agency - EPA). Often
these agencies can act only as watchdogs and point the finger when an abuse is discovered.

E.     Difficult to Assign Blame

Assigning blame in white-collar crime cases can be difficult. For example, pollution may be the
result of corporate neglect, but corporation cannot be sent to jail. Corporations could be heavily
fined (a viable option), but the social impact of severely punishing an institution that may
provide jobs to hundreds of people, as well as supply social necessities, may be more detrimental
than the initial violation of the law.

Assignment question: (30 marks)

1. What do you understand by white collar crime? Explain

2. Give an example of white collar crime (search any article, write the abstract)
3. How do white collar crimes remain hidden, Explain why?