The endless call for “ethics” is a bit like asking serial genocidal maniacs to take up knitting instead. Corporate crime is killing the global economy, the maniacs are doing quite nicely, getting richer, and everyone’s looking for that extra inch of moral high ground.
The bottom line here is that a word like “ethics” is hardly likely to be used in conversation in corporate crime, let alone become a topic of debate. When was the last time you looked at the S&P 500 and thought, “Wow! Look at all those ethics!”?
Corporate crime is also now a separate branch of journalism. It’s like the weather; there will be some corporate crime today, mainly sunny and in verbose denial, with a chance of bribery and payoffs later in the day. Forecasting, fortunately, isn’t required.
If you search corporate crime news on Google, you get apparently endless pages of results. Major financial companies like (pick a name), etc. are conspicuous on a routine basis. That’s nothing like the whole story. The crime is now endemic. The news about big financiers is mixed with unknown companies like pest control firms and other businesses with much less obvious relationships with high finance, in various scams and schemes.
The usual formula in coverage is textbook journalism:
1. Background of prior events and criminal activities
2. Regulator playing catch-up all the time.
3. Hardly anybody goes to jail or loses their assets, many of which are hidden anyway.
4. Fines are paid, re-offenses start almost immediately, and the cycle starts again.
5. In some cases, the same people are involved, over and over again.
6. Governments move incredibly slowly in this environment, for no obvious practical reasons.
7. The business “community” is apparently perfectly happy to say nothing and never respond to strange, not to say downright bizarre, suicidal, business practices.
You could make a macro out of these points. It’s anyone’s guess how many billions or trillions are being laundered, ripped off, and manipulated at various levels. The theory of people getting involved in this is pretty simple — there’s so much of it happening that only a relatively few people can be caught at any time; getting away with it is quite possible.
The Unaoil scandal and Panama Papers are simple cases in point regarding the “ethics” of corporate crime. This alleged bribery and evasion was apparently so pervasive on a global scale that it’s fair to assume all of this happened in plain sight. A huge number of people would have had to be aware of the facts. Who’s been charged with what? What “ethics” were involved, at any point?
Now the irony – Unaoil and the Panama Papers are small beer, compared to world finances. There’s reason to believe this is the tip of a very large iceberg, because the amounts of money in the Unaoil story are relatively small, compared to the trillions running through the global financial sector every day.
When did idiots suddenly become criminal geniuses?
Ironically, those committing the corporate crimes are usually pretty small beer themselves. They tend to be undistinguished non-entities, middle managers, executive nobodies, whatever, rather than heavyweights. They’re not business geniuses, by definition. They’re facilitators, rather than instigators. It’s a very long stretch of logic to assume that these guys came up with the Global Scamland Theme Park off their own bats. It’s a bit like suddenly discovering your canary is running a slavery racket.
White collar crime, in fact, is a particularly strange type of crime. No other form of crime provides an entire audit trail of itself. Maybe those who were asleep during basic business accounting training don’t know that, but everybody else does. The little guys are always caught, sooner or later. That’s not a sign of criminal genius, just criminal stupidity.
That said — it’s fair to say that just about every industry sector, from pharmaceuticals to food, housing to insurance, pesticides to credit markets, and science to Washington lobbies, is systematically behaving in the same way. The same mentality, including the irrational greed, is obvious. How did so many peanut vendors become “criminal masterminds”? Obviously these guys can barely hold a conversation — so who did come up with the scams, frauds, ripoffs and evasions?
The big non-topic
There are no-go zones in any discussion of corporate crime:
1. Nobody ever asks, “Where does the money go?”. Nor do they ask “To whom does the money go?”. Money does have to go somewhere; even if it’s written off, hard money and assets, as in bank deposits, property, etc. have to go somewhere.
2. Nobody ever asks “Why?”, either. At a time of incredibly low interest rates, in which any fool can borrow at 1% and re-lend at credit card rates, a virtual financial Nirvana by any standards, exactly why is corporate crime getting so much worse?
3. The big question which must never be asked, and never is, by anybody and covers both of the other questions, is “Who?” Who has the contacts to coordinate huge global scams on a regular basis? Who can find a shed in Romania, a bank in Switzerland, a vacant lot in Shanghai, or a warehouse in LA to help front companies carry out non-existent “business”? Who can launder money in multiple nations within 24 hours, anywhere in the world? Who can make people shut up about it?
Organized crime, that’s who. Nobody else has global contacts at all levels like that. Strangely, the involvement of organised crime in the mortgage subprimes which crashed the global economy, and which was flagged by the FBI at the time, was never explored.
Is it so hard to comprehend that crime goes where the money goes? Where there are trillions of dollars, would you expect to see criminals?
For those who haven’t noticed — organized crime is based on law. Prohibition created the billion dollar mobs. Various forms of legislation create revenue streams for crime. Illegal substances, high tobacco prices, people smuggling, construction, you name it; wherever there’s a legal obstacle, your friendly local organized criminals can help themselves to any amount of money which happens to be floating around. Add a few idiots who think they’re being clever to take the rap, and everything’s fine.
For the guys who do real ethical business – Don’t take this personally, but right now nobody can afford to believe you actually exist. The damage caused by corporate crime is almost universal, and costing the world a lot of money. May you live long and prosper, but remember, you’re in the minority, and a lot of those businesses used to be honest, too. Just stay out of harm’s way.
