Corporate fines leave executives personally unpunished and tax-deductible

Evidence

Responsibility is restored by consequences for culpable behavior. The market system malfunctioned because wrongdoers were shielded from the consequences of their detrimental actions. Instead, the public bore the costs of their faulty practices. Many such situations involve high-ranking officials, who command influence and power, which they use to shape protective self-policies and to craft settlements for harmful practices that guard them from legal penalties. For example, faceless companies are fined for corporate transgressions, but their chief executives are neither charged nor penalized nor even required to admit wrongdoing. It is difficult to reform transgressing organizations when they are considered agentless entities and allowed to treat fines as business tax write-offs. Although some progress has been made in getting transgressing corporations at least to admit wrongdoing, consequences need to be tied to individual executive wrongdoers, and corporations should not be allowed to treat financial penalties as tax benefits. — Albert Bandura, Moral Disengagement, 2977 (#expands, via linked claim)

There are several reasons that prosecutors may be reluctant to go after the corporate upper echelon. The assemblage of corporate legal power is highly intimidating. If deniability for profitable transgressive practices is built into the corporate governance structure of a company, top executives can easily absolve themselves of responsibility. Federal officials justify their reluctance to prosecute the top management of prominent banks by pointing out that it could set in motion events that cripple the economy. — Albert Bandura, Moral Disengagement, 1502 (#complicates, via linked claim)

Categorization

• XREF: connects to: Corporate fines with no admitted wrongdoing shield executives from consequences; Fining corporations without prosecuting executives hardened into a gentleman’s agreement; Banks internalize fines as tax-deductible expenses without admitting guilt (+11 more)

Broader Connections

• Corporate fines shield executives from personal accountability when treated as business costs #expands (0.97) — Albert Bandura, Moral Disengagement, 2977
• Corporate structure shields executives by diffusing responsibility #complicates (0.74)
• Structured deniability lets top executives escape liability for corporate crimes #complicates (0.72) — Albert Bandura, Moral Disengagement, 1502
• Corporate wrongdoing stems from diffused responsibility rather than individual guilt #complicates (0.71) — Wael Hallaq, Restating Orientalism, 377