The Short Arm of the Law

mindbrane writes "CNN takes a look at when companies are too big for the legal system to handle. Quoting: 'Prosecutors said that excluding Pfizer would most likely lead to Pfizer's collapse, with collateral consequences: disrupting the flow of Pfizer products to Medicare and Medicaid recipients, causing the loss of jobs including those of Pfizer employees who were not involved in the fraud, and causing significant losses for Pfizer shareholders. ... So Pfizer and the feds cut a deal. Instead of charging Pfizer with a crime, prosecutors would charge a Pfizer subsidiary, Pharmacia & Upjohn Co. Inc. ... As a result, Pharmacia & Upjohn Co. Inc., the subsidiary, was excluded from Medicare without ever having sold so much as a single pill. And Pfizer was free to sell its products to federally funded health programs.' IBM may have cast the mold for this sort of thing in its 1970s antitrust case, but the recurrence of similar cases speaks to ongoing concerns for legal systems."

Comments

Thomas Jefferson said it best:

[nuclearpenguins]

"I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country."

Too bad no one listened to him.

Re:Thomas Jefferson said it best:

[eiapoce]

Easy solution, hold the CEOs accoutable for fellonies carried out by corporations. And carry also on some death penalty if needed, you'll see things change in a snap.

Prosecuting corporations for crimes is asinine.

[John Hasler]

And is a cop-out by prosecutors. Crimes are committed by individual people and that is who should be prosecuted for them. And no, there is no shield, exemption, or veil protecting employees of a corporation against prosecution for crimes they commit on the job.

Re:Prosecuting corporations for crimes is asinine.

[Marc_Hawke]

That's what I was going to say.

When an individual is convicted of a 'hacking' crime, the punishment is often, 'No access to computers.'
When an male is convicted of rape, there is often a cry for him to be castrated.

I say when an individual is convicted of mis-using his corporation and corporate power that he have it be removed from him, (as well as any profits he might have earned at the time.)

Follow the signature trails, and get the people on both sides. The people responsible for oversight need to be held liable and the people who accepted the order need to be held liable. The further away from the central figure, the less their individual punishment would be. (However, emphasis goes UP, not down. We don't want any sacrificial lambs.)

Instead of a whole corporation paying for the actions of it's management, the management pays, and the punishment for the corporation is simply dealing with a management shift. (Hopefully a more carefully ethical one this time.)

Re:Prosecuting corporations for crimes is asinine.

[laughingcoyote]

"I was just following orders" does not work. Ever. Even when disobedience might mean death, let alone just getting fired.

Now, if you want to pass a law requiring triple damages for employees who are discharged based on refusal to follow an illegal or unethical request, and establish a system whereby they can get that redress without a drug out court battle, I'll be behind you 100%. But if you perform the unethical act, you are responsible for doing so, regardless of whether it was your idea or not. The people who "gave the order" are also responsible, but to avoid complicity yourself, you must disobey it and blow the whistle.

The only case where this would not be possible is if, for example, ten people are each instructed to do one thing, each of which in itself seems innocuous but when put together add up to something sinister. Since it would not be reasonable in this case for the individuals to know what they're doing is unethical, they could not be expected to disobey and/or blow the whistle. In a scenario like that, only those who developed, approved, and/or orchestrated the scheme are responsible. But most of the time, that's not the case:

"Oh, come on, John, you know how flighty investors can get, and there's really no need to worry them. If we just count things a little differently, I'm sure we can ease their concerns..."
"Well, sure, there is a safety flaw in the product, but at this point it appears that it would be cheaper to pay off the lawsuits than to fix it."
"Well, we want to cut the workforce by half, but not deal with unemployment. Go find even the most minor flaws in whatever someone's doing, and say they were terminated for cause."

Anyone who goes along with these practices is responsible for them. People need to grow a backbone. Maybe if we start throwing some people in jail, people will worry less about having to job hunt and more about doing it right. The people you're helping cheat (or in some cases even kill, see the exploding Pinto case) may have families to feed, too. There's absolutely no excuse for not blowing the whistle when you become aware of something like this.

Re:Prosecuting corporations for crimes is asinine.

[Hatta]

Yes, being able to profit from illegal acts while being shielded from the consequences is a big motivator. But I don't see why we should allow this to happen. The "corporate veil" encourages illegal acts and should be abolished.

patents

[blackraven14250]

Maybe they should rewrite the rules for big pharma so that if they're convicted of doing something outrageously illegal, the patents they own which were involved in the crime become public domain. That way, they will not risk a damn thing when it comes to marketing and promotion of their products, and there's no way that suing a company will screw up the nation's health care system.

Rule of Law

[headkase]

By letting Pfizer get away with this the US government has set an example. There is no reason to obey the law if you have enough tentacles. They could have chosen the high-road and smacked them down and then out of the rubble a new generation of companies would have emerged that would have had reason to obey the law. No, instead corruption is institutionalized.

Too big to sue

[PlanetX 00]

Is this just the latest application of the Golden Rule? He who has the gold makes the rules...

That's the real story here...

[raehl]

While one may not agree with the particulars, this seems like a pretty standard case of prosecutorial discretion. The reality of the law is that the maximum penalty prescribed by law - and sometimes even the minimum penalty prescribed by law - is not appropriate for the crime committed. And prosecutors plead out criminals for sentences less than those allowed by law all the time.

And in this case, some sales agents in the army of sales agents misrepresented one product out of an arsenal of products. Ok? Of course not. Deserving of a big fine, and probably one larger than the company got? Sure.

But cutting off access to Medicare/Medicaid for the entire company, even if it is an available legal penalty, is not the appropriate legal penalty in this case.

The real problems here are that:

1) The law is not appropriate. A better penalty would be loss of patent protection on a lucrative drug, or 10x profits made on the drug that was mis-marketed.
2) Those selling drugs in a manner that can harm patients are not personally liable for their actions. If your doctor prescribes you a drug that they should know might harm or kill you, they are liable. And if a pharma rep orchestrates or participates in a sales campaign designed to hide the hazards of a drug, they should also be personally liable. If all the pharma reps knew that off-label marketing got 30 days in jail the practice would be curbed considerably.
3) Corporations are designed to separate business assets and actions from personal assets and actions. There is value to this. But using shell corporations to protect parent corporations seems to have gotten a bit crazy.

One and two could be fixed by competent legislation. Three is probably a ship that has sailed.

Corporations are people, like it or not.

[elucido]

If we treat Corporations as persons in any context, they must be treated as persons in every context.

Re:The other side of the coin to Regulatory Captur

[Znork]

The best remedy we may have is stringent application of antitrust law (break 'em up)

The problem in this case stems directly from pro-trust law. Without patents, there wouldn't be a problem with kicking Pfizer out of Medicare (nor would they wield monopoly-level revenue that underlies issues here ranging from buying doctors to making the legal system its bitch).

There are much better, and vastly more efficient, ways to pay for research than these monopoly rights whose side effects are damaging to the free market, the political system and the legal system all at the same time.

Re:The other side of the coin to Regulatory Captur

[Blue Stone]

>Without patents, there wouldn't be a problem with kicking Pfizer out of Medicare

In that case, it sounds like a better way of achieving justice would be to seize their patent assets (some or all) and then nullify them.

Re:The other side of the coin to Regulatory Captur

[Archangel Michael]

I have a better solution, one that provides better self regulation...

Corporate Death Penalty.

Corporations are a creation of the state, and exist only under permission of the state. The solution for dealing with such abuse of laws is to have the state dissolve the corporation and auction all the assets, and release all "intellectual property" back to the public as public domain.

If we actually enforced corporate death penalty, the company's owners (stock holders) would be much more careful about how the company they own is operated.

No company is too big to fail, and failure is the only alternative we have. The whole idea that failure is not an option is itself a really bad idea.