On Matters Criminological: What is 'Corporate Crime', and how serious a threat does it pose?

The study of criminology and criminal justice has, traditionally, focused almost exclusively on crime committed by individuals or ‘street crime’. The corpus of criminological theory and empirical work heretofore published is thus composed mainly of attempts to account for why some individuals are more inclined to break into someone’s home and steal from them, murder someone in cold blood or commit common assault than others, and also why the severity of criminal punishment differs across individuals, categories of offenders and even societies (Shrover and Scroggins, 2009; McLaughlin and Muncie, 2010).

Yet as far back as the turn of the last century, Ross argued in favour of a rationale for isolating and examining corporate crime. As far as he was concerned “the pervasiveness and puissance of large corporations and the corporate form, the high cost of corporate crime to victims and the larger community, and the somewhat distinctive and difficult control challenges it presented” were reason enough (Ross, 1907, p.109; Newark, 2007; McLaughlin and Muncie, 2010).

More and more, however, we hear and see corporations and organisations and the dynamics by which they facilitate criminogeneity coming under scrutiny by the media, legislators and law-enforcement agencies (Shrover and Scroggins, 2009).

It is important to draw attention to a particular established conceptual distinction that has become accepted: between occupational and organisational crimes (Friedrichs, 2007).

Many of the crimes committed by individuals whilst at work are committed almost exclusively, or rather primarily, for personal gain. These are labelled by some as Occupational Crimes and by others as White Collar Crime (Clinard and Quinney, 1973; Sutherland, 1949; Yeager, 2007) - included in this category would be the infamous Martha Stewart, entrepreneur and “lifestyle diva” who, whilst originally charged with insider-trading (she was the friend of the founder of “ImClone”, the pharmaceutical company whose shares she sold for a profit), was only found guilty of obstructing the course of justice for lying to the investigators. The United States Department of Justice described, in 1981, White Collar crime as “[n]onviolent crime for financial gain committed by means of deception by persons whose occupational status is entrepreneurial, professional or semi-professional and utilizing their special occupational skills and opportunities; also, nonviolent crime for financial gain utilizing deception and committed by anyone having special technical and professional knowledge of business and government, irrespective of the person’s occupation” (United States Department of Justice).


In contrast to occupational crime, organisational crime is characterised by its auxiliary importance of expected individual reward in favour of organisational profit. When corporate agents knowingly report false or falsified information to the State regulators in relation to the firm’s conduct, they do so with the interest of their employer in mind (Shrover and Scroggins, 2009; McLaughlin and Muncie, 2010).

One example of this is ‘Corporate crime’ which is crime committed by officers, managers, or employees of profit seeking organisations or firms in pursuit of employer objectives. Indeed for Geis (2006) ‘corporate crime’ ranks as the most important example of a subtype of organizational crime that is given autonomous analytic status by many investigators.

A second example of ‘organisational crime’ is ‘State-Corporate crime’. According to Michalowski and Kramer (2006) and Michalowski, Kramer and Kauzlarich (2002, p. 263) State-Corporate Crime is crime “that occurs when one or more institutions of political governance pursue a goal in direct cooperation with one or more institutions of economic production and distribution”. State-corporate crime is also found in the behaviour of corrupt public officials who troll for and receive gratuities from corporate interests in exchange for access and favours. It can, in addition, take the form of complicity in crime committed by profit-seeking organizations...

e.g., Michalowski and Kramer (2006) suggest that the National Highway Traffic Safety Administration (NHTSA) was complicit in the deaths resulting from the Ford Explorer rollovers that took place in the last few years of the 20th century because it did not actively push Ford to comply with a recall of tyres that were, allegedly, a major contributor to the fatalities caused by loss of driver control.


Pearce (2001) argued that some organizations are unusually criminogenic or that certain causal conditions were more characteristic of them and their environments. For him the emphasis found in for-profit organizations, for example, on unlimited financial gain coupled with distinctive structural and cultural aspects could be an important factor in making them unusually criminogenic (Pearce, 2001).

Others contend that there are no compelling reasons to single out for special criminological attention any particular organisational form because of a belief that much can be learned about organisational crime by putting it under scrutiny in a range of settings. Whether they are philanthropic, voluntary, for profit, or public sector organizations, moreover, may be unimportant; corporations are organisations. No matter what distinguishes them from one another, the fact that they are organisations may add substantially to the commission of crime within their confines. This in no way denies that large corporations, which are among the most powerful institutions and political actors in the modern world, may be unusually criminogenic settings. Whether and under what circumstances this is true are issues that remain unsettled empirically (Pearce, 2001; Kramer, Michalowski and Kauzlarich, 2002; Kramer and Michalowski, 2006; Yaeger, 2007; White and Haines, 2009; McLaughlin and Muncie).


But what crimes, as the average man on the street would understand, constitute ‘corporate crime’? As most of these types of crime are directed at (in the first instance) other capitalists, organisations and corporations, the general public are not always aware of them being committed, or are indifferent to them (White and Haines, 2009). And even when the average member of the public feels they are the victim of corporate crime, what’s the point in pursuing the issue? If social power is concentrated in the hands of those who own the means of production (White and Haines, 2009), then they will, either through flexing their corporate muscles or a healthy compliment of shrewd lawyers and/or a corrupt police force, influence what behaviour will be defined as criminal and what will not: should industrial homicide be prosecuted as murder or on a lesser charge...as negligence or as an accident? Shop lifting is theft, but false advertising is a trade practices violation (White and Haines, 2009).

Sutherland offered up this list of what could be considered ‘corporate crime’ (O’Grady, 2011).


• Misrepresentation in financial statements of corporations

• Manipulation in the stock market

• Commercial bribery

• Bribery of public officials directly or indirectly

• Misrepresentation in advertisement and salesmanship

• Embezzlement and misappropriation of funds

• Misapplication of funds in receiverships and bankruptcies

However, in the age of the international, multinational and supranational corporations, how serious a problem does corporate crime pose? The Law Reform Commission of New South Wales was of the position that corporate crime posed quite a significant threat to community welfare: the pervasive presence of corporations in such a wide range of activities in our society, and their actions’ impact on a much wider demographic than are affected by individual action has the potential, they felt, for both great economic and physical harm (Law Reform Commission). In the same way, Mokhiber and Weissman (1999) asserted that given the absence of political control today, “corporations serve to destroy the foundations of the civic community and the lives of people who reside in them."


The militant anti-communist ideology parading as (irresponsible) capitalism that was begat by the Neo-Conservative victories and policies coming out of ‘The West’ in the wake of the Cold War, the inexhaustible and insatiable hunger for profit that followed the collapse of the age of Empire, bribery, corruption, and blind hubris enabled the perceived élite and upper echelons of the capitalist class to build around them a fortress of smoke, and secrecy. Society is changing; the social mentality and social conscience are also changing. How serious a problem does corporate crime pose for the future?


We only have to look to the recent past for a number of events that have for many, brought Corporate, State-Corporate and White Collar crime to the foreground: the Parliamentary Expenses scandal, Banking Crisis 2008, global economic recession, insider-trading at the Swiss bank UBS, fraud and deception at the Société Générale – one of France’s biggest investment banks (both in the City of London), News International and the Phone Hacking scandals (which also dragged the police and HM Government through the mud) as well as the ‘occupation’ of various financial districts such as Wall Street, the City of London (Stock Exchange and forecourt of St Paul’s Cathedral) by the Occupy Movement (Wall Street/London/Madrid etc). Even though the last of the examples was for reasons other than just actual criminal behaviour (such as questionable financial and social morality and conduct), the general public is more concerned about such things now than they have been before, and given the state of the global economies and an increase in general economic literacy and a heightened sense of social responsibility, these issues will continue to inflame passions and add sulphur to the fire of socio-economic inequality and social unrest.