"Self regulation amidst corporate criminality"

By Mitch Jones YellowTimes.org Columnist (United States)

(YellowTimes.org) – In a recent radio address President Bush stated that his administration will fully investigate cases of corporate fraud and jail executives found guilty of criminal misdeeds. This should not be misconstrued, however, as a shift away from the traditional Republican philosophy that business can regulate itself. By his wording the President implies that there are just a few bad eggs in the bunch and most of corporate America has real integrity.

Bush's statements are thanks to the recent attention given to the shady accounting of WorldCom, Global Crossing, Enron and others. Unfortunately, though, corporate crime is not new.

Government institutions such as the Environmental Protection Agency, the Department of Labor, Occupational Safety and Health Administration and the Food and Drug Administration have regulations that look good on paper governing corporate behavior in the areas of pollution emissions, labor practices, employee safety and consumer safety, but they are virtually powerless in enforcing their regulations or simply overlook violations.

This is partly due to legislation that was started by President Regan and partly due to certain aspects of Newt Gingrich's "Contract with America" which emphasized deregulation of business over strict government controls which was considered an unnecessary expansion to the size of the government.

Individuals have brought civil suits against big business as well. Some have been employees or consumers seeking repayment for unfair practices. Such suits are usually settled outside of court in order to avoid negative media attention.

Large corporations have also swindled the government out of millions of dollars in tax money finding loopholes and the like to avoid massive amounts of taxes. In a report published by CorpWatch USA, a corporate watchdog organization, Enron has paid no income taxes in four of the past five years by distributing funds to offshore subsidies.

There is obviously a fundamental flaw in the system of government- economy relations. Jailing a couple of executives is not enough to remedy the situation. There needs to be dramatic, systemic change.

President Bush is already seeking to give the Securities and Exchange Commission new enforcement powers. The bill has already passed in the House of Representatives. However, the SEC's jurisdiction falls mostly under accounting practices while the problem of corporate corruption goes much deeper; affecting labor, environment and safety. It is no longer plausible to say that big business can regulate itself.

Corporations that exist for the sole purpose of making money cannot be expected to voluntarily accept regulations that will cut into profits. Self-regulation makes it easy for corporations to undermine such laws.

Institutions that regulate big business must be impartial and be given wider enforcement powers in order for them to be effective. Penalties for violations should hurt the company where they will feel it: the pocket book.

[Mitch Jones is currently a student majoring in journalism and sociology. He attends the State University of New York at Brockport where he writes for the student newspaper, the Stylus. He also is a singer/songwriter and poet. More information can be found at Mitch's website: http://www.hastheboyfallen.cjb.net. He lives in the United States.]

Mitch Jones encourages your comments: mjones@YellowTimes.org

YellowTimes.org encourages its material to be reproduced, reprinted, or broadcast provided that any such reproduction must identify the original source, http://www.YellowTimes.org. Internet web links to http://www.YellowTimes.org are appreciated.