From
The Economist, August 30:
"WHO runs the world’s most lucrative shakedown operation? The
Sicilian mafia? The People’s Liberation Army in China? The kleptocracy in the
Kremlin? If you are a big business, all these are less grasping than America’s
regulatory system. The formula is simple: find a large company that may (or may
not) have done something wrong; threaten its managers with commercial ruin,
preferably with criminal charges; force them to use their shareholders’ money
to pay an enormous fine to drop the charges in a secret settlement (so nobody
can check the details). Then repeat with another large company.
"The amounts are mind-boggling. So far
this year, Bank of America, JPMorgan Chase, Citigroup, Goldman Sachs and other
banks have coughed up close to $50 billion for supposedly misleading investors
in mortgage-backed bonds. BNP Paribas is paying $9 billion over breaches of
American sanctions against Sudan and Iran. Credit Suisse, UBS, Barclays and
others have settled for billions more, over various accusations. And that is
just the financial institutions. Add BP’s $13 billion in settlements since the
Deepwater Horizon oil spill, Toyota’s $1.2 billion settlement over alleged
faults in some cars, and many more. In
many cases, the companies deserved some form of punishment: BNP Paribas
disgustingly abetted genocide, American banks fleeced customers with toxic
investments and BP despoiled the Gulf of Mexico. But justice should not be
based on extortion behind closed doors. The increasing criminalisation of
corporate behaviour in America is bad for the rule of law and for capitalism."
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