Elizabeth Warren's new 1%: the percentage of fraudulent profits companies pay in fines

In Rigged Justice: 2016 How Weak Enforcement Lets Corporate Offenders Off Easy, a 12-page booklet, Senator Elizabeth Warren documents corporations that were caught undertaking grossly fraudulent, highly profitable actions, and were made to pay a trivial fraction of those profits in fines -- fines become a part of the cost of doing business, not a deterrent to criminal behavior.

Included in the tales of wrongdoing are:

* Education Management Corporation, a private university that defrauded its students about the rate at which its graduates found employment, taking in $11B, mostly in government money, and paying $95m to settle charges of fraud

* Standard & Poors, who fraudulently rated toxic mortgage-backed securities, helping to destroy the planet's economy, bankrupting, sickening, ruining and even killing people in every corner of the earth. The company received an 83% discount on its fines by agreeing to a settlement, never admitted wrongdoing, and faced no criminal charges.

* Novartis, the pharma company that bribed pharmacists to recommend its products while the company was under sanctions for a previous kickback scandal. The company received a 90% discount on its penalties for settling, admitted no wrongdoing, and has had no limits put on its ability to participate in Medicare and other programs

JPMorgan’s settlement for giving conflicted advice to its clients over wealth management products was less than 1 percent of annual operating profits.

GM paid under 1 percent of company revenue to settle claims on the faulty ignition switch that killed multiple vehicle passengers.

For-profit college EDMC ripped off students with false promises of well-paying jobs, and paid below 1 percent of its student loan revenue over the period of violations.

Warren further documents how in some settlements, the headline dollar figure looks tough until you read the fine print. A settlement with Graco Children’s Products for selling defective car seats yielded $10 million, but $7 million of it went toward developing safety programs, which any responsible manufacturer would do in their normal course of business. The BP civil settlement over the Deepwater Horizon for $20.8 billion sounds massive until you learn that $5 billion could be deducted as an ordinary business expense for tax purposes.

Elizabeth Warren Challenges Clinton, Sanders to Prosecute Corporate Crime Better Than Obama [David Dayen/The Intercept]

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