Most commonly, the primary purpose of the corporation is as a legitimate business, but criminal activity is secretly intermixed with legal activity to escape detection. Because high-level management is usually involved, the corporation’s explanations and exculpations may focus on a “fall guy” who acted outside the organizational structures. Many times it is the occupational and organizational structures of a corporation, often hinged on the socio-economic system, gender, racial and/or age discrimination, that is blamed for facilitating the criminal conduct of a corporate employee.
Celebrity Behavior of Corporate Executives
Aside from the greed explanation, there is another theory as to why corporate executives commit white-collar crimes: “Celebrity Behavior.” According to this theory, high-profile corporate executives, with their lavish perks, luxurious homes, and large paychecks, have been elevated to celebrity status and, akin to misbehaving celebrities, they believe that rules don’t apply to them, that they have the wealth to get themselves out of trouble, or that they’re simply invincible. Additionally, high-profile executives are often in the public eye, which is stressful and may trigger an outburst of bad behavior, as is common among celebrities.
Other inferences that are aligned with misbehavior, both in Hollywood and the corporate suite, are the “beautiful mind” hypothesis—that possibly a genetic factor that leads to brilliance also causes behavior outside of social norms, and the “substitutability theory”—that someone who is especially talented or knowledgeable in some subject is able to get away with bad behavior because that person is difficult, if not impossible, to replace.
Finally, “business” is not a profession in the same way as medicine, law, or architecture. Those and other professions have controls and codes, require special training and licensing, and have recognized standards and enforcement procedures. Business, however, does not require a license to practice. Thus, for someone who was willing to make the sacrifices necessary to rise to the level of a Fortune 500 CEO, who might be an unusual person generally and not just a workaholic, the enticement of crossing the fine line between unethical and illegal behavior, fueled by the desire for ever larger quarterly profits and higher company share prices, outweighs the possibility of falling from the corporate ivory tower.
Differential treatment for White-Collar Offenders
Another explanation for the prevalence of corporate crime is that empirical data clearly demonstrate a double standard between white-collar crimes and so-called street crimes. There are a number of reasons to explain why white-collar criminals are not more rigorously pursued. By virtue of their relative affluence, those accused as white-collar offenders are able to afford the fees of the best lawyers, and may have friends among senior ranks of the political elite, the judiciary and the law enforcement agencies. These connections often not only ensure favorable treatment on an individual basis, but also enable laws to be drafted or resource allocations to be shifted to ensure that such crimes are not defined or enforced too strictly.
Virtually no police effort goes into fighting white-collar crime, and the enforcement of many corporate crimes is put into the hands of government agencies like the Environmental Protection Agency, which can act only as a watchdog and point the finger when an abuse is discovered. This more benign treatment is possible because the true cost of white-collar crime is dispersed through the bank balances of innocent people, either by way of share value reductions, nominal increases in taxation, or increases in the cost of insurance.
Another reason for differential treatment might be because public safety policy promotes higher patrolling of criminal violations predicated on physical force or violence than on those involving monetary loss, at least on the state level. Because white-collar crimes are committed by those with opportunities that do not require violence, they are far less likely to garner more severe criminal penalties. For example, someone who mugs a victim on the street by threatening to shoot them, and steals their wallet, might very likely be convicted and sentenced to a more severe punishment than an inside trader who cheats shareholders out of a million dollars.
