Judicial Democracy. Equality before Justice
Antonio P. García
is a growing conscience that Too Big To Fail banks pose a
huge threat to economies and society.
The fact that they additionally are Too Big To Jail increases
November 2013, JPMorgan Chase & Co. signed a record $13
billion deal to end probes into mortgage-bond sales. This
will save the bank billions since the US government allowed
them to avoid an explicit admission of wrongdoing. Additionally,
JPMorgan top officers are allowed to keep committing felonies
and getting the profits that derive from their crimes, while
they receive no punishment at all.
July 2013, a United States Federal Court approved a 1.9
billion USD settlement between the U.S. government and HSBC
Bank, despite "heavy public criticism." This
agreement cleared the way for HSBC to whitewash crimes of
money laundering for terrorist organizations and drug cartels.
By means of this settlement, the US government lets HSBC to
continue to violate the law, and allows the HSBC executives
who were responsible for the design and execution of these
crimes to continue reaping personal profits from criminal
nearly every month governments sign settlements that allow
corporations to avoid prosecution for known crimes, and halt
investigations into acknowledged corporate malfeasance.
for avoiding trials, corporations agree to pay sums which
are vast to the untrained eye, but insignificant if compared
with the profits these policies reap, and are unjust as punishment
for the damages these corporations cause with their illegal
that allow criminal corporations to avoid legal punishment
go against one of the fundamental pillars of democracy. Additionally,
they violate human rights and represent a major contributor
to income disparity.
have permitted some corporations to build their wealth and
their market dominance by means of committing felonies, again
agreements are a key piece in the complicity between governments
and corporations, and they have contributed to the great increase
in corporation’s share in the income pie, giving rise
to vast social injustice and discontent.
these corporations continue violating the law and keep committing
crimes, while governments keep running into settlements with
them. This endless cycle allows the institutionalization of
illegal corporate policies, with the routine paying of fines
that are mere fractions of the direct illicit income that
corporations receive from their felonies.
enter into these agreements even when the corporation is simultaneously
being investigated for other connected crimes, allowing
it to dodge the law on certain criminal acts while it is still
under investigation for other crimes, and ensuring the big
picture stays hidden. When individuals, as opposed to corporations,
are prosecuted for connected criminals acts, additional accusations
lead to consolidated charges, allowing the prosecution to
build a strong case that weighs the scope and purpose of the
criminal conspiracy of the accused. Instead, plea agreements
granted to corporations allow diverse criminal conspiracies
to be judged as distinct and discreet criminal acts, as if
the various component crimes were entirely independent deeds,
which is not true since they are committed by the same organization
and they are included in the same budget and financial plan.
though the top executives of these corporations are the clear
criminal architects of the crimes their companies are accused
of, the executives are rarely, if ever, punished at all. Routinely,
executives at criminal corporations are paid huge bonuses
that represent their share in the profits corporations receive
from felonious acts.
settlements are reached, the governments and the corporations
typically launch media blitz campaigns to convince the public
that a huge, punitive fine has been achieved. These press
releases stress the hugeness of the dollar numbers involved,
despite the obvious fact that these sums are plainly mere
fractions of the actual profits gained illegally, and are
insignificant both as deterrent or as just compensation for
the damaged caused.
have become rich by means of their illegal actions and by
their repeatedly entering into settlements that have allowed
them to avoid been convicted of systematically violating the
law. Medtronic and Microsoft are two corporations frequently
named in settlements of this kind, as well as "Big Banks"
such as HSBC, Goldman Sachs and Barclays. Enormous harm has
been done to individuals, communities and to other companies
as a result of the crimes these companies has committed. And
they would have been convicted of committing those crimes,
had not they been allowed to reach settlements. Nonetheless,
these same companies and others are repeatedly offered similar
settlements, allowing them to conceive and pursue further
that routinely violate the law make allowances on their balance
sheets for the contingency of their crimes being discovered.
They budget for the eventuality that their reputations might
require white washing by means of paying a settlement price.
Corporate felonies are simply a moderate risk investment,
as any legal investment a corporation makes might be. Just
as with "legit" investments, these criminal endeavors
are weighed for their costs, risks, opportunities and benefits,
and the threat of a large cash settlement is just another
calculable cost of doing business.
that enter into these settlement are accomplices to crimes,
as they conspire to prevent the criminal corporations from
being dully punished. This default government policy encourages
and promotes the institutionalization of criminal conduct.
that sign on for these settlements go against the tenets of
independent democracy, colluding with corporate entities to
apply unequal and preferential law enforcement for the few
and the powerful. The availability of these settlements hamstrings
judges from honouring their duty to impose the law.
branch runs over Judiciary Power
sign these settlements they are claiming negotiating rights
that don't belong to them.
of judges go well beyond simply applying fines to create the
appearance of justice served. Punishments must match the severity
and impact of the crimes committed. It is the responsibility
of justice systems to ensure that punitive fines outweigh
and deter the corporate monetary gains from illegal, exploitative
acts. Furthermore, it is the job of law enforcement to expose
the scope and impact of criminal acts. These settlement agreements
allow corporations to keep details of their crimes secret,
halting further investigation and encouraging a culture of
criminal activity by keeping the true size of crimes out of
the public eye.
represent a central pillar of democracy, and must be allowed
to impart equally applied justice that honors the scope of
a. to apply the law both in its form and spirit
b. to impose the punishment that society deems necessary,
both to punish and to dissuade
c. to guarantee that those affected by the crimes are fully
d. to defend each citizen and the society as a whole from
the possibility of being affected by the repetition of those
clear that these settlements that suspend legitimate criminal
probes impede the effective application of justice, and thus
threaten one of the very pillars on which democracy rests.
violate Human Rights
these settlements violate human rights and equal protection,
since these state that “all are equal before the law
and are entitled without any discrimination to equal protection
of the law."
of corporations that face repeated investigations for crimes
that end in settlements enjoy the privilege of being immune
from punishment and free to commit crimes. They are allowed
to violate the law, once and again, without even been prosecuted.
This is in stark contrast from the fate of two million individuals
imprisoned in US jails, most of them serving time for crimes
that are insignificant compared with those committed by executives
of large corporations.
these inmates had access to huge cash reserves, connections
to the right attorneys and friendly judges, and a general
juridical predisposition, they could have avoided jail altogether
and could instead be indulging in new and profitable misdeeds.
of a juridical predisposition cannot be overstressed, as in
so many cases corporations inhabit a legal structure which
has been specially designed for them, engineered to allow
great criminals to keep out of reach of the law and to achieve
social recognition from the wealth they have accumulated as
the spoils of their crimes.
modest street-level criminals suffer grave economic damage
as a consequence of being "caught" for their crimes;
typically forced to disclose their "felon" status
when applying for jobs, as well as punished with crippling
fines that amount to several times their personal wealth.
of criminal corporations face a very different fate. Frequently
executives at corporations who settle out of criminal charges
are neither jailed nor are punished in any way, with settlements
instead negotiated to exempt the executives from prosecution
and to enshrine closed records hiding executives' involvement
in the conspiracy.
governments accept in order to bury the corporations' criminal
charges are paid by stockholders, and not by the executives
involved in those crimes.
and stock options system, by which most corporate executive
pay is derived, serves to reward business elite criminals
for growing their corporations' profits through illicit means.
As corporate profits grow, so grow their bonuses, either thanks
to their crimes or, in many cases entirely as a result of
their crimes, since were it not for illegal activities many
corporations would permanently operate at a loss.
allowing corporations to avoid prosecution generate profound
disparities in economic rights. Governments are instrumental
in creating and protecting this discrimination.
impossible for individuals to enjoy similar rights and opportunities
to what these corporations are granted. Individuals are not
able to avoid trial without plea or admittance of guilt, nor
can negotiate for special secrecy and preferential treatment
in the eyes of the law. In this world of special corporate
rights, individuals cannot entirely enjoy democracy, so long
as this unequal Judicial Democracy continues to dominate.
sign settlements agreeing to abandon corporate criminal probes,
they relinquish their obligations to defend their citizens.
These settlements allow criminals to continuously develop
the same and new crimes, posing a threat to society and exposing
regular citizens to entrapment and scams.
These agreements kill justice and create a persistent economic
inequality that exacerbates income disparity, allowing a few
criminals to become immensely rich, collecting profits from
illegal schemes and frauds imposed at the expense of millions
of individuals, who end up poorer as a result of these crimes.
done by Too Big To Jail receive light punishment, if any,
while normal individuals suffer quite a different fate
magnitude of societal damages must be considered in the analysis
of this unholy marriage between government and criminals,
signed with each settlement.
has caused damages to both the health and finances of thousands
of individuals through unfair marketing practices and unsafe
medical equipment, all documented and settled out of court.
has systematically abused its monopolies and near-monopolies
and has imposed illegal "rent-seeking" causing huge
economic damages to countries, corporations and millions of
Goldman Sachs and Barclays, among many banks guilty of widespread
corporate malfeasance, are central parts of the financial
elite that caused the world financial and economic crisis
of the past five years, and have together given fuel to economic
suffering that has caused death, misery, hunger, social unrest
and large destruction of the labor and social fabric almost
corporate executives responsible for these great crimes have
not received the slightest punishment, and have benefited
immensely from them, while petty criminals who are accused
of stealing objects from shops, and similar crimes whose social
impact and cost are comparatively meaningless, have been sentenced
to lengthy jail terms, social scorn, and stigmatization in
the media, even in cases where those accused have never before
been accused of any wrongdoing.
To Jail individuals do not even lose their job
executive officers of these "repeat offender" felonious
corporations and banks typically keep their position and seldom
are fired without massive severance packages. The complicity
is self-evident, between criminal corporations and the criminal
executives who run them, and between the government authorities
who sign on for these settlements that do not even entail
the immediate removal of the actual criminals.
reports show that Bob Diamond, CEO of Barclays Plc (BARC),
was fired with a £2,000,000 severance package, a few
days after his bank paid $453 million USD in an agreement
to halt simultaneous US and UK investigations into the bank's
participation in fixing Libor. This "London Interbank
Offered Rate" is the daily interest rate, fixed by a
group of international leading banks, at which banks can borrow
funds, in marketable size, from other banks in the London
interbank market. The Libor scheme artificially manipulated
these rates, and caused immense damage to millions of individuals
and to a great number of banks, while generating huge profits
for the ten banks that participated in the scheme. Before
widespread public condemnation forced a reduction, Diamond's
severance from Barclays had initially been set at a staggering
Diamond was, in fact, fired, many other famous top executives
have been implicated in huge felony scandals but have continued
their leadership positions. Famous examples are Jamie Dimon,
currently JPMorgan Chase & Co. (JPM) CEO, and Lloyd Blankfein,
Goldman Sachs Group Inc. (GS) CEO, who have stayed on running
their banks even after billion-dollar scandals have been settled.
2010, Goldman Sachs, under the direction of Lloyd Blankfein,
agreed to pay US $550 million to end an investigation by the
US Congress into huge transaction of securities backed by
fraudulent mortgages. These fradulent mortgage-backed securities
were precisely the trigger mechanism of the world financial
crisis that has shaken countries and markets during the last
Dimon's administration at JPMorgan Chase engineered illegal
investments that led to over 7 billion dollars in losses,
and that after a recovery from initially losing a mind-blowing
50 billion dollars of Chase customers' and shareholders' money
due to the scheme. Dimon managed to reduce the reported loss
from $50 billion to $7 billion by means of desperate financial
manoeuvring and probably thanks to what billionaire Warren
Buffet calls “the possibility that bankers have of adding
a few zeros here and there”.
Buffet himself proposed Dimon for appointment as Secretary
of Treasure of the USA, even after the illegal fiscally catastrophic
activities in which Dimon was involved as JPMorgan CEO were
known. Buffet argued that Dimon has the confidence of great
corporations and that he is the most qualified individual
to handle a crisis in financial markets .
that Warren Buffet believes in Dimon does not speak to a lack
of honesty on Buffet's part. Rather it speaks volumes to one
additional damage caused by settlements to dodge justice:
even a man as brilliant, informed, and serious as Warren Buffet
still does not absorb that Dimon is a criminal. The white-washing
effects of these settlements allow even the most guilty individuals
to cloak their criminality with a "legalized" legitimacy.
Buffet lets himself be taken by Dimon's sympathy and cynicism.
This is no surprise, since after observing that the US government
has not acted against him, Buffet assumes Dimon innocence.
He is not alone in making this mistake.
Some experts have asserted that Dimon and Blanksfein held
onto their jobs, and their wealth and reputations, thanks
largely to a $9,000,0000 bonus
paid by the Financial Industry Regulatory Authority, a
private organization of Wall Street top executives, to Mary
Shapiro when she stepped down as Chairman and CEO of FINRA
to accept an appointment by President Obama to head the US
Securities and Exchange Commission. As head of the SEC, Shapiro
is the top authority that oversees Wall Street financial activities
to be done
are a few measures that could help to put an end to settlements
to dodge justice:
must refuse to approve these corporate agreements, and must
direct prosecutors and regulators to not seek such settlements.
When these settlements are proposed, judicial power must be
weighed instead to reopen these cases and move forward with
the due course of justice, until those individuals and corporations
involved are justly penalized.
top executives of these corporations that run into illegal
activities are themselves culpable for these crimes, and they
must be condemned to pay, from their personal wealth, at least
a 50% of each fine and compensation that the corporation must
pay resulting from illegal activities developed under their
executive officer of a corporation involved in illegal activities
must be prosecuted for the crimes they engineered or allowed
to happen under their watch, and must be punished with jail
time when their corporations are found guilty of crimes.
crimes must be investigated to their full extent. There is
no justification for any settlement that allows the government
to not investigate criminal activity. On the contrary, the
public's interest can only be served through investigation,
prosecution and public disclosure of the full extent and peculiarities
whenever a corporation is accused of a new criminal scam.