Corporate cowboys

But when it comes to recidivist corporate offenders such as BP, Massey Energy, AIG or Goldman Sachs there is plenty of tough talk about criminal charges but little action. Rarely is there a serious attempt by governments to hold corporations, corporate executives, and shareholders personally and criminally responsible for the company's crimes. Laws are rarely used or enforced against corporations and/or the responsible executives or directors. No corporation or corporate executive in the US has suffered any serious penalty for the fraud, illegality and corruption that triggered the financial collapse (with the exception of Bernie Maddoff).

The Obama administration has recently dropped charges against the executives of AIG, the insurance corporation the near bankruptcy of which contributed to the global economic collapse, despite allegations that investors and its auditors were misled and financial fraud had occurred. AIG is the British-based insurance company who in September 2008 were saved from bankruptcy by US taxpayer bailouts to the tune of $182.5 billion. Within months of the bailout AIG provoked outrage when it paid $450 million in executive bonuses and spent millions of taxpayer dollars on airlines and entertainment.

Even when corporations are charged and found guilty fines are the usual penalty and these are simply factored in as a cost of doing business and in many cases are tax deductible and reimbursed by the taxpayer. When evidence of corporate wrong doing is proved the authorities regularly negotiate non-prosecution agreements or deferred agreements. When charges are laid successfully they are usually against low level functionaries and, as in the case of the corporate killing by Union Carbide in Bhopal, it takes 25 years before anyone is legally held to account.

In his persuasive book Democracy Incorporated, the distinguished political philosopher Sheldon Wolin argues that most western democracies, which would include the USA, UK and Australia, have become managed democracies and corporate states, where corporate power no longer answers to state or citizen control. Wolin argues that the primary (but often unstated purpose) of government is to advance and protect the economic and political interests of corporations and markets, while claiming that these efforts serve the interests of the whole society.

When corporations can avoid criminal responsibility for their actions, and do so with the active or complicit support of governments, and attempts by civil society, whistleblowers and citizens to use their collective power to hold corporations and governments accountable are criminalised and prosecuted by governments, democracy is nothing but hollow rhetoric.