Reich: Why BP Isn’t a Criminal

Holding corporations criminally liable reinforces the same fallacy that gave us Citizen’s United v. the Federal Election Commission, in which five justices decided corporations are people under the First Amendment and therefore can spend unlimited amounts on an election. Even if 49 percent of their shareholders are foreign citizens, corporations now have a constitutional right to affect the outcome of American elections...

Punishing corporations as a whole almost always ends up harming innocent people – especially employees who lose their jobs because the corporation has to trim costs, and retirees whose savings shrink because their shares in the corporation lose value.

Remember the accounting firm Arthur Andersen, convicted in 2002 of obstruction of justice when certain partners destroyed records of the auditing work they did for Enron as the energy giant was imploding? After the firm was convicted, its clients abandoned it and the firm went under. The vast majority of its employees had nothing to do with Enron but lost their jobs anyway. Yet the real perpetrators came out fine. Anderson’s CEO moved to a lucrative job in a private-equity firm, and other senior partners formed a new accounting firm...

The [Justice] Department’s $4 billion criminal settlement with BP isn’t big enough to affect the oil giant anyway. BP’s market capitalization is $128 billion. Yesterday, BP’s stock price closed at $40.30 a share, up 0.35 percent from the day before the settlement was announced.

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