Phil Cannella stands for truth in his business and personal dealings, and as such finds himself personally offended when large corporations defraud, fleece and otherwise commit wrongdoings against American consumers. Recently, he found a like-minded colleague in Professor Brandon Garrett of the University of Viriginia, who authored Too Big To Fail: How Prosecutors Compromise With Corporations.
Professor Garrett spent years researching the lenient manners in which these cases are often settled, with many guilty companies paying small or no fines, and avoiding legal sanctions entirely—to say nothing of jail time. Phil Cannella asked Professor Garrett what motivated him to pursue this line of research.
“There was no information out there on how corporations are prosecuted,” Garrett shared. “There’s no corporate offender registry, the federal government wasn’t keeping information on the biggest and most serious prosecutions. So I started tracking those deals, and decided that people needed to know these things.”
Phil Cannella presented General Motors as a prime example of corporations fleecing bondholders and American taxpayers with minimal—if any—consequences. Garrett admitted that while this was bothersome, the problem goes even deeper.
“It’s not just fleecing people—General Motors, for example, is under investigation for defective autos,” said Garrett. “People can die in corporate crimes, like the BP/Gulf explosion. Corporate crimes can involve environmental crimes, workplace, bribery and corruption—not to mention economic fraud that can affect the markets.”
In response to Phil Cannella’s suggestion that many of these problems can be traced all the way back to Congress, Garrett agreed and offered the thought that in some ways, everything does. “Congress has passed some tough [laws on] federal crimes, but the problem is that prosecutors and government agencies don’t have the resources to bring these cases. These big Wall Street banks, they’ll hire an entire law firm to defend themselves against a potential criminal case.”
Garrett’s honest, revealing answers were nonetheless frustrating to Phil Cannella, who cited the source of the problem. “For example, we have a system that catches these investment banks red-handed laundering money, fleecing investors—and no one goes to jail? Isn’t there something wrong with some of these federal government agencies that regulate?” asked Cannella.
“The SEC goes to Congress every year to request more money for enforcement,” said Professor Garrett. “They’re the experts—they’re the ones who should be investigating and uncovering financial misconduct. Prosecutors aren’t going to bring cases unless an agency like the SEC—an expert—notices the problem first.”
The most troubling issue to Garrett, however, were the cases where everyone agreed that a crime was committed—yet corporations were still allowed off the hook. “I talk about the rise of these deferred, non-prosecution agreements,” he said. “Usually these are the public, most prominent companies.”
Joann Small, co-host of The Crash Proof Retirement Show, asked Garrett about the involvement of politicians in corporate crime and legislation. “Senators on both sides of the aisle (Democrat and Republican) are interested in legislation to make these settlements more transparent,” answered Garrett.
If you’re interested in learning more about Brandon Garrett and Too Big To Jail, visit www.brandongarrett.com