White Collar Crime and Punishment:

In the last two decades of last century Philips Environmental was a high flying public company listed on Toronto Stock Exchange. It was in the business of disposing garbage. It made money by separating marketable items, especially metals from what it collected. The stock price fluctuated based on the price of metals in a short time frame but the general trend was upwards and investors were rubbing their hands in glee. However, the bottom fell outwithout any warning in 1998 when it was discovered that the management was siphoning off company funds for their personal use on a massive scale. The company declared bankruptcy in 1999 and gullible fools like me lost all their investment in the company.

Two top executives of the company were prosecuted. Twelve years later, on October 24, 2011 one of them was sentenced to a long jail term and fined several million dollars. However, the punishment was suspended pending appeal to a higher court. It is anyone’s guess how many years it will be before The High Court and then the Supreme Court have had their say. The possibility that the accused would still be alive then is not very high. This case is an example of many other similar cases. The case of Livent CEO Garth Drabinski was in the courts for thirteen years and it is still waiting for an appeal to be heard by the Supreme Court although Mr. Drabinski is now in jail.

Compare these cases to those of the media mogul Conrad Black and billionaire hedge fund operator Raj Rajaratnam south of the border. Within a couple of years of the crime being discovered the cases were heard, appeals dealt with, sentences passed and guilty put behind bars. The justice was done and seen to be done. For a severe punishment to be deterrence, it has to be prompt. Canadian laxity where it takes several years for a case to be brought to court, another few years for the judge to hear it, and after all that the culprits are almost certain to spend their days out on appeal unless they are blessed with exceptionally long lives. And here is the rub. Even when they are in jail, they have almost all the comforts of their home including television, computers with internet connections and email privileges. If this pampering was not enough, the sentence is generally reduced to as little as one sixth of the original as a reward for ‘good behaviour’ whatever that means. Given a system like this, one wonders why white collar crimes are not present everywhere. I suspect that they are much more prevalent than we naively think; just that the regulatory bodies are not interested in uncovering them and it is only by accident that the most blatant ones come to light and are reported in the media.

Another example of white collar crime which no one cares to investigate and report is in the city halls, particularly in planning and development departments. One small example: mansions have been and are being built in my till recently upscale neighbourhood in Calgary which violate all building codes of the city, leave alone looking like a London (England) W.C. from the street. I do not believe for one moment that the officers in the city hall who approved the structural plans were not motivated by some extraneous considerations. Corruption in construction industry is not limited to Quebec and not to blue collar workers alone; it takes two to tango. Moreover, municipal corruption is a world wide phenomenon; there is no reason for Canadian cities to be immune from it.

Thought of the Week:

Does Sarah Palin’s withdrawal from the race for Republican nomination together with the drop in support of Perry-Bachman duo show that an iota of sense is returning to the Republicans and the pendulum is swinging against the Tea Party extremists? Or I am dreaming in Technicolor.