Saturday, June 16, 2018
Jailing A Corporate Person
written 9 June 2018
published 16 June 2018
Corporate personhood is an insane fiction of our times.
Wells Fargo is in the news again, with the potential of a $1B administrative judgment by the Consumer Financial Protection Bureau (CPFB), the third action in three years. In 2016 Wells Fargo was found to have created 3.5 million accounts without their customers knowledge. The CPFB judgment was a fine of $185M, which amounts to $53 for each bogus account. Evidence shows that Wells Fargo was not deterred from committing further illegal actions. When there are no real consequences to illegal behavior, there is loss of moral standard.
A real person convicted of a crime in a judicial court can be jailed, sometimes for life. Depending on circumstances, a negligent action can result in a court judgment to repay damages, provide compensation for pain and suffering, and restitution for any permanent economic loss. If found guilty of intent to commit the crime, punitive damages may also be awarded.
A jailed person has no further employment income. If they are unable to pay their bills, the holder of a secured loan can foreclose, forcing the sale of the asset to retire the loan. The remainder of the defendant's assets, including bank accounts and securities, are liquidated to pay any judgments, so unsecured loans can be a complete loss to the lender. Employees of the defendant lose their jobs.
If corporations expect the benefits of being a person, shouldn't they be held responsible for their actions as a person? In this example, it would start with a motion for a temporary restraining order to revoke the Corporate Charter of Wells Fargo, and initiate judicial proceedings. The CFPB showed Wells Fargo created 3.5 million accounts, accruing fees without their customers knowledge, which constitutes fraud. If judged guilty in a court of law, the Charter could be revoked, preventing Wells Fargo from doing further business, similar to going to jail for a period of time. A judicial sentence of one day of jail time per fraudulent account would be more than 9,500 years.
A judgement of $1000 per fraud, for economic damages, and pain and suffering due to a loss in customer credit rating, would total $3.5B. Since fraud is by definition an intentional act, punitive damages may be awarded. This fraud was one of several, so the bank is a repeat offender, showing no remorse. A factor of 100 times real damages is reasonable as a deterrent and an example to the larger industry, for an additional judgement of $350B.
Wikipedia lists Wells equity value at $207B. After secured assets were sold to satisfy mortgage holders, the rest of the equity would go toward covering the judgment. Stockholders, holding unsecured loans, would lose everything. Wells Fargo's employees (more than 250,000 real people) would be laid off. All bank accounts, which belong to the accountholders, would have to be transferred to another bank.
In the Wells Fargo case, no one died, but many people die as a result of corporate activities. I have seen a bumper sticker reading "I will believe corporations are people when Texas executes one". In the 70s, researchers for Exxon-Mobile, headquartered in Texas, discovered that continued burning of their product would raise global temperatures, putting humanity at risk. To protect their business, Exxon chose to bury the research and fund climate denial, making them accessory to deaths due to climate change. Such calculated mass murder by a real person could get them executed.
Since corporations, like zombies, aren't actually alive, killing one is problematic. A quick Internet search shows zombies can be killed by destroying their brains. The brain of a corporation could be described as the Board of Directors and Operating Officers. They would be judged for their part in the corporate person, not because of any culpability as individuals. Execute them and the corporation is dead. Execute even one corporation, and business ethics would immediately improve.
Real people don't have limited liability for their actions, why should corporate people? Even the threat of taking legal action against a corporation as a person would reveal that corporations are "fake" people, unwilling to be as responsible as real people, and end the insanity of corporate personhood "rights".