Walter Rhett: Are Government Fines a Firewall?

[DemocratsForProgress]

Who thinks fines work? Large fines, in the millions and billions of dollars, do they really change the corporate culture of open corruption, criminal behavior, the rule-breaking practices, the willingness to cheat that they are supposed to punish and deter? Or are they the cost of doing business for many businesses, especially large, multi-national corporations, whose continued violations damage US security and policy and are a major theft of taxpayers’ money?

In May 2011, the Department of State levied its largest civil penalty ever, $79 million, against a subsidiary of a British firm, BAE Systems, for illegal arms trafficking, after the firm was convicted of conspiracy to violate two international laws an estimated 2,591 times. 2,600 arms deals with Saudi Arabia, Hungry, Tanzania and Sweden, among other countries, were a part of the violations. The State Department settlement was the civil case. BAE Systems paid a $400 million criminal fine.

The Department of State’s Office of Defense Trade Controls addresses civil violations of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR), the two acts most frequently violated.

After it was all over, BAE Systems issued a statement thanking the State Department for its help in bringing the company’s inventory, record keeping, and sales program into international compliance. Of course, it has “initiated the appropriate steps.” BAE System is one of the Defense Department’s Top 10 contractors...

More at: http://www.democratsforprogress.com/2012/07/04/digging-deeper-are-government-fines-a-firewall/