Too big to go to jail: Jennifer Taub’s new book takes aim at white-collar criminals

  • Writer and legal scholar Jennifer Taub, seen here at her home in Northampton, makes a strong case for cracking down on white collar crime in her new book, “Big Dirty Money.” She’s testified before Congress and appeared on MSNBC and CNN on banking issues. STAFF PHOTO/CAROL LOLLIS

  • Writer and legal scholar Jennifer Taub, seen at her home in Northampton, makes a strong case for cracking down on white-collar crime in her new book, “Big Dirty Money.” She has testified before Congress and appeared on MSNBC and CNN on banking issues. STAFF PHOTO/CAROL LOLLIS

  • Letting white collar criminals evade jail time, says Taub, undermines trust in government and furthers the division in the U.S. between the uber-wealthy and everyone else.

  • Protestors gather outside the headquarters of Purdue Pharma, makers of the opioid Oxycontin, in Stamford, Connecticut in August 2018. AP PHOTO

  • Former Wells Fargo CEO John Stumpf testifies before the U.S. Senate in 2016. Stumpf, who resigned from the company following revelations it created millions of unauthorized accounts for unsuspecting customers and then charged them fees, walked away with a $134 million retirement package. AP PHOTO

Staff Writer
Published: 10/27/2020 9:54:40 AM

Tell me if you’ve seen this film before.

Corporate executives, bankers, stockbrokers, and other white-collar types commit fraud, insider trading and bribery. They peddle dangerous and faulty products or endanger the environment. If they’re caught, they and their companies might pay a fine, but it’s usually a manageable fee, and rarely does anyone go to jail.

Left behind are countless damaged or ruined lives: people who lose their homes because of bogus mortgages, their savings because of shady investments, or their loved ones to the abuse of prescription painkillers such as Oxycontin, marketed relentlessly by its manufacturer, Purdue Pharma.

If you feel there are two levels of justice in the country — one for the wealthy, and one for everyone else — you’re not alone, says Jennifer Taub. And in her new book, “Big Dirty Money: The Shocking Injustice and Unseen Cost of White Collar Crime,” the Northampton legal scholar and writer brings a sense of quiet outrage to a subject she believes is causing untold damage to the country.

In her book, published by Viking, Taub offers a blunt assessment of the situation: “Everywhere you look, prominent predators are profiting off countless targets and then striding away with their catch. They might lie low for a brief period while waiting for the predictable public outcry to fade, and then they go out hunting again…. The rest of us are victims, directly or indirectly, even if we’ve never invested in their companies or bought their shoddy products.”

In a crisp, accessible writing style, Taub details some of the more egregious cases of white-collar crime that have made news in the past decade, such as Purdue Pharma (the company has just pleaded guilty to three felonies as part of an $8.3 billion settlement with the U.S. Department of Justice) and Wells Fargo Bank, which had its employees open millions of accounts in the names of unsuspecting “customers”; those accounts were then used to collect overdraft fees and other charges.

Taub, who teaches at Western New England University School of Law and previously taught at the Isenberg School of Management at UMass Amherst, among other schools, cites numerous other cases, such as the securities fraud and insider trading scandals of the 1980s involving figures like Michael Milken and Ivan Boesky, in which white-collar criminals have consistently gotten off easy, either escaping jail or doing relatively little time.

Wells Fargo CEO John Stumpf, she notes, resigned “in shame” following the bank’s 2016 scandal, but his disgrace was softened by a $134 million golden parachute, and no senior executives of the company were charged in the case.

“Why does this keep happening?” Taub said in a recent phone interview. “Why don’t we take a harder position on white-collar crime, and why do we have this collective sense that it’s somehow a victimless crime?”

As just one example, she writes, the companies and people behind drugs such as Oxycontin are “as bad as the drug pusher on the street corner or the kingpins behind the cartel.”

Taub also says that when she took part in a promotional tour for her 2014 book, “Other People’s Houses,” a study of the 2008 financial meltdown and housing crisis, people kept asking her “Why didn’t any of the bankers go to jail?”

In retrospect, she notes, she didn’t have a clear understanding of that herself, “So I began looking into it. The book really began in 2016 when I had a sabbatical, and I used the time to begin my research.”

Personal exposure

Her interest in the subject goes back even further. Taub, a graduate of Harvard Law School who grew up in Michigan, started her law career in business in the 1990s. But then came a bad experience in the late 1990s, when she served as a marketing lawyer for what she calls “a promising start-up company” in Connecticut that then merged with another to form the Cendant Corporation in 1998. Cendant’s stock value quickly collapsed when it was discovered that some senior management figures from the start-up had been deeply involved in accounting fraud. Two of them went to jail.

“That eventually sent me into academia, which I’ve really come to love,” said Taub with a laugh. “I did not want to be a part of (private business) any longer.”

She also enjoys writing, she says, and majored in literature as an undergraduate at Yale and for years kept a journal.

“I really like to express myself in writing. It’s definitely part of my identity,” she said. 

In “Big Dirty Money,” Taub offers a look at how financial and economic crimes have been prosecuted through U.S. history and how legislation has been passed to try and rein in the problem. She notes that a sociologist from Indiana University, Edwin H. Sutherland, first coined the phrase “White Collar Criminal” in 1939, advancing the idea that crime was not, as commonly believed, closely tied to poverty — that it could just as easily be practiced by members of the upper class through financial chicanery. Laud says it’s difficult to pinpoint when white-collar crime became a more serious issue in modern times. 

“There are waves and then crackdowns, and I think we’re in a period right now when (crime) has become a real problem again,” she said. 

Nevertheless, she points to a steady wave of government deregulation, especially in the banking industry, since the 1980s that has helped pave the way for today’s problems.

As she sees it, there are several factors allowing white-collar crime to flourish. For one, there’s no national database on the issue. Prosecutors can also be reluctant to bring criminal charges against specific individuals, she says, because they believe they can be difficult to prove. Prosecutors instead often settle for deals that penalize companies but do not include jail time for their bigwigs.

Taub believes it’s a crucial mistake not to bring charges even if a conviction isn’t guaranteed. The lack of effort in going after the bankers behind the 2008 financial collapse, she writes, showed a lack of courage from the Department of Justice (DOJ) under President Obama. And, she adds, if it’s unrealistic to prosecute every white-collar criminal, “we do need to make an example of those who are the worst offenders.”

The issue has become even worse since Donald Trump became president, she notes. According to one set of statistics she cites, an average of 1,000 defendants faced federal charges for white-collar crimes on a monthly basis in 2011, compared to just 389 in October 2019.

Her book proposes a number of steps for beefing up enforcement, such as creating a special division within the DOJ to prosecute “big money criminals,” as well as establishing a nationwide database for tracking such cases and identifying the miscreants; strengthening laws against shell companies and money laundering; adding protections for whistleblowers; and funding independent journalists to help uncover corporate crime.

Doing nothing will simply encourage more white-collar criminals, leave more people victimized by their actions, and further erode trust in government, she says. And, she notes, the continued accumulation of an outsize proportion of the nation’s wealth by a tiny percentage of the population also breeds a sense among the super-rich that they’re immune to the laws others must observe.

“I don’t think the kind of change I’m talking about can take place overnight,” Taub said. “But we need to begin somewhere … I’d like to think of my book as a blueprint for one way of getting there.”

Steve Pfarrer can be reached at spfarrer@gazettenet.com. More information about Jennifer Taub and her new book can be found at jennifertaub.com.




Daily Hampshire Gazette Office

115 Conz Street
Northampton, MA 01061
413-584-5000

 

Copyright © 2020 by H.S. Gere & Sons, Inc.
Terms & Conditions - Privacy Policy