Puzzles of criminal justice

by Andrew Gelman on December 13, 2012 · 9 comments

in Judicial,Law

Four recent news stories about crime and punishment made me realize, yet again, how little I understand all this.

1. “HSBC to Pay $1.92 Billion to Settle Charges of Money Laundering”:

State and federal authorities decided against indicting HSBC in a money-laundering case over concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system. Instead, HSBC announced on Tuesday that it had agreed to a record $1.92 billion settlement with authorities. . . .

I don’t understand this idea of punishing the institution. I have the same problem when the NCAA punishes a college football program. These are individual people breaking the law (or the rules), right? So why not punish them directly? Giving 40 lashes to a bunch of HSBC executives and garnisheeing their salaries for life, say, that wouldn’t destabilize the global financial system would it? From the article: “A money-laundering indictment, or a guilty plea over such charges, would essentially be a death sentence for the bank. Such actions could cut off the bank from certain investors like pension funds and ultimately cost it its charter to operate in the United States, officials said.” But why not punish the individuals themselves (as well has having the bank itself make restitution)?

2. “For Lesser Crimes, Rethinking Life Behind Bars”. Fifteen years ago, Stephanie George was caught with a pound of cocaine in her attic:

“Even though you have been involved in drugs and drug dealing,” Judge Vinson told Ms. George, “your role has basically been as a girlfriend and bag holder and money holder but not actively involved in the drug dealing, so certainly in my judgment it does not warrant a life sentence.”

Yet the judge had no other option on that morning 15 years ago. As her stunned family watched, Ms. George, then 27, who had never been accused of violence, was led from the courtroom to serve a sentence of life without parole.

Life in prison for a nonviolent offender? That indeed sounds inappropriate (especially given that the HSBC executives don’t seem to be getting similar treatment for allegedly laundering money from illegal drug sales). The article continues:

Her sentence reflected a revolution in public policy, often called mass incarceration, that appears increasingly dubious to both conservative and liberal social scientists. They point to evidence that mass incarceration is no longer a cost-effective way to make streets safer, and may even be promoting crime instead of suppressing it.

Here’s my question. Was there ever a time when conservative or liberal social scientists thought it was a good idea to put someone away for life, just for dealing drugs? I would think that even fifteen years ago people wouldn’t have thought this was “a cost-effective way to make streets safer.” Again, I feel like I’m missing part of the story here.

3. “Tracing a Victim’s Path in Life to a Brazen Killing in Midtown”:

[Murder victim] Woodard, 31, was the scion of a successful family in California. His life had been a blend of achievement and puzzling setbacks that included at least 20 arrests, mostly in California, the police said. . . . He drove a Range Rover in college at Loyola Marymount University, but, as one friend said, “his personality was his bling.” This month, he had his eye on a Mercedes-Benz CL63 AMG that he hoped to buy, a cousin said. . . . In 2009, for example, Mr. Woodard was arrested on robbery charges in Hermosa Beach, a Los Angeles suburb, after he struggled with a supermarket guard who tried to stop him from stealing several bottles of wine. The police said he fled in a car, hit two other cars, abandoned his car, hailed a cab and fled. . . . He had a court date in Los Angeles in January on a charge of cocaine possession.

Also this sad bit:

Mr. Woodard’s father, J. Lincoln Woodard, 72, a retired lawyer, said that he and his son’s mother had divorced in 1982 and that he had not seen or spoken with his son since the late 1990s.

So far, this is unsurprising (at least, based on my general TV and newspaper-driven impressions of street crime). But here’s the strange part: the victim was, according to the article, a law student. I thought the way it worked was that you go to law school, you get rich, then you buy the fancy cars, do cocaine, and get into trouble. Or, conversely, you get into all sorts of trouble with drugs, you go to jail, then in prison you see the light, you work hard, go to law school, and get a second chance in life. But this guy seemed to have been on both tracks at once: fancy cars, drugs, arrests, and law school, all at the same time. Bizarre.

4. “Fishmonger Held in Attack Against Rabbi”: there’s a 100-year-old headline for you. “Everytime I go back to Brownsville it is as if I had never been away.”

{ 9 comments }

JeffD December 13, 2012 at 1:15 pm

Hi Andrew,

re HSBC: I think that there needs to be a recognition of the degree to which the distribution of decision making in a corporate environment makes individual acts of lawbreaking much easier. Probably no one individual at HSBC decided “Hey, let’s launder some drug money,” but rather there was a collective decision on the part of dozens of individuals, each contributing to some small part. There also needs to be a recognition that corporate culture plays an important part in enabling this kind of wrongdoing and in that sense the corporation as a whole bears responsibility.

The HSBC settlement – as well as the overall approach to corporate malfeasance seen over the past thirty years – sets a fairly troubling precedent. 2bn is a slap on the wrist; it’s a blip on a single quarter earning sheet. Apparently HSBC’s systematic important renders it immune to prosecution; if that’s the case why the hell shouldn’t the corporation begin relentlessly breaking the law, so long as it’s profitable. The incentives that this settlement creates are all sorts of awful.

Scott Monje December 13, 2012 at 5:51 pm

“. . . but rather there was a collective decision on the part of dozens of individuals, each contributing to some small part.”

And if those were passive decisions–decisions not to look into something suspicious that should have been looked into–then it might be especially difficult to determine who didn’t do it, or who of the various people who didn’t do it is most responsible.

Andrew Straticzuk December 16, 2012 at 2:37 pm

“I think that there needs to be a recognition of the degree to which the distribution of decision making in a corporate environment makes individual acts of lawbreaking much easier”
do you mean that there needs to be a recognition of the degree to which distribution of decision making in a corporate environment makes individual acts of law breaking much harder to establish?

Joe Grimm December 13, 2012 at 1:46 pm

Continuing on HSBC and other collective punishments. I think part of the philosophy is that institutions follow incentives. If pervasive lawbreaking improves profits then a “good” CEO will create a structure where pervasive lawbreaking is easy. If cheating in football leads to better outcomes then a “good” coach will avoid creating oversight. The punishment is supposed to make the Shareholders or Fans seek out leadership that will enforce laws. I think of it as similar to why illegally obtained evidence is barred from trials, rather than punishing the officers who collected it.

That said I agree that in practice the institutional punishment is too weak and I don’t see why we can’t have both individual and institutional punishment. My assumption is that JeffD is correct that identifying and prosecuting those responsible would be difficult. I think there is also a cultural problem in the SEC. I recall an NY Times article in which a prosecutor justified letting an executive pay a fine on the grounds that convicting him of fraud would bar him from work for life. In contrast, the NCAA punishes individual players as well.

Mark December 13, 2012 at 2:26 pm

“For Lesser Crimes, Rethinking Life Behind Bars”.
It is time to relook at these policies but there is a rationale behind their origins. There were two things that came together. First the crime increase from the 60s to the 80s along with a reaction to light sentencing, easy parole and high rates of recidivism. In 1970s California a life sentence for murder meant you were eligible for parole after 7 years. Second, perceived inequities and inconsistencies in sentencing led to the Federal sentencing guidelines (supported by both liberals and conservatives) which severely restricted the leeway judges have in tailoring a sentence to the circumstances of the individual, not just the crime. So there actually were some good policy reasons and there were some good results but like most policies after 25 years it definitely needs some revision. Certainly based on the excerpt above it appears to have led to the wrong result in this case.

RobC December 13, 2012 at 3:34 pm

Should we also be criminally punishing candidates whose campaigns break the law, rather than simply fining the campaigns?

Andrew Gelman December 13, 2012 at 7:52 pm

Rob:

If it was up to me, yes, for the same reasons as discussed above.

Mark December 13, 2012 at 8:50 pm

“HSBC to Pay $1.92 Billion to Settle Charges of Money Laundering”:
Several issues are packed into your comment.
First is that there is a distinction between conduct triggering civil v criminal liability.
In these circumstances it can be difficult to prove individual criminal liability in the absence of proof of direct personal knowledge of illegality or of willful avoidance of facts which would have alerted that person to illegality. Prosecutors need to weigh this in deciding what type of charges to bring (and according to the linked article the SEC was not involved).
Criminal charges can often be proved more easily against a company than individual employees.
A separate issue is the decision not to criminally charge HSBC because it is “too big to fail”. It is a difficult issue since HSBC, while having a US presence is based outside the US, and thus even different US policy would not cure the risk. Nonetheless it highlights the need to break up the largest banks in US jurisdiction to avoid this type of result. Too bad that neither party will do so and even worse that Dodd-Frank enshrined “too big to fail” (despite claims to the contrary) and even gave the largest banks an extra competitive edge against smaller banks.

Andrew Straticzuk December 16, 2012 at 3:07 pm

The problem is that it is absurd to hold a corporation criminally liable because it is impossible to levy criminal punishment on a corporation. You can’t put a corporation in jail. So much the worse for the SCOTUS’s ruling in effect conferring first amendment rights to corporations on the grounds that they can be considered to be persons for legal purposes.
As a practical matter I agree that both civil fines should be levied against the corporation and a studious effort must be made to ferret out the persons who can be said to be the principal enablers of the crime and prosecute them.

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