Mike Benson – White Collar Offenders
Hear from Dr. Danielle McGurrin as she interviews Dr. Michael Benson who explains his experiences and research on white collar crime.
Danielle McGurrin: Hello everyone. I’d like to welcome you to our program today. We have a very special guest, Professor Michael Benson from the University of Cincinnati. He is a full professor and he’s also the Graduate Director for the Master’s Program for Criminology and Justice online. Or is it your Criminal Justice?
Michael Benson: It’s just the Master’s Program in Criminal Justice Online.
Danielle McGurrin: Very good. And I wanted to ask you a few questions related to your scholarship today. Can you tell us a little bit about your professional background and what initially attracted you to studying white collar crime?
Michael Benson: Yeah. Well I did my graduate work at the University of Illinois and I was working for a woman named Rita Simon at that time, who is actually a very famous criminologist. And the way it happened was that a man approached her who was actually a white collar offender who had been caught. I think he was a lawyer and he’d been arrested and convicted of some crime. And he went to prison and he was appalled by the conditions in prison. And he came out and got in touch with Rita Simon and said he wanted to do something to help reform prisons. And Rita thought it would be good for me to talk to him and so I did. And then I started thinking about this issue of what happens to a white collar offender after they’re convicted. What happens to someone who’s a doctor or a lawyer or a corporate executive and has their name splashed in the paper and dragged through the criminal justice system and convicted and sometimes go to prison and sometimes not. And so I decided to write my dissertation on that topic and I went to — luckily my adviser, Rita Simon was a good friend of someone who was a district judge in the Northern District of Illinois, that’s the Federal US district there. And he got me into the probation and parole office and I was able to gather a sample of offenders and interview them. And I just started getting very interested in white collar offenders, in their lives, in their crimes, and what happens to them afterwards and that’s how I got started.
Danielle McGurrin: Very interesting. So that the status and reputation of the white collar offender is an important variable as far as (cross talking)
Michael Benson: It is, it is. I mean white collar offenders are not like these prototypical street offender. They don’t come from a disadvantaged background, they don’t have mental or psychological problems, they don’t have drug abuse problems. They don’t look like traditional criminals. And so that’s always poses an interesting question. Well why did they offend if they don’t seem to have all the characteristics that we usually associate with criminal offenders. And that’s one of the things I got interested in. That’s one of the reasons Edwin Sutherland got interested in it. Coz he’s had you know all of these things that we associate with crime, poverty, pathology, broken homes. These don’t apply to white collar offenders. And so we’ve got to come up with some other explanation. Of course he has this famous differential association theory. But since then other people have taken on this topic and I’ve also come to a conclusion that white collar offenders are not like ordinary street offenders in some regards. And therefore they are worthy object of investigation. Their crimes are important and serious and they’re interesting.
Danielle McGurrin: Well, I have some follow-up questions in a few minutes about your work on opportunity theory that ties in with this area. So I’ll shell that for now because I – actually, yeah, I can do that. You published a book in 2009 with Sally Simpson entitled Crime and Opportunity Perspective. Can you talk about some of these different opportunities that white collar crime offenders have relative to traditional street offenders?
Michael Benson: Okay. Well one of the things that’s important to recognize about white collar crime is first of all it’s fully a crime of specialized access, specialized opportunity. Coz usually these offenses arise out of the offender’s occupational position. That position gives them the access to commit certain types of crimes that other people who don’t hold that position couldn’t commit. For example – there is this very good example, Medicare fraud or health care fraud is a huge crime now worth of billions and billions of dollars committed in many cases by medical professionals. Okay, they are the only ones who can really commit that crime cause you have to be a medical professional to have access to the health care insurance system in such a way that you can defraud it. So that’s when I talk about opportunity.
What I’m talking about is how certain types of occupations and certain types of industries create opportunity structures that people can take advantage of, okay? And health care fraud is one, in other types of industries you get other sorts of opportunities. And the point of the book that Sally and I wrote was to try to think about white collar crime from that perspective. We were focusing less on the question of the offender and why does he do it you know and what are his motives and things like that. And more on the question of well how did they do it? Exactly how do you commit these types of fraud?
Danielle McGurrin: The technique?
Michael Benson: The techniques of the offense, that’s exactly right. For example health care fraud is another one. If you want to defraud health care system how do you go about doing that, you know. What’s the technique they used? There are some very well-known and sadly highly very successful techniques that can be used to defraud health insurers and the Medicare and the medic aid system. And I was interested and Sally too in writing about those, uncovering them, unpacking them so to speak, getting a very good understanding of them because once you figure out how an offense is committed and where and what locations, then you can start thinking ways of changing the opportunity structure to make it more difficult.
Without – what’s interesting here is that you can – the idea is you can actually affect the rate at which an offense is committed without doing anything to the offender. But not actually capturing the offender and punishing him or convicting him but simply by changing the opportunity structure to–
Danielle McGurrin: (cross talking)
Michael Benson: Yes. If you assume that offenders are rational, that they think about what they’re gonna do, they don’t wanna take on necessary risk. If you can somehow make it riskier or harder to do something then you can probably assume that offenders will change their behavior. And that’s what we were trying to write about in that book that’s saying this is in a techniques that’s been used with ordinary street crimes, we’re saying well what will happen if we try to apply white collar perspective.
Danielle McGurrin: Mike, have you and Sally shopped this around the law enforcement community coz it seems like it has a very practical, real world strategy or techniques as you said that you could utilize and help all those law enforcement agencies?
Michael Benson: Well no. We haven’t specifically shot it around. I’ve thought about it but no, I view myself more as a scholar and a writer. I will say this that at the University of Cincinnati I used this book in the online Master’s Program. Many of our students are Criminal Justice professionals. And I also teach an on campus course on white collar crime and many of those students are they are either current criminal justice professionals or they’re planning to go into the field of criminal justice and I’m hoping I’m having an effect that way. That they are picking up a little bit from my book and a little bit that will enable them to go out and address problems in their particular jobs.
One of the things that is important to know about the opportunity perspective is that it’s very crime specific. You cannot talk about the opportunity structure for white collar crime coz there’s too many different kinds of white collar crimes and they each have their own opportunity structures. Consumer fraud is different than health care fraud. That’s different than an antitrust violation, a Securities and Exchange violation, a work place safety violation, all of these different types of offenses have different opportunity structures. What I try to do is just to get people to think about the notion of opportunity structure and then think about their specific offense that they’re interested in and try to identify the most important elements.
Danielle McGurrin: It seems like it would be very useful to so many different organizations like you said in various fields, whether you’re in health care or whether you’re in education or some other fields where organizational managers could use this for their employees with respect to occupational offender.
Michael Benson: Yeah. I think that they do. I mean a lot of organizations are very interested of course in effect – in influencing offending against the organization. Banks go to great lanks to stop embezzlers of course. We – but we need also to think about offenses that are by the corporation directed out into the community. We focus on those too. For example the recent – not so recent now but the Enron scandals and world com and all those accounting frauds, okay, those things are harder to do now because in response to those you know new regulations have come about, new requirements that make it harder for a corporation to engage in that kind of accounting fraud you know. It’s kind of closing the barn door after the horses are out but nevertheless you make it harder and people can’t do that kind of fraud anymore you know. At least you made it more difficult for them to do it.
Danielle McGurrin: Right. And that’s a good leading because you have another book, Corporate Crime Under Attack, Fight Criminal Business Violence with Frank Holman. And I wanted to ask or I guess if – as I’m thinking about this, one of the least understood aspects of white collar crime, at least from the public’s perspective is corporate violence. What types of opportunities to corporate offenders have for committing violence and why is it important to frame our discussion about criminal acts that – criminal acts that cause harm as violence. Why does that matter?
Michael Benson: Well first of all corporations do can impose great physical harm in several different ways. One is through the manufacturer dangerous products that kill or injure or debilitate consumers. The other is through the creation of unsafe working environments. And then last directly but it still sometimes can be considered a form of violence is through various types of environmental crimes, environmental pollutions. Primarily it affects workers that their work place safety violations and environmental violations often merged together. I mean what you got are dangerous chemicals and products that you know pose hazards to the general community but they also pose hazard to workers who work with them. And I think that it is important to recognize that corporations can pose great harms. I mean the leading cause of you know preventable injure – death in America is work place violations. You know if you do something about that you could prevent a lot.
Now, it’s important to recognize that not all workplace death and injuries are the results of criminal acts. Accidents do happen, workers sometimes do things that are contrary to the company policy and that’s not good. But there’s some proportion of them that are due to the negligence of the corporate officers or managers or supervisors in terms of the safety of their workers. And I think it’s important to recognize that that sort of negligence should be treated the same way that we treat negligence by ordinary citizens. If you behave in a negligent way that jeopardized your neighbors, if you drive your car when you’re drunk or something, we see that as a form of criminal negligence. And we think occasionally it’s appropriate to characterize the negligence that corporations engage in that same fashion and try to protect workers. I don’t think that criminal law should be used in place of workplace regulations. I don’t think it should be used very often but it needs to be there for the most rigorous cases.
Danielle McGurrin: Related to that, let’s say you have an occupational safety health violation, the most serious kind of woeful violations that results in a death of an employee. The employer had been sited many times by Ostia, by Compliance Safety Health Officer, didn’t fix the hazard, the employee dies, let’s say this occurs multiple times. The worst that an employer will face is a misty meter offense, 6 months in jail. So I know you are talking tomorrow to an audience about prosecuting white collar crime specifically local prosecutor’s efforts to combat white collar crime. So what advice would you have for the attorneys facing you know limited resources when they have these serious cases of a woeful violation that resulted in the death and in another context that we would say that you know a negligent homicide perhaps? And yet from their perspective, the attorney’s perspective they say oh gee this is a misty meter. Why should I prosecute this?
Michael Benson: Well a couple of things, the situation is act with related to workplace deaths and injuries is complex and it varies by the state. It’s true that at the federal level it’s considered a misty meaner and the maximum penalty is 6 months or something. But many state, states can have laws that are tougher than federal Ostia regulations and state prosecutors can go after people for longer period of time and they have done so. There’s a famous film recovery system’s case in Chicago which was prosecuted by a state prosecutor in county Illinois in which the corporate officers were convicted of manslaughter and were sentenced to a more traditional 3-5 year sort of thing. So what I – what I would tell prosecutors, what I would tell them is that a lot of it depends on the state that they’re in. If you’re in California for example they have a very vigorous work place safety record and operation you know. In fact in Los Angeles county if there is a death at a workplace they got the local prosecutor’s offices team that goes out just like a SWAT team you know to investigate. And they do prosecute people out there and they could get some fairly citation penalties. There are other communities on the other hand where there’s more of a pro-business attitude and there’s less vigorous enforcement. That’s one of the things I’m gonna be talking about in my talk tomorrow on Local Prosecutor’s and Corporate Crime.
One of the points that I wanna make is that how the law is enforced various from community to community. And I really think this is something that people who are in the law enforcement business need to be aware of. They need to think about the fact that the law is not the same everywhere, that if you’re an environmental offender or a workplace safety violator in California it’s one thing. If you’re the same sort of offender in a different type of state you face much lower risks. And I think states need to be aware of that that some some companies will deliberately move into a particular area because of lax regulation. And I think states have to think about whether or not they wanna trade jobs for health you know. And I’m not saying that they necessarily shouldn’t make that trade but really should be aware of that. That’s what you do when you’re trading jobs for health in some of these cases.
So I wanna talk to prosecutors about results of – we did a big study of – national big study of local prosecutors about how constraints vary over space and how prosecution rates vary from one state to the next.
Danielle McGurrin: That makes sense. Good point. Now, if I can switch gears for a moment. I know you’ve written a lot on the Life Course Theory and on Career Criminals. So for career criminals, those that persist to the life course how are recidivist, white collar offenders either different or similar to traditional street career criminals?
Michael Benson: That’s a tough question. It’s tough coz we don’t have a lot of good data on that. What we do know is that if you take a sample of people convicted of white collar crimes in the federal system, you know there are two good datas that’s on this. And you look at their prior backgrounds, what you’ll find is about 40% will have some prior arrest or prior conviction. Which means that 60% of them are as far as the criminal justice system is concerned, first time offenders. Of that 40% most of those only have one prior arrest. Then you got a smaller group that has more than that. Whether or not there are white collar offenders who repeatedly commit white collar crimes and arrested over and over and over again, I personally don’t think that they make up a big proportion of the white collar offending population. And the main reason is that most of white collar crimes require a good occupational position. And once you start having convictions of course it’s harder to get those good occupational positions. Now, that’s not entirely true. There’s sometimes a fraud that you can commit without holding an occupation are some sort of scams, telemarketing scams and things like that.
Danielle McGurrin: The contreprepneurs, the ad vocational criminals?
Michael Benson: Ad vocational criminals, small business criminals maybe. But I really – I don’t really know how well I can address the question in terms of how they compare to career criminals, the traditional career criminal simply because we still don’t have a lot of good data on that subject.
Danielle McGurrin: That makes sense because we don’t have a national data base that collects all the different forms of white collar (cross talking)
Michael Benson: We don’t have a national data base on that. There is some interest in doing that. Another white collar crime scholar, a good friend of mine, Peter Yeager is working with a local congressman in Massachusetts to try to get some hearings in congress to talk about developing something similar to the uniform crime report but for white collar type crimes. We’ll see whether that happens but he’s been talking about it and there’s been some preliminary meetings so to speak.
Danielle McGurrin: Well that would be a welcome addition for white collar crime researchers and a benefit to the community. Just a few more questions, you were talking before about your presentation that you’re gonna give tomorrow. And for those of you that are interested in viewing the talk separately online it’s called Local Prosecutors and the Corporate Crimes, Social Contacts, Constraints, and the Decision to Prosecute. As you talked about your abstract, we know that many white collar law violations are federal in nature which means that you as attorneys are the ones that are ordinarily responsible for addressing these federal white collar crime cases. However, state attorney generals and county DA’s also are involved in prosecuting white collar crimes having an important role to play. You talked specifically about this advent in the 1970’s where local prosecutors started becoming more prominent in their efforts to combat white collar crime. Why the 1970’s, what happened there?
Michael Benson: The national – well as far as I can tell what happened was the National District Attorney’s Association got interested in the problem of consumer fraud? Because it was a prevalent offense, they were getting complaint and the federal prosecutors simply weren’t interested in that. You know the cases were often not large enough to pick their interest. You know there’s only 99 – at that point in time there were something like 98 US District Attorneys. There’s over 3,000 local DA’s you know, and they’re much closer to the ground, they have people to deal with smaller offenses. So the National District Attorney’s Association formed something called an Economic Crime Committee and they invited local prosecutors to come in and talk about what they’re doing. They were prosecuting consumer fraud under fraud, theft by deception statutes and it sort of snowballed. It started forming working groups and what not.
Then after the 1970’s when Ronald Reagan was elected and he started reducing the enforcement budgets for the EPA and Ostia there was you know they were suggesting environmental violations and workplace safety violations were on the rise. And local prosecutors then started expanding their interest in that and it has continued. But there are local prosecutors in many of the larger urban districts that have at least one person, sometimes more devoted to local and environmental crime and the local workplace safety violations.
But I think one of the points that I’m gonna try to make in my talk is that many times when the federal government retrenches, the shifts priorities or there’s a new administration with different priorities and they turn away from things, often times the only person that can step in are the local prosecutors. And now they try to encourage local prosecutors to consider doing that more.
Danielle McGurrin: And that’s perfect coz you were just leading into my question about the economic and political factors, so one obviously being resources. What other sort of political and economic issues, influence, whether local prosecutors get more or less involved in white collar crime?
Michael Benson: Well it’s a difficult question. A lot of course depends on community concerns. I think local prosecutors are sensitive on the community’s outrage about a type of offense. But they also pay attention to the expanse of these types of investigations and prosecutions. They’re very time consuming, they’re difficult to win. You know they got a lot of other cases in the mix, drugs and crimes and gangs and violence. So they have to factor all those things in. But there is room in that mix for some corporate prosecutions if they’re serious enough. And I think local prosecutors have recognized that their responsibility to enforce the law equally. That you can’t let people who steal with a pen and get away with stuff as opposed to people who break into your homes at night. You know they’re both types of theft. We tried to address this in our study, how much are they influenced by local, political, economic conditions. And it’s hard to get good data on that.
On one hand we have prosecutors say that they didn’t really pay attention to the local public issues very much. On the other hand we had some prosecutors that would say well if the local community’s really outraged you know they’ll take a look at the situation. But of course they would then say you know that their final decision would be based on the facts and on what the law is and everything. They wouldn’t just ride off on a crusade against a corporate crime unless they thought – really thought that there was a violation. And one of the difficult things about corporate crimes sometimes is figuring out if there has been a violation coz it’s not clear. The corporate crime is only a dead body in the road you know. They don’t leave broken windows or stolen cars. And so often times the most difficult thing for a prosecutor is to figure out whether there’s actually been a criminal offense. And then they can take the next step and try to figure out who’s responsible for it and what the appropriate response would be.
Another factor that I would have mentioned, influences this decision is the availability of alternative sanctions. Corporate crimes, there’s multiple systems of control. You got the criminal justice system but you also got state regulation, federal regulation. You know if those entities state regulators, federal regulators are already in a case and they’re gonna try to control then sometimes prosecutors will say we’ll watch it out and get involved you know. On the other hand if they fall down as happened in the 1980s, when federal regulators really fell down on the job, the local prosecutors are much more – have much more incentive to step in.
Danielle McGurrin: Right. So the level of regulation or deregulation as it lasted (cross talking)
Michael Benson: Deregulation matters, I think it really does matter. One of the things that happened during the Reagan years was that he cut back on Ostia enforcement and regulation. Most people thought this would have no effect, that most of these regulations were superfalist or just paper work, but then about two or three years after he was in there somebody did a study and they found that the rate of injuries and violations had jumped something like 20% in just 2 years. And that had a huge impact then people had realized these regulations really do make a difference. And that’s when local prosecutors started stepping in coz the federal – you know the federal government had dropped the ball.
Danielle McGurrin: One of the last things that I wanted to have you addressed along these lines are obstacles that the prosecutor’s face. And one thing that stood out my mind, I had an environmental prosecutor come to my class, like white collar crime class this year and he talked about the fact that you were addressing that there are so many different environmental laws that a given state may have. And an attorney may not be well versed in that area of law. And so he acknowledged that he learns on the go, kind of as the case comes and then learns about the statutes. Is that – has that been similar to your research on the studies that you have done on this topic that that’s a struggle that attorneys have?
Michael Benson: Yes, it is. In the studies that we did we did two things. We did a one was a national survey where we just did mail questionnaires to over 400 local district attorneys. But we also went and we talked to District Attorneys in 4 jurisdictions and we talked to them in-depth. And it came across clear – clearly to us that many of these cases because they are unusual, because they don’t happen all the time, that each one is a learning curve. They got to figure out what to do next you know. They’ve got to learn the law and if you take say for example an environmental case well, you got to learn what the law is and then you may have to win some chemistry. You got to learn something about how ground water seeps to be able to talk to experts. That’s in fact one that I think hold prosecutors back sometimes is that in order to successfully gather all the evidence and then build the case you can’t do it with just one in-house investigator. You got to talk to an environmental guy, you got to talk to a ground water guy, you got to get people from a bunch of different agencies who are willing to sit down, work together on one case, you know combine their information and all these other agencies have their own agendas, their own job responsibilities and it’s difficult sometimes to get on the — take time out and come and help you with the local prosecutor. That is the problem.
When we talked to prosecutors in Chicago, Illinois who did the film Recovery Case which I would encourage the audience to go read about the film Recovery Case coz it’s a very important corporate manslaughter investigation and prosecution. Well one of the things that they had to overcome when they’re going to court, the lawyers from the other side would file all these briefs relating to federal regulations which they weren’t used to dealing with. They were used to dealing with local defensive attorneys defending local criminals. But they weren’t used to dealing with these briefs that came from different legal directions. And so it was very difficult for them to learn how to respond to those. They eventually did but now, I remember the guy who prosecuted that case saying to me, he gets calls all the time from local prosecutors and other jurisdictions who were handling similar cases and they wanna say how are you gonna respond to this brief, you know. The defendant had filed something and I’ve never seen one of these before. I don’t know what to do with it.
Danielle McGurrin: Because they’re civil?
Michael Benson: No because – no, they’re criminal defenses but there are different ways of restricting evidence. For example, say a prosecutor wants to get a certain piece of evidence from a corporation records or something and they can say well no, they’re not relevant, you know. And well they file a brief and it goes to a judge and the judge has to think about. These are not sorts of briefs that ordinary criminal defendants file you know. So that was what makes it more difficult because they have to learn on the job. How do I respond to this brief, how do I deal?
Indeed in the book I wrote on Local Prosecutors, one of the things that we recommended was that the government needed to develop a national brief center where there would be these legal briefs would be available to local prosecutors that they could call upon. This is how you respond to this attack of the defense attorney. Then it doesn’t mean that local prosecutors will always win. I mean the issue’s always just on their merits but sometimes big companies can hire in effect legal machines who just grind down prosecutors. In the famous Ford -Penta case you know the only reason that they were even able to bring it to trial was that these all volunteer workers helping them respond to all the briefs that the Ford Motor company brought into the case.
Danielle McGurrin: Well that ties in with my final question for you Mike, the brief database would be certainly something that one could put on a wish list. If you had other items to include on this wish list for combating white collar crime and corporate crime, what would you like to see? What changes need to be implemented in order to more effectively address just both the scope, the prevalence, all these things related to white collar corporate crime?
Michael Benson: Well you know I’m a researcher so my wish list always includes more money for more research. Historically the Federal Government, the National Institute of Justice has not funded a research on white collar corporate crime. There was a brief period of time in the 1980s when they did, since then not very much. I think they’re missing both on that. I wish they would fund more research. My colleague Sally Simpson got a nice grant to study environmental violations but there’s not just enough research money there. And so it makes it hard to come up for suggestions on what to do, to fix, the problem coz we don’t know the problem very well yet because it’s so difficult to do research in this area without you know some sort of federal fundings. So that would be the first thing I would say.
We simply need to study this problem more. We’ve invested enormous amounts of money studying the drug problem for example and one can question whether that money was well spent. If we could spend just a fraction of that on things like environmental violations, workplace safety, who wanna forget the most serious ones but also in our trust violations, health care fraud. Health care fraud is enormous, the amount of money that’s lost to health care fraud. We really need to invest more money there. We need to ramp up enforcement. What we need to – we need to study the problem because there may be ways to as I was saying earlier make it harder for health care professionals to defraud the system even without trying to arrest them and convict them. I’m not talking about raising penalties. That I don’t think that’s necessary. We don’t need to raise the penalties. What we need to do is to figure out ways to detect the crime in the first place coz most health care fraud is not detected you know. It goes under the radar. If you do it well nobody ever knows you did it. But if you could figure out ways to raise the rate of detection then you’ll reduce the offense and you don’t need to raise penalties. You don’t need to punish people harder. You know most white collared grads a year in prison is the same as 50 years in prison to them. They’re scared to death of prison. But what they’re not scared to death of is getting caught coz they don’t think they’re gonna get caught.
Danielle McGurrin: The first principle of deterrents.
Michael Benson: Yeah. And we need to think more about how you raise the detection rate and the risk rate for white collar offenders. You don’t need to raise penalties. Raising penalties is always the first reaction. It’s the easiest thing to do. You just write a new number down on a piece of paper. So five years will make it, 10 years but that doesn’t do anything if nobody gets caught.
Danielle McGurrin: That’s a good point. Mike, I wanna thank you. This is a really interesting interview and I wanna thank you also for coming out to PSU.
Michael Benson: Well, I’m glad to be here. I enjoyed your questions. You think about these issues again.
Danielle McGurrin: And I’d like to thank our viewers for watching this interview with Mike and I. And I hope that those of you that are in town will get to hear my present tomorrow on prosecuting local prosecutors efforts to combat white collared crime and we’re out .