Politicians and bankers: The political origins of two local banking crises

This paper analyzes the role that political corruption played in banking crises in two states, Rhode Island and Maryland, where, in the 1980s and 1990s, private deposit insurance funds collapsed and state governments were forced to intervene to bail out member institutions. The argument is made that the collapse of these funds was not the result of abstract economic forces but rather was the outcome of structural weaknesses in the two banking systems, weaknesses that ultimately derived from close relationships and overlapping interests among bankers, politicians and regulators. These structural weaknesses are examined and the implications of these two case studies for private deposit insurance and self-regulation among financial institutions are considered. *** DIRECT SUPPORT *** A8806012 00002     

Automated gunshot residue particle search and characterization

The main disadvantage to gunshot residue (GSR) particle analysis utilizing scanning electron microscope/energy dispersive X-ray (SEM/EDX) instrumentation has been the excessive operator time required for search and identification. This study uses an automated particle search and characterization program for unattended GSR search and identification. This system allows for automatic matrix search, particle sizing, chemical typing, and spectral aquisition with subsequent storage of data to disk for later operator review and verification. This work describes various aspects of the program, determines appropriate parameters adequate for both unique and characteristic GSR particle identification, and evaluates the reliability of data obtained. Samples are collected via the tape lift method from test-firings of .38, .32, .25, and .22 caliber handguns at time after firing intervals of 0 to 6 h. Unique GSR particles are consistently and correctly identified by this method on tape lift samples taken up to 4 h after firing. False positive results of unique GSR particles are not encountered on control handblank samples. This technique appears to provide the forensic science community with an operator-free method of reliable GSR particle search and an improved analyst-time-per-case ratio.     

Making the rules and breaking the rules: the political origins of corporate corruption in the new economy

Recent scandals at companies like Enron and WorldCom have pointed to the systemic origins of many corporate frauds. This paper advances the argument that behind those scandals were strategic political actions that changed the regulatory and legal environment in which those firms operated and created criminogenic institutional frameworks that facilitated acts of corporate corruption. Three case studies involving (1) the California energy crisis of the late 1990's, (2) the regulation of energy derivatives, and (3) accounting treatments of stock options, are presented to illustrate how markets and the rules that govern them are the products of political processes and how they can create motivations and opportunities for corporate fraud. The implications these case studies have for the study of corporate crime and corruption are discussed.     

Criminalizing white-collar misconduct

In this article we examine three explanations for the differential treatment of white-collar offenders by the legal system: (1) an organizational advantage argument in which offenders in “organizationally shielded” positions receive more lenient treatment, (2) an alternative sanctions argument in which civil sanctions replace criminal sanctions in the response to white-collar crime, and (3) a system capacity argument in which the legal response to white-collar crime is driven primarily by resources and caseload pressures. These three theoretical arguments are tested through an analysis of data on individuals suspected of having committed serious crimes against savings and loan institutions in the 1980s. We seek to determine the factors that influenced prosecutors to file criminal charges against some of these suspects and not others. We conclude that all three models may be limited in their ability to explain low rates of prosecution in cases involving white-collar crimes of the sort examined here, and suggest that these limitations may have to do with the circumscribed levels of analysis at which these explanations have been pitched.     

In-your-face Watergate: neutralizing government lawbreaking and the war against white-collar crime

Crime, Law and Social Change - Ample official evidence exists that the Trump administration was the most corrupt in modern American history. Donald Trump’s overall pattern of behavior not...     

Reputations and corporate malfeasance: collusive networks in financial statement fraud

The prevailing theory used by economists to explain why more corporations do not engage in fraud focuses on the role of board members, auditors and banks in controlling corporate conduct and the “reputational penalties” that may be imposed on them if they fail to do so. In this view, beyond the formal sanctions imposed by criminal justice and regulatory agencies, these “control agents” are subject to extra-legal consequences for misconduct or failure to perform their duties in which their reputations for honesty and integrity are diminished and thus their value in the marketplace for their services declines. The “reputational penalty” theory has been challenged by recent work that asserts that these entities, far from controlling the behavior of corporate insiders, may form networks of “reputational intermediaries” who collude with corporate executives to give legitimacy to their illegal schemes. In this paper, empirical support for the latter view is provided through an analysis of a sample of 374 publicly traded firms that announced financial restatements between 1997 and 2002 and which were accused of securities fraud. The analysis shows that these schemes involved large numbers of board members, auditors, and bankers who aided and abetted senior managers in their attempts to deceive investors. These findings point to broader issues concerning: (1) the changing nature of corporate power; (2) the strengths of collusive networks; and (3) current policy debates regarding attempts to exert more regulatory control over corporate behavior.