THE BLOG
05/11/2010 11:11 am ET Updated May 25, 2011

How to Get Away With Murder: Guidant and Corporate Criminal Justice

Millions of citizens were up in arms this January when the Supreme Court bestowed on corporations the rights of speech guaranteed to individuals by the first amendment. Around the same time, the Justice Department announced its so-called "get tough" approach to corporate crime. Hypothetically, corporations would be allowed to finance political candidates just like individuals, but would be subject to similar punishments for lawbreaking. And if you believe that, the government has a bridge to sell you (or at least a road).

The contradiction between corporate rights and responsibilities was recently made clear in the case of The United States of America versus the Guidant Corporation. The New York Times reported that the Guidant Corporation sold potentially flawed heart defibrillators. When the company sold the defibrillators it chose not to alert doctors and patients that some of its defibrillators had a defect that might cause them to fail when needed to interrupt an erratic and possibly fatal heart rhythm. At least six people whose survival depended upon the defibrillators sold by Guidant are now dead because of those known defects.

In their charging instrument, federal prosecutors accused Guidant of knowingly selling the potentially flawed defibrillators. The prosecutors decided to bring criminal charges against Guidant the corporation instead of the living, breathing executives who knowingly authorized the decision. Since Guidant is a legal entity and can't be sent to prison like the 2.3 million citizens currently incarcerated, the government negotiated with Guidant's lawyers and manufactured an agreement they deem fair.

In the case of Guidant, the lawyers for both sides agreed that a fine of $296 million would be fair. Although that sounds like a lot of money, it's important to put it in perspective: the fine represents about 1 percent of the $25 billion Boston Scientific paid to acquire Guidant in 2006 -- after the Justice Department began its investigation. To give you a better sense of perspective, try this: in the 2006 quarter in which Guidant was purchased, Boston Scientific lost four billion dollars merely because of stockholder irritation with the Guidant purchase. More recently, Boston Scientific paid Johnson & Johnson almost two billion dollars to resolve patent infringement charges.

So, say that as a person you're making eight billion dollars a year (Boston Scientific's latest annual income). You purchase a $25 billion company, knowing that you would be responsible for several murders committed by that company. The government charges you with the crime, and decides that the adequate punishment is a fine of $296 million. You tack that on to your $25 billion tab, call it a bad day, and move on to your next $8 billion year. Nobody goes to prison, and the executives responsible for the murders are now on your much larger payroll, insulated from backlash against their smaller company. Everybody wins.

Unfortunately for the government and corporate lawyers who testified that the 1 percent fine was fair, the Guidant case went before Judge Donovan W. Frank of the United States District Court in Minnesota. Judge Frank rejected the 1-percent fine, saying the provisions of the agreement were "not in the best interests of justice and do not serve the public's interest because they do not adequately address Guidant's history and the criminal conduct at issue."

I was eager to find out what Judge Frank felt justice should entail for the multi-billion dollar corporation. I suspected the judge would call for a truly tough sentence, at least a sentence as harsh as those that thousands of non-violent drug offenders serve. I looked forward to meeting the Guidant Corporation (or its parent) when it hobbled in chains into federal prison. Although I've co-existed with all kinds of human beings over the decades I've served -- prisoners of every security level -- I've yet to meet a $25 billion corporation.

But it was not to be. Justice in America only imposes long, implacable prison terms on people -- not corporations. For Guidant, Judge Frank called for a sanction that would include probation. He wanted to see Guidant make contributions to society, restore public confidence, and make charitable donations, as well as pay a fine.

There's nothing wrong with allowing defendants to make amends, to work toward earning freedom. In fact, I'm very much in favor of it. But equal justice for all would extend those same opportunities to ordinary human beings -- not just multi-billion dollar corporate conglomerates.