Corporate Crime Reporter writes today: “General Motors will pay $900 million, enter into a deferred prosecution agreement and accept a monitor for three years as part of a settlement of allegations that it failed to disclosed a faulty engine switch in GM automobiles that resulted in 124 deaths. …

“Consumer advocate Ralph Nader said that ‘letting off General Motors — this homicidal fugitive from justice — once again desecrates the memory of over 100 victims and counting of General Motors criminality.'”

RENA STEINZOR, rstein at law.umaryland.edu

Steinzor, a professor of law at the University of Maryland, is author of Why Not Jail? Industrial Catastrophes, Corporate Malfeasance, and Government Inaction. She said today: “So much for the Justice Department’s new strong policy on individual prosecution,” referring to recent claims from the administration that that it would finally get serious about corporate crime, see “Will the DOJ Finally Go After Corporate Criminals?”



Steinzor continued: “This settlement is shamefully weak. A GM engineer knew about the fatal defect even before the first car rolled off the line. He secretly changed the part in 2005 but left hundreds of thousands of cars on the road with the bad switch. GM lawyers conspired to delay the recall. Much harsher penalties and individual prosecutions are warranted. The deferred prosecution is a toothless way of approaching a very serious problem.”

At a news conference this afternoon, U.S. Attorney for the Southern District of New York Preet Bharara defended the fact that no individuals would be going to jail: “We apply the laws as we find them, not as we wish they were.” He argued that his hands were tied as a result of “complex structures” in corporations that silo information and reporting responsibilities.

Steinzor responded: “All of these claims are contradicted by their own creative and aggressive behavior in other cases. So, for example, they did a RICO/second degree murder indictment against the compounding pharmacy in Massachusetts that shipped fungal meningitis tainted steroid injections. The government can use the wire fraud statute.

“The government indicted individuals associated with a very SMALL company, the Peanut Corp. of America that shipped peanut paste contaminated by salmonella. The DOJ tried the case and got felony convictions. The independent sentencing authority has recommended life for [executive] Stewart Parnell. Sentencing is on Sept. 21. The case had no ‘specific’ statute at stake — like the TREAD Act [Transportation Recall Enhancement, Accountability and Documentation], the FDA Act imposes inadequate penalties for shipping adulterated food.” See Steinzor’s paper “(Still) ‘Unsafe at Any Speed’: Why Not Jail for Auto Executives?” — summarized here.

CLARENCE DITLOW, cmdiii at autosafety.org

Executive director of the Center for Auto Safety, Ditlow said today: “GM killed over 100 people by knowingly putting a defective ignition switch into over one million vehicles. Yet no one from GM went to jail or was even charged with criminal homicide. This shows a weakness in the law not a weakness in the facts. GM killed innocent consumers. GM has paid millions of dollars to its lobbyists to keep criminal penalties out of the Vehicle Safety Act since 1966. Today thanks to its lobbyists, GM officials walk off scot free while its customers are six feet under.”