A Marketing Pitch for Corporate Criminal Law

Can you name 10 corporate criminals? Bernie Madoff, Martha Stewart, and Jeff Skilling don’t count – they are individuals, not businesses. How about just five? Three? It’s surprising the task should be so difficult. Corporate crime inflicts upwards of 20 times more economic damage each year than all street crime.[1] Brand-name corporations find themselves on the wrong side of the law for everything from accounting fraud to homicide to narcotics dealing.[2] Yet many people, including most law students and even some law professors, don’t even know that corporate criminal law exists.

In a forthcoming paper,[3] we argue that widespread ignorance about corporate crime and corporate criminals reflects a systemic problem for business law, as well as a missed opportunity. Marketing matters. Whatever truth there is to actions speaking louder than words, the fact is that the words employed in criminal law speak volumes. The language of criminal justice sets priorities, shapes values, repairs social breaches, and creates shared understanding about who and what is important.

Unfortunately, for years there has been virtually no effort to market corporate criminal enforcement. The Department of Justice keeps many criminal resolutions secret – no one other than prosecutors and the corporate criminals know about them. Of criminal resolutions that see the light of day, a large portion never makes it into the public record because prosecutors often conclude their investigations with sterilized agreements akin to civil settlements rather than trial and conviction.[4] Nearly all remaining investigations plead out with no fanfare.[5] Even the sliver of corporate criminal cases that do go to trial rarely enjoy the media attention showered on high-profile prosecutions of individual offenders.[6] Sometimes the DOJ’s Office of Public Affairs issues press releases about corporate prosecutions to its website, but their drab presentation and banner ads are more reminiscent of a mid-90’s weblog than any modern-era publicity effort.[7]

Corporate criminal enforcement needs a marketing makeover. When prosecutors and agencies ignore basic marketing principles, they undermine the deterrent impact of the public, expressive act inherent in corporate criminal enforcement.[8] These failures of communication undermine the most basic moral and preventive aspirations of corporate criminal law. This is an unforced error that some creative thinking and attention to marketing basics could begin to remedy, without even requiring much additional expense. We propose two solutions: one substantive, one methodological.

Substantively, we identify several steps that the government could take now to publicize its efforts more effectively – call it Marketing 101 for corporate criminal law. We frame our discussion around the “marketing mix” – that is, the “4Ps” of product, price, place, and promotion, which have guided decades of marketing theory and practice.[9] For example, with respect to “place,” judges should reassert the power of their courtroom to draw attention to corporate wrongdoing. Recently, a trial court embraced this tactic to dramatic effect when accepting PG&E’s guilty plea for causing California’s deadliest-ever wildfire.[10] The presiding judge required PG&E’s CEO to participate in the plea colloquy by admitting the company’s guilt individually to each of 84 manslaughter charges, during which the court read out each victim’s name.[11] This process brought weight and traction to what too often resembles, at best, a bureaucratic formality, or, at worst, a secretive exchange of nods.

When it comes to “promotion,” until prosecutors are willing to publicly put their moral authority behind their pursuit of corporate criminals, the whole corporate criminal justice system will remain underpriced and undervalued. To be sure, government speech doesn’t necessarily have to be flashy to be effective; sometimes, what matters most is just that the government has decided to speak. Late last fall, Deputy Attorney General Lisa Monaco[12] – followed a few months later by Attorney General Merrick Garland[13] – signaled the federal government’s intentions to pursue corporate wrongdoing more aggressively than the prior administration.[14] These comments made national news and have since been promulgated and amplified by legal and compliance professionals who have a vested interest in keeping their corporate clients apprised of pending risks.[15] We see these as welcome first steps. Our paper argues that the Department of Justice should continue down this pathway, while offering a branching roadmap for how.

Methodologically, we call for more cross-disciplinary dialogue about how to market corporate crime better. Prosecutors need access to marketing expertise, while legal scholars should take advantage of marketing colleagues in business schools. Effective messaging and value projection are core competencies of marketing professionals. That is, of course, why corporations invest so heavily in their own marketing departments. As a proof of concept, the Department of Justice in recent years has benefited by enlisting governance experts. In short order, it hired its first-ever Compliance Council Expert in 2015, promulgated detailed guidelines for evaluating corporate compliance programs in 2020, and continues to bulk up a dedicated team of compliance specialists to assist in fraud investigations.[16] In the same way, DOJ should look to marketing professionals to assist in selling corporate criminal enforcement to an underinformed public.

Now is the time to take the marketing of corporate crime seriously. The first members of GenZ turn 25 this year. They are beginning to discover their purchasing power, choose employers, and decide where to invest. Corporate values matter to GenZ at each juncture.[17] As consumers, “the core of Gen Z is the idea of manifesting individual identity. Consumption [is] a means of self-expression.”[18] As employees, GenZ cares about integrity.[19] They want to work for firms that share their ideological aspirations, even when doing so means taking a lower wage. As investors, every indication is that GenZ will double-down on the millennial-driven movement toward ESG-informed allocations of capital.[20] In a world where corporate values and identity shape every major aspect of corporate operations – from sales, to hiring, to funding – the expressive power of criminal law would be a powerful deterrent, if only corporate enforcers would seize it.

ENDNOTES

[1]     Rodney Huff, Christian Desilets & John Kane, The 2010 National Public Survey on White Collar Crime 12 (2010), http://www.fraudaid.com/library/2010-national-public-survey-on-white-collar-crime.pdf.

[2]     Mihailis E. Diamantis & W. Robert Thomas, But We Haven’t Got Corporate Criminal Law!, 47 J. Corp. L. (forthcoming 2022) (collecting citations), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3940447.

[3]     W. Robert Thomas & Mihailis E. Diamantis, A Marketing Pitch for Corporate Criminal Law, 1 Stetson Bus. L. Rev. (forthcoming 2022),available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4178259.

[4]     See Mihailis E. Diamantis & William S. Laufer, Prosecution and Punishment of Corporate Criminality, 15 Ann. Rev. L. & Soc. Sci. 453, 454, 458-59 (2019).

[5]     Mihailis E. Diamantis & W. Robert Thomas, But We Haven’t Got Corporate Criminal Law!, 47 J. Corp. L. (forthcoming 2022).

[6]     See W. Robert Thomas, Incapacitating Corporate Criminals, 72 Vand. L. Rev. 905, 958 (2019) (discussing prosecutorial incentives).

[7]     See, e.g., Department of Justice, Stericycle Agrees to Pay Over $84 Million in Coordinated Bribery Resolution (Apr. 20, 2022), https://www.justice.gov/opa/pr/stericycle-agrees-pay-over-84-million-coordinated-foreign-bribery-resolution.

[8]     See W. Robert Thomas, The Conventional Problem with Corporate Sentencing (and One Unconventional Solution), 24 New Crim. L. Rev. 397 (2021).

[9]     See Efthymios Constantinides, The Marketing Mix Revisited: Towards the 21st Century Marketing, 22 J. Mktg. Mgmt. 407, 407–09 (2006) (tracing the marketing mix’s historical development); see also Chai Lee Goi, A Review of Marketing Mix: 4Ps or More?, 1 Int’l J. Mktg. Stud. 2, 2–3 (2009) (collecting citations). Scholars recognize that “the traditional ‘marketing mix’ concept and the notion of the ‘4 Ps’ of marketing… may not fully describe modern marketing programs.” Kevin Laner Keller, Strategic Brand Management 194 (3rd ed. 2008) But that’s why this is Marketing 101: the federal government needs to start somewhere.

[10]    See W. Robert Thomas, Corporate Criminal Law Is Too Broad—Worse, It’s Too Narrow, 53 Ariz. St. L. Rev. 199, 232–34 (2021).

[11]    Michael Liedtke, PG&E Confesses to Killing 84 People in 2018 California Fire, Assoc. Press (Jun. 16, 2020), https://apnews.com/article/bill-johnson-fires-us-news-courts-paradise-67810cb4d9b6b90e451415b76215d6c9. While PG&E was a state criminal case, a similar power already exists in the Sentencing Guidelines. U.S.S.G. § 8C2.5 cmt. 15. See generally Jayne W. Barnard, Reintegrative Shaming in Corporate Sentencing, 72 S. Cal. L. Rev. 959 (1998).

[12]    Deputy Attorney General Lisa O. Monaco Gives Keynote Address at ABA’s 36th National Institute on White Collar Crime Oct. 28, 2021, https://www.justice.gov/opa/speech/deputy-attorney-general-lisa-o-monaco-gives-keynote-address-abas-36th-national-institute.

[13]    Attorney General Merrick B. Garland Delivers Remarks to the ABA Institute on White Collar Crime, Mar. 3, 2022, https://www.justice.gov/opa/speech/attorney-general-merrick-b-garland-delivers-remarks-aba-institute-white-collar-crime.

[14]    Brandon L. Garrett, Declining Corporate Prosecutions, 57 Am. Crim. L. Rev. 109, 144-28 (2020) (cataloguing a steep decline in enforcement during the Trump Administration).

[15]    E.g., Stephanie Yonekura & Rupinder Garcha, DOJ Enforcement in 2020: What the Monaco Memo and US Anticorruption Strategy Forecast for the Year Ahead, Corp. Compliance Insights (Jan. 20, 2022), https://www.corporatecomplianceinsights.com/doj-enforcement-2022-monaco-memo-anti-corruption/.

[16]    Stephen Dockery, U.S. Compliance Expert Carrying Out New Type of Investigation, Wall St. J., May 23, 2016, https://www.wsj.com/articles/BL-252B-10325?mod=article_inline; U.S. Dep’t of Justice, Evaluation of Corporate Compliance Programs (updated 2020), available at https://www.justice.gov/criminal-fraud/page/file/937501/download; Dylan Tokar, Revamped DOJ Compliance Unit Takes On Greater Role in Corporate Settlements, Wall St. J., June 22, 2022, https://www.wsj.com/articles/revamped-doj-compliance-unit-takes-on-greater-role-in-corporate-settlements-11655940214

[17]    See Sergio Alberto Gramitto Ricci & Christina M. Sautter, The Wireless Investors Movement, U. Chi. Bus. L. Rev. Blog (Jan. 28, 2022), https://businesslawreview.uchicago.edu/2022/01/28/the-wireless-investors-movement%ef%bf%bc/.

[18]    Tracy Francis & Fernanda Hoefel, McKinsey & Company, ‘True Gen’: Generation Z and its Implications for Companies (Nov. 12, 2018), https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/true-gen-generation-z-and-its-implications-for-companies.

[19]    Ashley Stahl, How Gen-Z is Bringing a Fresh Perspective to the World of Work, Forbes (May 4, 2021), https://www.forbes.com/sites/ashleystahl/2021/05/04/how-gen-z-is-bringing-a-fresh-perspective-to-the-world-of-work/.

[20]    Bloomberg, Majority of Generation Z Investors Identify Green and Sustainable Investing as the Biggest Trend of 2021, https://www.bloomberg.com/company/press/majority-of-generation-z-investors-identify-green-and-sustainable-investing-as-the-biggest-trend-of-2021/ (Feb. 3, 2021); David Webber et al., Shareholder Value(s): Index Fund ESG Activism and the New Millennial Corporate Governance, 93 S. Cal. L. Rev. 1243, 1250 (2020).

This post comes to us from professors W. Robert Thomas at the University of Michigan’s Ross School of Business and Mihailis Diamantis, at the University of Iowa College of Law. It is based on their recent article, “A Marketing Pitch for Corporate Criminal Law,” available here.

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