Wednesday, September 14, 2022

In order to effectively deter organizational misconduct, countries must hold companies liable for their organizational misconduct. Some scholars argue, however, that countries should not impose criminal liability on companies and instead should rely entirely on civil liability, which can impose the same sanctions on companies as criminal liability. This claim that corporate civil enforcement is as effective as criminal enforcement is incorrect because it overlooks how the choice between the two affects companies’ ability to use their political influence to undermine corporate enforcement intensity. This Article shows that eliminating federal corporate criminal liability would undermine deterrence because large corporations would be better able to leverage their political influence over Congress and the White House to reduce corporate enforcement if companies are not criminally liable for two reasons. First, civil enforcement is more vulnerable to political influence channeled through Congress and the White House than criminal enforcement. Second, eliminating corporate criminal enforcement would leave civil enforcement more vulnerable to companies’ political influence, less effective at deterring corporate misconduct, and less likely to pursue individual wrongdoers.

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