"three strikes" for criminal corporations

Wow, this is hard to believe. I had to check the URL to convince myself that I wasn't reading some kind of Adbusters wet dream.

Senator Proposes 'Three Strikes and Out of Business' State Law
A company's third felony conviction would bring a ban on operating in California.

SACRAMENTO -- A "three strikes" bill that would prohibit companies with multiple convictions from doing business in California was launched in the Senate on Tuesday. [...] On a 5-2 vote over Republican opposition, they sent the bill (SB 335) to the full Senate, where its passage is expected. Under the measure, sponsored by the Foundation for Taxpayer and Consumer Rights, a business convicted of three felonies in state or federal courts in California would be prevented from doing business in the state.

Proponents of the bill argued that enforcement of existing laws that can put a corporation out of business is weak and seldom exercised. Romero said current penalties are civil fines or financial settlements whose effects are short-lived and can be chalked up by corporate bad actors as merely the cost of doing business. [...]

The bill drew opposition from the California Chamber of Commerce, whose lobbyist, Dominic DiMare, criticized it as unnecessary. He said it was so broadly written that the criminal activity of only one company executive could set off a chain of events that might bring the entire corporation down, including its subsidiaries in other states.

"It takes people to do the crime, not the corporation," DiMare said. [...]

The Romero plan would provide that the first two strikes against the criminal corporation could occur in any state, not just California. But the third felony would have to be committed in California.

The strikes would apply to virtually any type of felony, ranging from violations of the tax and consumer protection codes to offenses involving civil rights, antitrust and environmental protection, among others.

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6 Responses:

  1. atakra says:

    That is so brilliant!
    I can't wait until all those power companies, insurance providers, and corporate lawyer firms are permantly exiled out of this state.

  2. nosrialleon says:

    as much as I like the principle, I can just see this law being used primarily against small business owners who operate solely in California and chose the wrong tax accountant rather than large interstate or multinational corporations. If anything, it could be a great tool for the Walmarts of the world who have the time and resources to investigate whether the local competition has all their ducks in a row legally or not.

  3. phygelus says:

    I had to read through it twice to realize you don't seem disturbed by this!

    It's kind of creepy:

    would this law revoke an individual's ability to do business after three strikes?
    does the RAVE act fall under "consumer protection"?

    • jwz says:

      I had to read through it twice to realize you don't seem disturbed by this!

      Well, I'm strongly against "corporate personhood", so insofar as this might cause corporations to be accountable for their crimes (as people-who-are-made-of-meat are), instead of just considering the fines and wrist-slapping as being a business expense, that seems like a fine idea to me. But I haven't actually read the legislation, so I don't know what kinds of screw-the-little-guy time bombs might be hidden in there.

      (The reason "corporate personhood" sucks is that if you treat a corporation and a human as being equal under the law, well, they're exactly the same except for the fact that the corporation is an immortal billionaire. So one of these animals is more equal than the other.)

      would this law revoke an individual's ability to do business after three strikes?

      If by "individual" you mean "corporation", yes. Which is why laws like this probably won't actually have any teeth: if I corporation gets the shaft, it will just shuffle assets and re-incorporate, or launder its transactions through a subsidiary, or something. But, that will still hurt, so it might provide some teeth to the law.

      does the RAVE act fall under "consumer protection"?

      Stop that terrorist talk.

      • phygelus says:

        I read the bill. It bans the meatpeople members of the board and officers of the illegal corporation from forming the majority of the board or the officers of a California corporation ever again. This is not so bad for the executives and such of the now-banned company, they can't all jump to the same new ship.

        It does, however, as I read it, basically prevent the convicted small businessperson from ever starting another small business in California without new majority partners in his or her company. Again, probably not that bad in practice.

        It's kind of vague on what happens when a corporation gets dissolved, too, but that's probably handled under other, existing law.