Suddenly, big fines are all the rage.
General Motors will have to pay a $35 million fine — the most allowed by law — for failing to disclose for a decade a serious flaw in its ignition switches that led to 13 deaths. Although automakers are supposed to report faults within five days of discovery, GM actually engaged in a cover-up in which it instructed employees to avoid certain synonyms for failure in company documents.
Oh, by the way, $35 million is less than one day’s gross revenue for GM, although after costs, it may take the company a whole two days or so to earn enough to pay Uncle Sam.
And we’re told that the Department of Justice is investigating, as well as Congress. Do you feel better?
GM wasn’t the only car company guilty of wrongdoing. The Justice Department wrangled an even larger amount from Toyota — $1.2 billion — for intentionally concealing problems with “unintended acceleration” from the National Highway Transportation Safety Administration.
Oh, and the company won’t be able to take a tax deduction on that fine, according to Forbes. Yes, apparently Toyota lawyers asked.
Although Toyota initially denied problems, an FBI investigation found company documents proved the company was aware of problems.
Closer to home, TIMET this month agreed to pay a record fine of $13.8 million for dumping toxic chemicals on its sprawling Henderson property. It’s the largest fine ever for violations of the Toxic Substances Control Act at a single facility, and it doesn’t include an additional $250,000 for hazardous wastewater disposal.
The Review-Journal’s Henry Brean reported the contamination was first discovered a decade ago, and that state officials have been monitoring the situation since. Environmental Protection Agency investigations in 2005, 2006 and 2008 showed TIMET had been illegally producing polychlorinated biphenyl (or PCBs) as a byproduct in the manufacture of titanium. The company has spent $6 million on cleanup thus far, and will spend $1 million more.
Notice anything missing here?
I’ll give you a hint: It involves handcuffs.
In all of these cases, nobody has (thus far at least) gone to jail for concealing dangerous conditions in consumer products, or polluting or lying to people with dangerous and even deadly results. No CEO, no mid-level manager, no engineer, no worker has faced any criminal penalties for what they’ve done.
But they knew. Workers at GM and Toyota knew their products were dangerous, even potentially deadly. They knew, and they chose not only to remain silent, but to actively conceal problems from consumers and the government, with sometimes deadly results.
The people at TIMET produced and dumped PCBs for years, repeatedly violating the law. And this wasn’t, say, the early 1940s, as Southern Nevada mobilized to help fight and win World War II, and environmental dangers were either unknown or took a back seat to defeating fascism. This was recent, and the dangers and damage were well-known.
By allowing companies to buy their way out of trouble — the way we did after the financial crisis spread misery throughout the country thanks to the knowing and reckless behavior of thousands — we send a terrible message: You’re not just too big to fail, you’re too big to jail. You can lie, cheat and cover up, and the worst that will happen is a fine, maybe even one you won’t be able to write off on your taxes.
It’s one thing for a person, or a company, to make a good-faith mistake, and to deal with the consequences. But what we’re talking about here is intentional conduct, which money damages or fines alone cannot cure. And until we see some accountability, the same level of accountability that regular people without means face every day when they break the law for even lesser crimes, we will see more bad acts.
Count on it.
Steve Sebelius is a Las Vegas Review-Journal political columnist who blogs at SlashPolitics.com. Follow him on Twitter (@SteveSebelius) or reach him at 702-387-5276 or email@example.com.