Puzzles of criminal justice

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Four recent news stories about crime and punishment made me realize, yet again, how little I understand all this.

1. “HSBC to Pay $1.92 Billion to Settle Charges of Money Laundering”:

State and federal authorities decided against indicting HSBC in a money-laundering case over concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system. Instead, HSBC announced on Tuesday that it had agreed to a record $1.92 billion settlement with authorities. . . .

I don’t understand this idea of punishing the institution. I have the same problem when the NCAA punishes a college football program. These are individual people breaking the law (or the rules), right? So why not punish them directly? Giving 40 lashes to a bunch of HSBC executives and garnisheeing their salaries for life, say, that wouldn’t destabilize the global financial system would it? From the article: “A money-laundering indictment, or a guilty plea over such charges, would essentially be a death sentence for the bank. Such actions could cut off the bank from certain investors like pension funds and ultimately cost it its charter to operate in the United States, officials said.” But why not punish the individuals themselves (as well has having the bank itself make restitution)?

2. “For Lesser Crimes, Rethinking Life Behind Bars”. Fifteen years ago, Stephanie George was caught with a pound of cocaine in her attic:

“Even though you have been involved in drugs and drug dealing,” Judge Vinson told Ms. George, “your role has basically been as a girlfriend and bag holder and money holder but not actively involved in the drug dealing, so certainly in my judgment it does not warrant a life sentence.”

Yet the judge had no other option on that morning 15 years ago. As her stunned family watched, Ms. George, then 27, who had never been accused of violence, was led from the courtroom to serve a sentence of life without parole.

Life in prison for a nonviolent offender? That indeed sounds inappropriate (especially given that the HSBC executives don’t seem to be getting similar treatment for allegedly laundering money from illegal drug sales). The article continues:

Her sentence reflected a revolution in public policy, often called mass incarceration, that appears increasingly dubious to both conservative and liberal social scientists. They point to evidence that mass incarceration is no longer a cost-effective way to make streets safer, and may even be promoting crime instead of suppressing it.

Here’s my question. Was there ever a time when conservative or liberal social scientists thought it was a good idea to put someone away for life, just for dealing drugs? I would think that even fifteen years ago people wouldn’t have thought this was “a cost-effective way to make streets safer.” Again, I feel like I’m missing part of the story here.

3. “Tracing a Victim’s Path in Life to a Brazen Killing in Midtown”:

[Murder victim] Woodard, 31, was the scion of a successful family in California. His life had been a blend of achievement and puzzling setbacks that included at least 20 arrests, mostly in California, the police said. . . . He drove a Range Rover in college at Loyola Marymount University, but, as one friend said, “his personality was his bling.” This month, he had his eye on a Mercedes-Benz CL63 AMG that he hoped to buy, a cousin said. . . . In 2009, for example, Mr. Woodard was arrested on robbery charges in Hermosa Beach, a Los Angeles suburb, after he struggled with a supermarket guard who tried to stop him from stealing several bottles of wine. The police said he fled in a car, hit two other cars, abandoned his car, hailed a cab and fled. . . . He had a court date in Los Angeles in January on a charge of cocaine possession.

Also this sad bit:

Mr. Woodard’s father, J. Lincoln Woodard, 72, a retired lawyer, said that he and his son’s mother had divorced in 1982 and that he had not seen or spoken with his son since the late 1990s.

So far, this is unsurprising (at least, based on my general TV and newspaper-driven impressions of street crime). But here’s the strange part: the victim was, according to the article, a law student. I thought the way it worked was that you go to law school, you get rich, then you buy the fancy cars, do cocaine, and get into trouble. Or, conversely, you get into all sorts of trouble with drugs, you go to jail, then in prison you see the light, you work hard, go to law school, and get a second chance in life. But this guy seemed to have been on both tracks at once: fancy cars, drugs, arrests, and law school, all at the same time. Bizarre.

4. “Fishmonger Held in Attack Against Rabbi”: there’s a 100-year-old headline for you. “Everytime I go back to Brownsville it is as if I had never been away.”

36 thoughts on “Puzzles of criminal justice”

  2. I think all of us agree on 2).

    But concerning 1) I think it is absolutely critical to punish the institution itself in addition to the actual perpetrators themselves unless the institution can plausibly prove that not only they did not know of it but also that they fully investigated it the moment they became aware of it.

    Everything else just begs to set up a scapegoat system, where there is a definitive incentive to get employees to perform criminal acts to increase profits as long as the institution can then disavow all knowledge of what happened.

    And the college football was a good example for that. Suspicions against the perpetrator were not followed up because he was seen as critical for the team; so, yes, there was institutional responsibility. At least if we are both talking about the Penn State scandal.

    • I’ve had some reservations about the NCAA punishing schools for athletic mishaps in the way that they do (namely, removing scholarships). Ultimately, the kids playing football at Penn State were punished for a disgusting act committed 10 years earlier by people (mainly one person) that are no longer affiliated with the school. This involved cutting scholarships.

      No this isn’t a cry for “what about the kids”. It’s simply a case of misdirected punishment. It seems to me that punitive financial damages could simply replace scholarship retraction in these situations (just project what the loss of scholarships would do to football revenues, calculate the present value, and make that a one time payment).

      • But this would still be a form of (in my view necessary) institutional punishment. I agree that billing the school directly instead of revoking scholarships would have better. OTH I doubt that the football association has that power. So if the school wants to really take responsibility they should make the scholarships up themselves.

        • Yes, it would be institutional punishment. My point is simply that some blanket punishments tend to hurt people that have no relation to what happened.

          If the school were to make up for the scholarships, those students would not be allowed to play football by NCAA rules. They would have to put them under the guise of “academic” scholarships, which we know isn’t true.

      • To avoid the scapegoat problem a bit
        People directly involved go to jail with the option of ratting out their superiors who
        directed them.
        Everyone in the chain of command above them loses their job, forfeits any pension or golden
        parachute to the government and all bonuses, stock options etc for the period of the crime
        are clawed back. This also applies to superiors who were at the company during the crime
        and subsequently left.

    • Punishments for the firm are problematic because the cost of the punishment is born by stockholders many of whom are far removed from the actual management. The average retirement plan money is in an index fund (or an actively managed fund that attempts to closely follow an index fund). That money has virtually no ability to influence the corporations direction, but equally suffers from the costs of actions by management.

      Perhaps we should be rethinking limited liability. Require that all corporations above a certain size offer two share classes:
      Class A: has voting rights, but is subject to government penalties
      Class B: has no voting rights, but is exempt from government actions.

      So when HSBC, BP, etc. break the law the government forces a split of the Class A shares and takes the proceeds of the split to sell back into the market, or the government garnishes dividends from Class A shares until $X is paid.

      The other benefit of this is that if you see that the people in the know (upper level executives) are buying up a lot of Class B shares or a meaningful divergence in the price of A vs B shares, then it tips you off on the likely existence of some impropriety in the corporation.

      • Punishments for the firm are good exactly because stockholders, while far removed from daily management, are major beneficiaries from such crimes and have the power to set policies and culture that determine whether such crimes occur.

        • That same logic would dictate that there are no “innocent civilians”. The United States is a democracy, so American civilians have control over the policies and culture of their political leadership. The United States political leadership did bad things to Afghanistan back in the 1980s. Therefore American civilians are responsible for what was done to Afghanis and deserve to be punished. Therefore 9/11 killed the people responsible.

          Most people would not agree with that argument, they would see the chain of responsibility as being too tenuous to support the “punishment” proposed by terrorist organizations. With corporate governorship the link from “the average” shareholder to corporate activities is even more tenuous than with citizens in a democracy. Unlike citizenship one can increase or decrease their “shareholdership” with ease, and if you don’t like the way management runs a company the recommended way of expressing that displeasure is to sell your stock, not to send in corporate voting forms where you vote “no” on the board members (you never actually have a choice of anyone else to vote for, because corporate governorship is a 1-party system), while the stock value sinks.

          I’m simply suggesting that we give the existing practice a formal legal structure. For the common man whose investment is passive, ensure that they have a protected class of passive shares to purchase. For the hedge-funds and billionaires who want to control the direction of the company, allow them to do so, but make it clear that they are going to be on the hook for any illegal activities.

    • I wouldn’t agree on (2). Drug dealing is a type of crime for which severe penalties are especially appropriate because it is not a crime of passion.

      Another example is Bernie Madoff. He was sentenced to 150 years in prison, even though he was a nonviolent offender. Nonviolent offenders often destroy other people’s lives more than violent ones. Drugs and theft can cause a lot more havoc than a minor knife wound.

      Economists are not in general dubious about mass incarceration. Penalties dropped in the 60s and crime vastly increased. Penalties rose in the 80s and crime dropped, as one would expect from either a rational-actor model or from simply an incarceration effect.

      I am surprised that a first-time offender would get a life sentence for possession, and I doubt the story’s accuracy. Was she a 3-time loser?

  3. (2) was a political decision by politicians who wanted to look “tough on crime” so that they would get re-elected. I doubt that much social science went into these laws.

    • http://en.wikipedia.org/wiki/Rockefeller_Drug_Laws
      “Both the New York and Michigan statutes came under harsh criticism from both the political left and the political right.”

      As the Wikipedia article points out, Murray Rothbard was definitely opposed, and I suppose Austrians are “conservative.” And I’m quite certain no liberal social scientists supported the sentencing laws.

      • Murray Rothbard was a libertarian, and libertarians are opposed to the war on drugs in general, they favor complete legalization. Not sure if it extends to Austrians.

        Rockefeller Drug Laws are interesting in themselves, but not relevant, because we’re talking about a federal case.
        21 USC § 841 (b)(1)(A)(iii), which currently prescribes a mandatory life sentence for “possession with intent to manufacture” of more than 280 g of crack cocaine, if the offender has two or more prior convictions for a felony drug offense. (Rules were relaxed since 1996; back then it was 50 g.) Mrs.George’s gang had 500 g of powder cocaine in her attic and her co-defendants admitted to selling another 790 g. For reference, this amount is about 5,000 to 10,000 individual doses.

        • There’s also an element of racism in these laws. Crack cocaine is/was favored by people of color, whereas powder cocaine is/was the drug of choice for whites. Hence the much harsher penalties for crack. Even though the substance seized was powder cocaine, the charge was “possession with the intent to manufacture” crack.

          I stand by my comment as regards appearing tough on crime. As Jonathan points out, Rothbard’s comment doesn’t really come from a standard conservative point of view. The “tough on crime” conservatives were an important element of congress, and Democrats, normally liberal, often sided with them when toughness on crime was an issue for fear of losing their next election.

  4. Probably the criminal actions at HSBC would not hold up in court.

    Who do you punish if an institution does not report a large cash transfer? The cashier who received it? The CEO? Who in between is actually guilty?

  5. (1) But who do you arrest? The teller who took the deposit? The clerk who laundered the money? The guy who wrote the money transfer software? The Chairman of the bank who can reliably prove he had not a clue what was going on? The auditor who misclassified the transaction?

    • The CEO. If you’re willing to take the $MM salary, you should be willing to take the fall for whatever happens on your watch. As CEO you are ultimately responsible for everything that happens. Or at least you should be.

      • An important part the discussion has to be that criminal conviction requires proof beyond a reasonable doubt. It might be easier to prove that the organization took an action than to prove that a particular person did it.

        Do you really want convict the CEO for something he had no knowledge of, even if he is willing to take the rap as a condition of work?

  6. Re: (2), from the right perspective, it’s not “putting someone away for life, just for dealing drugs”. It’s “putting away a leech on the face of the society whose lifestyle is incompatible with the norms of the modern world”.

    This may be an extreme and atypical case. And, besides, we don’t readily see what’s so “wrong” in keeping half a kilo of cocaine in your attic, since the crack epidemic is behind us, many of us don’t live in or near inner cities, and we don’t face the threat of being mugged and/or stabbed by a crazed crack addict on any given day.

    Perhaps a better and a more obvious example would be a career car thief who gets busted for stealing a car for the third time after serving two felony sentences behind bars for the same. He’s a nonviolent offender, but, if you ever had your car stolen, you might support the idea of keeping the guy safely locked up for an extended period of time at taxpayer expense.

    • Nameless:

      Hey, I don’t want to be stabbed by a crack addict either! But that doesn’t mean it makes sense to imprison someone for life for dealing the stuff (or for being a “leech”).

      • The question is, what do you do when normal penalties don’t work? If the person was previously convicted for dealing drugs not once but twice, and then he’s caught trying to deal again, it appears that prison didn’t change him the first two times and it probably won’t work this time. If it makes sense to enforce the law at all, you have to go extra harsh on the third strike.

        • Nameless:

          If it were up to me, I’d go for flogging. But no, I don’t think life imprisonment is appropriate. Even if someone continues to deal drugs, I can’t see the sense in putting them in prison for life.

        • If normal penalties fail, the most obvious response would seem to reform those, not to impose more of the same. It often seems that the fact that we can’t stop crime completely provides an irresistible urge to do something, anything at all, no matter how dangerous or unproven the proposed solution might be. The (relative) failure of some policy is not a good justification to do something else, the alternative has to make some sense on its own as well.

          Plus, one major problem with all this is it breaks down the proportionality between crime and punishment. If you can get life in prison for stealing or life without parole for non-violent offenses, what’s left for truly heinous crimes? Medieval-style torture and long painful death? It was once common practice and seen in historical perspective, it did not seem very effective in deterring crime in general.

          By the way, I had my car broken into once. It created a number of practical problems and some distress for me but I sincerely never felt that anybody should get significant jail time for that, no matter their background and circumstances. Beside all considerations of incentives and consequences, it just seems completely out of proportion.

  8. James Q. Wilson (who died last year) wrote in Thinking About Crime (1975, 2nd ed. 1983): “Wicked people exist. Nothing avails except to set them apart from innocent people”.
    He is often perceived as the leading social scientific voice in favor of mass incarceration. With John J. DiIulio, they have written stuff like the drama with sentencing is that it does not happen early enough, most criminals are most prolific around age 18, while the average age of incarceration is around 28, way after people’s peak of criminal productivity. Or, that too few people are executed, which makes death penalty not credible. And so on. I strongly recommend David Garland (from NYU)’s Culture of Control (2001) about all that.

  9. The answer to your first question is that violations like these are not only individual transgressions, but they are also institutional transgressions, they are institutional failures. Whether or not it makes sense to declare corporations “people”, the simple truth is that human institutions by their nature have some kind of independent life — they have traditions and habits and biases and codified practices. Pretty much none of these transgressions we’re discussing — where the entire institution is sanctioned — could have occurred without a widely distributed, non-discrete collusion and responsibility. And in many cases, the severity of the crime is not and cannot be matched up with the severity of any one individual’s responsibility.

    We don’t like to punish institutions because this almost always involves harm coming to individuals involved with those institutions who are individually entirely innocent. But it’s not as if when we punish individual people the punishment is entirely firewalled to them, with no other casualties. Family members are hurt, emotionally and materially. Children are hurt. The idea that punishment can be perfectly proportional and perfectly isolated to the guilty is natural to have, but idealistic. Justice is imperfect, and the perfect shouldn’t be the enemy of the good.

    One of the aspects of plagiarism discussed here is how this is often a failure of academic/scientific institutions. It’s not so much that punishing an institution in the wake of a severe transgression is to punish them specifically and exclusively for that transgression. Rather, it’s for the more amorphous transgressions of being the kind of institution at which these specific transgression did occur. Sometimes through simple laxness — but, rather, very often because distributed responsibility psychologically means that individuals are willing to act in a self-interested manner with far less regard to how it hurts others than they otherwise would be when the responsibility isn’t distributed. That is to say, institutions by their nature make it easy for people to collectively behave badly. It is extremely important that the institutions qua institutions be held accountable to how they combat this. And because, despite all that I’ve written, institutions are not in the end conscious, willful actors, the only way to influence them is to influence the individuals of which the institutions are composed. That is, give the individuals disincentives to collectively act badly. Thus, collective punishment.

    • Well, people are just strange. I used to be on the editorial board for a syndicated column that turned into a sort of blog that was called “News of the Weird.” The author was an erstwhile lawyer named Chuck Shepherd. The law school student/criminal story would have been no more than middling in Sheperd’s array of weirdos
      The News of the Weird may have disappeared, I don’t know, but the weirdness goes on, right in your neighborhood.
      Check this out.

      http://www.nytimes.com/2012/12/11/nyregion/a-quick-descent-for-cecilia-chang-dean-at-st-johns.html?pagewanted=all&_r=0

      • Well, to be honest I don’t even think 4 sounds that strange. If you follow the link it turns out that the Rabbi used his blog to publicly accused the father of the fishmonger who attacked the Rabbi of molesting. Add to that the evidence seemingly did not suffice for the father to be formally accused of a crime, this means the son probably thinks of the accusation of slander of the worst sort. Obviously we can’t judge at this moment whether there is truth behind the accusations.

        And it seems that it was a very spontaneous attack with a weapon (bleach) at hand.

        I also think 3 sounds very likely. He was already rich because of his parents, so he did not have to become successful to afford the drugs and the lifestyle… which is probably the limiting factor before that. In addition to that the fact that he was born rich even relativizes his accomplishments, since he probably good the privilege of all the best schools. No, this is not the case of all accomplishments, but if you read the article they seem to be limited to him being well-liked, a good student and being good at sports. This is a story that is probably being repeated all around the world right now.

    • Yeah, that’s really crazy. Obviously, there are some strange people out there, including judges.
      But we also have some strange social and legal practices and seem to have no way out of them.

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