In the 2010 case of Citizens United v. Federal Election Commission, the Supreme Court ruled that corporations, for all intents and purposes, are human beings with the same rights as any American citizen. Citizens United and the recent Hobby Lobby case established that corporations are protected by the First Amendment, with both freedom of speech and religion.
If corporations are going to have the same rights as American citizens, it seems only logical that they be held to the same standard and must obey the laws of the U.S.
Unfortunately, because corporations are legal constructs and not actually people, it is difficult to hold them accountable when they break the law. After all, you can’t send a corporation to prison.
Ideally, the senior executives of these corporations would be held liable for criminal activity committed under their supervision.
But rather than prosecuting these leaders for the misconduct of their corporations, the U.S. government often seeks negotiated monetary settlements. In the aftermath of the 2008 financial crisis, investment bank Goldman Sachs Group Inc. paid $550 million to the government for its role in engineering the catastrophe.
To put that number into perspective, Goldman Sachs earned $3.5 billion in profits during the first three months of 2010 alone. For large corporations like Goldman, these fines are minor nuisances at worst.
This leniency toward delinquent corporations has been a hallmark of the Obama administration, most recently in the area of student loan policy.
In May, student loan specialist Navient agreed to pay the government $139 million after it was accused of intentionally cheating U.S. military personnel on their federal student loans. Navient “swindled up to 60,000 service members out of tens of millions of dollars” by charging unfair fees and illegally raising interest rates on the loans.
Navient executives faced no legal action, and the Department of Education recently announced that it will require more students to deal with the company for their loans.
Essentially, this means that Navient will be receiving more taxpayer dollars as compensation for the loan work it does for the government. The company already manages 5.8 million student loan accounts, so it seems likely that it will quickly recoup its losses from the settlement.
The fines that the Obama administration levies on corporation lawbreaking are not an effective deterrent. Instead, they send the message that corporations are free to break any law they please — for the right price.
At a time when the U.S. has the world’s highest incarceration rate, the disparity in law enforcement between corporations and ordinary citizens could not be more apparent. It’s time to hold corporations, particularly corporate executives, truly accountable for their illegal actions.
[A version of this story ran on page 6 on 9/2/2014 under the headline "Corporations and Obama’s student loan decision"]
