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1994

4. WHITE-COLLAR AND CORPORATE CRIME OVERLOOKED

Non-violent crimes committed by white-collar workers and corporations are being overlooked due to a "public and political preoccupation with violent offences," says a leading corporate fraud investigator.

Justice Minister Allan Rock's crime-prevention strategy has focused primarily on violent crime. But Don Holmes, a fraud investigator with Ernst & Young, believes that the "social ramifications" of white-collar crime may in fact be more serious. The initial responsibility of investigating white-collar crimes such as employee theft and fraud falls on forensic accountants like Holmes.

Aaron Freeman and Craig Forcese, founding directors of the Ottawa-based Democracy Watch, argue that the "war on crime" largely ignores not only such white-collar employee crime, but also violations committed by corporations. These include tax evasion, bribery, fraudulent advertising, illegal mergers, and monopoly pricing.

While individual cases are reported, the media rarely convey the scope of corporate and white collar crime. The impact of such crimes is illustrated by the following:

  • Federal statistics show an annual increase of seven per cent in the incidence of white-collar crimes.

  • A Statistics Canada report in the early 1980s found the number of workplace deaths attributed to unsafe or illegal working conditions to be equivalent to the number of street homicides. This does not include "lingering deaths" resulting from exposure to "hazardous workplace pollutants".

  • According to Holmes, Canadians pay increased taxes and prices for consumer goods amounting to as much as $20 billion a year as a result of white-collar crime. American statistics show that white-collar and corporate crime accounts for $10 for every one dollar lost to robbery, burglary, larceny and auto theft combined. If this 10 to 1 ratio applies to Canada, Freeman and Forcese estimate that corporate crime costs Canadians about $30 billion a year.

  • While over one-million charges were laid against street criminals in 1988, only 23 were laid against corporations in the first two years of the 1986 Competition Act.

    According to Holmes, the lenient treatment of non-violent crime has led to the growth of a "get-something-for-nothing attitude." Similarly, many corporations view the penalties for corporate crime as a ̉mere cost of doing business." Freeman and Forcese claim Exxon spent less money cleaning up the Valdez oil spill than it spent on positive publicity of its efforts.

    Through stronger legislation, enforcement and penalties for white collar and corporate crime, argue Freeman and Forcese, the government could "begin to correct the biases of our two-tiered system of justice."

    SOURCES
    Author: Doug Fischer
    Title: 'Investigator fears fraud cases ignored'
    The Calgary Herald
    Date: 9 July 1994
    . . . and
    Authors: Aaron Freeman, Craig Forcese
    Title: 'Get tough on corporate crime'
    The Toronto Star
    Date: 17 Nov 1994

    PCC researcher: Diane Burgess

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