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>> 3 1 Conceptual Foundations Insights from Criminology and the Sociology of Work Randy Hodson and Gary F. Jensen In 1996, the average monthly sewer bill for a family of four in Birmingham was only $14.71—but that was before the county decided to build an elaborate new sewer system with the help of out-of-state financial wizards with names like Bear Stearns, Lehman Brothers, Goldman Sachs and JP Morgan Chase. . . . [The banks used] a blizzard of incomprehensible swaps and refinance schemes—schemes that only served to postpone the repayment date a year or two while sinking the county deeper into debt. . . . The original cost estimates for the new sewer system were as low as $250 million. But in a wondrous demonstration of the possibilities of small-town graft and contract-padding, the price tag quickly swelled to more than $3 billion. . . . Every time the county refinanced its sewer debt, JP Morgan made millions of dollars in fees. . . . In the mortgage business, this process is known as churning : You keep coming back over and over to refinance, and they keep “churning ” you for more and more fees. . . . Birmingham became the poster child for a new kind of giant-scale financial fraud, one that would threaten the financial stability not only of cities and counties all across America, but even those of entire countries like Greece. . . . You can see a trail that leads directly from a billion-dollar predatory swap deal cooked up at the highest levels of America’s biggest banks, across a vast fruited plane of bribes and felonies— “the price of doing business,” as one JP Morgan banker says on tape. . . . In Birmingham, lots of people have gone to jail for the crime: More than 20 local officials and businessmen have been convicted of corruption in federal court. . . . But those who greenlighted the bribes and profited most from the scam remain largely untouched. “It never gets back to JP Morgan.” —Taibbi, 2010 In a review of literature on crime and the workplace in 1999, we noted that “Neither crime at the workplace nor crime generated by workplace experiences has received much attention in criminology” (Jensen & Hodson, 1999). Assessments since that time have yielded similar conclusions. Based on a citation analysis, David Shichor (2009, 175) reports an “absence of scholars 4 > 5 used to be considered basic building blocks of the social sciences across their specific disciplines. In research on sources of crime or deviance in the workplace, the most common use is “perceived” injustice, which can generate worker anger and potentially underwrite workplace deviance. However, the concepts of injustice and the abuse of power can be applied at the corporate or organizational level, as well as at the individual level. At the corporate level the focus is less on crime as a response to injustice than on unconstrained power as a source of immoral and even criminal corporate behavior. Historically, the thirty years since the ascension of Reagan’s and Thatcher’s conservative revolution with its attendant neo-liberal ideology and its commitment to deregulation have brought into full fruition an era of rampant corporate malfeasance and criminality. The history of corporate scandals of the 2000s has expanded in number and size at an exponential rate. Enron’s “creative accounting” practices were quickly eclipsed by those of WorldCom. For those who thought these were isolated cases with isolated consequences, the worldwide “great recession” starting in 2008 brought about by a systematic pattern of fraudulent banking practices involving the largest banks in the world has clarified the fact that when the largest corporations bilk customers, competitors, and the government out of billions of dollars, the consequences are anything but localized. The rewriting of regulations for offshore oil-drilling practices under the Bush-Cheney presidency that allowed the massive Gulf of Mexico oil spill by British Petroleum in 2010 highlights the fact that the consequences of unconstrained corporate power leading to malfeasance and illegality influence every aspect of our lives from our jobs and pensions to the environment in which we work and live. It is essential at this moment that students of white-collar and corporate crime step forward and make themselves heard regarding the nature, causes, and consequences of the current era of unrestrained corruption, pillage , and criminality emanating from the largest private-sector institutions. Societies that do not confront rampant white-collar crime are likely to end up in the backwaters as “previous great powers.” Less industrialized nations that do not confront corporate criminality will stay...

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