Corporate Crime

Unfettered Corporate Power

Once upon a time, there was a debate on how best to check the power of giant corporations. Starting in the Progressive Era and resuming in the 1970s with the arrival of agencies such as the EPA and OSHA, some emphasized the role of government through regulation. Others focused on the role of the courts, especially through the kind of class action lawsuits pioneered by lawyers such as Harold Kohn in the 1960s.

When regulators were seen as too aggressive, business apologists pushed back by arguing that corporate misconduct should be addressed through litigation. When class actions grew more effective, those apologists started lobbying for tort reform and arguing that regulatory agencies (especially those dominated by industry) were the better forum.

This year, amid a supposed populist upsurge, that debate is dying out. The Republican-controlled Congress and the White House are undermining both regulation and litigation. Virtually all legislative “accomplishments” since Inauguration Day have consisted of Congressional Review Act maneuvers to roll back business regulations. Now, with the Senate’s move to kill the Consumer Financial Protection Bureau’s restriction on forced arbitration, Congress has used the same device to reduce the ability of consumers to seek redress through the courts — what Sen. Elizabeth Warren aptly described as “a giant wet kiss to Wall Street.”

The result of these moves is that big business is increasingly being allowed to operate with no effective controls at all. This unilateral disarmament is taking place when corporate misconduct is rampant. Among the companies that will benefit from the arbitration move are the likes of Wells Fargo and Equifax, whose willingness to mistreat customers has been truly astounding.

We should be careful, however, not to overstate the effectiveness of damage awards in class action lawsuits in changing corporate behavior. It’s unfortunately true that large corporations have come to regard substantial monetary settlements as an acceptable cost of doing business.

That’s true both of private litigation and cases brought by regulatory agencies and the Justice Department. As shown in Violation Tracker, 40 corporations have paid $1 billion or more in fines and settlements. Seven of those have paid $10 billion or more, including all the giant national banks: Bank of America ($57 billion), JPMorgan Chase ($29 billion), Citigroup ($16 billion) and Wells Fargo ($11 billion).

These amounts have involved scores of different cases dating back to 2000. In other words, the banks are repeat violators that are willing to pay out large sums in order to continue doing business more or less as usual. More class action lawsuits are unlikely to change this dynamic.

I believe that banks and other large corporations should continue to face heavy financial penalties for their misconduct, but it has become clear that these penalties alone are not going to put an end to the corporate crime wave. It’s time to go beyond damages in addressing the damage caused by these companies.

The Corporate Death Penalty for Wells Fargo?

Wells Fargo’s seemingly endless transgressions have reached the point that there is growing discussion of a possibility rarely considered even in some of the most egregious corporate scandals: putting it out of business.

Rep. Maxine Waters, the top ranking Democrat on the House Financial Services Committee, recently issued a report that recounted the banks sins (including a reference to the $11 billion Violation Tracker tally of its penalties), saying that Wells has “demonstrated a pattern of egregiously harming its customers.”

Such statements have been heard frequently since the Wells bogus account scandal came to light last year. But Waters goes on to argue: “When a megabank has engaged in a pattern of extensive violations of law that harms millions of consumers, like Wells Fargo has, it should not be allowed to continue to operate within our nation’s banking system, and avail itself of all of the associated privileges afforded to it.”

A similar sentiment is expressed in a letter just submitted to the Office of the Comptroller of the Currency by the AFL-CIO, Americans for Financial Reform and five other groups. The letter asks the OCC to consider whether, “in light of the bank’s pattern of law breaking,” the bank “should forfeit its national banking charter.”

The issue was even brought up in a recent Congressional hearing in which Wells CEO Tim Sloan was being grilled by members of the Senate Banking Committee. Sen. Elizabeth Warren said that Sloan should be fired, while Sen. Brian Schatz of Hawaii went further by asking Sloan: “Why shouldn’t the OCC revoke your charter?”

“We serve one out of every three Americans, we have 270,000 team members,” Sloan responded before Schatz cut him off, saying: “So, you’re too big.”

Those comments encapsulate how a debate about the possible shutdown of a bank or other company as large as Wells Fargo would play out. The corporation would emphasize the disruptive effect on its customers and employees, suggesting they would be the unintended victims. Of course, in the case of Wells it was the bank itself that victimized customers and staff.

Schatz’s comment points to the direction any serious effort to penalize a rogue corporation should take: the emphasis should not be a precipitous shutdown but rather a breakup into smaller entities that would be subjected to rigorous regulation and scrutiny. Care should be taken in the process to protect the interests of customers and employees, though upper level executives should be shown the door.

Discussions of the corporate death penalty have come and gone over the years. The need to deal with a brazen recidivist such as Wells may finally bring more serious consideration to a tool that could be more effective than billions in penalties in ending the ongoing corporate crime wave.

Identifying Repeat Corporate Offenders

When a new corporate scandal arises, there is a tendency on the part of many observers to treat it as a complete surprise — as something that could not have been anticipated.

The truth is that large companies are rarely first time offenders. If you look into their background, you are likely to see evidence of past behavior that presaged the recent misconduct.

It is now easier than ever to research that track record thanks to a major expansion of Violation Tracker my colleagues and I just rolled out. We posted an additional ten years of data, extending coverage back to 2000 and in the process nearly doubling the size of the database to 300,000 entries. Together, these account for $394 billion in fines and settlements — 95 percent of which was assessed against 2,800 large parent companies and their subsidiaries.

Take the example of Equifax, which is at the center of a growing scandal over its apparent negligence in protecting personal information and its delay in reporting a major hack. Violation Tracker shows that early this year the company was fined $2.5 million by the Consumer Financial Protection Bureau for using deceptive means to lure people into purchasing costly credit-protection services. The company was also ordered to provide $3.8 million in restitution to affected customers. Over the previous two decades, Equifax was fined three times by the Federal Trade Commission.

The announcement by the CFPB last year that it was fining Wells Fargo $100 million for creating bogus customer accounts — a scandal that has subsequently mushroomed — was far from the first time the bank had gotten into trouble for questionable practices. Violation Tracker documents prior penalties totaling some $11 billion going back to 2000 for offense such as mortgage abuses, toxic securities abuses, and discriminatory practices.

Sometimes the prior offense is indistinguishable from the current one. In 2005, a decade before it was revealed to be engaged in a massive scheme to deceive regulators about emissions levels, Volkswagen was compelled to pay a fine of $1.1 million and spend $26 million on a recall to settle allegations that it failed to correct a defective pollution-control sensor.

Of the 2,800 companies in the Violation Tracker universe, more than 80 were penalized for something or other by federal agencies or the Justice Department every year from 2000 through 2016. The company that has the dubious distinction of leading by this measure is oil giant BP, which has paid out an average of some $1.6 billion in fines and settlements each year during the 17-year period.

No other company comes close. In second place is Verizon Communications, whose average annual penalty was $72 million, followed by FirstEnergy ($71 million), Valero Energy ($58 million), Marathon Petroleum ($54 million), Alcoa ($43 million), Exxon Mobil ($42 million), Koch Industries ($39 million) and Chevron ($34 million).

While they may not have gotten penalized every single year, there are hundreds of other parent companies that have been penalized in multiple years, and in many cases multiple times in a given year. In other words, just about every large company is a recidivist.

Who knows: maybe regulators and prosecutors will start consulting Violation Tracker to identify prior bad acts and take them into account when deciding how to penalize companies for their current sins.

Recalling the Corporate Culprits of Yesteryear

Corporate crime has been happening as long as there have been corporations. But if you wanted to choose an event that marked the emergence of what we think of as modern big business misconduct it would be the admission by Enron in November 2001 that it had overstated profits by $600 million. Within months, the high-flying energy trader collapsed amid growing evidence that the company was one big scam. Enron’s lenders, investors, auditors and others were all pulled into the morass.

Enron turned out to be just one of a rash of accounting scandals that rocked the corporate world and severely damaged the legitimacy of American capitalism. The Bush Administration felt compelled to create a President’s Corporate Fraud Task Force headed by none other than James Comey.

I bring up this history because the Corporate Research Project is about to release a major expansion of Violation Tracker that will extend coverage to this period. We are adding ten more years of data, bringing the starting point back to January 2000. The expansion will nearly double the size of the database to 300,000 entries with more than $394 billion in fines and settlements.

More than 95 percent of that penalty amount comes from our universe of large parent companies, which is being increased to about 2,800. These include ones that are publicly traded and privately held, for-profit and non-profit, domestic as well as foreign-based.

Now the universe also includes a bunch of companies like Enron that are defunct but which are kept on the list for historical purposes. Here are some of those zombies. Note that Violation Tracker does not yet include entries relating to private litigation.

The largest penalty total comes from Adelphia Communications, a cable television provider that was riddled with corruption. In 2004 the Justice Department arranged for $715 million of what remained of the company to be handed over to a fund set up to compensate victims of Adelphia.

In 2002 WorldCom, another telecommunications company, filed what was then the largest bankruptcy ever in the wake of a massive accounting scandal. In 2002 the Securities and Exchange Commission reached a $500 million settlement with the company after originally seeking $1.5 billion in penalties. Since WorldCom was taken over by Verizon rather than being dismantled, its entries in Violation Tracker are listed under Verizon.

Enron shows up in nine entries with a penalty total of $446 million, the largest of which was a 2006 agreement with the Federal Energy Regulatory Commission giving the agency a $400 million claim in the company’s bankruptcy proceeding stemming from Enron’s misconduct during the 2000-2001 Western energy crisis.

We also list Arthur Andersen, which had served as Enron’s auditor and was convicted of obstruction of justice for shredding documents relating to that client. The conviction was overturned by the U.S. Supreme Court (and thus is not listed in Violation Tracker) but the firm never recovered from the scandal. We list a $7 million penalty imposed on Andersen by the SEC in 2002 in connection with its audits of Waste Management in the 1990s.

The corporate scandals of the early 2000s shook up the country and in some ways prompted even more aggressive remedial actions than are seen with more recent cases. There were many more criminal prosecutions of individual executives than occurred with the cases stemming from the financial meltdown, though the dollar amounts of penalties have grown larger.

One thing that has not changed is the persistence of wrongdoing by so many large corporations.

Note: The Violation Tracker expansion will officially launch on September 19.

Federal Watchdog Agencies Still On Guard

Donald Trump likes to give the impression that he has made great strides in dismantling regulation. While there is no doubt that his administration and Republican allies in Congress are targeting many important safeguards for consumers and workers, the good news is that those protections in many respects are still alive and well.

This conclusion emerges from the data I have been collecting for an update of Violation Tracker that will be posted later this month. As a preview of that update, here are some examples of federal agencies that are still vigorously pursuing their mission of protecting the public.

Federal Trade Commission. In June the FTC, with the help of the Justice Department, prevailed in litigation against Dish Network over millions of illegal sales calls made to consumers in violation of Do Not Call regulations. The satellite TV provider was hit with $280 million in penalties.

Drug Enforcement Administration. The DEA is a regulatory entity as well as a law enforcement agency. In July it announced that Mallinckrodt, one of the largest manufacturers of generic oxycodone, had agreed to pay $35 million to settle allegations that it violated the Controlled Substances Act by failing to detect and report suspicious bulk orders of the drug.

Federal Reserve. The Fed continues to take action against both domestic and foreign banks that fail to exercise adequate controls over their foreign exchange trading, in the wake of a series of scandals about manipulation of that market. The Fed imposed a fine of $136 million on Germany’s Deutsche Bank and $246 million on France’s BNP Paribas.

Consumer Financial Protection Bureau. Last month the beleaguered CFPB ordered American Express to pay $95 million in redress to cardholders in Puerto Rico and the U.S. Virgin Islands for discriminatory practices against certain consumers with Spanish-language preferences.

Securities and Exchange Commission. In May the SEC announced that Barclays Capital would pay $97 million in reimbursements to customers who had been overcharged on mutual fund fees.

Equal Employment Opportunity Commission. The EEOC announced that the Texas Roadhouse restaurant chain would pay $12 million to settle allegations that it discriminated against older employees by denying them front-of-the-house positions such as hosts, servers and bartenders.

Justice Department Antitrust Division. The DOJ announced that Nichicon Corporation would pay $42 million to resolve criminal price-fixing charges involving electrolytic capacitors.

Federal agencies are also finishing up cases dating back to the financial meltdown. For example, in July the Federal Housing Finance Agency said that it had reached a settlement under which the Royal Bank of Scotland will pay $5.5 billion to settle litigation relating to the sale of toxic securities to Fannie Mae and Freddie Mac. And the National Credit Union Administration said that UBS would pay $445 million to resolve a similar case.

It remains to be seen whether federal watchdogs can continue to pursue these kinds of cases, but for now they are not letting talk of deregulation prevent them from doing their job.

Note: The new version of Violation Tracker will also include an additional ten years of coverage back to 2000.

Corporate America Doesn’t Qualify for Moral Leadership Either

It may turn out that Donald Trump’s greatest contribution to American business is allowing the chief executives of tainted corporations to take a morally superior posture toward a presidency that seems to be completely devoid of principle. Their brands are boosted as his becomes increasingly toxic.

It is a good thing that big business is taking steps to separate itself from Trump. The collapse of the two advisory councils is not only a rebuke to Trump’s offensive comments on the events in Charlottesville but also an overdue retreat from entities that were set up mainly to foster the illusion that this administration is taking serious steps to reform the economy.

Yet it is dismaying that the moral vacuum created by Trump is being filled by the likes of Walmart chief executive Douglas McMillon, who got himself featured on the front page of the New York Times for a statement criticizing Trump.

For years the giant retailer was a national symbol of discriminatory practices. In 2009 it had to pay $17.5 million to settle a lawsuit alleging that it discriminated against African-Americans in the recruitment and hiring of truck drivers. The company was also widely accusing of gender discrimination. In 2010 the company was required to pay $11.7 million to settle a case brought by the U.S. Equal Employment Opportunity Commission, and it was facing potential damages in the billions from a class action suit brought on behalf of more than 1 million female employees until the Supreme Court came to its rescue and threw out the case for what amounted to technical reasons.

In addition to discrimination, Walmart has been at the center of countless controversies involved wage theft, union-busting, tax avoidance, bribery and much more.

After Merck CEO Kenneth Frazier led the way among business critics of Trump’s embrace of white nationalism, the president struck back with a tweet referring to “ripoff drug prices.” While Trump was just being vindictive, it’s true that Merck’s reputation is far from untarnished.

In 2011 the drugmaker agreed to pay a $321 million criminal fine and a $628 million civil settlement to resolve allegations that it illegally promoted and marketed the painkiller Vioxx. This came after Merck had to remove the drug from the market in the wake of reports that the company for years covered up evidence of serious safety issues surrounding its blockbuster product. This is just one of a long list of its cases involving illegal marketing, overbilling, false claims and anti-competitive practices.

Another of the CEOs who spoke out in response to Trump’s comments was JPMorgan Chase’s Jamie Dimon. Earlier this year, the bank had to pay $53 million to settle a case brought by the U.S. Attorney in Manhattan accusing it of engaging in discrimination on the basis of race and national origin in its mortgage business.

JPMorgan Chase was one of the parties that helped bring about the financial collapse of a decade ago, and in 2013 it agreed to a $13 billion settlement of federal and state allegations relating to the packaging and sale of toxic mortgage-backed securities.

In 2015 JPMorgan had to pay a $550 million criminal fine to resolve federal charges that it and other large banks conspired to manipulate foreign exchange markets. There are many more entries in the corporate rap sheet of this company, which since the beginning of 2010 has had to pay out more than $28 billion in fines and settlements.

It would be difficult to find any members of the disbanded advisory councils whose companies have not engaged in serious misconduct of one sort or another.

Such is the peril of looking for paradigms of virtue in the business world. Corporate executives should, along with many others, speak out against Trump’s reprehensible comments, but they cannot lay claim to moral leadership.

Exporting Hazards or Globalizing Regulation?

Americans may have initially felt a bit smug upon learning that the combustible material responsible for the Grenfell Tower disaster in London is largely banned in the United States. Perhaps our regulatory system is not as deficient as we thought.

That moral superiority went out the window when it came to light that the deadly cladding was purchased from an American-based company. Some of the outrage being exhibited toward public officials in Britain should also be aimed at Arconic, a company created from the break-up of the aluminum giant Alcoa. Arconic has announced that it will suspend sales of the cladding, known as Reynobond PE, for high-rises, but that does little good for the scores of people killed in the Grenfell fire or the thousands of others who have been forced to leave other apartment houses now found to contain the material.

Although most of the attention is on Arconic’s cladding and its role in spreading the conflagration, it turns out that fire itself was caused by another American product, a refrigerator made by Whirlpool under its Hotpoint brand. The appliance had a back made out of flammable plastic rather than the metal typically used in models sold in the United States. The London Fire Brigade had long lobbied, to no avail, to require new appliances to have fire-resistant backing.

The sale of banned products in offshore markets is, unfortunately, a longstanding practice among U.S-based multinational corporations. What’s unusual in this case is that the offshore market is a wealthy country such as Britain, whereas the dumping is normally done in poor countries.

As Russell Mokhiber points out in his 1988 book Corporate Crime and Violence, one of the earliest examples was that of the now defunct company A.H. Robins, which in the 1970s sold thousands of its Dalkon Shield intrauterine contraceptive devices in 42 countries even after it became apparent that thousands of U.S. women were experiencing severe and sometimes deadly ailments linked to the IUDs.

In 1972 the U.S. Environmental Protection Agency prohibited most uses of the insecticide DDT, yet American producers continued to sell in foreign markets for years until most other countries adopted their own bans.

U.S. companies also continued to export dangerous products such as asbestos, flammable children’s pajamas and lead-based house paint after being barred from selling them in domestic markets.

These practices illustrate the perverse way that most large companies regard the regulation of their business. They are not willing to admit that restrictions are legitimate — even when imposed in the wake or injuries and deaths — and will adhere to them only to the extent absolutely necessary. If they can continue to sell products they have been told are harmful to some customers, they will do so.

This mindset seems to result from both a knee-jerk ideological opposition to all regulation and an amoral pursuit of profits. The persistence of corporate crime suggests that attempting to reform big business from within — the dubious promise of corporate social responsibility — is far from adequate. Just as markets have superseded borders, so must regulation be globalized.

The Other Trump Collusion Scandal

For months the news has been filled with reports of suspicious meetings between Trump associates and Russian officials. Another category of meetings also deserves closer scrutiny: the encounters between Trump himself and top executives of scores of major corporations since Election Day. What do these companies want from the new administration?

During the presidential campaign, Trump often hinted that he would be tough on corporate misconduct — especially the offshoring of jobs — and this won him a significant number of votes. After taking office, however, much of the economic populism has disappeared in favor of a shamelessly pro-corporate approach, especially when it comes to regulation. Big business has put aside whatever misgivings it had about Trump and now seeks favors from him.

There is always a fine line between deregulation and the encouragement of corporate crime and misconduct. We should be concerned about the latter, given the roster of executives who have made pilgrimages to the White House.

Public Citizen has just published a report looking at the track record of the roughly 120 companies whose executives have met publicly with Trump since November 8 and finds that many of them “are far from upstanding corporate citizens.”

Using data from Violation Tracker (which I and my colleagues produce at the Corporate Research Project of Good Jobs First), Public Citizen finds that more than 100 of the visitors were from companies that appear in the database as having paid a federal fine or settlement since the beginning of 2010.

In its tally of these penalties, which includes those associated with companies such as Goldman Sachs and Exxon Mobil whose executives were brought right into the administration, Public Citizen finds that the total is about $90 billion.

At the top of the list are companies from the two sectors that have been at the forefront of the corporate crime wave of recent years: banks and automakers. JPMorgan Chase, with penalties of almost $29 billion, is in first place. Also in the top dozen are Citigroup ($15 billion), Goldman Sachs ($9 billion), HSBC ($4 billion) and BNY Mellon ($741 million). Volkswagen, still embroiled in the emissions cheating scandal, has the second highest penalty total ($19 billion). Two other automakers make the dirty dozen: Toyota ($1.3 billion) and General Motors ($936 million).

The rest of the dirty dozen are companies from another notorious industry: pharmaceuticals. These include Johnson & Johnson ($2.5 billion), Merck ($957 million), Novartis ($938 million) and Amgen ($786 million).

All these companies have a lot to gain from a relaxation of federal oversight of their operations. While it remains unclear whether the Trump campaign used its meetings with Russian officials to plan election collusion, there is no doubt that the administration has been using its meetings with corporate executives to plan regulatory rollbacks that will have disastrous financial, safety and health consequences.

The Emissions Scandal Widens

Big business would have us believe that it is on the side of the angels when it comes to the Paris climate agreement. A group of large companies just published full-page ads in the New York Times and Wall Street Journal urging (unsuccessfully, it turned out) President Trump to remain in the accord.

Not included in the list of blue chip signatories were the big auto producers, which may reflect the realization among those companies that it is becoming increasingly difficult for them to present themselves as defenders of the environment.

On the contrary, recent developments could cause them to be regarded as among the worst environmental criminals. That’s because evidence is growing that the kind of emissions cheating associated with Volkswagen is more pervasive in the industry.

Recently, the Justice Department, acting on behalf of the Environmental Protection Agency, filed a civil complaint against Fiat Chrysler alleging that the company produced more than 100,000 diesel vehicles with systems designed to evade federal emission standards. As a result, those vehicles end up producing pollutants (especially oxides of nitrogen or NOx) well above the acceptable levels set by EPA. In its announcement of the case, DOJ noted: “NOx pollution contributes to the formation of harmful smog and soot, exposure to which is linked to a number of respiratory- and cardiovascular-related health effects as well as premature death.” This is a polite way of accusing the company of homicide.

Around the same time, a class action lawsuit was filed against General Motors accusing the company of programming some of its heavy-duty pickup trucks to cheat on diesel emissions tests.

The two companies are responding differently. GM is denying the allegations, calling them “baseless” and vowing to defend itself “vigorously.” Fiat Chrysler tried to ward off the federal lawsuit by promising to modify the vehicles. It expressed disappointment at the DOJ filing but is still vowing to work with regulators to resolve the issue. Fiat Chrysler is also maintaining that its systems are different from those used by Volkswagen, which has had to pay out billions in settlements and criminal fines; several of its executives are facing individual criminal charges.

Whether the response involves stonewalling, remediation or splitting hairs, the emergence of these new cases turns the emissions scandal from one involving a single rogue corporation to a pattern of misconduct that may turn out to be standard practice throughout the auto sector.

This in turn raises broader issues about deregulation. The Trump Administration and its Republican allies in Congress try to depict corporations as helpless victims of regulatory overreach in need of relief. What the widening emissions scandal shows is that large companies are often instead flagrantly violating the rules and in doing so are putting public health at risk. Rather than relaxing regulation, policymakers should be intensifying oversight to make it harder for cheating to occur.

The car industry would be a good place to start. Misconduct among automakers dates back decades. It was GM’s resistance to safety improvements that inspired Ralph Nader to launch the modern public interest movement in the 1960’s, and it was Ford’s negligence in the deadly Pinto scandal of the 1970s that gave new meaning to corporate greed and irresponsibility. It’s time for these companies to clean up their act once and for all.

Targeting Those at the Top

It remains to be seen how high the new special counsel Robert Mueller aims his probe of the Trump campaign, but there are reports that another prominent investigation is targeting those at the top. German prosecutors are said to be examining the role of Volkswagen chief executive Matthias Muller and his predecessor Martin Winterkorn in the emissions cheating scheme perpetrated by the automaker. They are also looking at the chairman of Porsche SE, which has a controlling interest in VW.

Mueller and Muller, by the way, have more of a connection than the similarity of their names. Last year, the former FBI director was chosen by a federal judge to serve as the “settlement master” to help resolve hundreds of lawsuits brought against VW in U.S. courts. Mueller has played a similar role regarding suits brought against Japanese airbag maker Takata.

Although Winterkorn was forced to resign after the emissions scandal erupted in 2015, he and Muller — who was VW’s head of product planning while the cheating was taking place — denied any wrongdoing, and the company sought to pin the blame on lower-level managers.

The initial U.S. Justice Department case against VW named no executives at all, though a company engineer later pleaded guilty to fraud charges and in January DOJ indicted six other VW middle managers.

There is no question that many individuals had to be involved in a scheme as widespread as the one at VW. Although it was corrupt, VW was also bureaucratic, so it is to be expected that lower-level managers either sought permission from their superiors for undertaking a risky scheme — or they were carrying out a plot that originated from above.

In fact, the New York Times reports that it has been shown internal company emails and memos suggesting that VW engineers implementing the scheme were operating with the knowledge and consent of top managers.

As the evidence mounts, the issue for German prosecutors may no longer be whether the likes of Muller and Winterkorn were involved but whether they, the prosecutors, are willing to bring charges against those at the apex of the corporate hierarchy.

In the United States, a reluctance to take that step has tainted the prosecution of business crime for more than a decade. At a time when discussion of whether anyone is above the law is the focus of discussion in the government realm, we should not forget that the principle applies in the corporate sector as well.