October 01, 2007

Bush Administration Outlines 2008 Budget: Paves the way for more White Collar Crime

The Bush administration ignited a bruising battle with Congress last week, demanding the mammoth sum of over 190 billion dollars to fund the wars in Iraq and Afghanistan. While the Bush administration is clawing deeper into the government's pocket for the War on Terror, they are neglecting crucial programs at home. With the allotted 190 billion dollar budget, the FBI will lose critical funding for their criminal program, which Congress believes will cripple the bureau's ability to tackle white-collar fraud and other criminal injustices on the rise within the United States. White-collar crime has been on the rise in the last couple of years. Since September 11, many corporate criminals have escaped prosecutions because Bush has drastically shifted his funding programs towards increasing militarization and security as a result of the War on Terror. However, if he continues to do so as his 2008 budget outlines, corporations will take advantage of the loopholes.

President Bush has made, what esteemed blog "Comments from the Left Field" says is, a "wholesale shift" from domestic issues. The threat of terror abroad frightens the public, yet what they do not realize is that many corporations are stealing and defrauding them without their knowledge. White collar crime, defined as a crime committed by a person of respectability and high social status in the course of his occupation, costs the United States government $300 billion dollars annually. Already, thousands of criminals have escaped the federal prosecution since September 11. According to the justice department, there has been a 34% drop in white-collar crime cases reported to the federal government and a 30% decline in convictions. The Internet is a threatening gateway for white-collar criminals to exploit the public, having simple one-click access personal and financial information. Former FBI congressional liaison Charlie Mandigo believes that cutting agents will leave the door open for crime to become global and make it more difficult "to address interstate crime where local police do not have the capability, resources and jurisdiction."

Bush and convicted white-collar criminals are far too friendly, especially Enron. The White House and Enron have at times seemed interchangeable, both financially and politically. According to political author Sander Hicks, Vice President Cheney and Bush's campaign advisor Karl Rove previously consulted with Enron Chair Ken Lay on energy policy. Lay also gave suggestions to Rove on government nominations, creating a revolving door of personnel: five former Enron employees work in the White House and Cabinet. Enron donated almost "$2.4 million to federal candidates, and $2 million to Bush alone. They were in turn rewarded with legislation that allowed them to profit off the deregulation of state-run power industries," according to Hicks. Bush's tax cuts are designed to benefit his wealthy contributors, so that by 2010 the top 1 percent of Americans will have received 51.8 percent of the total tax cut and the bottom 20 percent will have received 1.2 percent. When money and politics meet, money prevails over ethics. Entanglements with white-collar crime do not begin and end with the Republican Party, however because Bush is in the executive chair right now, he has come under fire. Currently, the Democrats have united against Bush in Congress and are vehemently opposed to his tax cuts in many areas, FBI funding included.

Senator Patty Murray, D-Wash., is leading the Congressional effort against the new budget. Democrats and many Republicans have asked Bush to reexamine his tax cut policy. Murray claims that if Bush is willing to take money from the FBI for programming, he should be willing to change his tax cut proportions and reallocate the money. She approached the FBI and also implored the President to increase funding. In 2005 Washington sent only 28 white-collar cases to the federal government, which was a 90% drop from the year before. Bush has already transferred 2,400 agents since 2001, and if Bush takes more agents to his counterterrorism squad, the impact will affect the American people nationwide. Murray, however, is treading lightly. There is a fear the Bush will exercise his veto power. Because legislative and executive branches are politically misaligned, there is a significant power struggle and fear of the other gaining more power. Peter L. Strauss, a professor at Columbia Law School, said the executive order "achieves a major increase in White House control over domestic government. Having lost control of Congress, the President is doing what he can to increase his control of the executive branch."

Throughout the upper half of the last century, corporations, led by the contagious disease of greed, have sought emphatically for loopholes to cheat the system. Author Terry Leap argues in his book Dishonest Dollars: The Dynamics of White Collar Crime that "greed is difficult to understand, attributable to compulsive behavior and psychological behavior that can distort a person." Allowing adequate funding for the enforcement policies of white-collar crime is necessary to further democracy at home, regardless of what is happening abroad.

2 comments:

ND said...

KGP-

Thank you for brining this budget issue to light. While the press has been focusing on the billions needed for the military and large domestic issues like healthcare funding, it has neglected to cover the issue you raise here. White collar crime is especially difficult to investigate and prosecute, with evidence buried in pages of documents and obscured by arcane business practices. In terms of public cost per conviction, I imagine white collar cases are substantially more expensive than ones for other federal crimes.

I was wondering if you might be able to address some of the legislative measures recently passed against white collar crime. While enforcement measures can be expensive, some could say passing laws with more explicit rules and harsher penalties could act as a deterrent by itself. For example, following the implosion of Enron, congress passed the Sarbanes-Oxley Act that established tighter rules for companies and accountants to follow. There haven’t been cases of Enron-scale fraud in the United States since the law went into effect.

I think your post included many excellent sources. I like the way you wove in quotes from news stories, bloggers, and respected authors. However, I think a citation is needed at the top of the post regarding the budget. The SeattlePI article which mentions the proposed cuts to the FBI’s white collar unit doesn’t appear until article five. Otherwise, I think you touched on a lot of issues, from the political fallout to the changing role of technology in crime.

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