Suite justice or sweet charity?

Published date01 April 2002
DOI10.1177/14624740222228527
Date01 April 2002
Subject MatterArticles
/tmp/tmp-18xmJl9eOlgN3B/input 01 Levi (JG/d) 11/3/02 11:09 am Page 147
Copyright © SAGE Publications
London, Thousand Oaks, CA
and New Delhi.
Vol 4(2): 147–163
[1462-4745(200204)4:2;147–163; 022687]
PUNISHMENT
& SOCIETY
Suite justice or sweet
charity?

Some explorations of shaming and
incapacitating business fraudsters
MICHAEL LEVI
Cardiff University, UK
Abstract
This article examines the use of shaming and stigma against financial criminals and
evidence for and against their impact. It first reviews the extent to which fraudulent
behaviour attracts shaming responses – which depends partly on the nature of the frauds
committed – and then the extent to which fraudsters are likely to care about the shame
that is sought to be imposed upon them. It suggests that potential damage to business
prospects is probably more salient than shame per se to impact of informal sanctions,
but that culture is an important component of the process of shaming, and that further
research is needed before we can be confident about the effectiveness of shame in this
area, quite apart from the difficulties of applying it in practice.
Key Words
corporate crime • elite • fraud • globalization • sentencing • shaming • white-collar
crime
INTRODUCTION
White-collar crime in general and frauds committed by ‘respectable’ individuals in
particular have always presented difficulties both for the explanation of sentencing (in
particular, issues of socio-economic bias) and for the normative aspects of what is the
most appropriate form of sentencing (fairness). In one of the few interview-based studies
of sentencing white-collar criminals, Wheeler et al. (1988) discuss ‘the paradox of
leniency and severity’ whereby (as I summarize) US federal judges wavered between (a)
accepting that there was little or no point in sentencing offenders to jail who were
professionally ruined anyway, (b) satisfying the general public by tough retribution and
(c) expressing their own moral revulsion at offending by those who have the capacity to
behave honestly but who choose not to do so.1 Their work, together with my own
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PUNISHMENT AND SOCIETY 4(2)
analysis of sentencing cases and discussions with English judges, suggest that judges com-
monly assume a serious loss of social and economic standing in the community arising
from conviction or even prosecution per se. In short, for elites, ‘the process is the punish-
ment’ (Levi, 1993; von Hirsch and Wasik, 1997). For example, conviction can lead to
formal professional disqualification for accountants, lawyers, senior bankers and anyone
directly selling financial services. Disbarment may even follow acquittal, if breaches of
regulatory rules are demonstrated. These professional sanctions are imposed in order to
protect the depositing and investing general public, consumers of professional services2
and also to protect the image of the professions. So whether or not shame or its more
negativistic, socially excluding close cousin, stigma actually occur, some sorts of
meaningful sanctions – social and/or professional – are assumed by sentencers to take
place arising from or independent of the criminal process. Professional consequences of
this kind, like the more informal sanctions, vary between nation states and occupational
cultures, often in quite subtle ways.
This article examines the evidence for the existence and impact of shaming on white-
collar offenders, and discusses whether what happens and/or is intended to happen is
reintegrative shaming or exclusionary stigma. Braithwaite (1989 et seq.) and, in a
different way, Elias (1982) have focused academic and political attention upon the
shaming process, both (a) as an explanation for variations in crime rates and (b) as a
normative approach to crime control, which should partly replace imprisonment and
other severe formal sanctions. Braithwaite argues that society’s emphasis on punishment
as desirable in itself and its assumption that punishment leads to reformation consti-
tute a mistake both of principle and practical judgement. Instead, he argues, societies
like Japan that shame offenders and then (supposedly) reintegrate them into normal
life are better able to control deviance without wasting money and human capital on
pointless punishment. He does not claim that such reintegration is easy, and one might
expect shaming to work best with those who are already well integrated into law-
conforming groups and therefore fear loss of esteem from their peers and feel the need
to atone for past conduct: people, in other words, who have some grace from which to
fall. In relation to fraud and corporate crime, evidence of the effects of either punish-
ment or shaming is poor compared with street and household crime, since measures of
commercial offending and victimization are less well established. However, Braithwaite
plausibly argues that large corporations are concerned about their reputations and
commit fewer health and safety and other violations than do marginal firms that tend
to be less concerned about complying with standards. Because he is more concerned
about behavioural change than about moral deserts, the question of whether corpor-
ations – which have ‘no body to kick, no soul to damn’ – are appropriate objects of
deserved punishment is by-passed in favour of pragmatic concerns about ‘what works’.
Braithwaite’s focus on improving behavioural standards in major corporations leads
him to neglect frauds committed by individuals and corporations that do not intend
to continue in business or whose offending is essential to their economic viability. This
omission is significant because the costs and benefits of ‘reputation’ for these marginal
firms differ substantially from those of large multinational corporations, who devote
considerable resources to reputation maintenance. We might also question whether
and under what plausible monitoring conditions we should allow every shamed
business-person or professional to be reintegrated into their ‘trade’ as well as into
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LEVI
Suite justice or sweet charity?
‘society’. Might there not be some businesses for which stigma and exclusion are
appropriate sanctions?
Shaming and fraud: The context
In this article, the focus is upon fraud rather than the wider area of corporate malefaction
(for which, see Fisse and Braithwaite, 1983, 1993; Slapper et al., 1999). In principle,
one might expect shame to be applied most strongly to those who are seen as having the
ability to behave honestly (noblesse oblige) and to those offences that are viewed most
seriously. These are also areas in which emotionally it is most difficult to avoid a prefer-
ence for retribution rather than forgiveness. Both the people and the activities that fall
within the category of ‘fraud’ are heterogeneous, ranging from blue-collar credit card
fraudsters to elite insider dealers, and from fraud against the poor and elderly to fraud
against wealthy institutions. Furthermore, analyses of the impact of shame should
incorporate wider reference groups to which the offender belonged at the time of the
offending and at the time at which sanctions were applied, as well as the narrower
relationship between the offender and the victim.
Reference group attitudes are affected by the shift towards more impersonal dealings
in an increasingly globalized market society. Though it is true that ‘the financial City’
remains a place in which repeat players interact rather than being a virtual network of
strangers, the level of mutual integration and dependency has lessened to varying
degrees.3 In a highly mobile, anomic culture (Friedrichs, 1996; Passas, 1999), individual
traders and their managers are focused more on this year’s performance-related bonus
than on next year’s, not least because many are unlikely to be around to face the
consequences of the risks that they take. (Though of course retribution via criminal or
regulatory sanctions may follow eventually.) Nevertheless, my unpublished interviews in
the UK suggest that many traders are avid readers of the professional trade and broad-
sheet press (such as the Financial Times and Wall Street Journal) so they can be expected
to be aware of any formal sanctions imposed on their peers and the basis for those
sanctions. In relation to the more technical forms of market abuse, however, such
concerns are more likely to reflect classic ‘rational actor’ deterrence models than be
internalized views about the wrongfulness of the behaviour.
What factors would one predict would influence the effectiveness of shaming? One
element would be sub-cultural and national variation. Victimization and business
perception surveys conducted for Transparency International (TI, 2001) indicate sub-
stantial variations in general levels of corruption and consumer fraud within and
between first- and third-world countries (Levi and Pithouse, forthcoming;
www.gwdg.de). Conceptions of the ‘normality’ of commercial criminal behaviours can
thus be expected to differ, with businesspeople in Finland or New Zealand (at the moral
end of the TI business perceptions index) finding bribery of foreign public officials far
less normal or acceptable than their counterparts in China, Nigeria and Russia (at the
low end of the index). In addition to personal values and cultural norms, expectations
of whether people in their social group will learn about their offences and what their
reactions will be are also salient. This is not a function solely of the denunciatory inten-
tions of the prosecutors4 or...

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