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Corporations can be punished for their involvement in criminal activity through seizure or forfeiture of assets, imprisonment of corporate officials found guilty of the crime(s) in question, and through debarment by federal, state, and/or local governments, which prohibits the companies in question from being eligible to bid on government contracts that, especially at the federal level, can be very lucrative. Beyond these traditional methods of penalizing corporations for criminal conduct, companies could be compelled by courts to act in a socially responsible way. In other words, a creative or nontraditional punishment or penalty that could be imposed upon corporations is the requirement that they engage in activities beneficial to the public at large. These activities would have some relationship to the nature of the crime for which the corporation has been found guilty. For example, one could demand a corporation replenish wetlands or fund construction of a public facility like a park as a way of addressing or remediating destruction of property caused by corporate malfeasance.
Corporations could also be compelled by the courts to redress injuries caused to the public through the funding of educational activities oriented toward the nature of the crime, such as through academic grants or scholarships focused on environmental protection or health care in the case of corporations guilty of environmental degradation or practices detrimental to consumer health. Penalties such as these are entirely consistent with existing judicial practices intended to rehabilitate individuals guilty of crimes such as driving under the influence of alcohol or drugs. Celebrities like famous athletes guilty of these types of crime are often sentenced by the courts to public service activities like speaking before groups of high school students on the dangers of drunk driving. Corporations, similarly, can be forced by the courts to conduct these types of activities -- executed, of course, by corporate officials -- while also being monetarily fined for misconduct.
When penalizing publicly-traded corporations, courts have to remain aware of the impact of penalties that could undermine the viability of the corporation. Causing thousands of stockholders to be penalized for the actions of corporate officials may not be fair, as the stockholders probably had no insight into the criminal behavior of corporate officials. The company must, however, be held accountable, and stockholders can express their displeasure with corporate conduct by exercising their vote at stockholder meetings and by dumping the stocks in question.
Corporations found to be guilty of criminal activities are frequently driven out of business as a result of the negative publicity surrounding the criminal and/or civil trial. In some cases, such as Enron, that may appear palatable to most observers. Dissolution of major corporations, however, means the sudden loss of thousands of jobs by employees who had no role in the illicit activities. Creative punishments, therefore, can alleviate the burden on innocent employees while holding accountable those corporate officials directly responsible for the criminal conduct.
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