No Further Convincing Required

Laurie Taylor's latest newsletter promoting his Thinking Allowed program on Radio 4:


Plenty to read in the papers this morning. The Sun has the story of a grandfather being beaten to within an inch of his life while the Mirror gives me all the details of how a drunken man stabbed his friend in a bust-up over a packet of sausages.

But nowadays I’m reading such stories with rather less appetite than usual. What’s changed my attitude is the recognition that their appearance tends to obscure or even deny the presence in our society of other serious criminals – smiling white collar fraudsters who during the course of their everyday jobs steal massive amounts of money from banks, pension funds, corporations, government and private individuals.

According to even the most conservative estimate £20 billion was stolen in 2005 and City accountants believe such fraud figures may treble as a result of the current recession.

And how much of that fraud will be detected? One leading police fraud officer told me that the figure was probably no more than five per cent. Cases of financial crime are complex, but can that really be sufficient explanation for the news that the Financial Services Authority failed to initiate a single prosecution last year?

You can tell the story of the neglect of fraud in a little flowchart. Even if a serious fraud is detected in a company it’s rarely reported to the police or financial authorities. (Frankly, your bank would rather no-one else knew about their lack of security). Even if a fraud is reported it may not then be subsequently investigated. Former police officers who’ve worked in this area told me that outside London I’d be hard pressed to find a force with even a couple of officers dedicated to the crime. Then after a successful investigation there may be no prosecution (long drawn-out cases which end in failure are a serious embarrassment to bodies like the Serious Fraud Office which knows full well that between 2003 and 2007 four out of every ten fraud prosecutions failed). But if at the end of this hazardous path, a verdict of guilty is finally achieved, then the white collar criminal can usually look forward to a light sentence in an open prison.

Does the existence of so much unchecked, undiscovered, unpunished fraud matter? Former Director of Public Prosecutions, Sir Ken MacDonald put it this way in The Times earlier this year. Regulation and enforcement, he argued, ‘create an environment in which people can make decisions…confident in the knowledge that what they legally hold will not be stolen from them. That is the basis of all law and it is shockingly absent from our financial markets.’

Brave words. It's unlikely that a public figure will ever express such a sense of outrage about another group of white collar criminals who never made an appearance in my seminars and rarely warranted a single headline. And yet their actions, or lack of action, lay behind, according to official statistics, over two hundred deaths and as many as 28,000 serious injuries every year. The perpetrators of this mayhem are the UK employers who failed in one way or another to secure the safety of their own workers. Official figures admit 229 people died at work last year: crushed in building sites, consumed by machinery, decapitated by cranes , burned to death by acid, and other grizzly ends, but these figures go up enormously when one adds in all those who continue to perish from the effects of such known work-place hazards as asbestos.

Of course a small proportion of these deaths and injuries may be nobody’s fault or the fault of the victim. But how might we ever know? The body charged with regulating safety at work, investigating deaths and injuries, and prosecuting offenders, is the Health and Safety Executive. But my visit to the HSE headquarters on Merseyside revealed that the total number of inspectors has dropped to 1415. There is no more dangerous workplace than the construction site, but a recent estimate suggests that there is now a single inspector available for every 3,300 building sites. I also learned at the HSE that the numbers of prosecutions for safety crimes had fallen by 46 per cent over the last six years.

Perhaps it’s our traditionally cavalier attitude to white collar crime which means that so little attention is currently paid to computer fraud. Stories may regularly surface about how people have been cheated out of their savings by ‘phishing’ (e-mails offering unexpected legacies in return for bank details) and ‘scareware (the use of bogus viruses to achieve similar ends). But despite an estimated 294,600 computer fraud offences in 2008 alone, there have been just 200 prosecutions for such offences under the Misuse of Computer Act in the last 20 years.

Why don’t we bother more about white collar crime? And why should we give it more attention? Over a hundred years ago, the American sociologist, Edward Alsworth Ross, perfectly captured the problem. ‘The stealings and slaying that lurk in the complexities of today’s social relations are not deeds of the dive, the dark alley, the lonely road and the midnight hour. The modern high-power dealer of woe wears immaculate linen and sins with a calm countenance and a serene soul, leagues or months from the evil he causes. Upon his gentlemanly presence the eventual blood and tears do not obtrude themselves. The hurt passes into that vague mass, the ‘public’ and is there lost from view’.

How might we ensure that more of these white collar criminals in their immaculate suits are brought to justice? Attitudes might just start to shift if readers of the popular press – and that includes the mass of politicians – woke up every morning to some slightly unusual headlines. How about:

‘Rich City boss robs poor pensioner blind.’ or ‘Top Company Executive drowns worker in vat of acid.’
I’ll be introducing a special three part exploration of White Collar Crime at four o’clock today or after the midnight news on Sunday (or download our podcast).

In next week’s programme I will take a critical look at the various agencies which attempt to regulate this form of crime (the Serious Fraud Office, the Financial Services Authority and the Health and Safety Executive). And in the third programme on the following Wednesday (18th November) I’ll be looking at the very modest punishments which await the few people ever successfully convicted of white collar crime.

This means that this will be my last newsletter until we resume normal programming again on Wednesday 25th November. I trust you won’t miss me too much!

You can hear the programmes which were made in association with the Open University, and have your say on the issue of white collar crime, by going to a dedicated website: http://www.open2.net/thinkingallowed/index.html

Laurie