The Back History of “Too Big to Jail”

In which we learn, courtesy of the blog Hooked, that in many pharma corps there used to be a “VP in charge of going to jail”  but a supreme court decision ended that tactic.  Now we have a “shell” corporation take the hit which amounts to no serious damage to the corporation really responsible.

From Howard Brody’s blog Hooked:

As I described in HOOKED, Australian business sociologist John Braithwaite, in the course of doing the research for his 1984 book, Corporate Crime in the Pharmaceutical Industry, was interested to discover that more than one U.S. drug firm had a position in the organizational chart informally called “vice president in charge of going to jail.” The lines of authority were arranged so that, if the firm was ever caught doing illegal things, this particular VP would take the hit and thereby protect higher-ups from criminal prosecution; and that VP’s compensation package included appropriate recompense for this service. This handy arrangement was later messed up by a U.S. Supreme Court ruling in a case called Park. According to Park, I gather, the court held that if a company did wrong, and somebody had to be blamed, it had to go up to the CEO. So the position of “VP in charge of going to jail” presumably went the way of the dinosaurs and the dodo.

Now fast forward to the present. According to a CNN special report:

http://www.cnn.com/2010/HEALTH/04/02/pfizer.bextra/?hpt=Sbin

–the old VP in charge of going to jail has been replaced with the shell company in charge of being prosecuted for the main firm’s misdeeds. This is a much nicer arrangement as there really is no shell company, so no one has to go to jail, or to be paid extra for running the risk.

via Hooked: Ethics, Medicine, and Pharma: CNN: Pfizer Too Big to Prosecute; Shadow Company Takes the Hit.

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