The New Policing of Business Crime
| Publication year | 2013 |
I. INTRODUCTION
The majority of police departments in the United States changed their policing practices in various ways in the 1980s and 1990s in a group of varied reforms often lumped together under the heading of "the new policing."(fn1) While earlier police reform efforts focused on professionalizing the force,(fn2) the new policing emphasized a shift away from a model built on reacting to crime-responding to 911 calls and investigating reported crimes-toward a more proactive model designed to stop crimes from occurring in the first place.(fn3)
Different police departments employ different proactive strategies in the service of deterring crime under this new policing framework. Some have been inspired by the "broken windows" theory made famous in a 1982 article by George L. Kelling and James Q. Wilson. Their central idea is that allowing disorder to exist unchecked facilitates a breakdown of social norms and community controls, which in turn sends a signal to would-be criminals that "no one at the scene of disorder cares," increasing fear in the community, and therefore spawning more disorder and crime.(fn4) Inspired by this insight, many departments have employed tactics designed to maintain order. Some departments emphasized a greater police presence to increase the perception of orderliness.(fn5) In other places, increasing the perception of order has meant aggressive enforcement of so-called quality-of-life crimes, such as prohibitions on aggressive panhandling, unlicensed vending, public drunkenness, turnstile jumping, or graffiti. For some departments, more police stops and frisks are the key to maintaining order.(fn6) In an effort to target youth crime, other communities have turned to anti-loitering or anti-gang ordinances, youth curfews, or reward programs for people who turn in gun possessors.(fn7)
Another key approach that has been grouped under the new policing heading has been a turn to community policing. Many departments began to place great weight on improved community interactions and partnerships to figure out the community's priorities and how best to address them.(fn8) This interaction could take the form of more officers walking a beat, regular community outreach meetings, or more authority vested in the beat cop as opposed to centralized police management.
Still another facet of the new policing emphasizes the use of data and intelligence to identify hot spots or key criminal actors in an effort to improve the deployment of resources. The New York Police Department (NYPD), for instance, uses satellite imagery and computerized data analysis to identify zones of high crime density, unearth trends and patterns, and then develop a proactive policing strategy that responds to what the data reveals.(fn9) For example, the NYPD's Operation Impact takes discrete hot spots-some as small as a single housing development-and "floods" the area with a large police presence.(fn10) Boston's police force, to take another example, uses computerized analysis of reports and investigations to identify particularly dangerous individuals in communities so those individuals can be swiftly punished when they transgress.(fn11)
New policing in the street crime context has not gone without criticism. Some of the tactics associated with the new policing-particularly aggressive stop-and-frisk tactics-have come under fire for their disproportionate impact on communities of color. And although new policing techniques have been associated with reductions in crime, critics have questioned the extent of that relationship.(fn12) Skeptics of the new policing have further argued that even if it reduces some crimes, the approach involves greater costs than benefits, particularly because the impact of heightened enforcement of misdemeanor and quality-of-life offenses falls disproportionately on minority and economically disadvantaged individuals(fn13) and because the tactics may undermine the legitimacy of the police, which in turn reduces the cooperation of the community in fighting crime.(fn14) Scholars have created a rich literature that seeks to identify which aspects of the new policing are worth embracing and which aspects require reform.(fn15)
But just about all the attention to new policing techniques thus far has focused on street crime. It is not hard to understand why. The new policing largely began as an outgrowth of the broken windows theory that calls for an aggressive response to signs of disorder; thus, it is quite literally the broken window seen from the street and other tangible signs of neglect in a community that prompted the development of these new strategies.
Crime, however, is not limited to the streets. Business crime has been a significant problem in the United States.(fn16) Indeed, by some measures, it is on the rise and an increasing source of concern for law enforcement. Just as the spike in street crime in the 1980s prompted new policing strategies, the growth in business crime is beginning to spur a change in policing tactics in this context as well. And some key enforcement actors in the business crime context have turned to the new policing of street crime for inspiration.
The central goal of this Article is to describe the burgeoning turn to new policing techniques in the business crime context and to offer some initial thoughts on the promises and limits of the approach. Part II begins by explaining the traditional or "old policing" of business crime. After implementing an initial strategy that focused on pursuing individuals, the government turned its attention to the organizations where those individuals operated. It increased the sanctions for violators and sought to target companies in an effort to prompt them to adopt internal compliance programs. The focus on company compliance programs was designed to change corporate culture, sharing with the broken windows theory a focus on norms. This policy did not, however, stop enormous corporate frauds or the economic meltdown that occurred in 2007 and 2008 that many believe depended on illegal activities.
In response to these failures, Part III argues, the United States is embarking on a new era in policing business crime that, like the new policing of street crime, aims to be more proactive. And like its street crime counterpart, business crime policing is pursuing different approaches.
One approach relies on intelligence-led methods that use extensive data analysis to target problematic areas and actors. The Securities and Exchange Commission (SEC), arguably the most important entity policing financial crime, is the key actor pursuing this strategy. It established the Office of Market Intelligence, a central repository for all complaints and data analysis. And the SEC has dedicated specialized units to interpret data in particular contexts with the aim of identifying white-collar hot spots and actors that merit closer scrutiny. The SEC also recently passed a rule to make it easier for the agency itself to identify wrongdoing-instead of relying solely on complaints and tips supplied by others-by creating a uniform audit trail. Additional regulatory approaches include providing new incentives for whistleblowers within the organization.
Another approach to new policing in the business crime context follows a different blueprint and is akin to those street crime methods that aim to change social norms. The Department of Justice (DOJ)-the United States' chief prosecutor of financial crimes-is taking a more active role for itself inside companies, at least for those companies that have already demonstrated a propensity for wrongdoing. DOJ increasingly allows companies to enter deferred prosecution agreements (DPAs) or non-prosecution agreements (NPAs) that allow companies to avoid criminal charges if they agree to terms set by prosecutors.(fn17) The content of these agreements reflects a new, more aggressive approach to policing wrongdoing that goes beyond the compliance programs of the old policing. For example, through DPAs and NPAs, the government routinely installs monitors who report what they see and hear directly to the government. Thus, instead of relying on the company to report violations and then reacting to it, now the government proactively seeks to identify problems through the use of an agent it has installed in the company. The government has also ordered changes in personnel and company business practices, further placing itself in charge of changing norms.
Another effort to change norms through criminal policing involves the increasing use of wiretaps to investigate insider trading. Although that particular policing technique is not necessarily proactive and can be used reactively to investigate a reported instance of abuse, DOJ is currently using it in the spirit of the new policing paradigm. Market participants and the general public share the view that insider trading is commonplace, so the absence of prosecutions sends a message that the government does not care. It is thus analogous to the broken window that no one fixes. The message sent is that disorder is prevalent, which in turn erodes the social norms that help constrain criminal conduct. Wiretaps, and particularly well-publicized ones, seek to alter that perception by suggesting the government does care-because it is listening.
...
To continue reading
Request your trial