Hardly a day passes without news of another multi-million
(sometimes billion) dollar fine against some company for
harming other people. The cheque, however, isn't written to the
victims but rather to the US Treasury or some state authority,
where it is spent on other things.
Punishing transgressors is fine, but the disposition of the
resulting bounty seems far wide of the mark.
Forget, for now, that innocent shareholders actually pay the
fines in the form of falling share prices. Set aside that the
employees truly responsible escape both financial and physical
punishment far too often.
What about those against whom the dastardly deed was
perpetrated? They must either absorb the huge cost of
litigation alone, or seek to overcome the considerable hurdle
of obtaining "class action" status where all victims can share
the expense equally.
Punishing transgressors is fine, but the disposition of the resulting bounty seems far wide of the mark.
Why not pass a constitutional amendment or valid legislation
that gives victims a priority claim to any sums collected by
True, this would require a complex settlement process that may
have its own imperfections (see BP's oil spill or the
distributions following the Madoff and MF Global affairs), but
it trumps the current model where the largess received by the
government can be (and is) used for entirely different
There is something unseemly about the present system. It
enriches the wrong people. How different is it from a scheme
where police take a bribe for tearing up a speeding ticket or
allowing drugs to cross national borders?
Let's remember those who were harmed by letting them recoup
their losses first. The remainder (if any) can be retained by
the government and used as it sees fit.