Senate Bill Would Ensure Negligent Corporate Officials Are Held Accountable
by Ronald White, 7/16/2014
On July 16, Sens. Richard Blumenthal (D-CT), Bob Casey (D-PA), and Tom Harkin (D-IA) introduced the Hide No Harm Act. The legislation would require corporate officers to disclose to employees, federal officials, and the public information and warnings about serious dangers associated with product defects or unsafe work practices. Currently, criminal fines and imprisonment are rarely imposed on individual corporate executives who have knowingly concealed such crucial information, but this bill would ensure that those personally responsible for decisions leading to serious injuries or deaths are held criminally accountable.
The legislation comes in the wake of multiple cases of corporate misconduct that led to serious injuries and deaths. A recent example involved General Motors' (GM) recall of millions of automobiles with defective ignition switches. For over a decade, GM withheld information about the switches from regulators and the public. The company recently conceded that faulty switches are responsible for at least 13 deaths over the past several years, and some regulators believe the actual death toll may be much higher. GM has moved to settle more than 300 claims related to these deadly ignition switches.
On May 16, the Department of Transportation and the National Highway Traffic Safety Administration slapped GM on the wrist with a $35 million civil fine, amounting to less than a day's revenue for the company. Although GM executives were aware of the defects and even asked employees to conceal the safety concerns from the public, not one of them will have to pay a criminal fine or face time in prison. A leaked slide from a 2008 training presentation, shown below, lists words and phrases that GM executives wanted employees to avoid when communicating about defective vehicles and parts. The list includes: "deathtrap," "crippling," "Hindenburg," "rolling sarcophagus," and yes, "you're toast."
Only a few years prior to the GM case, Toyota similarly withheld safety defects in millions of its vehicles, which have been linked to at least five deaths. Instead of informing and warning people about potential unexpected acceleration in some of their cars, Toyota officials chose to intentionally mislead the public by concealing their knowledge of the defective vehicles. Toyota executives paid a civil fine (albeit a significant one at $1.2 billion) and washed their hands of the situation. But again, not one corporate official faced criminal penalties.
Dangerous product cover-ups aren't unique to the auto industry. In the pharmaceutical sector, Merck withheld information on the risks of the painkiller Vioxx from doctors and patients for more than five years, resulting in an estimated 88,000 to 139,000 heart attacks, approximately 30 to 40 percent of which were fatal.
We need to ensure that companies take health and safety seriously and that corporate executives no longer consider loss of life a "cost of doing business" that they are willing to absorb because potential fines are paid by the corporation. The criminal penalty provisions of the Hide No Harm Act will deter corporate officers from withholding critical information and failing to warn about product defects and dangerous work practices that endanger workers and the public. By holding corporate executives personally accountable for their decisions, this legislation serves to ensure that human life is valued over a company’s bottom line and executive bonuses.