The Savings and Loan Debacle, Financial Crime, and the State

Abstract

The savings and loan crisis of the 1980s was one of the worst financial disasters of the twentieth century. We argue here that much financial fraud of the sort that contributed to this debacle constitutes "collective embezzlement," and that this collective embezzlement may be the prototypical corporate crime of the late twentieth century. We further argue that the state may have a different relationship to this kind of financial fraud than to manufacturing crime perpetrated on behalf of corporate profits. In the conclusion, we suggest that an understanding of the relationship between financial fraud and state interests may open up new regulatory space for the control of these costly crimes. Our data come from a wide variety of sources, including government documents, primary statistical data on prosecutions, and interviews with regulators.

Histories of Transnational Crime

“…Furthermore, this chapter has shown that problems of transnational and business related crime are framed depending on their contemporary manifestations. The appearance of corporate crime seems to reflect the scandals and cases of misconduct that outrage the public and make good media attention (Levi 2006): from the muckrakers exposure of the robber barons at the beginning of the twentieth century, to trading with the enemy after World War II, consumer related crimes in the 1970s (e.g., the birth defects due to the drug Thalomide and the preservative Dalkon Shield and the death and injuries due to the explosive car Ford Pinto; Punch 1996), insider trading at Wall Street in the 1980s, the Savings and Loans crisis 1990s (Calavita et al 1997) and the big accounting fraud scandals in the new Millenium (e.g., ENRON, Worldcom, Tyco, etc). These are all US cases 5 , but other countries also have their landmark cases.…”

White Collar Crime: Recent Trends and Debates

“…White-collar crime scholars have investigated numerous examples of the interplay between changing regulatory regimes (and especially deregulation) and the expansion or maintenance of criminal activities in various industries or services, including the thrift industry (Calavita et al, 1997), the health care system (Sparrow, 1996), the accounting profession (Coffee, 2002), and recently the mortgage industry (Nguyen and Pontell, 2010), to name a few. As laws or regulations evolve or change, opportunities for white-collar crime expand or contract.…”

Love, Hate, Ambivalence, or Indifference? A Conceptual Examination of Workplace Crimes and Organizational Identification

“…As noted in Table 1, our review of the research on workplace crimes revealed that work on "organizational illegality," "corporate crimes," "unethical prosocial behaviors," and "corrupt organizations" (Baucus and Near 1991, Calavita et al 1997, Pinto et al 2008, Szwajkowski 1985, Umphress et al 2010) covers workplace crimes that are carried out with the intention to benefit the organization. For instance, organizational illegality is conceptualized as legally prohibited action that is taken by organizational members primarily on behalf of the organization (Szwajkowski 1985).…”