Corporations Stiffing Government on Fines

By MARTHA MENDOZA and CHRISTOPHER SULLIVAN
The Associated Press
Sunday, March 19, 2006; 5:51 AM

-- When a gasoline spill and fiery explosion killed three young people
in Washington state, officials announced a record penalty against a
gas pipeline company: $3 million to send the message that such
tragedies "must never happen again."

When nuclear labs around the country were found exposing workers to
radiation and breaking other safety rules, assessments totaling $2.5
million were quickly ordered.

When coal firms' violations were blamed for deaths, injuries and risks
to miners from Alabama to West Virginia, they were slapped with more
than $1.3 million in penalties.

What happened next with these no-nonsense enforcement efforts?

Not much.

The pipeline tab was eventually reduced by 92 percent, the labs'
assessments were waived as soon as they were issued, and the mine
penalties largely went unpaid.

The amount of unpaid federal fines has risen sharply in the last
decade.

Individuals and corporations regularly avoid large, highly publicized
penalties for wrongdoing _ sometimes through negotiations, sometimes
because companies go bankrupt, sometimes due to officials' failure to
keep close track of who owes what under a decentralized collection
system.

These are conclusions of an Associated Press examination of federal
financial penalty enforcement across the nation, which also found:

_The government is currently owed more than $35 billion in fines and
other payments from criminals and in civil cases, according to Justice
Department figures. This is almost five times the amount uncollected
10 years ago _ and enough to cover the annual budget of the Department
of Homeland Security. A decade ago, Congress mandated that fines be
imposed regardless of defendants' ability to pay, which has added
tremendously to outstanding debt.

_In 2004, federal authorities ordered $7.8 billion in 98,985 fines,
penalties and restitution demands in criminal and civil cases, but
collected less than half of that.

_White-collar crime cases account for the largest amount of
uncollected debt. In a study, Government Accountability Office
investigators found that just 7 percent of restitution in such cases
is paid.

"Fines and orders to pay restitution are an important part of how we
punish convicted criminals. When so little effort is made to collect
that money, we allow convicted criminals to avoid punishment for their
crimes, weaken our criminal justice system and ultimately deny justice
to the victims of crimes," said Sen. Byron Dorgan, D-N.D., who has
pressed for closer scrutiny for years.

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Who's in whose back pocket?

Harry