Shallow Trachea, Kin of Deep Throat,
Tells All on Why Big Business Pays those Large Fines.
By Jim Penn
It was one of those nights I couldn’t sleep: You know, when your mind keeps racing and thinking of stuff you need to do right away. About 1:30 a.m. I decided to go downstairs to my office to research and write. My faithful 24/7 writing companion, Cheddar the Golden Retriever, followed and took his position under the desk to keep me company and hear my supposed words of wisdom.
The phone rang at 2:00 a.m., and I pondered whether to answer it; the number that appeared was unfamiliar. Curiosity won out; I answered.
Caller: “Is this Jim Penn?”
Me: “Yes it is, and do you know what time it is?”
Caller: “Of course I do. Do you think I’m an idiot? This is Shallow Trachea; we’ve spoken before. Do you want the straight scoop on why major corporations pay large fines?”
I was immediately alert at the mention of one of my favorite topics.
Me: “Yes, I would like to know why. I have my own ideas and…”
“Cut the gab, Mister! Meet me in 30 minutes in the lower parking level of the Pleasure Inn on I-27. I’ll give you the inside story. You better show up.” Click.
Cheddar heard the conversation booming out of the speaker phone. He had heard her previous calls and thought I was crazy each time I ventured forth in the middle of the night. “Well, Cheddar, what do you think? Should I go?”
Cheddar cocked his head and answered with a stretch, a full tail-wagging and a request for snack.
Interpreting that as a yes, I gave him the requisite cookie and hurriedly dressed.
Arriving in 29 minutes, I parked my car in a darkened area of the parking structure and looked for the telltale signs of a lit cigarette or pipe or the popping of bubble gum. Once accustomed to the semidarkness, I noticed a person’s silhouette and what could have been a lit tobacco product Sure enough, the smell of aromatic tobacco wafted its way in my direction, and I exited my car.
Shallow Trachea: “That’s far enough, Jim. Long time no meet. I’ve been reading some of your stuff, and you sure could use some help.”
Me: “Thanks for the encouragement and support. Okay, what about big business paying fines? Do you have any insights that I don’t have?”
Shallow Trachea: “How the heck am I suppose to answer that? You really are not a very bright fellow, are you? I know your background; I know everything about you. I know you’ve got some experience in accounting and law and all that stuff, but you really don’t know much about government and big business, do you?”
Me: “Of course, I do. Do you think you’re the only person in the world that…”
Shallow Trachea: “Shut up and listen! Major corporations pay the large fines and get on with business to avoid getting debarred and being prohibited from lucrative government contracts. You know that, don’t you? You once had a client that was about to get debarred, but he died first. I’m going to refresh your memory since you don’t seem to be the brightest bulb in this parking lot. Under the Federal Acquisition Regulations, governmental agencies can suspend or debar contractors for various types of misconduct, including fraud, embezzlement and forgery. Suspension is temporary, while debarment can last three years or longer, however, the agencies cannot justify suspension or disbarment unless they are able to show that a company has engaged in ‘a pattern of consistent misconduct.’”
Me: “Yeah, yeah, I know all about that.”
Shallow Trachea: “Well, didn’t Halliburton do just that when it overcharged the Defense Department by as much as $61,000,000 for gasoline imported from Kuwait to Iraq? Halliburton has had a history of questionable accounting and billing tactics, including other services and goods charged the U.S. government in the Iraqi conflict. What about Boeing, who recently announced it’s going to pay $615, 000,000 to avoid criminal charges as well as debarment? Boeing does a heck of a lot of business with federal government, doesn’t it?”
Shallow Trachea: “Will you keep still? Who's the expert here, you or me? Who has greater sources in the federal government, you or me? Who had to get dressed in the middle of the night and travel 30 minutes to meet me?
“Most of the companies pay the fines in order to negotiate a deal where the company can avoid both criminal charges and sanctions which could include debarment. But, there are at least three other reasons why they do it. One, they know they are as guilty as sin, and they’re trying to cut their legal and other costs. Two, in doing so, it’s good P.R. for them, presenting to the public the image they’re cleaning up their practices and becoming a good citizen again. And, three, it’s a cost of doing business.”
Me: “A cost of doing business? Holy Toledo! $615,000,000 is a cost of doing business?”
Shallow Trachea: “Actually Smith Kline paid $150,000,000 in 2005 to settle a false claims suit. The Swiss company Serono Laboratories, manufacturer of the AIDS drug Serostin, agreed to pay more than $700,000,000 to settled issues that it had offered kick-backs to doctors to write prescriptions. I believe that Attorney General Gonzales announced that one in October, 2005.”
Me: “Those are large amounts. They affect the bottom line and…”
Shallow Trachea: “How you go on! It’s a wonder you ever get any work done. As I told you, it’s a cost of doing business. Just think of all the profits those companies will be making in fulfilling government contacts. There will be many more corporations paying large fines; they figure that if they don’t get caught, they’re ahead. And, if they do get caught, they pay the fine and pass the additional cost on to the consumer. Well, I’ve got to go. I guess you don’t want me to help you any more, do you? I think I’ll go over to the G.O.P. gang of writers to see if I can help them. God knows, they need all the help they can get these days.”
And, with that, she turned and disappeared into the dark of night. It was a minute or two before I heard the sound of a car leaving the garage, the “all clear” for me to exit.
I knew all that stuff, but it’s always good to get some validation of my viewpoints and opinions. I guess the remaining question is, what does our federal government do with all those fine and penalty monies?