Payback time

jail the bankers (jaimeperez flickr)

Two RBS bankers establish several fake companies so they can apply for mortgages to buy and renovate homes and sell the property for profit. The two men get loans totalling 3 million pounds in five years and buy five properties, of which three in London. Recently the two men were sentenced to suspended prison sentences and 250 and 300 hours of community service. According to the news reporter, the bankers had repaid the loans to RBS by the time the case came before a judge, which was, in addition to how they had already ‘suffered’ and were ‘embarrassed’, enough punishment, the judge said:

I accept that it was not your intention to cause loss to the bank. I accept you intended at all times for the money to be repaid and it has been fortunate the bank has not suffered.

My first response was to think that they got off easy. And of course the bank had not suffered: they have loads of money! In that case stealing from a rich person should always result in a lower sentence compared to when one steals from the poor. I doubt that that plays any role in sentencing burglars.

Desire for revenge

It is possible that I was primed for this sentiment by the way the news item got to me. I came across this tweet saying ‘Steal to feed your children & you go down, commit £3m fraud on a public bank & you don’t. Class justice.’ More generally, the gap between how ‘common’ crimes (including minor offences such as possession of marijuana) are punished and how financial crimes (including those that lead to a full-blown crisis) are handled seems to spur a desire for revenge when it comes to white-collar criminals. After decades of war on poverty, now it’s payback time! Jail the bankers!

My second thought was more temperate. What caught my attention was that the bankers had repaid the loans. If the damage is repaired, there may be less need or desire to punish people. To be honest, I could understand why the men were not sent to prison. I support avoiding prison for non-violent crimes. In the spirit of restorative justice, this may indeed have been the most sensible way to handle this case. (Although I don’t understand why the money they made from their investments was not seized.)

Repairing damage

The case of the RBS bankers is not necessarily an example of restorative justice. I probably made this connection because it was Restorative Justice Week last week and because the Dutch labour party this week announced that it wants to extend the possibilities for restorative justice in the Dutch criminal justice system – it was on my mind. Restorative justice is based on the idea that crimes are best dealt with by getting offender and victim together to negotiate how the damage that was done by the crime can best be repaired – for example by returning stolen items, paying for damages (material and/or immaterial), doing community services, or by apologizing and acknowledging the pain that was caused.

It seems to me that the principle of restorative justice is often leading – although the term is not explicitly used – in handling white-collar and corporate crimes. Settlements are also deals to repair the damage. Just this month, SBM Offshore settled a bribery case with Dutch prosecutors for $240 million, including a $40,000 fine – a record for the Dutch prosecutor. The obvious difference between settlements and restorative justice is that settlements exclude prosecution and formal punishment. Although the settlement included a fine, I don’t think the CEO of SBM Offshore will have a criminal record. The two RBS bankers will have one.

Addressing disparity

If it is the disparity in punishment for poor and affluent offenders that concerns us, we can resolve it in two ways: 1) adjust punishments for crimes committed mostly by affluent offenders, or 2) adjust the punishment for crimes committed mostly by poorer offenders (assumed that we can distinguish such crimes). To put it overly simply: option 1 means higher sentences and more prison sentences for white-collar and corporate crimes, option 2 means fewer prison sentences and more settlements for thieves, burglars, drug offenders, etc. Because the socio-political climate is more favourable towards harsher punishment, option 2 is the more difficult option, but it’s still an option.

The two bankers were wealthy enough to pay back the money that they had ‘lent’ within a relatively short period of time. I suppose this is not an option for most ‘common’ criminals who ‘lend’ from others because they are short on cash. I don’t think a judge would agree with burglars or thieves that they ‘intended at all times for the money to be repaid’. This suggests that rich offenders can afford to commit crimes, as long as they are able to repair the damage – if they get caught.

In terms of class justice and sentencing disparities, it is not necessarily fair that the judge takes into account whether offenders have paid back and repaired the damage. In that case, it is either restorative justice for those who can pay for it, or criminal justice for those who have no money. That is still class justice. Repairing damage is a solution to class justice only if all offenders have the option to repair, with or without money. In relation to class differences I am very curious to learn how this is done or could be done.

Image by Jalme Pérez on Flickr

2 thoughts on “Payback time

  1. Thanks. Interesting to read your reactions.

    I had a series of questions about class bias in our perceptions of offenders – as in, Would the judge have felt the same if there poor minorities who engaged in analogous conduct? These are questions, rather than accusations, based on a brief news account.

    The judge seemed to credit them for not intending to cause a loss. Would we feel the same about a minority using fraud to borrow something from work for extracurricular capitalism (and maybe to get money for a necessity rather than a luxury)? (Remember Madoff’s multi-billion dollar Ponzi scheme started off a way to get by until he made up some trading losses)

    Is the judgment call that someone is a fundamentally a good person who erred in this case easier if we share a socioeconomic background with them rather than having someone come from an inner-city brutality we have a hard time really imagining?

    Paying back what was taken is expected so the harm can be repaired, but I’d love to understand the circumstances through which they did so before the court proceedings. If they had the resources to repay, why didn’t they do so before arrest? They enjoyed the scam and made money?

    So what should the sentence be?

    • Thanks Paul, for raising these questions. It fascinates me too: whether social distance or similarity plays a role in how offenders are judged by judges (and other criminal justice actors, notably the prosecutor). I wish I knew more about this case, but I don’t – did they pay back before or after they were caught? – so I’m reluctant to say anything about what their sentence should be.

      I agree that it is important to understand how this works in practice (although researching such processes is quite a challenge I’m afraid). Even though judges are professional actors, a significant part of their judgement depends on the interaction between judge and offender, for example in assessing whether offenders take responsibility for their actions or show genuine remorse. Such assessments may well be influence by social distance (and prejudice). People may express responsibility or remorse in different ways which may result in misunderstanding and consequently in differences in sentencing. Interaction and social distance may play a similar role in restorative justice and mediation. I can easily imagine that social distance between offender and victim makes it harder for them to come to terms with each other. It requires empathy (if that is the right word) of the victim for the offender. How does that play out in practice? If you know of research into this topic I’d love to hear about it. Thanks again for stimulating my thoughts about this.

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