The Crime of Being in Charge: Executive Culpability and Collateral Consequences

Abstract

This Article argues that the government's exclusion of executives who have been convicted as "responsible corporate officers" for a period longer than three years without any showing of moral blameworthiness is misguided. The responsible corporate officer doctrine is flawed because under the doctrine it is irrelevant that the executive did not intend for the misconduct to occur. It is not a defense that the executive delegated responsibility in good faith. Nor is it a defense that the executive is not knowledgeable about or did not participate in the misconduct. The only potential defense is impossibility, but it has never been used successfully. Even if those shortcomings in the responsible corporate officer doctrine were overlooked due to the fact that it is a misdemeanor charge, the piling on of long periods of exclusion significantly raises the stakes for the executives. Part II of this Article sets forth the foundation for and justification of the responsible corporate officer doctrine. It also scrutinizes the shortcomings of the responsible corporate officer doctrine. Part III of this Article examines the collateral consequences of conviction as a responsible corporate officer. It uses the exclusion of Purdue Pharma executives as a case study to examine the justification for and problems with excluding executives who had no knowledge of wrongdoing. It argues that the collateral consequence of conviction - exclusion - is more devastating than the criminal sentence that an executive would face upon conviction. Part IV argues that a conviction as a responsible corporate officer does not demonstrate that the executive is morally blameworthy for the actions of subordinates. Further, it argues that despite the fact that exclusion is technically a civil remedy, it should be treated as a de facto criminal penalty in the context where it is the most serious consequence that responsible corporate officers face as a result of conviction. This Article concludes that the collateral consequences of holding "responsible corporate officers" criminally accountable for the misconduct of their subordinates are disproportionate to the crime of conviction and should not be imposed for longer than three years absent a showing of moral blameworthiness.