American businesses lead the world in their commitment to, and investment in, legal compliance and business ethics. Thus, it is mistaken to view the business environment as in disrepair based on a relatively few reported transgressions.
American companies spend billions annually to ensure their operations meet their legal obligations under a vast array of regulations and their own internal ethics policies. They spend this money policing their own business operations, themselves investigating incidents of non-compliance and often voluntarily disclosing the results to authorities.
That is hardly the conduct of businesses run legally amok. Companies across all industries also function in a highly regulated environment and are accountable to overlapping state and federal regulators imposing a dense thicket of rules and reporting requirements.
Although well-publicized examples of improper conduct within the business community can be used to condemn the whole lot, the inclination to that abuse should be avoided. The reality is that such examples are most often outliers and frequently involve bad actors within an otherwise compliant corporation. Unjustifiably questioning the general commitment of U.S. companies to sound business practices weakens the sector of our economy that provides economic growth and increased prosperity.
This is not to suggest that businesses be given a free pass for truly criminal conduct. But we should appreciate that exploiting relatively rare lapses in ethical conduct to score political points hurts millions of Americans looking for jobs and upward mobility.
The government's allegations in many cases can be overblown and based on untested legal theories. The government knows most businesses and financial institutions cannot run the collateral risks of challenging in court its novel enforcement theories or unproven facts. But in those circumstances, insisting on "record" penalties as the price of legal peace and issuing over the top corporate condemnations in press statements looks more like government bullying than reasoned enforcement.
Former deputy attorney general George J. Terwilliger III co-chairs the white collar litigation and government investigations practice at Morgan Lewis & Bockius LLP.