It's a Crime

The law is giving more jail time for business decisions that harm employees and customers.

Congress took action last fall when the public learned about the deaths and injuries attributed to faulty Firestone tires on Ford Explorer SUVs. And it didn't hurt that the election was not far away. Republicans and Democrats alike called for new laws to promote product safety and punish executives and owners who willfully ignore safety warnings.

In September, Sen. Arlen Specter (R-PA) proposed brief but sweeping legislation that would have imposed a prison term of up to 15 years on anyone who knowingly allowed a defective product that later killed someone to enter interstate commerce. The law would have held responsible anyone who manufactured, assembled, imported, sold or otherwise produced or transferred the product.

That bill didn't get very far, but a more narrowly focused one quickly passed both houses of Congress, and former President Clinton signed it into law. The TREAD (Transportation Recall Enhancement Accountability and Documentation) Act applies only to tire and auto executives, authorizing prison terms of up to 15 years for execs who knowingly withhold information about safety defects in products that cause injury or death.

This is only the latest in a string of laws, regulations and court decisions that turn certain immoral business decisions into criminal acts. Fueling the fire of those arguing for increased accountability is the principle held by some owners and execs that fines, even very big ones, are simply a cost of doing business. What's likely to deter those scoundrels, the argument goes, is the threat of criminal sanctions-not just giving them criminal fines, but actually locking them in jail.

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This article was originally published in the June 2001 print edition of Entrepreneur with the headline: It's a Crime.

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