Trapped: When Acting Ethically is Against the Law

New book examines over-criminalization in age of corporate scandals

March 6, 2006

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Since Enron’s collapse in 2002, the federal government has stepped up its campaign against white-collar crime. In doing so, contemporary federal criminal law has created a “Catch-22,” in which businesspeople are increasingly forced to act either unethically or illegally.

In Trapped: When Acting Ethically is Against the Law, Cato Institute senior fellow and Georgetown University business professor, John Hasnas, examines the ethical dilemmas raised by over-criminalization. “Because there is an increasing divergence between the demands of the law and the demands of ethics,” Hasnas explains, “current federal criminal law incentivizes and in some cases mandates unethical behavior by businesspeople.”

Because federal prosecutors have ever-expanding ideas of what constitutes “obstruction of justice,” business executives are pressured to abandon employees who are under investigation, but who may have done nothing wrong. According to Hasnas: “Federal criminal law gives corporations strong incentives to invade employees’ privacy, deny them the presumption of innocence, and breach promises of confidentiality.”

And in its efforts to “crack down” on corporate fraud, the federal government has eviscerated the safeguards of the traditional criminal law to permit conviction for merely negligent actions and to circumvent the presumption of innocence, the Fifth Amendment privilege against self-incrimination, and the attorney-client privilege.

Hasnas concludes that federal enforcement efforts do more harm than good. Fraud is certainly a problem, Hasnas acknowledges, but state law already criminalizes the offense of false pretences and wrongdoers can also be held accountable by civil lawsuits.

About the Author

John Hasnas is an associate professor of business at the McDonough School of Business at Georgetown University in Washington, DC, where he teaches courses in ethics and law. Professor Hasnas has held previous appointments as an Associate Professor of Law at George Mason University School of Law, Visiting Associate Professor of Law at the Washington College of Law at American University, and Law and Humanities Fellow at Temple University School of Law. Professor Hasnas is a senior fellow at the Cato Institute in Washington, DC, and has also been a visiting scholar at the Kennedy Institute of Ethics in Washington, DC and the Social Philosophy and Policy Center in Bowling Green, Ohio. He received his B.A. in Philosophy from Lafayette College, his J.D. and Ph.D. in Legal Philosophy from Duke University, and his LL.M. in Legal Education from Temple Law School. Between 1997 and 1999, Professor Hasnas served as assistant general counsel to Koch Industries, Inc. in Wichita, Kansas. His scholarship concerns ethics and white collar crime, jurisprudence, and legal history and he is currently at work on a philosophical analysis of the Constitutional right to die.

About the Book

Trapped: When Acting Ethically is Against the Law
by John Hasnas
$ 12.95 Paperback
ISBN: 1-930865-88-0
Publication date: March 29, 2006

About the Institute

The Cato Institute is a nonprofit, public policy research foundation in Washington, DC. It is libertarian or classical liberal in its outlook, and it receives the bulk of its funding from individuals and foundations.

Since 1992 the Cato Institute’s books have been distributed to the trade by the National Book Network.