0

My question is related to this story. In Spring 2020 Boeing asked for a $60 Billions bailout, then they rejected the bailout because it had too many strings attached, the government gave in and agreed to let the Fed buy corporate bonds which coupled with $25 Billions coming from private investors saved the company with no strings attached. Last week part of that money was used to stop a legal prosecution for fraud, a comment pointed out that it wasn't any longer public money, however it belongs to the shareholders, not to the managers even if this didn't prevent them from using it for their own interest, the company under the deal admits guilt, but the managers themselves are not required to.

This is not the first time that a corporation buys their way out of a legal prosecution, and every time those who committed fraud or other crimes were not required to put their own money, they used the money of the company which formally belongs to the shareholders, most of whom have no voice on the way the company is managed.

So, my questions are:

  1. Is this capitalism?
  2. In my country the prosecutor in cases like this is obliged to carry on, why in the US the prosecutor is allowed to settle for a fine? Isn't there too much discretionary power in the hands of a public official?
  3. On the news I saw absolutely no reaction to the story. What is the position of the various parties?

references:

https://www.chicagotribune.com/coronavirus/ct-nw-coronavirus-boeing-fed-bailout-20200504-2has6gghmnfsnj5mvjjpaa6xye-story.html

https://www.justice.gov/opa/pr/boeing-charged-737-max-fraud-conspiracy-and-agrees-pay-over-25-billion

Improve this question
  • 10
    At Christmas I gave my son £50, the next day he broke his sister's teddy bear, so I made him pay for a new one. How come he was allowed to use my money to pay for his sisters teddy? (not a real story, but you get the point, after you give Boeing the money, its not "public money" any more) – James K Jan 12 at 21:13
  • @JamesK I edited my question pointing out that even if I can no longer call it public money it doesn't belong to the managers who used it to buy their way out of jail. Another possible question would be whether they should be forced to declare it as part of their compensation. – FluidCode Jan 13 at 12:43
  • 1
    @FluidCode Because it says the managers weren't charged? Boeing - the company - was. And Boeing can use Boeing's money to do things for Boeing. – user253751 Jan 13 at 17:45
  • @user253751 Are you serious? Here the criminals who committed a fraud which caused the death of hundreds of people could easily offload all their responsibilities on the company and you see nothing wrong with that? Furthermore this is not a treatment applied equally to everyone, if an employee without decision power in a company is caught committing a crime he will go to jail. – FluidCode Jan 13 at 19:49
  • @FluidCode It Says. The. Company. Was. Charged. So your question should be "why was the company charged?" and not "why is the company allowed to use its own money to pay its own speeding fine?" – user253751 Jan 13 at 21:09

Browse other questions tagged .