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Thursday, July 31, 2008

Big Tobacco Fined $1.5 Billion for Smuggling

Big Tobacco has just been fined for cigarette smuggling activities between 1989 and 1994. This was a guilty plea and was about a complex cigarette smuggling scheme. What about pursuing them for the same activities from 1994 to the present?

The Big Tobacco culprits are Imperial Tobacco who is liable to pay a fine of $200,000,000.00 now and $400,000,000.00 more over the next 15 years. Rothmans Benson & Hedges is on the hook for $100,000,000.00 in fines now and $450,000,000.00 more in civil payments over the next 10 years. Classy operators these guys!

It is easy and appropriate to blame the companies for this illegal activity. I want more. I want to know the names of the individuals in those companies who perpetrated these illegal activities. Companies don’t make decisions by themselves or in isolation. It is the leadership and management who are the active agents of corporate decisions and such misdeeds.

There is a personal obligation here as well. Who was it exactly that aided, abetted, enabled and executed this illegal activity within these organizations? If there is not personal liability as well for this stuff the corporate cultures that drive these behaviours may never change. I am not a big fan of more government regulation but I do like personal accountability and liability for illegal corporate activities, be they civil or criminal.


Release the names of the individuals involved in this illegal activity please. We may need more legislation that will enable personal actions to be brought against corporate management and individual directors who enable this crap to happen. Then things will really change for the better. Sarbanes Oxley was a start but personal accountability for corporate actions must obviously be expanded.

For the record, I worked with a consortium of Alberta based health based organizations to get legislation passed in Alberta to get smoking banned in public and workplaces in Alberta last year. I have seen the tactics Big Tobacco used in lobbying and PR based misdeeds too.

5 comments:

  1. Anonymous9:09 pm

    The shareholders or director's are not liable for the corporation's tax liabilities, you idiot. Think before you write these stupid things. Your musings would change the whole way corporate-commercial structuring and financing works in Canada. Coming from a liberal (part of the biggest scandal in Canadian history where no politicans went to jail) it is a bit rich of you to make your suggestion.

    Let's not get into your lobbying efforts despite the fact that you have supported the Minister you lobbied in the past. Who exactly is the crook here?

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  2. Thx for the comment. You are right shareholders are not liable for corp taxes but directors are liable for GST and EI premiums so far as I know.

    That said, I am sugesting there ought to be more personal accountability and liability for those how are the operative "mind" of the legal fiction of the corporate "person."

    In some of Alberta's environment legislation I believe there is personal libility in some circumstances too. But I am not an environment nor a tax lawyer and could be wrong.

    You are right about one thing, I am proposing more personal liability for decision makers in corporate matters...espeically where fraud is involved - like the tobacco smuggling in this post.

    The Corporate Veil is a good thing but it ought not to be a shield for individuals who use it to break the law in the name of a corporation and escape responsibility for those decisions.

    Next time you want to be insulting on this Blog - don't hide out as an anonymous comment. Have the strength of character to stand behind your comments and tell us who you are.

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  3. Making the shareholder liable for actions of the directors would completely destroy the way businesses are financed as one would be unable to safeguard their assets. As such, your suggestion would have dramatic ramnifications and make Canada less competitive - given Dion's statements, maybe this is what he wants?

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  4. eric: No one is saying shareholders should be liable. Where did you get that idea? Read the post.

    On the other hand, management and directors who are the operative minds of the legal fiction corporations as "persons" do bear some personal responsibility for such things as went on with Big Tobacco in this instance.

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  5. Yes, the tobacco companies are the posterboys for corporate scumbagdom as this disgraceful criminal activity on their part demonstrates yet again. I agree with you - the specific individuals within those companies who were responsible for the law-evading policies need to be personally prosecuted for their actions.

    I'm curious about something else. You said: "I have seen the tactics Big Tobacco used in lobbying and PR based misdeeds too."

    Eh? If you have something more specific & concrete to offer as documentation for this, not simply parroting the self-serving conspiracy theories of ASH, please do post it. Perhaps you know something I don't, but please be specific.

    -Roy Harrold

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