Corporate Capital Punishment: Corporations Convicted Of Serious Crimes Should Face The Death Penalty

If not executed, corporations convicted of crimes should be forced to operate under a state-appointed board of directors

David Grace
David Grace Columns Organized By Topic
5 min readJun 14, 2023

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Image by kalhh from Pixabay

By David Grace (Amazon PageDavid Grace Website)

Corporations Can Be Charged & Convicted Of Committing A Crime

In April 2021, Forbes published an article entitled: “PG&E Faces Criminal Charges — Again — Over Another California Wildfire

In part, the article said:

Pacific Gas and Electric Company was hit with a slew of criminal charges Tuesday for sparking the 2019 Kincade Fire, making it the fourth time California’s largest utility has faced criminal charges related to fires in the state.

It went on to state:

California officials have long accused PG&E of putting profits over safety by neglecting upgrades and maintenance of its aging equipment. The company pleaded guilty last year to involuntary manslaughter charges for its role in sparking the 2018 Camp Fire that killed 84 people. In 2016, the PG&E was convicted of multiple safety violations stemming from a 2010 pipeline explosion that killed eight people in San Bruno, California.”

The Punishment For Corporate Criminal Conduct Is Now Only Financial

The punishment imposed on PG&E for all of these felonies was only financial because the common wisdom was that “you can’t lock up a corporation.”

Nonsense. Of course you can lock up a corporation. Moreover, you can, in fact, impose the death penalty and execute a corporation.

When corporations commit serious crimes, I think we should do both.

You Can Execute A Corporation

Corporations are completely legal entities and exist at the pleasure of the state. Given an amendment to the Corporations Code, upon its conviction for a designated felony the state could revoke the convicted corporation’s charter and dissolve that corporation — legally kill it.

In that dissolution, the assets would be sold; the fines imposed for that crime would be paid; the other debts of the company would be paid, and the remainder of the proceeds from the sale would be distributed to the shareholders.

Had California seen fit to enact a corporate capital punishment provision prior to 2010, the State of California could have forcibly dissolved the Pacific Gas & Electric Company, sold the corporation’s assets to a new buyer, paid any outstanding bills and distributed whatever money from the sale that was left to the shareholders. And it probably should have done so.

Corporate Criminals Can Be Imprisoned

Also, corporations can be imprisoned, in a way.

When you jail a human being, you restrict their freedom and put their lives under the control of others. Incarcerated humans are forced to live their restricted existence under rules and controls of the Department of Corrections.

We can do a similar thing to a corporation. We can remove a corporation’s freedom of action and force it to operate under the restricted control of the Department of Corporations.

If the death penalty is not imposed on a corporation convicted of criminal conduct, the court would order the removal of the entire board of directors and replace them with new directors appointed by the Commissioner of Corporations.

That new board’s term of service would be equivalent to the term of a human criminal’s sentence for that crime — two years, five years, ten years, whatever.

The Criminal Corporation Would Operate As A Nonprofit Corporation

Moreover, the obligations of the new directors would not be to operate the corporation for the financial benefit of the shareholders. No, their obligation would be to operate the corporation for the benefit of firstly, its customers, then secondly, its employees and lastly its shareholders.

That would mean reduced prices, higher wages, better products and services, to the point of operating the company in a purely break-even manner and generating no profits at all during the term of the sentence. Essentially, the convicted corporation would become a nonprofit corporation for the entire term of its sentence.

One of the fundamental tenets of capitalism is being responsible for one’s choices.

If the shareholders elect directors who appoint officers that together operate the corporation in a criminal matter, then the shareholders, along with those directors and officers, deserve to pay the price for those decisions.

If the shareholders are going to receive the profits then they have to be ready to bear the losses. They can’t have their cake and then complain when the clumsy employee they hired knocks it on the floor.

So, I propose that the Corporations Code be amended to provide that if criminally convicted of certain crimes under stated circumstances, the corporate defendant shall be dissolved and that for other, lesser crimes the corporate defendant shall have its board of directors removed and replaced by directors appointed by the Commissioner of Corporations for a period of years with the mandate that the publicly appointed directors operate the corporation on a break-even basis primarily for the benefit of its customers and secondarily for the benefit of its employees without regard for returning any financial benefit to its shareholders.

The Responsible Officers & Directors Would Also Be Criminally Liable

Lastly, we should add provisions to the criminal code providing that any officer or director who knowingly assists or enables the corporation’s commission of a crime would be subject to criminal prosecution and punishment for that crime as a co-conspirator.

If The Corp Is To Have The Rights Of A Human, It Has To Also Have The Responsibilities Of A Human

If corporations want to have all the rights of human beings, then they need to be subject to the similar obligations and detriments of human beings for criminal conduct, namely, incarceration and, in severe cases, death.

— David Grace (Amazon PageDavid Grace Website)

Legal Issues — What if the company is incorporated in another state, e.g. Delaware? Every corporation that wants to do business in a state other than its state of incorporation must obtain a certificate qualifying it to do business in that other state.

The other state can require that in order to qualify to do business in that other state the corporation must agree to be subject to the provisions of the other state’s criminal law and must agree that that other state’s courts will have the right revoke that corporation’s qualification to do business in that state unless the corporation allows the other state to replace its board of directors upon the corporation’s conviction of applicable crimes.

California can’t involuntarily remove the board of directors of a Delaware corporation or dissolve a Delaware corporation contrary to Delaware law, but it can bar that corporation from doing any business in California.

If Delaware adopted such laws, or if Delaware agreed to abide by such laws in other states for crimes committed by Delaware corporations in those other states, then most major American corporations would be subject to capital punishment and replacement of its board.

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David Grace
David Grace Columns Organized By Topic

Graduate of Stanford University & U.C. Berkeley Law School. Author of 16 novels and over 400 Medium columns on Economics, Politics, Law, Humor & Satire.