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WHITE

COLLAR
CRIMES

Preface
This notion was laid down for the first time in the field of criminology by Prof. Edwin
Sutherland in 1941. He defined white collar crime as crime committed by persons
of respectability and high social status in course of their occupation. Examples of it
include fraudulent advertisements, infringement of patents, publication of falsified
balance sheet of business, passing of goods, concealment of defects in the
commodity for sale etc. These white collar crimes by nature are such that the injury
or the damage caused as a consequence of them is so widely diffused in the large
body of citizens that their enormity as regards personage victim is almost trifling.
Hartung defines a white-collar offense as a violation of law regulating business,
which is committed for a firm by the firm or its agents in the conduct of its
business.

The white collar crimes which are common to Indian trade and business
world are hoardings, profiteering and black marketing. Violation of foreign
exchange regulations and import and export laws are frequently resorted to
for the sake of huge profits. That apart, adulteration of foodstuffs, edibles
and drugs which causes irreparable danger to public health is yet another
white collar crime common in India.
Three reasons support the need to study white-collar crime. First, and perhaps
foremost, white-collar crime is a serious problem in our society. Estimates provided by
the Federal Bureau of Investigation (FBI) routinely suggest that far more is lost to
white-collar crimes than to traditional property crimes such as larceny, rob- bery, and
burglary. Beyond these economic costs, and as will be shown later in this text, whitecollar offenses have the potential to cause serious physical and emotional damage to
victims.
Second, unlike some offense types, it is important to recognize that white-collar offenses affect
every- one. While a specific street offense might have just one or two victims, white-collar
offenses tend to have a large number of victims, and on a certain level, some white-collar
offenses are so traumatic that they actu- ally may influence all members of society. For instance,
Bernie Madoffs transgressions duped thousands of individuals and organizations out of billions
2

of dollars. It was not just these individuals, however, who were victims. Members of society who
then felt distrust for financial institutions and their employees were also affected by Madoffs
behaviors. Members of society may also experience what one social scientist calls demoralization
costs (Coffee, 1980). In this context, demoralization means that individuals have less faith in
societal values, and this reduction in faith may actually create a situation where individuals
justify their own future misdeeds based on the illicit behaviors of those white-collar and
corporate organizations we have been socialized to trust. As one author team wrote, Because
most white-collar offenses violate trust, they breed distrust (Moore & Mills, 1990, p. 413).
A third reason it is important to study white-collar offending is that by studying white-collar
offending we can learn more about all types of crime. Just as medical researchers might learn
more about all forms of diseases by studying one form of disease, the study of white-collar crime
allows criminologists, students, members of the public, and policy makers greater insight into all
variations of criminal behavior and types of criminal offenders.
This paper provides a detailed understanding behind the motives of
people committing crimes.
committing

crime,

where

Researchers
the

crimes

have

named

the

people

were minimal and confined to a

particular area of administration as Grass Eaters. People involved in white


collar crimes and which has spread in almost all fields of business are termed
as Meat Eaters. With the advent of technology and growth of education,
white collar crimes are on the rise, being protected by professionals finding
loopholes in the judiciary and support from the government indirectly. This
has created a nexus where people from almost all walks of life have started
forming group to do white collar crimes and being protected by professionals
in law.

This has lead to a situation where the small timers have become

white collar criminals. Talking about the prevalence of white collar crimes in
India, they are spreading like a rapid fire in every sphere of society. Though
corruption, one of the species of white collar crimes, has been the most
talked about issue in all spheres-social, economic and political, not
much

stringent steps/actions have been taken to curb this menace.

Therefore the concern of this paper is to define white collar crime, study its
historical development and formulate tentative solutions for eradicating the
problem.
3

The types of crime committed are a function of what is available to the


potential offender. Thus, those employed in relatively unskilled environments
and living in inner-city areas have fewer "situations" to exploit than those
who work in "situations" where large financial transactions occur and live in
areas where there is relative prosperity.[4] Blue-collar crime tends to be more
obvious and thus attracts more active police attention such as vandalism
or shoplifting. In contrast, white-collar employees can incorporate legitimate
and

criminal

behavior,

thus

making

themselves

less

obvious

when

committing the crime. Therefore, blue-collar crime will more often use
physical force, whereas in the corporate world, the identification of a victim
is less obvious and the issue of reporting is complicated by a culture of
commercial confidentiality to protect shareholder value.
ABBREVIATIONS
AID- Agency for International Devolopment
AFSPA- Armed Forces (Special Powers) Act
AFT Armed Forces Tribunal
ADB- Asian Development Bank
ACLU- American Civil Liberty Union
AIR- All India Reporter
AMA -American Medical Association
BBC- British Broadcasting Corporation
BCI- Bar Council of India
BIFR- Board for Industrial and Financial Reconstruction
BIS- Bank of International Settlement
BTIA- Broadbased Trade and Investment Agreement
CrLJ- Criminal Law Journal
CBI- Central Bureau of Investigation
CID- Criminal Investigation Department
CENVAT- Centralised Value Added Tax
4

Cr PC- Criminal Procedure Code


CPC- Civil Procedure Code
CJI- Chief Justice of India
DTAA- Double Taxation Avoidance Agreement
EU- European Union
FBI- Federal Bureau of Investigation
FTC- Fast Track Court
FTZ- Free Trade Zone
GIC- General Insurance Corporation of India
GOI- Government of India
HDR- Human Devolopment Report
ICJ- International Court of Justice
IG- Inspecter General
IPRs- Intellectural Property Rights
IPC- Indian Penal Code
JFA -Justice for All
JAG- Judge Advocate General
LMG- Light Machine Gun
LPO- Legal Process Outsourcing
MNC- Multi National Company
MLM- Multi Level Marketing
NCADP- National Coalition Against the Death Penalty
NBW- Non-Bailable Warrant
NCRB-National Crime Records Bureau
PhD- Docrorate of Philosophy
PUDR- People's Union for Democratic Rights
PCA- Permanent Court of Arbitration
Q&A-Question and Answer
RBI- Reserve Bank of India
5

RIS- Research and Information System


SCC- Supreme Court Cases
SBI- State Bank of India
TIFAC- Technology Information, Forecasting and Assessment Council
UGC- University Grants Commission
UT- Union Territory
VAT- Value Added Tax
WFTU- World Federation of Trade Unions
WIPO World Intellectual Property Organisation
WTO- World Trade Organisation
Y- Yes
ZBB- Zero Base Budge

Table Of Cases
Absolute Activist Value Master Fund Ltd. V. Ficeto.
03/01/2012
11-0221.
Alaska Elec. Pension Fund V. Flowserve Crop.

06/19/2009

07-11303.
Amalfitano V. Rosenberg.
08/06/2008
06-2364.
Belmont V. MB Investment Partners, Inc.

02/22/2013

12-1580.
Bereano V. US.
2/08/2013
12-6417.
Berson V.Applied Signal Tech., Inc.
06-15454.
Boulware V. US.
03/03/2008

06-1509.

06/05/2008

City Of Omaha Civilian EmployeesRetirement. System V.


CBS Crop.
05/10/2012
11-2575
Capital Management Select Fund Ltd. V. Bennett.
01/10/2012
08-6166.
Connally V. H.D. Goodall Hospital, Inc.

10/31/2005

05-1392.
Decarlo V. Bonus Stares, Inc.

12/26/2007

06-60977.
Denney V. Jenkens & Gilchrist.

04/03/2006

05-1275.
DE LA FUENTE V. FED. DEPOSIT INS. CROP. 06/18/2003
00-71547.
Fabrica de Muebles J.J Alvarez, Inc. V. Inversiones Mendoza,
Inc.
06/04/2012
11-1985.
Frame V. Price Waterhouse Coopers LLP.

11/29/2005

A106383.
Gabelli V. SEC.

02/27/2013

11-1274.
Kisano Trade & Invest Limited V. Lemster.

12/12/2013

13-1759.
Kawashima V. Gonzales.

09/18/2007

04-74313.
MLSMK Investment Co. V. JP Margan Chase & co. 07/07/2011
10-3040.
Manta V. Chertoff.

03/11/2008

07-55353.
NECA-IBEW Health & Welfare Fund V. Goldman Sachs & Co.
09/06/2012
11-2762.
Official Comm.of Unsecured Creditors of PSA, Inc. V.
Edwards.

01/30/2006

05-12320.

People V. Sweeney.

07/23/2014

E056132.
People V. Mozes.

02/17/2011

B221020.
Q Soft, Inc. V. Super.Ct .(Mahallaty)

11/29/2007

Go37275.
Securites & Exchange Commission V. Obus.

09/06/2012

10-4749.
SEC V. Rajaratnam.
09/29/2010
10-462.
SEC V. Apuzzo.
08/08/2012
11-696.
State of Floridoc V. Rubio.

07/12/2007

SCO6-157.
The Cancer Found. Inc. V. Cerberus Capital Management, LP
03/19/2009
US V. Hsiung.

08-1981.
01/30/2015

12-10514.
US V. MCGEE.

08/14/2014

13-3183.
Westar Energy, Inc. V. Lake.

01/22/2009

3219, 07-3280.
Weber V. Finker.

07-

01/15/2009

08-13372.
Yeager V. US.

06/18/2009

08-67.
Zengen Inc. V. Comerica Bank.
S142947.

06/04/2007

CONTENTS

INTRODUCTION
This thought evolved with the Criminologist and Sociologist Edwin H. Sutherland, in
the year 1939, who popularised the term white collar crimes by defining such a
crime as one committed by a person of respectability and high social status in
the course of his occupation. Sutherland also included crimes committed by
corporations and other legal entities within his definition. Sutherlands study of
white collar crime was prompted by the view that criminology had incorrectly
focused on social and economic determinants of crime, such as family background
and level of wealth. It is true to the common knowledge that there are certain
professions which offer lucrative opportunities for criminal acts and unethical
practises which is very often overlooked by the general mass of the society. There
have been crooks and unethical persons in business, various other professions, who
tend to become unscrupulous because of no reason apart from the thirst of gaining
more and more for themselves. These deviants have least regard for ethical and
moral human values. Therefore, they carry on their illegal activities with impunity
without the fear of loss of respect and prestige. These crimes are of the nature of
white collar crimes which is the essential outcome of the development of the
competent economy of the twenty-first century.
White-collar crime is financially motivated nonviolent crime commited for illegal
monetary gain. Within criminology, it was first defined by sociologist Edwin
Sutherland in 1939 as a crime committed by a person of respectability and high
social status in the course of his occupation. Sutherland was a proponent of
symbolic interactionnism and believed that criminal behavior was learned from
10

interpersonal interactions. White-collar crime is similar to corporate crime as whitecollar employees are more likely to commit fraud, briber , Ponzy schemes, insider
trading, embezzlement, cybercrime, copyright infringement, money laundering,
identity theft, and forgery. . It is estimated that a great deal of white-collar

crime is undetected or, if detected, it is not reported. Corporate crime deals


with the company as a whole. The crime benefits the investors or the
individuals who are in high positions in the company or corporation. The
relationship white-collar crime has with corporate crime is that they are
similar because they both are involved within the business world. Their
difference is that white-collar crime benefits the individual involved, and
corporate crime benefits the company or the corporation. One well-known
insider trading case in the United States is the ImClone stock trading case. In
December 2001, top-level executives sold their shares in ImClone Systems, a
pharmaceutical company that manufactured an anti-cancer drug. The U.S.
Securities

and

Exchange

Commission investigated

numerous

top-level

executives, as well as Martha Stewart, a friend of ImClone's former chief


executive who had also sold her shares at the same time. The SEC reached a
settlement in 2005.

OBJECTIVE

By the type of offense, e.g., property crime, economic crime, and other corporate
crimes like environmental and health and safety law violations. Some crime is only
possible because of the identity of the offender, e.g., transnational money
laundering requires the participation of senior officers employed in banks. But
the FBI has adopted the narrow approach, defining white-collar crime as "those
illegal acts which are characterized by deceit, concealment, or violation of trust and
which are not dependent upon the application or threat of physical force or
violence" (1989, 3). This approach is relatively pervasive in the United States, the
record-keeping does not adequately collect data on the socioeconomic status of
offenders which, in turn, makes research and policy evaluation problematic. While
the true extent and cost of white-collar crime are unknown, the FBI and the

11

Association of Certified Fraud Examiners estimate the annual cost to the United
States to fall between $300 and $660 billion. [2]
By the type of offender, e.g., by social class or high socioeconomic status, the
occupation of positions of trust or profession, or academic qualification, researching
the motivations for criminal behavior, e.g., greed or fear of loss of face if economic
difficulties become obvious. Shover and Wright (2000) point to the essential
neutrality of a crime as enacted in a statute. It almost inevitably describes conduct
in the abstract, not by reference to the character of the persons performing it. Thus,
the only way that one crime differs from another is in the backgrounds and
characteristics of its perpetrators. Most if not all white-collar offenders are
distinguished by lives of privilege, much of it with origins in class inequality.
By organizational culture rather than the offender or offense which overlaps
with organized crime. Appelbaum and Chambliss offer a twofold definition: [3]
Occupational crime which occurs when crimes are committed to promote personal
interests, say, by altering records and overcharging, or by the cheating of clients by
professionals.
Organizational or corporate crime which occurs when corporate executives commit
criminal acts to benefit their company by overcharging or price fixing, false
advertising, etc. The negotiation of agreements between a state and a

corporation will be at a relatively senior level on both sides, this is almost


exclusively a white-collar "situation" which offers the opportunity for crime.
Although law enforcement claims to have prioritized white-collar
crime, evidence shows that it continues to be a low priority.When senior
levels of a corporation engage in criminal activity using the company this is
sometimes called control fraud.

Chapter-1
WHITE COLLAR CRIMES-SOCIOECONOMIC AND
CULTURAL INTERVENTIONS
FOR VULNERABLE GROUPS

12

White collar criminality has become a global phenomenon with the advance of commerce and
technology. Like any other country, India is equally in the grip of white collar criminality. The
recent developments in information technology, particularly during the closing years of the
twentieth century, have added new dimensions to white collar criminality. There has been
unprecedented growth of a new variety of computer dominated white collar crimes which are
commonly called as cyber crimes. These crimes have become a matter of global concern and a
challenge for the law enforcement agencies in the new millennium. Because of the specific
nature of these crimes, they can be committed anonymously and far away from the victims
without physical presence. Further, cyber-criminals have a major advantage: they can use
computer technology to inflict damage without the risk of being apprehended or caught. It has
been predicted that there would be simultaneous increase in cyber crimes with the increase in
new internet web sites. The areas affected by cyber crimes are banking and financial institutions,
energy and telecommunication services, transportation, business, industries etc.

Reasons For Growth Of White Collar Crimes


# White collar crimes are committed out of greed. The people who usually
commit these crimes are financially secure.
# Financial or physical duress.
# White collar crimes are estimated to cost society many times more than
crimes such as robbery and burglary. The amount of death caused by
corporate mishap, such as inadequate pharmaceutical testing, far
outnumbers those caused by murder.
# The emergence of cutting edge technology, growing businesses, and
political pressures has opened up new avenues for these criminal
organizations to prosper.
# This increase is due to a booming economy and technological
advancement such as the Internet and fast money transfer systems. Law
enforcement is sometimes reluctant to pursue these cases because they are
so hard to track and investigate.
# It is very difficult to detect as white collar crimes always committed in
privacy of an office or home and usually there is no eyewitness.
# But naturally a question arises that if we have specific legislations to trace
13

out White Collar Criminality then why these offenders go unpunished. Main
reasons for which these white Collar criminals or occupational criminals go
unpunished are
i) Legislators and the law implementers belong to the same group or class to
which these occupational criminals belong;
ii) Less police effort;
iii) Favorable laws;
iv) Less impact on individuals.
The judiciary is equally, if not more, guilty of delaying justice. With whitecollar crimes on the rise, it is necessary for the judiciary and police to
distinguish between white-collar crimes, petty crimes and acts of homicide
and violence. Sending everyone to the same jail is also unfair. India needs
different detention centers for different kinds of criminal misconduct. At this
present juncture what we need is the strengthening of our enforcement
agencies such as Central Bureau of Investigation, the Enforcement
Directorate, The Directorate of Revenue Intelligence, The Income-tax
Department and the Customs Department. Concentration and distribution of
national wealth must be done in a proper manner. Speedy trial should be
arranged by appointing more Judges. Central Vigilance Commission must
keep a constant vigil on the workings of the top ranking officers. General
public must not avoid being engaged themselves in the prosecution of the
White-collar criminals as the offence in general is directed towards them.
Lastly if they are traced and proved guilty then Deterrent Theory of
punishment is an option one.
Conclusion
In my concluding words I would like to say that if everyone at a particular
business or company would keep an eye out for anything suspicious that
alone would detour potential thieves. The real solution to this problem is
going to have to come from the people who are being affected by it. They
14

are the most likely to stop it. They cannot let anyone take advantage of them
anymore. Most do not give white collar crimes much thought because they
are only things that they read about in newspapers and hear on the news. If
these crimes continue to grow at the present rate, they will be out of control
before we know it.
Types of White Collar Crime
Bank Fraud: To engage in an act or pattern of activity where the purpose
is to defraud a bank of funds.
Blackmail: A demand for money or other consideration under threat to do
bodily harm, to injure property, to accuse of a crime, or to expose secrets.
Bribery: When money, goods, services, information or anything else of
value is offered with intent to influence the actions, opinions, or decisions of
the taker. You may be charged with bribery whether you offer the bribe or
accept it.
Cellular Phone Fraud: The unauthorized use, tampering, or manipulation
of a cellular phone or service. This can be accomplished by either use of a
stolen phone,or where an actor signs up for service under false identification
or where the actor clones a valid electronic serial number (ESN) by using an
ESN reader and reprograms another cellular phone with a valid ESN number.
Computer fraud: Where computer hackers steal information sources
contained on computers such as: bank information, credit cards, and
proprietary information.
Counterfeiting: Occurs when someone copies or imitates an item without
having been authorized to do so and passes the copy off for the genuine or
original item. Counterfeiting is most often associated with money however
can also be associated with designer clothing, handbags and watches.

15

Credit Card Fraud: The unauthorized use of a credit card to obtain goods
of value.
Currency Schemes: The practice of speculating on the future value of
currencies.
Educational Institutions: Yet another field where collar criminals operate
with impunity are the privately run educational institutional in this country.
The governing bodies of those institutions manage to secure large sums by
way of government grants of financial aid by submitting fictitious and fake
details about their institutions. The teachers and other staff working in these
institutions receive a meager salary far less than what they actually sign for,
thus allowing a big margin for the management to grab huge amount in this
illegal manner.
Embezz1ement: When a person who has been entrusted with money or
property appropriates it for his or her own use and benefit.
Environmental Schemes: The overbilling and fraudulent practices
exercised by corporations which purport to clean up the environment.
Extortion: Occurs when one person illegally obtains property from another
by actual or threatened force, fear, or violence, or under cover of official
right.
Engineering :In the engineering profession underhand dealing with
contractors and suppliers, passing of sub-standard works and materials and
maintenance of bogus records of work-charged labour are some of the
common examples of white collar crime. Scandals of this kind are reported in
newspapers and magazines almost every day in our country.

16

Fake Employment Placement Rackets: A number of cheating cases are


reported in various parts of the country by the so called manpower
consultancies and employment placement agencies which deceive the youth
with false promises of providing them white collar jobs on payment of huge
amount ranging from 50 thousands to two lakhs of rupees.
Forgery: When a person passes a false or worthless instrument such as a
check or counterfeit security with the intent to defraud or injure the
recipient.
Health Care Fraud: Where an unlicensed health care provider provides
services under the guise of being licensed and obtains monetary benefit for
the service.
The white collar crimes which are common to Indian trade and business
world are hoardings, profiteering and black marketing. Violation of foreign
exchange regulations and import and export laws are frequently resorted to
for the sake of huge profits. That apart, adulteration of foodstuffs, edibles
and drugs which causes irreparable danger to public health is yet another
white collar crime common in India.
Insider Trading: When a person uses inside, confidential, or advance
information to trade in shares of publicly held corporations.
Insurance Fraud: To engage in an act or pattern of activity wherein one
obtains proceeds from an insurance company through deception.
Investment Schemes: Where an unsuspecting victim is contacted by the
actor who promises to provide a large return on a small investment.
Kickback: Occurs when a person who sells an item pays back a portion of
the purchase price to the buyer.
17

Larceny/Theft: When a person wrongfully takes another person's money


or property with the intent to appropriate, convert or steal it.
Legal Profession: The instances of fabricating false evidence, engaging
professional witness, violating ethical standards of legal profession and
dilatory tactics in collusion with the ministerial staff of the courts are some of
the common practices which are, truly speaking, the white collar crimes
quite often practiced by the legal practitioners.
Money Laundering: The investment or transfer of money from
racketeering, drug transactions or other embezzlement schemes so that it
appears that its original source either cannot be traced or is legitimate.
Medical profession: White collar crimes which are commonly committed
by persons belonging to medical profession include issuance of false medical
certificates, helping illegal abortions, secret service to dacoits by giving
expert opinion leading to their acquittal and selling sample-drug and
medicines to patients or chemists in India
Racketeering: The operation of an illegal business for personal profit.
Securities Fraud: The act of artificially inflating the price of stocks by
brokers so that buyers can purchase a stock on the rise.
Tax Evasion: When a person commits fraud in filing or paying taxes.
The complexity of tax laws in India has provided sufficient scope for the taxpayers to evade taxes. The evasion is more common with influential
categories of persons such as traders, businessmen, lawyers, doctors,
engineers, contractors etc. The main difficulty posed before the
Income Tax Department is to know the real and exact income of these
Professionals.
18

Telemarketing Fraud: Actors operate out of boiler rooms and place


telephone calls to residences and corporations where the actor requests a
donation to an alleged charitable organization or where the actor requests
money up front or a credit card number up front, and does not use the
donation for the stated purpose.
Welfare Fraud: To engage in an act or acts where the purpose is to obtain
benefits (i.e. Public Assistance, Food Stamps, or Medicaid) from the State or
Federal Government.
Weights and Measures: The act of placing an item for sale at one price
yet charging a higher price at the time of sale or short weighing an item
when the label reflects a higher weight.

The Tenth Five Year Plan categorized the developmental needs of the female
population using the tool of age and classified them into five age-groups.
Girls in the age group of 0-14.
Adolescent girls in the age group of 15-19,
Women in the reproductive age group of 15 to 44,
Women in the economically active age group of 15 to 59
Older women in the age group of 60+ and above.
The first two categories comprising infants, children and young girls represent roughly half of
the countrys female population. Within these two categories, there are especially defenseless
sub-groups, such as the girl children of tender years, when discrimination in matters such as food
intake, health and medical care, schooling, recreational facilities etc. is entrenched both within
families as well as communities as well as larger social formations. Another group consists of
girls stepping from child hood to adolescence, facing a new grown-up world, with very little
preparation of learning, knowledge or skills, or of how to come to terms with their own emerging
sexuality in a patriarchal environment.

19

While age is an important marker in categorizing women, there is also the necessity of looking at
other criteria such as those based on certain socio-economic differentials. Besides looking into
women, on the whole, as a discriminated lot, it is important to reflect on the reality that women
are not a homogenous category. The draft Approach Paper to the Eleventh Plan repeatedly
emphasizes the need to restructure growth as a broad and inclusive process. It frankly admits that
even the achievement of reaching broad based and inclusive growth will not suffice to reach
certain marginalized groups and that the 11th Plan must pay special attention to the needs of
these groups. The Paper points to SCs, STs, some OBCs and minorities as those who are
lagging behind. The women and girls belonging to such groups are doubly disadvantaged and,
therefore, need more attention in the XI Plan. Whilst developing the theme of deprivation and
scarce access to social services, it is accepted that the most deprived groups among the poor are
rural women, urban slum women, dalits, adivasis, backward classes and other categories as
detailed in the chapter on Introduction of this Report.
In fact, viewing women as a distinctly separate group (from men) misses out the intersections
between gender and other variables of social and economic status. These intersections reinforce
vulnerability of more than one type and result in double and triple discrimination amongst
women belonging to these groups. It is necessary not only to unravel these threads and trace
several distinctive roots of inequality and discrimination, but also to conceive of multi-layered
responses in planning and programming in order to bridge the divides using the theme of
inclusive growth. While gender is undoubtedly an independent source of vulnerability, what is
of particular concern is the way class, social and gender relationships reinforce one another in
order to increase the insecurity and vulnerability of poor, low caste women Srivastava (1999).
The proposition is that there is a certain pre-disposition to being deprived of human development
opportunities, even where these opportunities, state provided or otherwise, exist for the men and
women of these communities. What is less recognized is that this pre-disposition is aggravated in
the case of women of these communities being a woman exacerbates the conditions of being
poor, illiterate, landless, asset-less and (or) suffering from poor health morbidity or malnutrition.
This systemic differentiation has to be responded to using the enabling provisions of Article
15(3) in respect of women of these deprived groups. Extending this beyond (but inclusive of) the
gender logic, it is possible to draw inferences that there are as glaring disparities between women
and girls of different social and economic groups as there are between men and women
(including girls) of different groups.

20

Women from Scheduled Castes and Scheduled Tribes


Discrimination In Education
As per data collected by the Ministry of Human Resource Development
In 60 districts in the country, literacy rate of both SC and ST girls is less than
10%.
In16 districts in the country, either the SC or ST female literacy is less than
5%.
In 68 districts, either SC or ST female literacy is more than 5% but less than
10%.
In only two districts in the country, general female literacy rate is less than
20%.
The stark disparities in access to human development amongst SC/ST girls in the country are
well brought out by the data above. It brings out the crucial need to not only see social, economic
and gender disparities within the same frame, but also provide responses that integrate all these
concerns. There are some welcome initiatives emerging from the Ministry of Human Resource
Development. Special attention is being paid to districts identified as low female literacy
districts for Scheduled Castes and Scheduled Tribes. The proposal is to launch national
programs of elementary education in these areas. Another welcome initiative by the Ministry is
to cross-match indicators of educational backwardness such as minority concentrations, tribal
and Schedule V and VI areas etc. and draw up lists of such districts for introducing program
interventions. However, the exercise does not disaggregate the data by sex. Looking at
subordinate status of women and girls as a hard fact and as a systemic feature at all levels of
society today; perhaps the above findings/suggestions would seem to be only belaboring the
point. But sectoral development planning often fails to catch the extent of gender discrimination
across social groupings in situations of double and triple pronged exclusion. Interventions for
girls cannot and or should not stop at narrowing the gender gap (in access to human development
opportunities), but also bridge the divides of social, caste and religious groupings. Support to
human development through affirmative action has to straddle both gender and social divides. It
is here that the provisions of both Articles 15(3) and 15(4) of the Constitution are to be
synergized.
Instruments of gender planning such as national and state action plans for women, perspective
plans for women, gender budgets, gender audit etc. should pay sufficient attention to the problem

21

of reaching women of particular groups, communities and categories to help them to catch up.
Conversely, affirmative programs for SC/ST and other similar groups being administered by the
concerned Ministries should pay attention to gender as well as caste/tribe, which is not the case
now. A scan of Government documents reveals gender gaps in affirmative action programs meant
for such disadvantaged groups. Chapter IV, Vol.II of the Tenth Plan document deals exclusively
with Socially Disadvantaged Groups. But the provisions do not respond to the capacity building
needs of women and girls of these groups, who are facing double deprivation of caste and
gender. A few illustrative examples are given below:13, 000 scholarships are to be granted to talented rural SC/ST children at the
secondary school stage during the Plan period.
70 scholarships are provided for SC/ST candidates under the National Talent
Search Scheme.
50 Junior Fellowships are to be awarded every year in sciences to SC/ST candidates who appear
in the National Eligibility Test (NET) and qualify the eligibility test for lectureship. There is no
special consideration for being female in these grants, though the poor educational status of
scheduled caste and scheduled tribe girls, vis--vis that of boys in these communities is borne out
in each set of Government data on levels of SC/ST enrolment, drop out and attainment.
Other such gender-muted instances of affirmative action include reservation of seats for SC/ST
candidates in IITs, IIMs, Regional Engineering Colleges, Central Universities, Kendriya
Vidyalayas, and Navodaya Vidyalayas etc. These are amongst the most prestigious educational
and professional institutions run under the aegis of the Central Government throughout the
country.
The only welcome exception is an Intensive Program for Educationally Backward Minorities in
325 blocks in 13 states and in 4 districts in Assam, which focuses specifically on girls belonging
to minority communities. The issue is whether multiple disadvantages can be captured and
responded to along a single axis. Data shows that whether it is women and girls of minority
communities or socially disadvantaged groups or those suffering from disability or the aged, for
all of them, several axes of disadvantage operate simultaneously. Absence of special gender
focus in affirmative action in favor of socially marginalized groups often means accepting the
fall back position of making choice on the basis of merit, a criterion that has negated the vision
of social and gender empowerment in the larger context.

22

The effects of gender on schooling, as brought out in a survey of Bihar and UP, show girls from
poor low caste households as having the least access to education. 61% of SC/ST girls were out
of school, while only 12% of girls belonging to upper caste households were out of school.
Since both the states are educationally backward, the overall enrolment rates are poor and so are
the female enrolment rates, with wide gender disparities. Among each social group and within
each quintile, lesser numbers of girls are enrolled, indicating the importance of gender as a factor
determining access to education. In the lowest quintile, nearly two-thirds of girls are out of
school, while this number declines to one-fifth in the highest quintile. But it is the girls from the
poor, lowcaste households who have the least access to education. About 70% of SC/ST girls,
75% girls from agricultural OBC households, 64% of girls from non-agricultural OBC
households in the poorest category are out of school. Compared to SC/ST girls, 61% of whom
are out of school, only about 12% of girls from upper caste households are out of school.
The researcher observes, the largest educational differential is between poor low caste girls and
rich upper caste males in these areas, showing how social, economic and cultural (gender)
relations reinforce each other to the detriment of this group of girls. While this provides a
gender comparison, the data also shows the steep differential between the enrolment rates of the
poorer low caste, Muslim and backward girls and the rich/better off upper and middle caste girls.
What is needed is not only more data on dalit, adivasi, Muslim and other vulnerable groups of
women disaggregated by income and consumption variables, but also to ensure that these
distinctions are kept in mind when designing policies and programs for education and training.
Discrimination in Health
Equal access to education and health is part of the right to equal enjoyment of human rights by
women and men as a universally accepted principle, reaffirmed by the Vienna Declaration
adopted at the World Conference on Human Rights in 1993. (Human Development Report 1995)
Education and health both promote the freedom and capability of individuals to make use of
available opportunities (Dreze and Sen 1995). However, data on the health status by
gender/caste/tribe/community is much less available in official health statistics than in
educational statistics. A World Bank Survey (2000) shows that households in the poorest quintile
in the country had two-and-a-half times the rates of infant mortality and child mortality and
nearly 75% higher rates of malnutrition than the richest 20% households. But corresponding
comparison of girls of these groups is not readily available. (World Bank 2000) Availability of

23

such data would help in looking at the combined effect of gender and social backwardness on
human development indicators.
In a study of socio-economic, health and nutrition inequalities of women in India, based on
NFHS 2 data, a group of researchers found that poverty measured on the basis of low standard of
living, illiteracy, no exposure to media and no health facility within locality was highest among
the SC/ST women in the sample, of whom nearly half came from households with low standard
of living. In the other category of women, non- OBC/SC/ST, hardly 20% of the women had a
low standard of living. Among OBC women, one third fell into the poverty category. The
analysis found that the same pattern of deprivation, SC/ST the most disadvantaged group, OBC
next and others in the best position, prevailed across the remaining indicators such as antenatal
care, unassisted delivery, anemia and low body mass index. The group of researchers succeeded
in bringing out the effect of social stratification on the extent of utilization of health care
programs and on nutritional status and that, differentials between the four groups of women
SC, ST, OBC and others are partly due to socio-economic factors. The researchers also point
out that the situation of inequality on account of disparities by caste/tribe in less developed and
poor performance states is different from the situation in better-off states showing consistently
good overall performance.
Infant mortality differentials for example, are accounted for not only by education of mother,
residence (urban-rural) or place of delivery (health facility or home) but also by the fact of
belonging to particular social groups. The mortality differentials between children of SC, ST and
others are striking. These differentials are also widening. In NFHS I, the IMR amongst SCs
was 24% times higher than the national average. Similar differentials exist in the treatment of
morbidity among children. Education of mother and location of residence account for as much of
the differentials as the fact of belonging to SC and ST (Shiva Kumar 1999) Though there do exist
separate agencies working within the government for the welfare of different caste and religious
groups, it has been the experience that they tend to club gender along with caste, tribe or religion
and community. Gender is not seen as crucial, so progress is measured by the steps taken by the
group as a whole.
Human Development indicators of these groups and communities tend to be much lower than
that of the general population. But within these groups, women tend to do much more poorly.
Unless focused attention is paid to gender and caste (or religion, tribe, region, race, etc. as the
case may be) in plans and programs, the progress achieved will be one-sided. The active

24

intercession of MWCD on behalf of the women and girls of these marginalized groups is an
imperative in the interests of inclusive growth. It is well known that in all development
indicators women tend to be crowded at the bottom. But it is lesser known that within women,
human development indicators show a definite pattern. While this active involvement by MWCD
may not (or need not) take the shape of program interventions, a continuous watch dog and
monitoring role is necessary, backed up with collection of feedback and data. .
Recommendations
Intersectionality should be taken on board as a guiding principle of gender planning.
Discrimination is doubled, trebled and multiplied further in case all the different axes intersect
caste/tribe, religion, economic and work status, residence, geographic location, asset-ownership,
marital status, age, health status, etc. The gender framework should incorporate this. A
comprehensive data base will enable MWCD to keep track of the progress achieved in basic
human development indicators by women and girls belonging to these groups as well as women
in general. Apart from human development indicators such as health and education, etc.
women of some of these groups suffer from a multitude of handicaps, ranging from legal barriers
to being exposed to superstitions. In all programs an exercise should be done to establish the
existing patterns of discrimination, lower participation and performance. This necessitates the
collection and arrangement of data (on program participation etc.) by caste, tribe etc. This should
be introduced. Reporting of this data in the Annual Report should also be considered, again in the
interest of inclusive development.
Tribal women have been conventionally held to be better placed than women in other
communities since they are not subjected to segregation within the community nor are their life
styles dictated by purdah values. Both in the overall tribal population and in the child population
the female: male sex ratio is higher than those in the general Indian population. However, the
tribal population consists of many diverse groups spread throughout the country and is located at
different stages of development. Drawing general conclusions may not reveal the whole picture.
There is also a decline in the child sex ratio between the last two Censuses. The strength of
belonging to the community is a typical feature of tribal life and women feel a strong sense of
their own group identity. This identity is also linked to their livelihoods and to their own norms
of inheritance and asset ownership. However, tribal women are also dominated by male led local
institutions With modernization, tribal women have experienced loss of livelihoods and also

25

access and control to natural resources, including land, forests, water etc. Tribal communities are
often involved in conflicts relating to these and other issues. The entry of private companies has
exacerbated this process. There are also the problems associated with displacement caused by the
introduction of huge development projects in tribal areas Women have taken part in many of the
agitations surrounding these projects. The loss of livelihoods has led to tribal womens increasing
dependence on migration. Their work load has increased with the loss of traditional rights. They
are also subjected to sexual violence, exploitation and trafficking. They are in conflict with many
powers and interests ranging from the state agencies to builders and landlords. Against this
general background, which affects both men and women, tribal women have to fight for their
rights with the men of their communities as well. New practices of controlling womens freedom
to move and travel freely are now noticeable. Customary rights over land are being eroded. Older
practices of witch hunting are also continuing. The custodial rights of women over their children
are also beginning to be threatened.
Women themselves have started questioning the prevailing convention of treating their status
within the community as egalitarian. Though still community-centered and reposing pride in
their collective identity, they are now looking at their own position in the current period of
transition, especially in inter-generational terms. Child marriages are increasingly taking place
and witch hunting is now increasingly linked not only to womens property rights but also to
bigamy. Women do not participate in the traditional decision making forums and there is an
increase in the incidence of alcoholism and the resulting domestic violence. A major area of
neglect is tribal womens health.
Recommendations
Tribal womens status is an extremely multifaceted and complex issue, given the multiplicity of
tribal customs, cultures, norms etc. There is an urgent need to document the changes in status of
women belonging to particular groups resulting from socio-economic development, while
respecting the inherent variety. Womens participation in traditional decision making forums as
compared to their access to the bodies created under the panchayati raj laws should also be
studied. Customary laws not recorded of different tribes should be documented in order to
gain a better understanding of the emerging issues. MWCD should try to make all its support
programs, such as awareness generation, short stay homes, Swadhar etc. accessible to tribal
women by means of mounting a special campaign. Economic programs in tribal areas being

26

implemented by MWCD should incorporate decrease in migration of women as one of its


objectives. Better collaboration between MWCD and the Tribal Ministry should become a
special area of attention.

From Minority Community


The main issues of Muslim minority women stem from three major factors: a) insecurity b)
exclusion and c) poverty.
Recommendations
Muslims need to be integrated into the list of BPL population. Provide Government Scholarships
for education from primary to higher levels. Address the whole range of basic needs by first
listing the areas of disparities, including- but not confined to education, health, employment,
credit, civic infrastructure, poverty strategies, etc. holistically. Basic civic infrastructure is
lacking in most areas inhabited by the Muslim poor population; implementation of the same must
be undertaking with the participation of NGOs.
Disaster Affected
Experiences have shown that disaster, however natural, is profoundly discriminatory. Wherever
they hit, pre-existing structures and social conditions determine that some members of the
community will pay a higher price. Among the differences that determine how people are
affected by such disasters is that of gender. Womens lower status in general results in various
kinds of exclusions and vulnerabilities in a disaster setting. Low mobility and lower access to
information implies that women are often the last to receive relief resources. Women are
disproportionately represented within the informal and agricultural sectors, which are the most
adversely affected by disasters. This adversely affects their claim to relief and rehabilitation.
Thus, women experience high rates of unemployment, even further decreasing their bargaining
power within households and communities. Unlike men, they are the primary household
caretakers and thus are not able to migrate for work. All these factors involving structural biases
and gender discrimination results in the compensation amounts awarded being directed
invariably at men. Furthermore, domestic violence against women sharply increases after

27

disasters and women face additional kinds of physical and sexual violence in relief camps. In the
face of disasters where men die, are injured or migrate, women are left to lead households and
communities, with few marketable skills and opportunities and even more vulnerability to
violence and extortion. Women take on the responsibility for both caring for families and
meeting livelihoods while having the least access to information, resources and opportunities.
Disasters create the potential to engage in longer- term rights and equity- based development
through critical and practical strategies for gender empowerment. Successfully incorporating
women within disaster management and mitigation is one way to increase womens social,
political and economic status in general, and to minimize the currently disproportionate impact
of disasters on women. Strategies include strengthening the marketable skills of women,
promoting livelihood options, enhancing womens leadership in micro-planning, relief and
disaster mitigation and increasing their role in local governance.
Practically, women have immense knowledge of their local environments and information about
how to mitigate risks that lead to disasters. This knowledge can be transformed into actionable
expertise by involving women within disaster management. Furthermore, women are the most
effective in mobilizing communities, networks and institutions to pool resources, respond to
disaster and create safety mechanisms. Women are also most knowledgeable about those living
within their communities, in terms of identifying marginalized groups and community trends.
Recommendations
A policy framework to plan the re-construction process of women is essential within disaster
management planning. Re-building should address the root causes of vulnerability including
gender inequalities. Promote joint entitlements like Patta, Compensation. Have appropriate
gender and disability-sensitive infrastructure/community assets. Availability of suitable insurance
and prompt settlement of insurance claims for life and assets are crucial aspects of disaster
management. While India is a high- risk region for natural disasters, there is currently a lack of
adequate communityaccessible risk management insurance. The insurance market remains
underutilized.
Policies can play an important role in promoting community-accessible insurance schemes for
those in ecologically- fragile and disaster prone areas. Increase resource allocations for gendersensitive interventions. These include trainings, as well as modifying institutional structures and
mechanisms. Develop and adopt codes of conduct for government, aid workers and armed forces

28

that are sensitive to the vulnerabilities and needs of women. Collect and use genderdisaggregated data for all vulnerable groups, to inform relief and rehabilitation policies. Conduct
social equity audits after critical stages of relief and rehabilitation are completed.
Examine and review the relief code and Disaster Management Bill to ensure gender
mainstreaming. Greater accountability for ensuring gender mainstreaming in disaster
management, should be instituted via performance management systems. Poverty alleviation
programmes should create opportunities for gainful employment for women, especially in
disaster-prone areas. Convergence of various line departments and civil society organizations,
before, during and after a disaster. Community participation, particularly involving women,
including socially excluded and vulnerable groups, must be an integral part of disaster
preparedness and management interventions. Existing community structures such as womens
SHGs, health (Swasthya) committees, watershed groups and local panchayats should be involved
in disaster preparedness issues and sensitized about gender. Pre-disaster convergence meetings at
district and block levels must take up preparedness issues such as availability of essential
medicines, safeguarding against trafficking and other violence against women. Information and
communications systems should be gender-appropriate and accessible, e.g., early warning
groups, health committees, etc. Identify tools and yardsticks by which performance with respect
to women can be monitored at all levels district, block and village. All block, district and
panchayat/village contingency plans must be made public (shared with key stakeholders)
In the North-East
The conflict situation in the North East is rooted in lack of income and employment. The Look
East policy of the GOI could be a valuable device to open opportunities. Of special attention are
issues related to introducing new avenues for non farming activities of women - food processing,
bottling, canning and packaging. Attention needs to be paid to creating job oriented skills for
manufacture of indigenous products, popularizing indigenous cuisine in the potential tourist
areas and highways, skills in hotel management, creating travel guides to depict north east
histories, cultures and traditional assets etc. Women are the most vulnerable section of society in
Border trade centres and areas, which are adjacent to international borders and normally a nomans land controlled by anti-social elements and organizations that are inimical to the interests
of the country. Under the circumstances, women, who are the major component in border trades,
especially in agriculture and allied activities, are under severe threat. Matters are compounded by
problems of infrastructure and facilities, which are either most rudimentary or simply do not

29

exist. Access to health, education, drinking water, and sanitation, etc, is almost impossible, which
adversely affect health. Border Trade Centres/Areas besides normally being hot beds of
smuggling, particularly of narcotics, also are centres of trafficking of women and children.
Women are rendered vulnerable to all kinds of diseases, especially STD, HIV/AIDS. Women are
also used or forced into smuggling of narcotics, which makes them further vulnerable to law
enforcing agencies that are not sensitized to dealing with women law-breakers. The circle gets
more vicious for women in these areas, many of whom are either illiterate or have received only
rudimentary education and cannot be expected to be aware of their fundamental, human, legal
and other rights. Problems of communication, organized marketing and non-implementation of
labor laws also adversely affect womens economic power, which in turn reinforces them to play
subservient roles and their empowerment continues to remain illusionary and elusive. It is
therefore suggested that some mechanism is set-up in Border Trade Centres and Areas to enforce
the law of the land, as also to implement and monitor all fundamental, human, legal and other
rights to ensure that no citizen of this country is denied and deprived of them. Enhancing the
utilization of the regions local and rich natural resources with appropriate technology for
producing and marketing herbal products and processed food/fruits is another avenue to meet
with the challenge posed by anti-social elements. Cold storages can be located in appropriate
areas of the region, to sustain perishable items before they are transported to larger markets.
Recommendations
As a result of conflict in the area, trauma and fear among women and children is high. There is
evidence that homes and counseling centres in the region are mostly dysfunctional, and there is a
need to revamp the existing night and counseling centres for women. Resource allocation is a
priority for healthcare services and counseling for women. Up gradation of support services such
as health care for women; refresher courses on counseling have to be initiated to upgrade the
quality of counseling. Violence against women has to be seen as a public health issue because of
the repercussions of its increase in the north east region as well as the general apathy to such
incidences. Strict measures need to be established by the government to safeguard visiting
tourists, especially women, from sexual harassment. On the lines of the Supreme Court
Guidelines on Sexual Harassment at the workplace, women involved in the tourism industry,
buying selling and marketing should be safeguarded too. There should not be any stationing of
military and paramilitary forces near girls schools, hostels etc. Gender Sensitization of Military
and Paramilitary forces is a crucial need and should form part of the priority agenda. . Fast track

30

criminal courts should be set up for dealing with cases against military, paramilitary and other
State officials who inflict atrocities against women. Provision for womens safe mobility and
their physical access to common Property Resources should be ensured Land should be
transferred to Female headed households impacted by conflict and death of husband, etc.
Due to increase in the number of orphans free orphanages are required with facilities for food
and education up to class X. Special attention needs to be paid to capacity building of both boys
and girls in order to sensitize them to especially cultural and social issues. Introduce State
insurance to cover victims. Vocational and technical training of women in particularly nontraditional areas along with appropriate skill training, technical up-gradation, and
entrepreneurship under public-private partnership within a region specific context. Increase
allocation to SHGs and develop them into independent Cooperatives. Resource allocations
should be part of the planning process in order to implement market concepts. Given a history of
womens collective role in livelihood practices, a group approach should be adopted where
women of the region, especially that of tribal and ethnic communities, can work together both in
agricultural and non- agricultural sectors. There should be a separate quota for conflict affected
female headed households under Indira Awas Yojana. Suggested funding for the above can
perhaps come out from the funds available in the Non-lapsable Pool.

Internally Displaced People


Recommendations
Formulate a national policy for the resettlement of internally displaced within a specific time
frame. Attention should be given to Internally Displaced People with special emphasis on
women & children in conflict areas like Assam, Manipur, Nagaland and Tripura. Displacement
also leads to internal migration where women have become totally vulnerable. They are reported
to have left their homes and have resorted to work as domestic servants, liquor vendors, sex work
and the like. Such issues and their solutions should be incorporated into policies Conduct surveys
of physical structure, livelihood and job opportunities, and basic requirements of people.

Urban Poor
31

Urbanization is an increasing phenomenon as the nature of activities pursued by an economy


progressively shifts from primary to the secondary and tertiary sectors. Urban poor settlements in
India are around 40 million and the average family size is 5. It has been projected by the
Planning commission (Working group on 9th Plan) that by the end of the 9th Plan and at the
beginning of the 10th Plan, the shortage of housing in urban areas would be 16.76 million
houses. Of this 10 million houses would be needed for the economically weaker sections, which
can be broadly categorized as below poverty line population.
Recommendations
Womens rights to housing need to be understood in terms of their entitlements. This means they
have rights in, access to and control over land, housing and property. The state must evolve
policies and programmes that are sensitive to the nuances of womens status-linked needs - aged,
widows, divorced, and single. There is a need for greater commitment to institutional reorientation by adopting a more enabling approach to the delivery of basic services accessible to
the poor through the more effective mobilization of community resources and skills to
compliment public resource allocations. Major areas of attention include: town planning, land
management, adequate housing, poverty alleviation, and provision of basic amenities, access to
social services such as health, education, access to credit etc. all of which are crucial for
womens human capital development and for reducing the incidence of poverty Improved access
to social services would also help in building up the capacities of poor women and empowering
them to improve their own living conditions and quality of life. Effective delivery of these
services would also reduce social and gender inequities and promote integration of people
residing in slums into the social and economic networks of the city as a whole, thereby
enhancing the overall productivity of the city. Various physical infrastructure components such as
water supply and sanitation have a direct bearing on improving health conditions in slums,
especially of women. There is a need for formulating a National Urban Settlements for the Poor
Policy, which would cover the above said components. Womens needs arising from their
gendered position as well as their being poor, should form part of the policy.
The Missing Girl Child
The most critically endangered sub-group (out of the five age groups listed earlier) is that which
does not figure in the above list. This sub-group is not eligible for listing because the numbers
are missing and what is not counted, does not exist on public record. This sub-group consists
of the unborn girl children in their mothers wombs, who are deliberately disposed of (in

32

contravention of existing laws) before birth only because they are female. Their disposal is an
instance of the most extreme instance of gender discrimination, (forbidden both by domestic and
international laws and conventions), but seldom regarded as such, it being more commonly
referred to as a social issue. Estimates drawn from the 2001 Census indicate a figure of 15 lakh
missing girls in the 0-6 age group in a period of 6 years. During the period 1991 to 2001, the
female: male sex ratio in this age group has declined from 945 to 927. Not having been born, this
category has no presence in a five year plan; yet the burgeoning size of this missing group is
now receiving attention as a factor crucial to the health of the social fabric and to the well being
of communities, both of which are fundamental goals of socio-economic planning. The high
numbers of missing girls seriously affect the status of the living girls and women and their
prospects for a safe and secure life. Less realized is the strong possibility that increasing numbers
of missing girl children are also inimical to the safety and health (including mental and
psychological health) of mothers. Repeated abortions weaken the reproductive health system and
increase the risk of infections. There is evidence of regression to earlier marital practices such as
polyandry. Women from lower socio-economic strata are also being trafficked from supply
centres to demand centres to make up for the deficit of females in the marriageable age groups.
Reports are also surfacing of women being auctioned in public after being trafficked from far
away places. All such women are treated as merchandise, as inferior wives and many of them
are abandoned as soon they carry out their apportioned task of giving birth to children. In
deficit areas, there is also some evidence emerging of increased surveillance over young girls
and their physical movements at the village and local level, by traditional male-dominated
councils such as the khap panchayats. The incidence of violence against women is on the rise,
giving the lie to the myth that lesser numbers of women means better and more humane
treatment, resulting in higher status. The female deficit in the younger age groups today will soon
make its presence felt in the older age groups of women as well amongst women who are of
marriageable age. Whereas now, there are deficit areas and surplus areas, the situation may
become quite starkly different in the near future and this will have far reaching consequences.
Factors responsible for female feticide are many, complex and interlinking. A succinct
summarization is given below:The obsession to have a son
The discrimination against the girl child
The socio-economic and physical insecurity of women

33

The evil of dowry prevalent in our society


The worry about getting girls married as there is the stigma attached to being an unmarried
woman Easily accessible and affordable procedures for sex selection during pregnancy
Failure of medical ethics The two child norm policy of certain state governments The two child
norm implies that the State promotes two children per family and has a system of incentives and
disincentives/punishments for achieving it. A two child norm has the potential to cause immense
harm to womens health in the existing social situation where son preference is high and
womens status is very low. One of the gravest risks includes increase in sex selective abortion
and consequent reduction in (the numbers of) girl children. We feel that the compulsion to have
no more than two children would result in increased female feticide. This happened in China
when Government declared that no couple should have more than one child. There are lessons to
be learnt from the Chinese experience.

Chapter-2
CHRONOLOGICAL MILIEU OF THE EMERGENCE OF WHITE
COLLAR CRIMES

The earliest documented case of white-collar crime law dates back to 15th century is
England. There has been a case popularly known as the Carriers case of 1473, where the
agent was entrusted to transport wool and he attempted to steal some of it for him.
Therefore the Star Chamber and Exchequer Chamber of the English Court of Law adopted
the breaking bulk doctrine as it constituted the crime of larceny. However, the growth of
industrial capitalism in the eighteenth century ushered a new history of crime and
criminality. The very base of industrial capitalism is based on coercion and robbery. Now,
before we discuss the topic let us understand the meaning of capitalism
The process of emergence of these conditioned was termed by Karl Marx as
primitive accumulation while in the words of Adam Smith, it was previous
accumulation. Therefore, the Dutch Marxist, William Bonger contended that criminal
attitude develops among the working class under capitalism due to conditions of misery
and at the same time the criminal attitude develops among the bourgeoisie from the
avarice fostered when capitalism strives.It succeeded in United States of America in
1890, when Congress passed the Sherman Antitrust Act which took the initiative to make
the monopolistic trade illegal. Other industrialized countries like Great Britain had a
history of penalties involving white- collar crime by that time, but it was not as sweeping
as the Sherman Act. Some nations implemented a smattering of these laws, known as
competition or antitrust law, but did not have a strong binding force for a long time. But
34

more anti-white-collar crime sentiment rose in the late 19th century and early 20th
century in the United States as a result of a group of journalists known as muckrakers.
They laid much focus on the prevalent stock fraud, insurance fraud and underhanded
practices of monopolistic companies that had grabbed under the Sherman Act. The
muckrakers exposes gave rise to public resentment and thereby called for in some
reform. By 1914, Congress attempted to solidify and strengthen the sentiment laid down
by the Sherman Act, which was used against labour unions, with the Clayton Antitrust Act
. This Act was much stricter and went much further than the Sherman Act in
making particular monopolistic practices illegal.

WHITE COLLAR CRIMES IN INDIA


The street crime, especially snatching and motor vehicle theft, relatively down
compared to 2010, the year 2011 truly belonged to the faceless white-collar
criminals. The numbers of such criminals arrested by the crime branch this year saw a
massive increase
108 per cent as 148 people were arrested for dabbling in white-collar crime as opposed
to just 71 in 2010. In all, around 20 organised white-collar rackets were busted last year
and cash and valuables, amounting to R4.5 crore, thousands of mobile phones used
in the commission of criminal activity and three dozen vehicles were recovered, said a
senior police officer. The list includes perpetrators of lottery fraud, fake recruitment
racketeers, ATM fraudsters, travel agents, property dealers, agents promising fake court
affidavits and death certificates as well as both men and women operating fake
friendship clubs. Meanwhile, the Economic Offences Wing (EoW) of the Delhi Police
arrested more than 163 criminals in 1,358 cases ranging from those of land grabbing to
fake job rackets and attached property valued at amounts estimated to be between Rs. 350
to Rs. 500 crore. This year, we focused more on individual cases as opposed to
those in which several persons were victimised. We got more manpower, said Vivek
Gogia, joint CP (EoW).
White collar crimes are to be considered as a global phenomenon to which India is no
exception. As discussed earlier, white collar crimes emerged in India with the advent of
the British colonisation during the period of industrial capitalism. Prior to that, instances
of men working with the District treasury embezzling with the money kept under his safe
custody or bribing practiced among the officials were found. Therefore, the white collar
crimes were confined to this limit. Thus, the people indulging in the white collar crimes
then can to said to be mere grass eaters the people in the modern times have reached the
stage of meat-eaters.
People in India face a crisis of growing, yet un- addressed, health needs. From the moment of
conception to the end of life, the challenges to the female sex are enormous, especially poor
women who have limited access to health care. The child sex ratio continues to plummet and is
as low as 793 in an economically prosperous and progressive state such as Punjab. Malnutrition
begins during infancy and sets in motion a life long cycle of poor health. Over half of all Indian
35

women suffer from anemia, which acerbates maternal morbidity. More women die of maternal
death related causes in India than in any other country in the world. While NACO data highlights
that many new HIV cases are of married women, the National Family Health Survey, 1998-99
shows that only four out of ten women in the reproductive age have heard of HIV/ AIDS.
Furthermore, every form of violence against women has steadily increased since the last decade,
including rapes, dowry murder and domestic violence. Despite the alarming health crisis of
women and girls, the national policy focus prioritizes family planning and reproductive health
without addressing underlying issues such as womens low participation in decision-making,
which adversely affects her health status. Another important point to note is that the leading
killer of women in India is tuberculosis. Yet due to the focus on maternal and reproductive health
this fact is little known nor are there any gender specific policies or programmes in place with
regard to this disease.
Recommendations:
The National Health Policy 2002 needs to address issues of womens survival and health through
a life cycle approach. The policy should ensure women friendly accessible, free, comprehensive
primary health care accessible to all, specially marginalized groups with full preventive,
promotive and curative care. The policy should address occupational health hazards and needs of
women working in adverse situations- mines, plantations, quarries, construction, informal sector,
free trade zones, garbage disposal etc. A holistic perspective on womens health (moving beyond
reproductive health) needs to be mainstreamed in the education system, from primary to higher
and non formal sectors. An independent regulatory commission should be set up to regulate the
private sector from a gender and equity perspective as well as to suggest reforms of existing
bodies in the health sector including the Medical Council of India. Create a gender focal point in
health ministry and in the departments of health in the States, in order to incorporate the lifecycle approach to womens health.
Violence as a public health issue
NFHS-2 shows disturbing evidence that women have internalized domestic violence as a
necessary part of domestic marital relationships. More than half of all Indian women believe that
husbands can beat wives if they have an appropriate reason for doing soi[i]. Half of nonworking married women in India dont make personal healthcare decisions, almost three-fourths
(72%) need permission to go to the market and just over one- tenth (11%) are not involved in any
household decisions at allii[ii]. Violence, neglect and abuse not only result in long- term physical

36

injuries and poor health, but also create chronic low- self-esteem, depression and other mental
health issues for women. Despite the high rate of violence against women, including neglect,
rape, dowry murder and domestic violence, violence is not seen as a public health issue.
State should recognize Violence as a public health issue and include it in medical education. This
should in addition to the recognition of violence as a breach of womens human rights. ANMs
should be trained to deal with violence and the trauma that follows Counselors should be
appointed at the PHC level. The medical and health establishment should be targeted and
sensitized on VAW issues, as they are often the first point that women go to in a crisis situation.
The medical and health establishment should be sensitized on recognizing and dealing with
injuries resulting from various forms of VAW like domestic violence, rape etc.
Low budgetary allocation
Despite the health crisis of women and girls, India is consistently among the lowest of all
countries in terms of its investment in health, as acknowledged in the National Health Policy of
2002. Indias investment in health as a proportion of GDP has vacillated from 1.3% in 1990 to .9
in 2001, making it amongst the lowest global spenders on health. In 2002, Indias public health
expenditure as a proportion of GDP rose to 1.3%.
A great deal of rural indebtedness in poor rural families is linked to rising health costs. The
importance of public provisioning of quality health care to enable access to affordable and
reliable health services cannot be overestimated in the context of preventing the non-poor from
entering into poverty or in terms of reducing the suffering of those who are already below the
poverty line. Low investment in health and the under- utilization of funds has resulted in health
delivery systems that are increasingly inaccessible, inefficient and unaffordable. Currently, little
investment is made on front-line public health care workers, who have extensive workloads,
multiple areas of responsibility and multiple lines of accountability with little compensation.
Adequate budgetary provision should be made for womens health and these funds should be
timely disbursed and properly utilized to reach the target groups in time. Expand the womens
component plan to cover chronic health problems of women such as anemia/ under nutrition,
morbidity, etc. and commit 30% of the funds specifically towards this. Upgrade at least 50-60%
sub- centers and public health centers and make the phase wise information of the plan available
to all women in the community. Allocate funds for training, treatment in alternate medicine and

37

recognize the role of TBAs and upgrade their skills. Make provisions for regular fundamental
and refresher training and capacity building with strong public health & gender perspectives for
all functionaries.
Healthcare access
Health care access remains low for many women, especially those who are poor; suffer from
multiple exclusions, including caste, class, geographic isolation and tribal status. Health policies
have few specific strategies for improving access to marginalized groups.
Specific IEC and training strategies should be developed in all programmes to target excluded
groups, including tribal and low- caste communities. Ensure women-friendly free comprehensive
primary health care, based on a life cycle approach, with full preventive, curative and promotive
care at the PHC level with free ambulance referral and/ or alternate transport mechanism by
identifying a pool of transport in the local area and reimbursement by the State. Integrate
grievance cell and help lines with health services to ensure speedy investigation and facilitate
redressal for users and health workers. Set up special counters in all health centres and easy
referrals for improving access to free comprehensive health care particularly for stigmatized
groups such as sex workers, hijras etc. Ensure access to women with disabilities through
provision of ramps, lifts in public offices, transport etc and provide rehab and equipment
(wheelchair, hearing aids etc) as a right.
Reproductive Health
The high rates of MMR and IMR, poor pre natal and post natal care combined with the low
proportion of institutional deliveries is a grave cause of concern. Therefore the reproductive
health care of women needs special attention in the XI Plan. For this purpose :
Ensure full enforcement of Supreme Court guidelines on sterilization. The current policy focus
on female sterilization should be broadened to providing people with greater reproductive
choice. This includes better access to contraception, more information about birth spacing,
increasing male responsibility for small families, as well as providing greater education and
economic opportunities for women Reproductive and maternal health programs, including RCH,
should not be combined with the goals and strategies of population stabilization The NPP, Health
plan and NRHM policy documents must include institutionalized mechanisms and for ensuring
that states comply with the notarget policy of the national government. This includes preventing
states from denying women participation on the PRI, or accessing other benefits for having

38

more than two children Policies should promote strategies for involving men that foster equitable
gender relationships. This includes equitable decision-making and resource-sharing amongst
couples, how men can take more responsibility for birth control and foster greater opportunities
for their wives/daughters Policies should address how womens non- reproductive health status
impacts reproductive health. This includes understanding trends in how TB, malaria and
HIV interact with one another and impact womens maternal health Ensure a clearly defined
package of essential Reproductive health services including ante and post natal care, emergency
Obstetric care, information about and services for contraception and safe abortion and counseling
at the PHC, free to all women and adolescents (married or unmarried). The Janani Suraksha
Yojana should be extended to cover all poor women irrespective of their age, parity, or place of
childbirth Extend maternity leave to 6 months and provide maternity benefits for ALL
women of all sections irrespective of the parity Ensure regular collection of data on maternal
morbidity and mortality (as done with fertility and demographic data through the NFHS and
DLHS), to facilitate decentralized planning and monitoring as envisaged within the NRHM
Provide adequately trained attendance at delivery- at home or in institutions- with emergency
referral backup and a continuum of care from pregnancy through childbirth and 42 days hence
Recognize the role of traditional birth attendants and upgrade their skills. The health insurance
schemes being implemented by government and private sector should also cover the pregnancy
period (both normal and caesarian cases). The premium of these schemes should be kept to the
minimum so that the poor women can have access to these schemes.
Communicable and Non Communicable Diseases
Women as a whole are especially susceptible to many diseases because of their poor nutritional
standards and discriminatory practices in health inputs right from their birth. The access and
availability of health care women is generally poor and scanty. There is an imperative need to
upgrade facilities for women to tackle the various health problems. Some recommendations
include :
Allocate adequate budgets for all Communicable Diseases and Non Communicable Diseases
IEC, prevention, early detection, treatment, equipments etc. Horizontally integrate the vertical
National Cancer Control Programme into the public health system by imparting health
awareness, making available the test of Visual Inspection and appropriate referral. Ensure
universal availability of ART, access to drugs for treatment of opportunistic infections, provision
of safe blood banking and palliative care.

39

Mental Health
Ensure availability of required mental health professionals psychiatrist, psychologist, psychiatric
social worker, and mental health nurses at all levels. Undertake periodic assessment of treatment
facilities including rehabilitation at district level Develop a National Policy on Mental Health
with adequate budget provision at both Centre and State level.
Occupational health hazards
Address occupational hazards and needs of women working in adverse situations, including
mines, plantations, quarry, construction, informal sector, free trade zones, and garbage disposal.
Welfare of the girl child and adolescent
Health policies and plans should promote strategies that empower adolescent girls through
information about health, community activism roles and increased awareness about how to
negotiate power with families, future partners and in the workplace. Ensure regular check ups of
newborn and monitoring of growth parameters through maintenance of growth charts of
children, lactating mothers, and adolescents. Allocate funds for comprehensive education and
counseling for adolescents, with special emphasis on Life Skill education, sex education and
education against substance abuse.
HIV/AIDS
HIV in India is spreading from high-risk groups to the general population in many areas, and
from urban to rural areas. Increasingly the face of HIV/AIDS is female. According to estimates
of the National AIDS Control Organisation (NACO) 1 in 3 persons living with HIV in India is a
woman. In 2004, it was estimated that 22% of HIV cases in India were homemakers with a single
partner. The increasing HIV prevalence among women can consequently be seen in the increase
of mother to child transmission of HIV and paediatric HIV cases.
Women are increasingly becoming the face of the HIV epidemic and there are biological, social,
legal, cultural, political and economic factors that make them more vulnerable to HIV/AIDS. In
turn these factors have an impact on womens access to services, resources, and information.
Women have limited ability to negotiate safer sex and the risk and reality of sexual violence also
means an increased risk of HIV transmission through unprotected non-consensual sex.
In India, testing for the HIV virus is rare until symptoms set in. The numbers suffering from
HIV/AIDS are therefore likely to be far higher than estimated. Once HIV/AIDS enters the home,
family budgets are reversed forever often loss of income earning opportunities and expenditure
on medical care on the other. Women are the major caregivers in most cases.

40

A multi-sectoral and decentralized, gender sensitive community based health services is needed.
The health care systems in the region are inequitably gendered in terms of accessibility, priorities
and services provided. As such, effective strategies that address the relationships between gender
and HIV/AIDS require a focus on gender within health care in general. There is perhaps an
urgent need that the response to the HIV/AIDS 6epidemic be made multi-sectoral and be
integrated into comprehensive, decentralized, participatory community based health services and
promote the highest mental and physical health, including empowering women to make
decisions related to their sexual and reproductive health. A focus on increasing womens ability
to access preventive and treatment and care services is crucial.
Legislation to be enacted to protect HIV positive women against discrimination in education,
livelihood opportunities, workplace, medical treatment and community. Women should
participate in the formulation and implementation of HIV/AIDS policy. Widen the outreach for
the positive women to access information, spread awareness, build capacities and services by
setting up self help groups and networks at the local, state and national level; Address the socio
economic problems faced by women; care and support for most vulnerable women and children
of HIV positive parents; political and media advocacy to address issues of stigma and
discrimination; Mobilize resources for accessing health services, ARV treatment, and providing
child care services Information on a mass scale for prevention and treatment of HIV/AIDS is
crucial more specifically on symptoms, opportunistic illness, exposure, prevention and use of
condoms, testing facilities for determining HIV status, follow-up CD-4 tests and antiretroviral
(ARV) treatment. Training and infrastructure needs of health care providers at all levels need to
be identified and met with. Behavioral and attitudinal change at all levels is an important
intervention, and can be achieved through training sensitization workshops and follow up.
Counseling and access to condoms are needed for women to reduce the risk of exposure in
situations where they do not have money to even buy food. Education on HIV/AIDS must be
introduced into the school curriculum Community care homes to be provided for HIV positive
people HIV positive women to be provided livelihood opportunities. Rural women and childrens
access to Anti-retroviral should be ensured as well as provision of free transport both for HIV
positive and those accompanying them. Adequate funds should be allocated for ARV treatment.

EDUCATION

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Education is a key intervention in initiating and sustaining processes of empowerment. Good


quality education can help women and marginalized communities improve their status, enable
them to have greater access to information and resources and to challenge various forms of
discrimination. Education helps strengthen democratic processes as it allows for greater and
more equitable participation. Being educated or literate leads to greater self-confidence and selfesteem. It enables engagement with development processes and institutions of governance from a
position of strength. Poor women from socially disadvantaged communities are invariably not
literate and therefore find themselves at a disadvantage when participating in development
processes. They are unable to take full advantage of progressive measures like reservations in
PRIs. Many of the negative fall-outs of being outside the education net for women are quite
recognized, however, the articulation of the problem tends to remain at the level of rhetoric.
It is however, important to recognise that while being literate or educated is necessary for
empowerment it does not automatically ensure it. For that we need an education that is of good
quality and promotes critical thinking. From the perspective of gender this means that education
and literacy should enable women and girls to critically analyse their situations, raise questions
about their subordination and help them make informed choices. It is well known that the
institution of schooling is an important site for socialisation, that actually can actually reinforces
rather than challenges patriarchy and gender discrimination. It is in this context that the content
and pedagogy of education become critical considerations. The focus of educational planning is
on formal education but this is only one dimension of the educational provisioning. Especially
when considering the needs of deprived women and when womens empowerment is our main
aim, there is a need to think about well-developed and structured educational interventions
outside the formal system. Capacity building interventions are in essence educational and
learning processes and must therefore be invested in, well-designed and conceived as a
sustained, rather than ad hoc process. Such interventions must necessarily be broad based and
flexible and address a number of different needs, including literacy.

EMERGING CONCERNS
Gender gaps in enrolment and retention in Elementary Education
Elementary education has emerged as the key policy and programmatic concern of the Indian
Government. Some important schemes have been launched. The Sarv Shiksha Abhiyan (SSA) or
Education for All with very ambitious goals was launched in 2001. Specific programmes within
SSA (National Programme for Education of Girls at Elementary Level (NPEGEL) and Kasturba
42

Gandhi Balika Vidyalaya) focus exclusively on girls in educationally backward districts. Another
landmark scheme the Midday Meal Programme- has been introduced. The scheme has been
welcomed as it positively impacts nutritional levels and school participation of girls and children
belonging to poor and marginalized sections. Such positive measures have led to improvements
in enrolment at the primary level - from 97.4 million (40.40 girls, 57 boys) in 1990-91 to 122.40
million (57.3 girls and 65.1 boys) in 2002-03 (Select Educational Statistics, 2003). There has
been a 14.18 percent increase in the number of primary schools, 50.65% increase in the number
of upper primary schools and 38.43% increase in the number of secondary schools between 1993
and 2003 (NCERT, 6th and 7th Educational Survey).
However despite the improvements several gaps with regard to gender persist. The gaps also
point to the fact that strategies need to targeted as the girls belonging to SC, ST and the Muslim
community are still lagging behind.
Gender gap and low priority to womens literacy
The 2001 Census recorded a significant increase in literacy rates (from 52 % in 1991 to 65 % in
2001), particularly female literacy rates, which increased by 14.8 % in 2001 as compared to 11.7
% in 1991. For the first time the absolute numbers of illiterates declined. However, despite the
literacy gains, disparities in terms of gender, other social categories (like schedule caste and
tribes), rural/urban situation continue to be glaring.
o The gap between male (75. 8 %) and female (54.1%) literacy rates is 22 %.
34.6% of the worlds non-literate population resided in India in 2003-04.
o The female literacy rate is below 50% in 253 districts.
o In 2001, the gender gap in the literacy rate for SC was 19 % (male and female were 66% and
47.1% respectively) and for 24 % for STs (male and female literacy rates were 59.2 % and 34.8
% respectively).
o The educational status of Muslim women is another major cause for conern.
The momentum generated around literacy till the mid- 90s was impressive and resulted in
improvements in literacy rates. Despite this and the fact that the Literacy Campaigns mobilized
large numbers of poor women, the political commitment to adult literacy and education has
reduced. For the most part the Continuing Education programme has failed to take off leading to
women relapsing into illiteracy. It is very likely that India will not be able to meet the EFA and
MDG goals pertaining to literacy (as was pointed out in the Unesco Global Monitoring Report

43

2006). The present situation means that critical literacy inputs that are required to sustain
processes empowerment of womens collectives, including self-help groups are not being
provided. Reports from the field show that there is a high-correlation between literacy levels,
leadership opportunities and access to credit within SHGs. And since socio-economic status and
education are correlated leadership tends to get concentrated in the hands of the better-off SHG
members. Similarly, many of the women, especially dalit women, coming into institutions of
local self-governance find themselves at a disadvantage. It needs to be remembered that this is
the only programme providing literacy and continuing education to poor women. Another area of
concern is the lack of an equivalency system for adult literacy. This lack prevents women and
girls who have learnt outside the formal school system to actually avail of many of the positions
(like ASHA, ICDS workers etc. that open up within the development sector. The problem of
finding qualified women from socially disadvantaged sections to fill these positions continues.
Mahila Samakhya, (Education for Womens Equality), an effective process-oriented womens
education and empowerment programme targeting poor, socially disadvantaged women is now
operational in 9 states. Womens collectives of the Mahila Samakhya Programme address several
gender issues, including violence against women. It runs a number of innovative non-formal
education programmes women and adolescent girls. The innovative approaches adopted by MS
need to be mainstreamed.
Issues Pertaining To The Content And Quality Of Education
Though the content of education and classroom pedagogy are critical to altering gender and other
social relations it has not been paid the attention it deserves. Efforts to make curricula gendersensitive have been undertaken but can be considered initial attempts as they have remained
largely at the level of removing stereotypes or increasing visibility and not have looked at gender
in terms of social relations. Problems related to the representation of marginalized communities
continue to exist and contribute to the deep sense of alienation of these communities from the
mainstream education system and a reason for children dropping out. Sexuality is addressed in a
problematic manner in educational materials. It is either related to population or reproductive
health or seen as a problem associated with promiscuity and shame. Classrooms need to be
transformed into spaces that can help girls think critically. Discriminatory practices based on
identity based prejudices need to be monitored and stopped. Corporal punishment, which is wide
spread, needs to be checked. The role of the teacher is naturally crucial in this context. The
present strategy of gender orientation sessions has proved to be ad hoc and ineffective. There is a

44

need to incorporate gender and social equity concerns within the regular in-service and preservice curriculum teachers.
Violence Against Women And impact on Education
Sexual harassment and violence against girls and young women within educational institutions is
widespread but under-reported. There is however no data (or systematic mechanisms to gather
data) that indicate the extent of the problem. While some universities have formulated guidelines
and established mechanisms to deal with sexual harassment many educational institutions still do
not have policies. Though technically the guidelines should cover schools no efforts have been
made to implement the guidelines in schools, where sexual harassment is fairly common but is
rarely reported. One only has the media to rely on for such information. Another area that has not
received much attention is the impact of impact of conflict and communal and sectarian violence
on education. Communal and sectarian violence and long-term conflict severely impacts
opportunities for girls and womens education. Reports from the ground show that the communal
violence in Gujarat in 2002 have had far reaching consequences, both immediate and long-term,
on education in general, and girls and womens education in particular. In volatile situations girls
are kept away from schools. Many of the riot-affected are living lives of migrants with little
access to basic facilities. Ghettoisation, even in education, leads to further distance and mistrust
between communities.
In parts of India, like the North East and Kashmir, that have been experiencing conflict for
several years the ground level situation reveals that prolonged violence has negatively impacted
the education systems there and the education opportunities for women and girls in various ways.
Dropout rate of girls is high because of fear, extreme insecurity, restricted mobility,
displacement, migration or economic compulsions. School participation and quality of education
for girls is impacted by measures to control women's sexuality and mobility, like diktats
imposing a dress code, by religious bodies, militants or separatist groups are not uncommon.
There are alarming increases in panic disorders. In such situations schooling and other
educational interventions can bring about a semblance of normalcy and prevent alienation from
the mainstream.
Resources
The budgetary allocation for education has hardly increased (from 3.49% 1997-98 to 3.97% in
2002-03) over the past five years and is still way below the 6% of GDP commitment. Within the
overall education budget the greatest priority has been given to elementary education (1.93% in

45

2002-03) and the least to adult education (0.02%).vi This low allocation to the sector whose main
target group is poor, rural, socially disadvantaged women raises concerns. Women's studies is
also under-budgeted and resourced. There is need for greater transparency in fund utilization. he
concept of gender budgeting has been introduced by the Ministry of Women and Child but needs
to be operationalised and strengthened within different departments. At present the links between
policy level situational analyses and the interventions and budgets being proposed are not always
clear.
RECOMMENDATIONS
Notwithstanding the importance of elementary education and keeping in mind the role of
education in bringing about and strengthening womens empowerment the educational policy
framework and programme emphasis should be holistic and the specific educational
requirements of each sector should be addressed and backed by resources. The focus of womens
education should not be on elementary education alone but on also on secondary, higher,
vocational, technological and professional education.
Sarva Shiksha Abhiyan
The XI plan through the SSA should pay attention to specific groups, contexts and locations and
design programmes accordingly. The most difficult to reach groups should reached through
special projects within SSA. Educational data should be gender disaggregated but should also
collected in terms of other social groupings. Systematic mapping of social groups should be
undertaken to sharpen planning and programme design processes.
In order to improve the educational status of Muslim girls and women and to bring them into the
mainstream, policy measures and specific programmes backed by resource allocation needs to be
put in place on an urgent basis.
A sub plan on Muslim girls education should be constituted, which can act as a national task
force, which should draw on could be set in place. The number of formal schools in areas with a
high Muslim population should be increased. However at the same time the community leaders
should be sensitized to enable their girl children to attend schools and for retaining them in
school system. In order to arrest high drop out rates after primary school attention SSA should
extended to the secondary school level. Attention should be paid to infrastructural issues like
sanitation etc. Incentive schemes can be thought of after a review of the existing schemes.

46

Programmes like the NPEGEL and KGVB which focus on girls should be continued and
strengthened. The policy of hiring female teachers should be continued. Strategies to increase
the pool of female teachers from socially disadvantaged groups like SC, ST, OBC and Muslims
should be adopted.
Adult literacy and learning
Given the important role it plays in sustaining women's empowerment, womens collectives
including self-help groups and its criticality in reaching EFA targets the commitment to adult
literacy and education should be re-articulated and backed by adequate resources. The National
Literacy Mission should be adequately resourced and revitalised. The CE programme should be
revamped and innovative programmes designed with the participation of women's groups and
other civil society organizations. As the literacy rates of women from marginalised communities
is far worse such programmes should address the specific needs of different groups. The
programme content should combine literacy with livelihoods and other survival issues and
organization building. Lessons from the Mahila Samakhya Programme should be taken on board.
Equivalency programmes and certification systems should be set in place for adult learners to
enable them to take advantage of the various opportunities opening up. This can be done through
the open learning mode and by expanding the mandate of NIOS. A comprehensive capacity
building programme which includes gender, legal literacy, livelihoods and literacy should be
designed and a mechanism for its transaction put in place for women emerging in leadership
positions through SHGs.
Content and quality of education and training
Textbook reform processes with the involvement of academics and practitioners should be
continued. Gender needs to be looked at not as an add-on but integrated in all subjects and
should be an important organizing principle of national and state curricula and textbooks. Issues
of sexuality needs to be addressed to provide children with information, enable them to make
informed choices, make them aware of the diversity of expressions of sexuality and gender and
to equip them to deal with violations. A new curriculum for the accelerated learning programmes
needs to be developed.
Curriculum for Teacher training and training of student teachers (DIETS) should
include a substantive module on gender issues. Gender should become a subject within
the regular in and pre service training programmes.
Higher and professional training

47

Women of schedule caste (SC), tribes (ST) and Muslims categories have lower access to higher
education. The present efforts should be reviewed and a comprehensive strategy formulated to
increase the participation of these groups in higher and professional education. Strategies for
affirmative action to increase the number of women and girls in professional and technical
courses should be developed. The private sector should be approached to come with a time
bound plan with monitorable goals to provide training facilities.
VAW and education
Guidelines for sexual harassment at all levels of educational institutions including schools (upper
primary upwards should be put in place) and monitored. Teachers training programmes should
include awareness on sexual and other forms of violence against girls and women. The issue
should be sensitively covered in the school curriculum. Educational institutions should be made
responsible for spreading awareness about these issues.
At present there are no policy framework in place that addresses the particular educational needs
emerging from different situations of conflict. Specific programmes and policy guidelines to
address these concerns should be designed specifically to restore confidence, address feelings of
fear and insecurity and alienation from the mainstream specifically keeping in mind the needs of
women and girls in such situations. As this is an under researched area some studies can be
commissioned.
Resources
Ensure that 6% of GDP is invested in education at all levels and of all types with specific
allocations to enhance girls education at all levels including higher, technical and professional
education. Gender budgeting mechanisms should be put in place, strengthened and regularly
monitored. There should be a tracking of funds allocated to girls education both in terms of
expenditures and programming.Much of the countrys governance has been left to the hands of
elected representatives and the official machinery. It has been increasingly recognized that such a
centralized approach has not produced desired results, especially in terms of the inclusion of
marginalized sectors within governance processes. Notable Constitutional, legislative and policy
reforms within the last decade, including the 73rd and 74th amendments and the continued
administrative decentralization through programs like NRHM, have demonstrated the
Government of Indias commitment to increasing the political participation of marginalized
groups, especially poor women. Womens increased political participation has yielded positive
results. First, issues central to development, including health, nutrition, family income and

48

education, take center stage as women participate in the PRI, village development boards and
other governance structures. Secondly, women have shown that they have critical information
about community resources, are adept at managing funds, result in more inclusive governance
and learn quickly about how to lead effective community- centered development.
Despite such positive results, women remain largely excluded from the PRI and other local
governance structures. Proxy politics, power brokering and gender discrimination continue, and
many women sarpanches have had to face extreme violence for challenging existing societal
power centres. In other cases, women are only within the PRI in name, but in reality, it is male
family members who hold the power. In spite of the affirmative action in panchayati raj in favor
of marginalized communities, exclusion of caste, poverty, tribal status, gender and caste sharply
demarcate those who have political power from those who do not.
Governments at both Centre and State should not delay any further, to complete the devolution
and decentralization of powers from higher bodies (Government of India or State Governments)
to the panchayati raj structures. This devolution right now is lagging in almost all the States. The
three Fs funds, functions and functionaries in most States are still in the same position prior
to 1993, especially the latter. In the absence of this basic requirement, the Constitutional
provisions are not only being violated, but there is lack of clarity at the field level which leads to
dysfunctional situations. Other program bodies are being referred to as parallel structures and
since they are often better trained and energetic, their presence is seen as being genuine
peoples organizations. The legal and political status of PRIs as laid down in the Constitution
gives them a unique status; mark them quite separately from all other grass roots bodies created
for other development purposes. All these bodies should work together. The delay in genuine
devolution and decentralization is causing a serious set back to the political empowerment of the
locally elected bodies. Amend the provision of the no-confidence clause, often used to remove
women sarpanches, to ensure that a no-confidence motion cannot be passed for a year and a half
of having taken office. If a no-confidence vote is passed, the replacing incumbent should also be
from the same social group as the earlier incumbent. Ensure that two-child norm laws that
prevent those who have more than two children from holding office are repealed across states.
These laws are most often used against women and disproportionately impact poor, Muslim and
tribal women. More tragically, the norm leads to increasing female feticide Electoral reforms
should provide for state funding for women contesting for elections to Parliament, state
assemblies, urban local bodies and PRIs Greater attention needs to be placed on how central and

49

state policies can promote local governments to monitor the meaningful participation of women
on the PRI Increased resources need to be placed in the political skill- building of women within
the PRI. Greater efforts should be made towards the inclusion of poor and other excluded women
on state planning boards and commissions. Allocate funding for time- series evaluation of the
impact of women on the PRI, and what policy and other contextual factors promote and enable
womens political participation Governments at both Centre and State should not delay any
further, to complete the devolution and decentralization of powers so that PRIs are not
handicapped in carrying out their mandated duties. Promote programmes that create greater
political leadership training for women and girls. All development programmes should be created
with an intention to empower womens participation within the PRI and through other
governance structures. Bill to reserve one-third seats for women in Parliaments and Assemblies
to be passed soon.

Chapter-3
WHITE COLLAR -LEGAL PROFESSION

The white collar crimes became a phenomenon to be reckoned with industrial


revolution. Modern industrial capitalist economy which evolved with time became
complex in nature as it developed a growing commercial nexus among insurance, banking,
stocks and related corporate matters. This in turn, gave rise to critical legal
intricacies relating to property rights and other legal matters which paved the way for the
birth of a new class of professionals of advocates who in the name of providing justice
50

started abetting in the wrong and thereby pursued their own narrow interest. A large
number of advocates evolved, who forget the pious oath of serving the society and started
looking for the legal loopholes and concentrated mainly in helping out the rich
entrepreneurs to grow richer. They made extensive study to try out ways for
maximum tax evasion for these rich corporate personalities as well as for themselves.
The white collar crimes committed by these legal practitioners only confines in sorting out
illegal methods of tax-evasion. There are very frequent instances of unscrupulous and
unethical practices like that of fabricating false evidence, engaging professional
witnesses, thereby violating ethical standards of legal profession and dilatory tactics in
collusion with the ministerial staff of the courts.
The instances of white collar crimes committed in the Indian society by the lawyers, there
lie the shameful illustrations of Magistrates and judges involved in committing crimes.
They in the name of interpreting the laws often act as the protective shield for the goons
having or not-having any political colour and allow them to go free whereas they should
have been subjected to deterrence. It is the most unfortunate situation at the same time
devastating, because here the crimes are committed by those individuals who are being
given by the State the responsibility to ensure justice.

WHITE COLLAR MEDICAL


In India, the white collar crimes are so wide spread that it does not confine itself in the legal
arena. Similar unfortunate instances can be drawn from other professions too, like that of medical
practitioners, engineers, educationalists, businessmen, politicians and the list goes on. The
medical practitioners are often found involved in issuance of false certificates, carrying out
illegal abortions, selling out sample drugs and medicine, even in some cases adulterated drugs
and medicines to the patients. Dilatory tactics are often adopted by them in providing treatment
to their patients with a menswear to extract huge amount of money, no matter the person has
good practice. Some of the notorious instances are like that of Nithari case, where the medical
professionals put up before the society the optimum level of brutal character they can reach for
the crave of making money. Misleading and fake advertisement claiming absolute cure is also
one of the frequent malpractices being carried out in the medical profession. The problem lies in
the fact that, they often escape punishment, since they cannot be said to have violated the letter of
law, but, by violating the spirit of law, they commit crimes which are truly anti-social and creates
enormous damage to the public health and safety at large.

WHITE COLLAR-ENGINEERING
Speaking of the engineers role in having their role to play in white collar crimes, we often
find instances of underhand dealing with contractors, suppliers, passing of sub
standard works and maintenance of bogus reports of the labour works. They financially
earn more for their low grade works from the contractors, than they can earn for
the genuine work. Therefore, many of them, out of the greed of earning more and more,
51

play dangerously with thousands of lives of the individuals.


WHITE COLLAR-EDUCATION
The matter comes to the white collar crimes educational institutions do come in the league to
operate with impunity. A nastier role is played by the private institutions that are least bothered in
providing the education, but only concentrate of making business at the cost of the childrens
future. Even rackets operate in these institutions for procuring students to appear in the
examinations on the basis of manipulated eligibility certificates, thereby damaging the
standard of education in India. When it comes to the Governmental institutions, the teachers and
staffs of the institutions are often found to be involved in unscrupulous practices, since they can
hardly make fortune from the inadequate salary they receive from the government. Teachers often
drag the students for taking private tuitions and even go to the extent of blackmailing them of
ruining their future, if they deny doing so.
WHITE COLLAR-CORPORATE
These are only a handful of instances of white collar crimes practiced in day to day life by
certain professionals in the course of their profession. The major role in committing white
collar crimes are played by the business tycoons and politicians, whose greed and wants
multiply with the more they acquire. In India, whenever any major scandal comes to the
media focus, a through investigation always finds an unlawful involvement of
political parties in it. So far as the businessmen are concerned, their acts of white collar
crimes go beyond count. They are termed as the corporate criminals who more often than
not,are involved in illegal contracts, combination and conspiracies of trade restraints,
unfair labour practices, selling of adulterated foods and drugs, bribing of public officials
so on and so forth. They take advantage of the corporate veil and indulged in a number of
crimes. The recent Satyam scam case is one of the worth-mentioning illustrations, where it
was seen how an individual, hiding himself in the veil of incorporation, indulge in
defrauding crores of money.
WHITE COLLAR- UNIVERSAL
The white collar crimes are often master minded and are carried out in a planned manner
by technocrats in the form of scams, frauds, etc. facilitated by technological
advancements. In these types of offences not only the individual is being with pecuniary
loss but also, such offences like peddling drugs and narcotic substances, counterfeiting of
currency, financial scams are some of the crimes which evoke serious concern and impact
to the national security and governance. Violation of foreign exchange regulations and
import and export laws are frequently resorted to for the sake of huge profits.
WHITE COLLAR- SOCIETY
The major white collar crime very common among the individuals, no matter he/she
belongs to the middle or upper strata of the society is that of evading taxes. The
complexity of the taxation laws provided a number of loopholes through which many
individuals tried to escape. A tax-evasion has known no professional or class boundary in
our country. Be it an engineer, doctor, advocate, a business tycoon or a simple small
industry trader-all have learnt the trick of evading taxes. The main difficulty posed before
52

the Income Tax Department is to acquire true information of the real and exact income of
these professionals. It is often alleged that only an insignificant amount of their total
income is posed a income before the Income Tax Department and the rest therefore goes
into the circulation as black money. The frequent modifications in the tax-laws of the
country has been able to add very little to put a check on this continuing menace which
is throwing a great negative impact in the Governmental revenue and thereby the
growth of the country.
INDIA CRIME AND FRAUD IN WHITE COLLAR
2010-2011 Annual Global Fraud Survey report of Kroll conducted by Economist
Intelligence Unit gives expected results. Fraud continues to be a big problem worldwide
and more so in India. Of the companies surveyed, globally 75% reported experiencing
fraud during the year. Though the figure has reduced in comparison to previous years
88%, the situation is still dismal.
In India, the situation is disastrous, with 84% organizations reporting that they suffered
from fraud during the year. It is wake-up call for India, as it is ranked second worldwide
after Africa and shares the position with China
The chart below compares the top six fraud categories at global level with India. In most
of the cases, India is doing much worse than its global counterparts are.
Worldwide management conflict of interest, internal financial fraud, corruption and
bribery and vendor procurement related frauds have increased. Physical theft of assets and
information theft decreased. Indian business crucial pain points are corruption and
bribery, information theft, internal financial fraud, financial mismanagement and vendor
procurement.
No Types of Fraud

1.

Global 2011(%) Global 2011(%) India 2011(%)

1 Management conflict of
interest

21

19

19

2 Internal financial fraud

19

13

23

3 Corruptions & bribery

19

10

31

4 Vendor procurement

20

15

22

5 Physical theft of assets

25

27

23

6 Information theft

23

27

27

COST OF FRAUD

The report answers the most relevant question relating to fraud what is the loss caused
by fraud? The estimated figure given in the report is that globally organizations suffered
2.1% revenue loss due to fraud. For India, the percentage is higher at 2.4%.
53

Further analysis available in the report says that 18% of the companies reported an
earnings loss of more than 4%. A quarter of these most affected companies suffered losses
more than 10%. These companies are reporting corruption, bribery, money laundering and
regulatory breaches frequently. However, they are doing nothing about it. The lack of
fraud prevention and investigation measures is causing huge losses in these companies.
Indian companies are ill prepared to the fight fraud menace. Just 50% companies have
background screening, third-party due diligence and other fraud prevention measures
in place. In my view, India does not have adequately trained fraud investigators as part of
the risk management teams. Overall, the focus is on financial statements audits and
internal audits. These audits are not done to detect frauds.
2.

THE INSIDE JOB

Management finds it hard to accept this fact that internal employees and related parties
conduct most frauds. The report mentions that insiders conducted 60% of the frauds
globally. That is, 28% junior employees, 21% senior employees and 11% third-party
agents conducted frauds. In India, 59% of the frauds were conducted by internal sources.
The frauds conducted by senior employees cause more damage to the company. Not only
are the financial figures larger, the reputation damage is huge. However, the companies in
India still do not have adequate focus on internal controls and management controls.
However, government has initiated some steps to address the high level of frauds in Indian
private sector. In my view, the Indian governments decision to give more power to the
Serious Fraud Investigation Office (SFIO) in the new Companies Bill is a step in the right
direction. SFIO will be in a position to conduct more investigations, arrests, raids
and seizures. This would put some brakes on the escalating financial fraud cases in India.
3.

CORRUPTION & BRIBERY IN INDIA

The report has a special coverage on corruption in India. It shows that the 2010-2011
corruption and fraud cases in India 2G telecom scam, Adarsh Society scam, CWG fraud,
various land scams etc. have negatively impacted Indias reputation internationally. Last
decade depicted Indias growth story. The government and private sector post
independence never had it so good. Huge investments were planned to improve
infrastructure. With liberalization foreign investment flows increased. The sudden spurt in
economy also resulted in higher greed and corruption soared. The cases show how senior
level politicians and business heads who were much revered and respected compromised
their ethics.
The multinational subsidiaries in India are also significantly affected by corruption.
Though the FCPA and/or UKBA are applicable to them, the acts do not have much teeth in
Indian scenario. In my view, the US/ UK authorities will be able to follow through only on
the bigger cases, and the smaller ones will be ignored. Hence, the effectiveness of these
acts is limited. Secondly, the developed countries have a one sided view of corruption.
They prohibit their own countrys companies from paying bribes. However, accept the
bribe money deposits from Indian (and other countries) politicians and businesspersons in
their countrys banks. This encourages money laundering rather than curtailing
corruption. Although, India has a Prevention Against Corruption Act, it hasnt
54

reduced corruption. As per the act, government officials cannot receive any form of
bribes or grease payments. However, receiving 2-10% bribe of total contract value
assigned is quite prevalent. The India Against Corruption moment led by Anna Hazare has
forced government to issue a strong Lokpal Bill. The bill expected to be passed in this
winter session of the parliament. The implementation of the bill may curb the demand
side of corruption to some extent.
Recently in October 2014 the Prime Minister
announced, ? that his government was working on proposals to criminalize private sector
bribery and to also make illegal gratification of foreign public officials an offence. This is
in line with United Nations Convention Against Corruption, which India had signed off
earlier in the year. The government is also planning to issue a bill to protect whistle
blowers. The two bills jointly would have significant impact on curbing supply side of
corruption.
FOUR SHOCKING MISCONCEPTIONS ABOUT WHITE-COLLARED CRIME
The most recent issue of Psychology Today has a short column on four major myths that
are widely when it comes to white-collared crimeusually described as an illegal act
committed for financial gain.
1.

White-collared crimes are nonviolentsince white-collared crime is usually


characterized as non-violent, many are prone to this myth. But criminals in general
have a sense of entitlement and need for control.

2.

White-collar criminals are highly paidyou may be thinking of famous Ponzi


schemers like Bernie Madoff or Allen Sanford here, but white-collared criminals
also depend on poorly paid underlings.

3. White-collar criminals are otherwise upstanding citizensabout 40% of whitecollared criminals have a record. So, no.
4.

It's all about cashYes, there are poorly paid white-collar criminals, but the
mastermind of the crime could be very rich. Researchers say "peer pressure,
company culture, and pure hubris" cause people to commit white-collared crimes.

The National Common Minimum Program lays down empowerment of women politically,
educationally and legally as one of the six basic principles. To provide an impetus to this
objective, the Finance Minister in the budget speech for 2004-05 highlighted the perceived need
for budget data to be presented in a manner that highlights the gender sensitiveness of the
budgetary allocations. This was followed by a more emphatic commitment in the budget speech
of 2005-06, wherein the budgetary allocations under 10 demand for grants estimated at Rs.
14379 crore were highlighted in a separate statement as a part of the Gender Budgeting exercise.
The 2006-07 Budget Speech revealed an estimated allocation of Rs.28,737 cr. for benefit of
women under 24 demand for grants in 18 Ministries and Departments. In spite of these
commitments and focus on womens development and empowerment, the present status of

55

women continues to be quite dismal in terms of important human development parameters like
health, nutrition, literacy, educational attainments, skill levels, occupational status etc. There are
a number of gender specific barriers, which prevent women for gaining access to their rightful
share in the flow of public goods and services. Unless the felt needs of women are incorporated
and mainstreamed in the planning and development process it is apprehended that the fruits of
economic growth are likely to completely bypass a significant section of the countrys population
which does not augur well for the future growth of the economy. This calls for a focused priority
in the Eleventh plan for the strengthening, expansion and universalisation of Gender Budgeting
in all its aspects.
Gender Budgeting
Gender Budgeting is defined as the application of gender mainstreaming in the budgetary
process. It encompasses incorporating a gender perspective at all levels and stages of the
budgetary process and paves the way for translating gender commitments to budgetary
commitments and carrying out an assessment of the budget to establish its gender differential
impact. In other words Gender Budgeting looks at Government budget from a gender perspective
to assess how it addresses the needs of women not only in traditional areas like health, education
etc but also in so called gender neutral sectors like Transport , Power, Telecommunications,
Defence etc. It does not seek to create a separate budget but seeks to put in place affirmative
action for meeting womens specific needs, thus bringing into effect gender responsive
Budgeting. The ultimate objective of gender budgeting is to transform and transcend traditional
perceptions and mind sets towards women and awaken a gender sensitive consciousness which
will not only enable women to come into the mainstream but also give them their due recognition
as equal citizens of the country.
Budgeting for Gender Equity: A step forward in Gender mainstreaming
The Ministry of Women and Child Development (MWCD) in 2004-05 adopted the mission
statement of Budgeting for Gender Equity. In 2005-06 the task was to carry forward this
exercise of universalizing gender budgeting exercises in the Centre and the States. Several
initiatives have been undertaken by MWCD to operationalize Gender Budgeting. A strategic
framework of activities to implement Budgeting for Gender Equity disseminated to all
Departments identifies areas for gender mainstreaming including quantification of allocation of
resources for women in Union/ State/ Local Budgets, gender audit of polices of Governments,
impact assessment of various schemes, analyzing programmes and strategies, institutionalizing

56

generation and collection of gender disaggregated data, consultations and capacity building etc.
Further, guidelines for gender sensitive review of public expenditure and policy were framed in
the form of checklists both for beneficiary oriented sectors (such as Health, Rural Development,
Human Resource Development, Labour, Drinking Water, Textiles, Agriculture etc) and for
mainstream sectors that may appear gender neutral like defence, power, telecom, transport etc.
The Ministry has conducted several workshops and training programmes to disseminate the tools
of gender budgeting and has advocated that a review may be undertaken with respect to (1)
Gender Based Profile of Public expenditure (2) Beneficiary needs assessment (3) Impact
Analysis (4) Participative Budgeting and (5) Spatial Mapping. The MWCD has requested
Ministries to set up Gender Budgeting Cells to undertake review of the public expenditure and
policy, guide and undertake collection of gender disaggregated data, conduct gender based
impact analysis, beneficiary needs assessment and beneficiary incidence analysis. As a result of
these efforts 43 Ministries/ Departments have set up Gender Budget Cells as a nodal agency for
all gender responsive budgeting initiatives.
Womens Component Plan (WCP)
The WCP was the first major initiative taken by the Government to address women related issues
and requirements on a systematic basis involving the inputs from major Ministries/ Departments.
The Womens Component Plan (WCP) involved efforts to ensure that not less than 30 per cent of
funds/benefits were earmarked for women under the various schemes. However, performance on
the WCP has been disappointing and the Mid Term Appraisal of the Tenth Plan notes that while
the Department of Education has confirmed a flow of funds of 42.37 per cent of the gross
budgetary support to the WCP, the Ministry of Labour, which had reported flow of 33.5 per cent
of its budget to the WCP in the Ninth Plan, has reported flow of funds of only 5 per cent of its
budget during first three years of Tenth Plan. Several Ministries and/or Departments, which had
earlier reported on the WCP in their sectoral budgets, have stopped doing so. It also noted that
there are some Ministries and Departments, which have the potential to go beyond 30 per cent of
funds under WCP as well as devise and administer womenrelated programmes. These include
Education, Health, Family Welfare, Environment and Forests, Rural Development, Agriculture,
Labour, Urban Affairs, Drinking Water Supply, Tribal Affairs, Social Justice and Empowerment,
and possibly others. It also pointed out that the Ministries and Departments that have defaulted

57

in providing WCP allocations or whose WCP is less than 30 per cent of their budgets are advised
to immediately take the necessary steps to make amends.
Taking the essence and intent of the Mid term appraisal of the Tenth plan, WCP would need to be
extended to all Ministries and Departments and not confined to the realm of some Ministries and
Departments which have historically been perceived as women-related. Simultaneously the
implementation process of Gender Budgeting needs to be institutionalized and universalized in
all the Ministries/ Departments at the Centre and States.
Recommendations
WCP to continue as a bridging mechanism to ensure that the momentum of flow of funds to
women related programs is sustained. WCP will require to be strengthened and to cover all
sectors and schemes and all programmes both in the Centre and the States. Hitherto the emphasis
of WCP has been on women related and women specific Ministries/ schemes. However, as
women comprise nearly 50% of the population in the country, it is inevitable that all
schemes and programs of the Government, irrespective of the sector, will impinge on women in
one way or another. As such it is firmly believed that there is no sector /program / scheme that
does not have gender implications. Hence the strong recommendation of the Sub Group is to
extend the concept of WCP to all Ministries/ Sectors in the Centre and the States. At least 30 per
cent of the funds for all schemes to be earmarked for women beneficiaries. For this purpose the
Ministries should identify women related schemes or engender existing schemes so that women
can get the benefits under such schemes. The essential earmarking of 30% funds for women
under the WCP for all Ministries at the Centre and the States is, at the very least, a
good exercise as it forces the policy makers to start thinking on the lines of gendered-impact of
policies. This commitment of resources is both vital and necessary. Beneficiary incidence is an
important part of WCP. It should be ensured that at least 30 percent of the beneficiaries should be
women. PRIs should be intensively involved to ensure 30% earmarking for women. As per the
Seventy Third Constitutional Amendment, 29 subjects have been transferred to the panchayats.
The schemes falling under these subjects could be looked into by the Panchayats to ensure
implementation of WCP. To ensure that funds actually reach the women, a non-lapsable pool of
womens fund could be created in every State and also at the Centre. If there is under-utilisation
of funds allocated for women specific programmes/schemes under any Ministry (Central or
State), the balance amount of funds should be transferred to this pool. Funds from this nonlapsable pool should be transferred to MWCD for utilizing the same in women related

58

programmes/ projects. At present, WCP treats women as one homogenous group but in reality,
there are layers of discrimination even within women,. Thus some women are more vulnerable
than others. For example, a dalit woman will be doubly discriminated and a differently-abled
dalit woman will be even more vulnerable. Thus WCP needs to factor in this intersectionalityframework while addressing issues of most vulnerable women, like dalit women, adivasi
women, HIV positive women, sex-workers, etc Planning Commission should take quarterly
meetings to review the progress of WCP. It should mandatorily obtain the information on WCP
from Ministries/ States as a part of the Annual Plan exercise. The proposals submitted by the
Ministries/Departments and the States should document the progress/review of the WCP during
the current/previous year and the steps proposed to be taken during the forthcoming year.
Revised proforma need to be devised which should be simple and user-friendly in order to collect
information on WCP
Gender Budgeting
With the objective of gender mainstreaming as the ultimate aim, Gender Budgeting seeks to truly
empower woman in every respect and enable her to realize her full potential in all spherespolitical, economic, social, cultural and civil. Towards this end Gender Budgeting helps ensure
better access of women to health and education facilities, vocational training, employment
opportunity and social security etc. for women. Setting up functional Gender Budgeting Cells in
all Ministries/ Departments in the Centre and the States with a view to mainstream gender
concerns in all areas of Government is therefore vital and needs to be taken up on a priority
basis. Gender Budgeting cannot be restricted only to government programmes and schemes. If it
is to be to be truly successful and beneficial to women, the process has to permeate and penetrate
to all sectors (government and non government), policies and strategies and reach out to all
sections of the governance and the community. Only then can gender budgeting completely
fulfill its objective of truly empowering women keeping in view this macro vision of gender
budgeting the recommendations for the Eleventh plan are as follows :
Important National macro-economic policies to be engendered
Policies of the Government form the genesis for programs and schemes providing the direction
and describing the components of inputs that go into them. They determine the quantum of flow
of the funds to different schemes, its components and also spatial spread of the programme.
Unless the policies are engendered, it cannot be hoped that the programs and the schemes that
emerge from this will be gender sensitive. Therefore, it is very essential that all policies of the

59

Government from its very inception and formulation stage be thoroughly examined from a
gender perspective. The following paragraphs indicate the various possibilities and potential of
engendering some important national polices. The fiscal and monetary policies will need to be
analyzed from a gender perspective as both have tremendous potential to have malefic or benign
influence on the lives of women. Indirect taxation impinges heavily on women as the tax
incidence, by and large, affects important items of sustenance which are generally highly price
inelastic and even a small price rise in such items will have a negative impact on women; again
the subsidy needs a re-look to ensure that withdrawal of subsidies do not adversely impinge on
women. For example, withdrawal of subsidy on kerosene with no other alternative fuel options
will result in the woman wasting valuable productive time in gathering firewood, twigs etc and in
the process also face health hazards. Thus the ramifications of indirect taxes are quite significant
as far as womens well being is considered. The gender affirmative role of direct taxation could
be further enhanced through various incentives like reduction in stamp duties for women if assets
are registered in their name, lowering of income tax slabs for women etc. Monetary policy has to
be viewed from a gender angle, especially in the case of credit and loan facilities and easy access
of women to financial instruments and attractive saving options. In this context the spread of
private micro credit lending instruments needs to be carefully regulated to ensure that women
and SHGs are not exploited through high interest rates.
Agricultural policies are of prime importance in gender budgeting exercises as
There is a growing feminization of agriculture in recent years with out migration of men moving
to urban areas in search of work. It is estimated that 75% of all female workers and 85% of all
rural female workers are in agriculture. Women constitute 40% of the agriculture force and this
percentage is rising. The number of women headed households in the agricultural sector is also
increasing. The prosperity of agriculture therefore will largely depend on how effectively these
women are empowered. Enhancing womens rights to land, providing infrastructure support to
women farmers and advancing legal support on existing laws are some of the policy
interventions needed. However, critical problems persist. The lack of formal titles to women on
the land they cultivate is a big drawback. This adversely affects their access to credit, inputs and
marketing outlets. It also reinforces the womans position as unpaid farm labour which reduces
their incentives to invest in the land. It further excludes them from receiving services of
agricultural extension services, new production techniques etc. The lack of appropriate women
friendly tools and agricultural implements is another drawback. Also the farmers cooperatives

60

basically comprise of men and therefore disadvantageous to women in terms of mind set and
location and services profile. The agricultural policy will therefore need to be reviewed to
provide a gender friendly perspective.
Policies for the Non farm sector and information is another highly important area that has to
seriously reviewed keeping in view the gender perspective. As women tend to remain in the rural
sector they also undertake non-farm activities, which significantly contributed to the familys
income. In times of agricultural stress, it is these non-farm activities of women that support the
family. Therefore, the requirements of women in this sector needs to be identified and
appropriate support facilities in terms of access to raw materials, micro credit, skill development,
training, market linkages etc. have to be ensured.
Poverty alleviation programs should essentially focus on women as they are economically more
disadvantaged than men and chronically poor. These alleviation programs should be geared and
designed to meet womens needs with strengthening of SHGs, easy access to cheap credit, equal
wages for equal work and a judicious mix of cash and non cash in the wages etc. With the advent
of mega poverty alleviation schemes like the National Rural Employment Guarantee Scheme,
more and more women are coming forward to work. It is important that the work place should be
made safe from harassment and woman friendly with adequate provision of sanitation, drinking
water and crche facilities.
The existing public distribution system has failed to deliver the required food grains to the
vulnerable groups on time in the requisite quality and quantity. The persisting problems of under
weight, malnutrition, anemia are primary causes for early mortality, morbidity, high rates of
MMR etc. There is urgent need to review and streamline the policy and strategy of PDS to
ensure easy and timely distribution of food grains to women .The institution of food /grain banks
and managing the same by women SHGs could be considered to enable uninterrupted supply of
food grains even in times of drought or other natural/ man-made disasters. Public policy with
respect to migration is another area for consideration. Due to extreme poverty or seasonal farm
work, women are forced to migrate to semi urban / urban areas. There are large numbers of
social and economic consequences, which these women face such as exploitation in work place,
wages differentials, low paid work etc. Also their access to safe housing, food, sanitation and
health remain precarious. A very alarming feature of unregulated migration is the trafficking of
young girls and women by duping, luring or kidnapping them. Such women are forced into
prostitution, bonded labour or slavery. These social aspects need to be looked into in greater

61

detail while reviewing the Migration policy The possibilities of gender differentials for social
security insurance schemes is another area that need to be examined, as there is an urgent need
for low cost and gender friendly insurance systems that cater to the specific life cycle needs of
women. It must be acknowledged that a safety net /social security in the informal sector is almost
non existent. As women comprise a large proportion of the informal sector, this implies that
they are excluded from the insurance framework and therefore not protected against social,
medical or economic emergencies. More importantly, it is absolutely necessary to put in place a
well designed Health Insurance scheme (which can operate under the aegis of the National Rural
Health Mission) for women in view of their inability to access medical facilities. Also pensions
policy needs a relook in view of the large number of widow population in the country.
Environmental concerns also warrant gender mainstreaming. Providing alternative sources of
fuel for women especially in rural areas reduces both her drudgery with collection of firewood
and exposure to pollutants; switching from fossil fuel to non conventional fuel based systems
such as green fuels(bio-mass), solar power, hydel power etc. should be stressed. Womens SHGs
should be encouraged to be actively involved in Watershed Committees, Joint Forest
Management Committees etc. There is a double advantage from this exercise, as on the one hand
environment preservation issues will be addressed and on the other women will be empowered.
Disaster management policy should become gender sensitive as experiences have shown that
women are most affected by disasters whether manmade or natural. The tendency for trafficking,
sale of women and children is quite common in these extenuating circumstances . The
emergency response systems in the event of such disasters should have well thought out gender
relief measures to cater to afflicted women and children without any delay. Media policy needs to
be gender proactive. There is a need to encourage media to project positive images and balanced
portrayal of women and girls to enable attitudinal changes. The media policy should also help in
generating awareness on gender issues and concerns so that the process of societal reorientation
towards creating a gender just society gets widely disseminated.
Research and Development should also be geared with a view to identify technological needs of
women and develop and adapt technology especially to reduce the drudgery of women,
facilitating her health and also income generating activities. The Information Technology Policy
should also be women oriented imparting skills and strengthening the knowledge base of girls
and women in the field of computer software and hardware especially in rural areas.
Dissemination of information in local languages on socio-economic and legal issues concerning

62

women would encourage better awareness and instill confidence. Information Technology
Kiosks need to be opened for women which would facilitate the Self Help Groups in using
internet facilities to purchase raw material designing and marketing of their products. The above
is an illustrative list of engendering national policies. Similar gender perspectives and
mainstreaming has to be built into all policies whether they are economic, social or political in
nature as Gender Budgeting cannot be seen in isolation from the overall socio-economic-political
scenario. The successful impact of these policies on women implies the successful
implementation of Gender Budgeting.
Intersectoral convergence for Important gender development Indices/Parameters
While the gender sensitization of policies, programmes and schemes go a long way in
empowering women, it is human development indicators, which reflect the
ultimate and true empowerment of women in the country. In a way, these indicators are the
outcomes of the gender budgeting, yet in their own sphere they are also the process inputs for
gender budgeting. Unfortunately, the basic parameters of health (declining sex ratio, IMR,
MMR, immunization levels, morbidity, mortality, anemia etc.), nutrition (Mal-Nutrition, under
weight, anemia etc.), education, (literacy levels, poor enrolment, drop out etc) employment and
training (unorganised, unpaid sectors, discrimination in wages, poor skill development, mainly in
drudgery areas of occupations such as agriculture, construction) reflect the continuing dismal
status of women in the country. While individual sectoral policies, be it health, education ,
employment etc. will be separately engendered , cross cutting holistic intersectoral policies also
need to be converged effectively with a gender perspective, if Human Development Indicies are
to improve. Therefore along with sectoral polices, intersectoral polices too need to be gendered
defined.

Review of and effective implementation of all legislations and laws with a gender
perspective to eliminate all forms of discrimination and violence against women.
The laws and legalization are the framework that provide women her rights as equal citizens of
the country. There are over 42 women specific and related legislations. Some women specific
legislations include the Immoral Traffic (Prevention) Act 1956, Maternity Benefit Act 1961,
Dowry Prohibition Act 1961, Protection of women from Domestic Violence Act 2005 etc which
seek to protect the women from sexual exploitation and other violence and abuse; women related

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legislations which have economic implications include the Factories Act 1948, Minimum Wages
Act 1948, Equal Remuneration Act, 1976 etc, many of which have provisions for providing
economic justice and fair wages to women ; there are other Acts which are Protection oriented
such as Pre conception and Prenatal Diagnostic Technique( Regulation and Prevention) Act
1994, Child Marriage Restraint Act 1929 ; and those with Social implications like Family Courts
Act 1984, Hindu Succession 1956, Indian Divorce Act 1969. Thus while there are a plethora of
Acts existing for the protection and socio-economic equality of women, it is only through their
effective implementation that women receive the intended benefits. However, gaps still remain
and It is essential that specific laws are brought into effect which provide adequate safeguards
and protection to women. One such very important Act is the Compulsory Registration of
Marriage Act, which will protect the marital rights of the women and ensure her rightful share in
the husbands property. A review of the legislations is also required to bring about conformity in
the laws. In this context, it may be noted that necessary provisions of Indian Penal Code be
brought in harmony with the provisions of the women related Acts so that there is no dichotomy
between the different legislations.
Mainstreaming and sensitizing gender concerns in various organs such as police,
legislation, judiciary and trade unions
While the planning process and public expenditure in terms of programs and schemes are sought
to be included in Gender Budgeting, yet without gender sensitivity of important organs such as
police, judiciary etc the implementation will not be successful. This is especially true of such
schemes which have a strong element of protection or are rights based. For example, if the
woman is not given her due share of property or other assets as per law it is essential that these
agencies help and support her in getting her share without much delay or harassment. This can
happen only if gender sensitivity is inculcated in such bodies, and they are made aware of the
laws, polices, programs and other initiatives for women. It is also important that justice delivery
is quick with the enforcement machinery being responsive and gender sensitive to womens
needs especially in cases of domestic violence and personal assault. In addition, trade unions also
need to be sensitized to play an active role protecting womens rights/interests. A very effective
method of ensuring that gender concerns are not lost sight of in such bodies is the induction of
larger number of women at different levels. This will encourage women to actively participate in
power sharing and active participation in decision-making. Efforts should be made to provide
coaching facilities and support services so that women can compete along with men both at entry

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and to facilitate upward mobility of women in these institutions. The setting up of women
police stations, womens help desk in every police station, and increasing the strength of women
police to 30% of the total force has been reiterated a number of times by the Ministry of Women
and Child Development in a number of forums. The Ministry of Home Affairs should take
requisite steps to fulfill their obligations towards gender budgeting by engendering the police
force.
Gender mainstreaming to be extended to corporate sector and other civil society
organizations
While so far the focus of gender budgeting has been on public expenditure of Government only,
an increasing quantum of funds is being invested by the corporate sector in their businesses as
well as in fulfilling their corporate social responsibility. The development of the corporate sector
as an employer has grown tremendously in the wake of liberalization and globalization ,
especially with its entry in those sectors which were hitherto the domain of the Government .
Therefore the time has come to apply the strategy of Gender Budgeting to the private sector.
There is a three fold responsibility that rests with the corporate sector one of extending the
scope of their employment opportunities to more and more women, provide them with level
playing fields , equal wages and promotion opportunities ; two, to support skill building,
training ,vocational courses etc; and thirdly, to fulfill their social obligations towards women
employees in terms of extending maternity benefits, protection from occupational hazards and
sexual harassment, provision of facilities like crches, toilets, sanitation and hygiene, allowing
formation of womens associations, legal protection etc. The civil society organizations whether
NGOs, or other community based organizations are partnering government in formulation and
implementation of government policies and programs. Thus their voice and views have an
important bearing on shaping economic or social issues pertaining to women. They have to
function as watch dogs ensuring that Gender budgeting and mainstreaming is actually taking
place right at the grass root levels and helping in implementing gender concerns effectively.
.
Estimation of value addition by women in the unorganized, informal and rural non
farm sector and systemized mechanism in place to monetize the labour, efforts and
output and include the same in the GDP
Informal farm work and non farm work where women are increasingly employed are mostly non
monetized and therefore cannot be captured in the national accounting system. Despite the

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sizeable value addition to the national economy, on account of home based and other non farm
and informal activities, the contribution of womens work continues to be invisible. Women also
spend considerable time in collecting fuel, fodder, and water and on care related activities, which
is neither aid or recognized as an economic activity. The statistical invisibility of such unpaid
work implies that the economic system is missing out on a substantial part of the income
generated and value added. The Eleventh Plan should ensure that the National Income includes
these activities in their accounting system so that it forms a part of the GDP.
Gender Outcome Assessment
Gender outcome assessment and evaluation is of utmost importance for ensuring the success of
Gender Budgeting. For this it is necessary that the gender fund flow into schemes are properly
and correctly assessed. The Finance Ministry has made it mandatory that Gender Outcomes form
a part of the Outcome Budget prepared by every Ministry/ Department as part of the Budget
documents. Some anomalies have been observed in allocations reflected in Union Budget 200506, under various programmes/schemes for women. In 2005-06 this exercise covered 10
Departments and the total magnitude of Gender Budget (i.e., women specific allocations) was
recorded at 2.8% of total Union Government expenditure. In 2006-07, 24 Departments of the
Union Government were included under this exercise and the magnitude of Gender Budget went
up to 5.1% of total budget estimates. However, it has been observed that schemes which do not
have a 100% womens component found a mention as women specific schemes. Therefore the
first step towards proper outcome assessment of Gender Budget is that each Ministry/Department
of both Centre and State should put in place a systematic and comprehensive monitoring and
auditing mechanism for outcome assessment. At present, the major task of the Gender budgeting
Cells in the Ministries/ Departments is limited to identification of schemes and computation of
allocations meant for women. To bring a qualitative improvement in the functioning of the Cells
and make Gender Budgeting exercises more meaningful and effective, the following approach
can be followed by the Cells for extending gender outcomes. Assessing budget allocations and
proposing for additional allocations for gender related schemes / components ; Analyzing and
reviewing policy, strategies, programmes and schemes from the perspective of women as also
improving the status of women, identifying constraints and taking into view their needs and
requirements. Identify constraints in flow of funds to women through expenditure tracking.
Studies institutionalize generation, collection and compilation of gender disaggregated data
through various mechanisms right form the grass root level and ensure that this should be an

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inbuilt part of the programme/ scheme. Identify data gaps and design the future steps for building
gender disaggregated data monitoring of spending and service delivery. Assessing the extent to
which women are benefiting under the schemes and programs of the Ministry Assessing
beneficiary incidence Identification of areas where existing schemes can be further engendered
and initiating new initiatives, innovative ideas and schemes for gender benefit In addition to the
above, which will primarily be the responsibility of the individual sectoral Ministries/
Departments, the Planning Commission and the Finance Ministry should enable assessment of
national level gender outcome assessment through:
Spatial mapping of gender gaps and resource gaps by Planning Commission Gender audit of
public expenditure, programmes and policies. There is a need to collect gender disaggregated
data at national, state and district levels. Standardisation of data is also necessary to facilitate
comparison not only at national but also international levels. The data should flow on a regular
basis and should be compiled, collected and analysed periodically.
Training and Capacity Building
Strengthening GB Cells
MWCD being the nodal Ministry for Gender Budget should have a full fledged Unit for Gender
Budgeting with appropriate staff and infrastructural facilities. At present, there is no staff allotted
for Gender Budgeting. As the MWCD undertakes all coordination, orientation and sensitization
exercises for Gender Budgeting at Centre and States , it is very essential that adequate staff be
provided for the unit. It is recommended that the Gender Budgeting unit should comprise of the
following officers who have a strong base in formulation, evaluation, project appraisal,
monitoring etc of economic strategies, policies and programmes etc.
Joint secretary level officer (1)
Deputy Secretary /Director level officer (2)
Deputy Director(3)
Assistant Director (3)
Research Assistant/ Investigators (4)
Section officer and staff (5)
The capacity of the Gender Budgeting Cells that have been set up in various Departments and
Ministries too need to be strengthened, especially as the Cells will have a large number of
activities to carry out. For this purpose it is suggested that each Gender Budgeting Cell should

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comprise of officers who have a strong base in formulation, evaluation project appraisal,
monitoring etc of economic strategies, policies and programmes.
Setting up of Regional Resource and Training Centers for Gender Budgeting
(RRTCGB)
With the basic objective of building a core team of resource agencies and trainers to disseminate
the tools, strategy and process of Gender Budgeting throughout the country so as to enable a
wider outreach and to decentralize the technical support and capacity building activities, there is
a need to set up Regional Resource and Training Centers for Gender Budgeting (RRTCGB).
Institutions/ centers which have the requisite Infrastructure and expertise in the related
disciplines of gender budgeting and gender related issues need to be identified in different parts
of the country. Such centres should have experience in promotional activities such as outreach,
advocacy and in facilitating networking and linkages through convergence and with sound
financial capability. To enable such training programs and capacity building will require
adequate funding under a new separate head of account titled Training and Capacity building in
Gender budgeting.
Preparation of Training manuals
Detailed training manuals will need to be prepared which can be used by the Trainers. These
manuals will give the approach and the methodology to be taken in the engendering policies,
schemes, programmes and assessing their gender outcomes. The Manuals will be specially
designed to cater to the requirements of the different stakeholders such as:
Central Government and State Governments Ministries, which are administratively oriented
Corporate sector
Civil society organization and NGOs etc Gender budgeting cannot be the sole responsibility of
any one Ministry or any one sector. It is only through the commitment and efforts of all sectors
of the Government, be it at the Centre or in the States, the Private Sector and Civil Society, can
the objective of redressing the inequalities faced by women be achieved, thus establishing the
true essence and spirit of Gender Budgeting in empowering women holistically.

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Chapter-4
INSTITUTIONAL MECHANISMS

Institutional mechanisms for the advancement of women include institutions of different types
which support the cause of womens advancement. The various institutional mechanisms that are
contributing / will contribute to the achievement of womens empowerment and gender equality
as laid down in the Eleventh Plan are listed below:
Government structures with a mandate for women such as Ministries, Departments, focal points,
bureaus, cells, desks, coordination units and committees, inter-agency committees etc.
Government-sponsored dedicated agencies for women, such as Commissions, Boards,
Committees, Councils, Corporations, Womens Resource Centers,
Womens Studies Centres, grass roots formations such as Mahila Mandals, Self Help Groups etc.
The Parliamentary Committee on the Empowerment of Women.Institutions of local government
such as the three tiered panchayats and urban local bodies which are to be delegated vast
administrative, financial and legal powers across the development sectors, including social and
womens development.
Mechanisms and Plans such as gender budgets, component plans for women, action plans for
women, monitoring and assessing instruments such as HDRs, audit systems such as gender and
social audit, appraisals and evaluations using tools such as gender analysis, participatory
exercises etc. To these can be added grass roots innovations capturing attention such as the Jan
sunwais (public hearings within an informal space) in the style of courts or other judicial bodies.

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Womens bodies and groups working for the economic, social and political rights of women, all
bearing the voluntary and democratic label, but with varying emphasis on different belief
systems, ideologies and philosophies, etc. ranging from academia, research, education, feminism,
to action research and advocacy.
Federations, trade unions, cooperatives, youth and other age based groups ad-hoc groups formed
for short term objectives, watch dog bodies, local groups etc. The National Policy for
Empowerment of Women (2001) had announced formation of National and State Councils to
oversee the operationalisation of the Policy on an ongoing basis. The National Council was to be
headed by the Prime Minister, and the State Councils by the Chief Ministers. They had to be
broad in composition, with officials as well as Central and State Social Welfare Boards, National
and State Commissions, NGOs, womens organizations, trade unions, academics, experts, social
activists, etc. These bodies were to meet twice a year and review the progress made in
implementing the National Policy. Further, the National Development Council, the highest body
in the government hierarchy , which has to officially approve all the five year plans, was also to
be informed of the progress of the programmes undertaken under the Policy from time to time
and their advice sought.
Other commitments made in the Policy on institutional mechanisms include setting up of State
Resource Centres which would be linked with the womens studies centres functioning in the
country. At the district level, the existing institutions would be strengthened and at the grass roots
womens groups (SHGs) would be helped to federate as registered societies at panchayat and
municipal level. They would also be involved in the implementation of the Policy.
The Policy also announced the operational strategy for converting the Policy into concrete
programs on the ground. This was to be done through the mechanism of the National and State
Action Plans. These plans would be time bound and implemented in a participatory manner and
also involve all the institutional machineries in the country. The requirements of gender
mainstreaming calls for close coordination between MWCD and the many other Ministries and
Departments (as well as other agencies) that are involved in the empowerment of women and
gender equality. The setting up of gender budgeting cells in more than 40 Ministries and
Departments at the national level has the potential of taking the preparation and implementation
of the Plan of Action forward.
Recommendations

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An apex body at the National level, as envisaged in the 2001 Policy (NPEW) should be set up at
the earliest, so that a comprehensive picture of the Action Plans can be prepared and reviewed.
Similarly, the Policy commitment of reporting on progress of womens plans to the National
Development Council from time to time should be implemented at the earliest. Action Plans for
Womens Empowerment at national and State levels should be drawn up in consultation with
civil society including womens groups, lawyers, activists, womens studies centres etc. While
Action Plans should receive inputs from all sectoral agencies, the format of the Plans should not
be restricted to the sectors. Cross cutting issues such as unpaid work, land and asset entitlements,
skill development and vocational training, child care, occupational health, wages, violence
against women etc. should be mainstreamed across all the implementing agencies.
The Action Plan should be made time bound and a system of accountability for each component
or action point should be clearly laid down. Different deadlines may be set for different
components.
Since the Plans of Action are a Government commitment to the women of the country, all
implementing agencies should be made accountable for its successful implementation, in the
spirit of collective responsibility. Appointments to the National and State Commissions for
Women should be made on the recommendations of a Search Committee comprising of eminent
individuals from every walk of life, including womens development. The Search Committee
should be set up by a decision of the Cabinet. The statutorily laid down systems for making
appointments to other high level commissions and bodies can also be looked at.
All State Commissions should have a statutory base, ensuring their legal status. National and
State Commissions should have more functional and financial autonomy. Resource Centres for
women should be set up at state levels and these centers both at the National and State levels
should be linked with the Womens Studies Centres.
Keeping in view the availability of resources and the need to deliver on commitments, MWCD
should make synergistic use of the Gender Responsive Budgeting and Gender Mainstreaming
processes. The building of budgets from below is a paradigm that can be attempted, in the spirit
of devolution and democratic decentralization process. The new Ministry of Women and Child
Development must be suitably strengthened with a larger complement of staff whose capacities
must also be enhanced. Besides the competencies of gender and economics, the ministry must
also have competencies in gender & trade and legal matters. In view of the vision of the
Government to ensure the holistic and integrated empowerment of women using the tools of

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gender mainstreaming and gender responsive budgeting, the MWCD must have a stronger
coordinating and monitoring role being a kind of watch dog on behalf of the government, on
gender issues.
The MWCD should take the lead in creating and maintaining a comprehensive sex-disaggregated
data base, for quantitative and qualitative data. The purpose would be (1) to base new initiatives
on facts and figures, (2) assess the gender impact of programmes and (3) assess the level of
womens participation and involvement in the planning implementing and managing of
programmes.
A qualitative assessment of ongoing gender sensitization programmes for government officials
being undertaken by different institutions should be carried out by MWCD, with the involvement
of womens groups. Re-structured outcome oriented gender sensitization programmes must be a
constant and recurring phenomena for all (in all departments) government officials, at all levels.
The Parliamentary Committee on Womens Empowerment should clear all legislations before
they are presented to Parliament for enactment.
At the state and district level, the existing institutions including departments and womens
commissions should be strengthened both with human and financial resources and powers. At the
grass roots womens groups (SHGs) should be helped to federate as
registered societies at panchayat and municipal level.

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Chapter - 5
SCHEMES OF THE MINISTRY OF WOMEN AND CHILD
DEVELOPMENT
The Ministry of Women and Child Development, as the nodal agency for all matters pertaining to
welfare, development and empowerment of women, has evolved schemes and programmes for
their benefit. These schemes are spread across a broader spectrum such as womens need for
shelter, security, safety, legal aid, justice, information, maternal health, food, nutrition etc as well
as their need for economic sustenance through skill development, education, and access to credit
and marketing. The schemes of the Ministry like Swashakti, Swayamsidha, STEP and
Swawlamban enable economic empowerment. Working Women Hostels and Creches provide
support services. Swadhar and Short Stay Homes provide protection and rehabilitation to women
in difficult circumstances. The Ministry also supports autonomous bodies like National
Commission, Central Social Welfare Board and Rashtriya Mahila Kosh which work for the
welfare and development of women. These schemes were run in the Tenth Plan. It is proposed to
continue some in the Eleventh Plan and also to take up new schemes. Scheme-wise details are
given in the following sections.

Schemes for Economic Empowerment


Swa-Shakti

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The Project jointly funded by IFAD, World Bank and the Government of India was launched in
October, 1999 and culminated on 30thJune, 2005. The objective of the Program was to bring out
socio-economic development and empowerment of women through promotion of women SHGs,
micro credit and income generating activities. The project was conceived as a Pilot Project
implemented in 335 blocks of 57 districts in 9 states. The Project established 17,647 SHGs
covering about 2,44,000 women. This was a Centrally Sponsored Project.
Swayamsiddha
This is an integrated scheme for women empowerment through formation of Self Help Groups
(SHGs) launched in February, 2001. The long term objective of the programme is holistic
empowerment of women through a sustained process of mobilization and convergence of all the
on going sectoral programmes by improving access of women to micro-credit, economic
resources, etc. This is a Centrally Sponsored Scheme. The Scheme has been able to provide a
forum for women empowerment, collective reflection and united action. The scheme is expected
to culminate in March, 2007. The programme is implemented in 650 blocks of the country.
67971 women SHGs have been formed benefiting 9,89,485 beneficiaries. The scheme comes to
an end in March 2007. It is proposed to take up Swayamsidha with a wider scope during the XI
Plan. It is also proposed to implement a womens empowerment and livelihood project in four
districts of Uttar Pradesh and two districts of Bihar with assistance from IFAD. The schemes of
Swayamsidha and Swashakti would be merged and implemented as Swayamsidha, Phase-II in
the XI Plan. The Mid-Term Appraisal Report of the Tenth Plan has also recommended merger of
these two schemes as these have similar objectives. The next phase would be a country wide
programme with larger coverage in States lagging behind on women development indices.
Convergence is the basic concept in Swayamsiddha. The lessons learnt in Swayamsiddha and
Swa-Shakti would be incorporated in the universalized Swayamsiddha giving an integrated set of
training inputs relating to social and economic empowerment, including skill development and
training in traditional and non traditional sectors. The estimated requirement during the XI Plan
period for both phase II of Swayamsidha as well as the IFAD Project is Rs.3000 crore.
Swawlamban Programme
Swawlamban Programme, previously known as NORAD/Womens Economic Programme, was
launched in 1982-83 with assistance from the Norwegian Agency for Development Corporation
(NORAD). NORAD assistance was availed till 1996-97 after which the programme is being run
with GOI funds. The objective of the programme is to provide training and skills to women to

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facilitate them to obtain employment or self employment on sustained basis. The target groups
under the scheme are the poor and needy women, women from weaker sections of the society
such as Scheduled Castes and Scheduled Tribes etc. In order to ensure more effective
implementation and for better monitoring/evaluation of the scheme, it has been transferred to the
State governments from 1st April 2006 with the approval of Planning Commission.
Support to Training and Employment Program (STEP)
This program seeks to provide skills and new knowledge to poor and assetless women in the
traditional sectors. Under this project, women beneficiaries are organized into viable and
cohesive groups or cooperatives. A comprehensive package of services such as health care,
elementary education, crche facility, market linkages, etc. are provided besides access to credit.
Skill development is provided in ten traditional skills amongst women. This is a Central Scheme
launched in 1987. The Ministry is at present getting the program evaluated. Based on the results
of the evaluation, the scheme is proposed to be revamped. Further, the possibilities of providing
training and skills to women both in traditional and non traditional sectors and integrating with
Rashtriya Mahila Kosh for credit linkages are being considered. A sum of Rs.240 crore is
proposed for the scheme in the XI Plan.
Support Services
Construction of Working Women Hostels
Under the scheme, financial assistance is provided to NGOs, Co-operative Bodies and other
agencies for construction / renting of buildings for Working Women Hostels with day care centre
for children to provide them safe and affordable accommodation. This is a central scheme. The
utilization of funds under the Scheme has been unsatisfactory during the Tenth Plan period
because NGOs are not able to avail funds due to strict norms of funding and lack of suitable
proposals from the organizations. The norms and financial pattern of assistance discourage the
NGOs for construction of these hostels. At present, the norms are (i) availability of land in prime
location so that they get sufficient number of working women, (ii) 50% of the cost of land (the
land has to be acquired before the proposal for the government grant is submitted) and 25% of
the cost of construction has to be borne by the NGO, (iii) construction of the hostel is required to
be completed with in two years, etc. Another issue needing review is the fixed percentage of
trainees and students as a proportion to working women that is uniformly applicable across the
country. There should be some flexibility especially for educationally backward states and
regions, where rural girls are not able to find suitable accommodation when entering the portals

75

of higher education. This scheme is one of the oldest programs of the Ministry. But as now only
873 hostels have been constructed under the scheme. With the increasing number of working
women, the need for adequate housing and shelter for working women is now felt not only in big
cities but also in small towns and rural areas. Hence a Committee to revamp the scheme has been
set up under the chairpersonship of Secretary, Ministry of Women and Child Development to
make the scheme more viable and to attract more NGOs to come forward to apply for the
scheme. NGOs are not able to avail of the funds due to escalating costs of land. The possibility
of approaching the Land and Development Authorities for allocating land for Working Women
Hostels in their States is also being considered. Construction would be taken up by the
Departments/Ministries in charge of Womens Affairs and the constructed building handed over
to an NGO for running the hostel. Recurring grants for maintenance would be given to NGOs.
Then monitoring also would be easier unlike in the present scheme where once the construction
is over, the Ministry has no control over the NGOs. In the current scheme, a day care centre is
optional. Women with small children would not prefer to stay in the hostel if the hostel does not
have a day care centre attached to it. The Committee would look into this aspect as well. In view
of these, it is proposed to totally revamp the scheme and the revamped scheme would be run in
the XI Plan. Requirement of funds for the XI Plan is estimated at Rs.500 crore.
Creches
The Ministry runs a scheme of crches that caters to the children of poor working women or
ailing mothers. This provides a great help to women who are working as their children are being
provided a safe environment when they are at work. This scheme is being covered in the Report
of the Working Group on Child Development of this Ministry. Relief, Protection and
Rehabilitation to Women in Difficult Circumstances Swadhar This Scheme was launched in
2001-2002 for providing relief and rehabilitation to women in difficult circumstances. The main
objectives of the scheme are as follows:

To provide primary need of shelter, food, clothing and care to the marginalized women/

girls living in difficult circumstances who are without any social and economic support.
To provide emotional support and counseling to women.
To rehabilitate destitute women socially and economically through education, awareness,

skill upgradation and personality development.


To arrange for specific clinical, legal and other support for women/girls in need of those
interventions by linking and networking with other organizations in both Government
and non-Government sectors on case to case basis.
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To provide Helpline or other facilities.

Benficiaries covered under the scheme are widows deserted by their families, women prisoners
released form jail, women survivors of natural disaster, trafficked women, women victims of
terrorist/extremist violence, mentally challenged, and women with HIV/AIDS etc. At present 129
shelter homes are functional in the country. The number of homes currently functional in the
country is grossly inadequate. The requirements of women being catered to by the scheme are
different. The needs of mentally challenged women are quite different from that of women
rescued from trafficking or women survivors of disasters. Hence it is proposed to set up different
homes for women with different needs. The recently introduced Protection of Women from
Domestic Violence Act provides that women seeking shelter should be accommodated in the
shelter homes. These call for increase in the number of shelter homes in the country. In the XI
Plan, it is proposed to set up one home in each district. It is also proposed to revise the schematic
norms. The root cause of most of problems being faced by women is lack of economic
independence among women. Providing training and skills in various vocations to women living
in shelter homes will facilitate them to obtain employment on sustained basis. Though the
scheme in the current form provides for vocational training, no separate funds are being provided
for the purpose. Organisations are expected to seek convergence of the benefits of schemes like
STEP, Swawlamban etc. In the XI Plan, it is proposed to allocate funds for vocational training to
the women as a part of the scheme. It is also proposed to revise the norms for food, medical
expenses, clothing, rent etc under the scheme. A provision of Rs.1000 crore is proposed in the XI
Plan to set up more shelter homes as also to revise the norms of the scheme.
Compensation to Rape Victims
The Honble Supreme Court in Delhi Domestic Working Womens Forum Vs. Union of India
and others writ petition (CRL) No.362/93 had directed the National Commission for Women to
evolve a scheme so as to wipe out the tears of unfortunate victims of rape. The Supreme Court
observed that having regard to the Directive principles contained in the Article 38(1) of the
Constitution, it was necessary to set up criminal Injuries Compensation Board, as rape victims
besides the mental anguish, frequently incur substantial financial loss and in some cases are too
traumatized to continue in employment. The Court further directed that compensation for victims
shall be awarded by the Court on conviction of the offender and by the Criminal Injuries
compensation board whether or not a conviction has taken place. The Board shall take into

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account pain, suffering and shock as well as loss of earnings due to pregnancy and the expenses
of child birth if this occurs as a result of rape.
Accordingly NCW has drafted a scheme titled Relief to and Rehabilitation of Rape Victims. It
is proposed to initiate the scheme in the XI Plan. The budgetary requirements for the scheme in
the XI Plan is estimated as Rs.250 crore.
Pilot Projects for women in difficult circumstances
The schemes that are being run for women look at women as one homogenous group. In reality,
there are different categories of women requiring different interventions. In the introductory
chapter of this Report, vulnerable women have been grouped into different types. In the XI Plan
it is proposed to take up pilot projects for the different categories of women. If these pilot
projects prove to be fruitful, then the States would be asked to take them up on a wider scale.
Rs.2000 crore is proposed for the pilot projects in the XI Plan.

Implementation of Protection from Domestic Violence Act and other


Acts of the Ministry
The Protection of Women from Domestic Violence Act came into force on 26 th October 2006. In
the XI Plan it is proposed to take up the following for effective implementation of the
PWDDVA:
Set up the required infrastructure and requirements to make the Act effective. Provide training,
sensitization and capacity building of Protection Officers, Service Providers, members of the
judiciary, police, medical professionals, counselors, lawyers, etc on the issue of domestic
violence and the use of law (PWDVA and other criminal and civil laws) to redress the same.
Monitoring the appointment of Protection Officers by regular feedback from the
various states Set up an effective MIS to monitor its implementation. Give wide publicity to the
Act. Rs.500 crore is proposed to be provided for implementation of PWDVA in the XI Plan. The
Ministry is in the process of drafting an act to prevent sexual harassment at workplace. It is
proposed to allocate Rs.100 crore for implementation of this and other acts that the Ministry may
bring into force during the XI Plan.
Media

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A number of women specific and women related laws have been enacted to protect them from
social discrimination and to give them equal opportunity. Ministry of Women and Child
Development is the administrative ministry for implementation of many of these Acts like
Commission of Sati (Prevention) Act, Dowry Prohibition Act, Indecent Representation of
Women (Prohibition) Act, Immoral Traffic Prevention Act and Protection of Women from
Domestic Violence Act. In spite of some of these Acts being in place since a long time, these
crimes against women continue unabated.
Implementation of these Acts is very poor. The knowledge about the existence of these Acts is
also very low among the public and other stake holders. Similarly, though the country is a
signatory to the UN convention on elimination of discrimination against women and the
convention was ratified as long back as in 1992, its dissemination has been very poor.
Further, to achieve gender equality and to stop crime against women, what is needed is a change
in the peoples attitude, both of men and women. Having any number of legislations, policies and
programmes will not take us towards the desired goals unless the thinking, perception and
attitude of the society changes. Bringing about attitudinal change in the society as well as
dissemination about the laws, policies, programmes etc of the Government can be achieved only
through an effective multi-media publicity campaign through electronic media, print media and
outdoor publicity tools. In the XI Plan it is proposed to take up media activities on a much larger
scale and a sum of Rs.1000 crore is proposed for disseminating women related issues alone. To
carry out the above women related media activities as also those relating to children, it is
necessary that a separate media unit is set up in the Ministry with officers from Information
Service posted therein so as to give a professional touch to the various multi media activities
proposed to be carried out during the XI Plan. An amount of Rs.4.00 crore would be required for
the purpose.
Research and Evaluation
Ensuring efficient implementation of policies and programs is the most important aspect of any
intervention. The tools and strategies to assess these aspects are Research, Monitoring and
Evaluation. Considering the importance and the necessity of research, monitoring and evaluation
of all policies and programs, the Ministry of Women and Child Development is operating a GIA
(Grant In Aid) scheme for Research, Monitoring and Evaluation. During the 11th Plan, in order
to give more thrust to the development of women and children, many new schemes such as
integrated child protection scheme, Swayam Sidha Phase II, over hauling, rationalization and

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expansion of already running schemes such as ICDS are being conceived of. New acts and rules,
amendment of existing rules and regulations, may also be brought out. The working of Domestic
Violence Act 2005 and its rules recently notified need to be assessed for remedial actions; the
outcomes and outputs are to be matched with outlays and the directions of the interventions are
to be altered if necessary. It is proposed to include the following areas for research, monitoring
evaluation and publication during the 11th Plan:
Prevention of Female foeticide / Infanticide Working of Prohibition of Child Marriage Act Issues
relating to Child sex tourism, Pilgrim tourism, Tourism sex Studies on children of prostitutes
Workshop/seminars on spreading awareness about ITPA act, ill effects of foeticide and
infanticide, child marriages etc Awareness campaigns/motivation campaigns for the police and
other enforcement authorities/implementing officials of acts and rules.

Concurrent monitoring / evaluation of schemes


Development of data bases on women, children
Preparation of gender development Index / gender empowerment measure
Preparation of child development Index
Create mappings showing comparative status of women/ children in different

States/UTs

Creation of directory of facilities created under various welfare schemes


Information booklets/brochures to propagate the schemes of Govt. of India / M/o

WCD for women and children

Statistical publications/brochures on women/child


In case of ICDS scheme workshops on district level awareness of ICDS in selected

areas where the malnutrition is highly prevalent

Working of existing acts for women and children etc


All India surveys / impact studies / evaluation on various issues and schemes

pertaining to women and children.

To undertake the Research, Evaluation, Monitoring and Publication activities during the

11th five year plan, a plan outlay of Rupees 15 crores is proposed.


Setting up a Gender Budgeting Cell and a Statistical Division in the
Ministry
Statistical Division
Monitoring and evaluation of the progress made in improving the status of women is extremely
important; systems should be in place for regular monitoring and evaluation of all gender

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development programmes implemented by various ministries. Gender development indicators


may be compiled at all India, State and District levels and disseminated widely for use by the
policy makers, planners and programme implementation authorities. Further analytical studies
may be undertaken to bring out regional imbalances for enabling corrective action. Hence a cell
for Development of Statistical Databases on Women and Child and other related issues may be
set up, which may undertake the following important activities:

Statistical publications on women and children / creation and maintenance of data base of
important parameters on women and children (all India, State/ UT, District levels) to

reflect the progress by comparative analysis.


Compilation of GDI/ GEM and publication of India country report with

annualperiodicity.
Development of statistical data on emerging topics such as violence against

women,feminization of poverty etc.


Identify gender related data gaps and organize sample surveys by reputed
Government/Non- Government agencies to fill up the data gaps and to monitor
implementation of policies and programmes of M/o WCD and other tasks entrusted to
M/o WCD. Requirement of funds during the XI Plan is estimated as Rs.3.50 Crores.

Gender Budgeting Cell


As the nodal Ministry for women, the Ministry of Women and Child Development has been
undertaking several initiatives for the empowerment of women. In this context, Gender
Budgeting has been adopted by the Ministry as a tool for achieving the goals laid down for
women in our plans and policies. Guidelines for implementing Gender Budgeting by the various
ministries have been laid down and this Ministry is continuously taking up with the other
Ministries as well as the State Governments and holding hands with them to carry forward this
exercise. For the Ministry to take up this task more effectively, the Gender Budgeting Cell of the
Ministry needs to be strengthened for which Rs.2.50 crore is required during the XI Plan.
Further, detailed training manuals need to be prepared for the use of the trainers. These manuals
will give the approach and the methodology to be taken in the engendering policies, schemes,
programmes and assessing their gender outcomes. A budget of Rs.50 crore is proposed for
organizing training and capacity building workshops and preparation of training manuals.

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Autonomous Organisations under MWCD


Rashtriya Mahila Kosh (RMK)
RMK was established in 1993 to provide micro-credit in a quasi-formal manner to the poor
women for income generating, production, skill development and housing activities in order to
make them economically independent. RMK mainly channelises its support through NGOs,
Voluntary agencies, States Women Development Corporations, Cooperative societies, State
government agencies, Urban Women Co-op Banks etc. to the women SHGs. It was started with
an initial corpus of Rs. 31crore which has been recycled to reach cumulative sanctions of Rs.188
crores of loans. It has maintained a high recovery rate of over 90%. It is proposed to expand the
credit program from the present level of Rs.20 crore to Rs.100 crore per annum by 2010-11 and
also to expand its operations in all States and Union Territories through nodal agencies and
franchisees. Client friendly innovative loan/grant products would be launched make the credit
programmes more attractive. During the XI Plan RMK will upscale its operations to target
assistance to about 20 lakh SHG members and enhance the corpus to Rs.500 crore. Vision for the
XI Plan

RMK would be the nodal agency/apex body for micro-credit for women.
RMK would act as the premier advocacy organisation for the development of microfinance sector at national and international level to enhance the flow of microcredit in the

unorganised sector for women.


Mechanism would be evolved to access credit from RMK for women SHGs instead of
Banks as an alternative financial institution by all Ministries which are promoting /
implementing subsidy-linked SHG programmes. To this end, institutional capacity of
RMK should be expanded through organizational expansion by providing adequate
financial support complemented with sociopolitical and economic inputs. Also, with the

universalized Swayamsidhha in the 11th Plan, RMK is required to be expanded.


RMK would expand its role from a mere credit disbursal agency to a genuine community
based, women oriented, saving cum lending agency.

Central Social Welfare Board

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CSWB was set up on 12th August 1953 by a Resolution of Govt.of India to act as an apex body
at national level for welfare and development of women and children. State Social Welfare
Boards were established in 1954 in all State capitals to support CSWB in achieving its
objectives. It is proposed to review all the existing schemes and restructure them looking into
the current requirements. Programmes of CSWB would be merged with those of the Ministry
like the schemes on Short Stay Homes and Working Women Hostels. New schemes if need be
would be taken up and the schemes like Condensed courses of education for women would be
modified during the XI Plan. There is a strong case for restructuring of the CSWB and the State
Social Welfare Advisory Boards to meet the needs of development of women and children in the
fast changing economic scenario. The State Boards in particular need to be more responsive and
in tune with requirements in their areas.
Programs of CSWB
Family Counselling Centres
Objectives

Counselling and rehabilitative services for women & families affected by domestic

violence, marital discord or family maladjustment.


Pre-marital counselling for preparing youth for healthy interpersonal relationships,
responsible parenthood and strengthening the institution of family. During the Xth plan
830 FCCs have been set-up in different districts, Mahila Jails, Police Headquarters &
Red Light Areas catering to the needs of 2,98,312 clientele.

Vision for the XI Plan

The programme would be expanded to respond to felt needs of the society.


More impetus on training and orientation of counsellors to provide professional services

and strengthening of the scheme through capacity building of voluntary organisations.


To enlarge the coverage in a phased manner so that every district has at least two FCCs.
To give wide publicity to the scheme and networking with other stakeholders for
settlement of cases.

Short Stay Homes


Objectives

Women and their minor children, in difficult circumstances are provided comprehensive
institutionalised services such as shelter, counselling, vocational training and

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rehabilitation for a period of 6 months to 3 years. During the Xth Plan, 360 SSHs have
been set up to benefit 96457 women & children.
Vision for the XI Plan

Training programmes for the functionaries of the Short Stay Homes should be geared up
to sensitize them about the problems of women in distress and to improve quality of

services.
Networking of the SSHs with those agencies who can help in purposeful rehabilitation of

women.
Anomaly in the quantum of honorarium to counsellors under various schemes of GOI

needs to be removed.
Would be merged with the Swadhar Homes.

Condensed Courses Of Education For Women


Objectives

Providing education to adolescent girls/women who are school drop outs or did not have
opportunity of joining formal education system to pass primary/middle/matric level
examination with inputs skill development During the Xth Plan 1840 Condensed Courses
were sanctioned for 46275 beneficiaries

Vision for the XI Plan

Scope of curriculum of all courses to be enlarged to include component of life skills,

social skills and negotiating skills.


To include provision for training of teachers and office bearers of voluntary organisation

on various aspects of the scheme.


To enhance intensity and impact of the scheme by reorientation, duration and time of the
courses and to incorporate provision for educational tours, creches and nutrition in the

scheme.
Schematic pattern of the scheme to be revised.

Rajiv Gandhi National Creche Scheme For The Children Of Working Mothers Objectives

Working women from the economically weaker sections are provided support services in
terms of substitute care through creches for children in the age group of 0-6 years. They
are provided day care services, supplementary nutrition, health care services and early

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childhood education. During the Xth Plan 12600 creches were supported to reach to
3,15,000 children.
Vision for the XI Plan

To provide training to creche workers for better management of creche centres.


The programme is much in demand and has proved its utility over the years. There is a

felt need to set up new creches in uncovered areas.


More than one lakh creches should be set up in the first phase to cater to the needs of
working women in the unorganised sector.

Awareness Generation Programme Objectives

Camps are organized in the community for generating awareness among masses on

issues relating to status, legal rights, problems of women and other social issues.
To create an enabling environment for effective participation of women in decision
making processes and for asserting their social, economic and political rights During the
Xth Plan 26626 Awareness Generation Camps were organized for 6,65,400 women.

Vision for the XI Plan

Regular campaigns on issues such as female foeticide, physical abuse, trafficking, gender

discrimination and domestic violence may be organized.


To develop audio-visual and print material in local language /dialect for dissemination of

information during the camps


Duration of camps may be made flexible.
Organisation of special camps for school children, college students on stress
management, family life education, self defence and personality development.

Working Women Hostel


Under this scheme, CSWB provides maintenance grants to those working women
hostels which have not been constructed with assistance from the Ministry of Women and
Child Development. The maintenance grant is restricted for a period of five years.
Vision for the XI Plan

The schematic norms need to be revised.


The schemes of the Board and the Ministry would be merged.

National Commission for Women


The National Commission for Women was set up in 1992 to protect and safeguard the rights of
women. The activities of the Commission include receiving complaints or suo moto enquiring in
85

cases of deprivation of rights of women, providing counseling, conducting Parivarik Lok Adalats
and legal awareness programmes and organising public hearings.

Chapter-6
E-COMMERCE

Introduction
Sustained and rapid growth rates are the most effective route to poverty reduction. However, the
main challenge is to ensure that growth is pro-poor and pro- women. The Indian economy, on has
grown at a rate of more than 8 per cent during the last three financial years, making it one of the
fastest growing economies in the world. This has been accompanied by a benign rate of inflation.
The BRICS report identifies India as the only economy that will be capable of maintaining
growth rates above 5 per cent till the year 2050. Indias share of global GDP, in purchasing
power parity (PPP) terms, at 5.9 per cent in 2005 is the fourth highest in the world. In terms of
share in world exports, India accounts for 0.9 per cent, with the value of exports in US dollar
terms placed at US $ 100 billion. The poverty level, which was 36 per cent in 1993-94, had come
down to about 22 per cent in 2004-05. However, statistical indicators, however, do not fully
capture Indias recent economic achievements. For example: there has been an increased focus
on infrastructure investments such as development of the Golden Quadrilateral, Bharat Nirman,
The National Urban Renewal Mission aimed to provide further impetus to growth. In addition ,
major development initiatives have been launched -- the historic National Rural Employment

86

Guarantee Act; the National Rural Health Mission (including the Janani Suraksha Yojana); the
expanded Sarva Shiksha Abhiyan and a National Cooked Mid Day Meal Programme.
The above initiatives are indicative of the growing awareness of the multidimensional nature of
development. It is well acknowledged fact that the thrust on social and human development is an
important plank of the next generation of policy reforms. The efforts are being complemented by
a steep jump in budgetary outlays for social sectors, along with dedicated initiatives for
removing poverty and increasing employment. The main task that needs to be undertaken during
the XI FYP is to ensure that women are at the centre stage of all the activities economic,
social and political.
Economic Growth, Poverty and Gender Inequality
There exists a two-way link between economic growth and poverty, and gender inequality. On
one level, poverty and the lack of growth exacerbated gender disparities. Inequalities between
girls and boys in access to schooling or adequate health care were more acute among poor people
than among those with higher incomes. And while poor people had less access to such productive
resources as land and credit, poor women generally had the least access of all. Similarly, girls
and womens health and schooling were more vulnerable to economic downturns than those of
boys and men. On another level, gender inequalities undermined the prospects for poverty
reduction in fundamental ways. While disparities in basic rights, access to schooling, credit and
jobs, and the ability to participate in public life took their most direct toll on women and girls,
the evidence showed that gender inequality ultimately hindered economic growth. The rationale
for economically empowering women is compelling for both for its own sake (intrinsic) and for
other spillover benefits (instrumental). Research indicates that economic participation of women
their presence in the workforce in quantitative termsis important not only for lowering the
disproportionate levels of poverty among women, but also as an important step toward raising
household income and encouraging economic development in countries as a whole. Amartya Sen
makes a compelling case for the notion that societies need to see women less as passive
recipients of help, and more as dynamic promoters of social transformation, a view strongly
buttressed by a body of evidence suggesting that the education, employment and ownership
rights of women have a powerful influence on their ability to control their environment and
contribute to economic development. However, participation alone is not enough, quality of
womens work is critical. A key challenge is to overcome a situation where women may gain
employment with relative ease, but where their employment is either concentrated in poorly paid

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or unskilled job ghettos, characterized by the absence of upward mobility and opportunity. For
example: women are most often concentrated in feminized professions, such as nursing and
teaching, office work, care of the elderly and disabled termed horizontal occupational
segregationwhere they tend to remain in lower job categories than men. Typically, because
these functions are carried out by women, they are the lowest paid, in addition to offering limited
or no opportunity for advancement. The term feminization of poverty is often used to illustrate
the fact that a substantial percentage of poor are women and that the gap between women and
men in poverty has not lessened, but may well have widened in the past decade. Further,
globalization has dramatically changed the conditions under which the work for gender equality
must be carried out, especially in high growth countries like India. While globalization has
generated opportunities for local producers and entrepreneurs to reach international markets, it
has at times intensified existing inequalities and insecurities for many poor women, who already
represent two-thirds of the worlds poorest people. Since the gains of globalization are often
concentrated in the hands of those with higher educationthose who own resources and have
access to capitalpoor women are usually the least able to seize the longer term opportunities
offered. In last two decades, this disadvantage has been exacerbated as in most of the countries,
policies reflect a commitment to global norms of markets and social policy is increasingly
determined by market dynamics. Market friendly policies generate high growth rates that fail to
translate into improved standards of health, education and human security. Feminist scholars
have highlighted the gendered impact of such policies, many of which increase womens job
vulnerability, unpaid work burden, while reducing state level resources that might be used to
provide a social safety net. Owing to dissent voiced by feminist scholars on the widespread
assumption that gender inequality as a challenge can be overcome with effective and sustained
advocacy as it is more about mindsets and less about policies, especially economic policies, there
have been some attempts to integrate economic and social policies but gender concerns have not
been accorded requisite attention. These disadvantages have led to a situation where gains in
womens economic opportunities lag behind those in womens capabilities. This is inefficient,
since increased womens labor force participation and earnings are associated with reduced
poverty and faster growth, women will benefit from economic empowerment but so too will
men, children and society as a whole. Womens lack of economic empowerment, on the other
hand, not only impedes growth and poverty reduction, but also has a host of other negative
impacts including less favorable education and health outcomes for children and a more rapid

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spread of HIV/AIDS. Thus, it is extremely important to ensure that women are economically
empowered. There are various factors that contribute to the economic empowerment of women.
These factors operate at various levels. In the current scenario, one can identify the following
characteristics of womens work in India:
1. Volatility of employment-- particularly export-oriented employment. In less then one
generation, there had been massive shifts of womens labour into the paid workforce and then the
subsequent ejection of older women and even younger counterparts into more fragile and
insecure forms of employment. Womens livelihoods in rural areas had been affected by the
agrarian crisis in most developing countries.
2. Changes in the nature of womens work -- including an increase in informal work,
characterized by greater reliance on casual contracts and an increase in service work. There had
been a substantial increase in self-employed low-end service work, especially in domestic and
retail trade.
3. Increase in unpaid work --The impact of the decline in the public provision of many basic
goods and services had meant a substantial increase in unpaid work.
4. Crisis of livelihoods in agriculture -- The effect of trade liberalization had been accompanied
by a decline in world agriculture prices. Agriculture constituted the main employer of women in
the developing world and the basic source of income for most of the worlds poor.
5. Massive increase in womens migration for work --What was new historically was the fact that
women were moving alone. Cross-border migration had become a huge issue. While it had
become a source of macroeconomic stability, it was also a source of exploitation. Internal
migration had also increased. Migrant workers had few rights, and governments rarely thought
about ensuring their protection.
Enabling Strategies For Economic Empowerment Of Women
Sound macroeconomic policies Gender inequalities manifest as women and men have
different access to resources, roles and responsibilities, both in the market and at the household.
These inequalities exist at the meso and micro levels with macro implications indicating clear
two-way linkages.In the Indian context, fiscal policies are being increasingly examined through
gender sensitive-budgeting exercises, although the focus still remains on expenditures in 'soft'
sectors, with several aspects like taxation, trade, capital flows, etc. remaining largely an
unstudied domain. Macro-economic policies are formulated and implemented in areas such as
trade, fiscal management, debt financing, social welfare and other sectors without a

89

comprehensive assessment of their potential gender impacts. All these issues would be
particularly important if the analysis of the sources of growth were to suggest that influencing
the distribution of income and assets by gender might have a beneficial effect. Some policies,
particularly those promoting health and education, or promoting greater women's property rights
and control over assets or access to credit, technology, and transport, are likely to be win-win
policies in terms of higher growth, greater gender equality, and reduced susceptibility of women
to economic shock.
Recommendations
1. Increasing the mainstream financial services available to women;
2. Developing or adapting legal frameworks that eliminate the gender biases of financial
institutions;
3. Increasing inclusion of poor women and other vulnerable groups to give them a voice in
economic bodies and financial structures;
4. Supporting the incorporation of gender perspectives into budget processes;
5. Undertaking and disseminating gender analyses of economic policies;
6. Developing policy frameworks that allow women to move away from the ghetto of microfinance to mainstream economic policy and structures.
7. The Eleventh Plan should address the unpaid work of women in an explicit manner through a
well-designed strategy that will inform all planning and programming for women.The Eleventh
Five Year Plan should emphasize the need for collection of
comprehensive data on womens paid and unpaid work, womens asset ownership and
other sex segregated data.
8. Banking policies had to include targeted credit.
9. Microcredit was not a panacea. It was necessary to reinstate the role of public
institutional credit.
10. Measures were also needed to reduce employment volatility and to increase public
provision of basic services and goods, especially nutrition. It was crucial that the crisis in
agriculture be addressed, including the issue of trade protection and import regulation.
11. Problem with gender budgeting was the obsession of how much was directed towards
women. That did not say much about how fiscal policies were affecting women. The
focus needed to be made broader.
Improvement in infrastructure Development of infrastructure was previously assumed to be

90

gender neutral, with both sexes benefiting equally from well-designed projects Genderresponsive
infrastructure interventions can free up womens time, thereby increasing girls enrollment in
schools and facilitating womens participation in income-generation and decision-making
activities.
Transport
Men and women have varying transport needs and constraints and are affected differently by
transport interventions:
Rural Transport Projects that build roads for motorized transport often do not benefit rural
women, who mainly work in and around the village and travel on foot.
Urban Transport Systems that transport people to and from employment centers are sometimes
inadequate for women, who must combine income-generating activities with household and
familial activities, such as taking children to school and health centers and visiting the market.
Poor women, who balance productive, social, and reproductive roles in societies, often have
higher demands on their time than poor men.
Recommendations
A number of policy initiatives can help ensure that women benefit from road construction
and maintenance projects:
1. Promoting labor-based construction and maintenance, with incentives to hire women.
2. Ensuring that women are represented in the planning and design of transport investments,
including on user panels, road fund boards, and so on.
3. Improving the dissemination of information on transport investments and related employment
opportunities.
4. Womens transport needs,such as better route planning or the provision of special buses or
increased off-peak hours or services on less-traveled routes.Where women are highly
dependent on nonmotorized transport, studies in several countries suggest that the simplest
forms of wheeled transport (such as wheelbarrows or handcarts) could halve the amount of
time women require for local transport.
5. Promising interventions also include widening roads to provide safer and faster passage or
providing cycling and walking paths and teaching women and girls to ride bicycles.
Energy
Women are disproportionately impacted by a lack of access to energy given their

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prominent role in domestic, low paid and unpaid work. In rural India nearly 3 billion days are
spent in gathering fuels and 700 million days in processing them i.e., chopping, drying, turning,
storing, stacking and handling. This work is done almost exclusively by women. Since it is
women who manage 1/3rd of the energy system they need to be substantially supported through
investment, management and technology inputs to be able to continue to manage the systems in
sustainable ways and with minimum hardship.
Recommendations
A comprehensive policy is needed for domestic energy, covering a range of solutions:
small sized biogas plants, firewood plantations, small hydro plants, and other renewable
energy sources to create a portfolio of energy options, rather than single source options.
In addition, the promotion of non- biomass sources of energy, including solar, for small
production units would save firewood for domestic use.
Access to energy can be made closer to habitations by means such as womens groups
forming tree-growing cooperatives for fuel wood or oil seed plantations with the same
efforts that they put in searching and gathering fuel wood to develop sustainable energy
supply. They can determine what energy sources such as wood, agricultural residues,
animal dung, oilseeds, solar, biogas, LPG or kerosene could be available at least cost and
effort. After examining this, user groups can also identify land and the type of plantation
(e.g., wood, oilseed, agriculture etc.) that will serve the purpose.
These groups can be linked with the existing poverty alleviation and social and economic
development schemes such as employment guarantee scheme, land development scheme
and other Bharat Nirman Schemes.
The IEP proposes to provide subsidy through debit cards to BPL households, which can
be tested through a pilot. There is also need to set up a mechanism to monitor success,
failure and best practices.
Capacity building and assistance to manage energy programs should be taken up.
Provide special trainings and special fellowship for women.
Locally available biomass such as Jatropha can be used to generate raw oil.
Energy-based enterprises such as making charcoal, briquette making, gassifiers and so on
can be thought of.
Where work patterns and income sources are changing, fuel sources probably are too.
Thus, the focus should be not only on meeting cooking energy needs but also on

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enhanced livelihood options. Both rural and urban women need adequate energy supplies
for their small and medium scale enterprises and home industries. Hence, there is a
commercial motivation to improve the efficiency of the entire process.
Information and communication technologies ( ICT)
ICT have delivered enormous benefits around the world, much of their potential remains
untappedparticularly forgroups facing severe time constraints, suffering from social isolation,
or lacking access to knowledge and productive resources. Women in developing countries are
among the most important of these groups. Although women account for nearly a third of
information technology workers in developing countries, they are concentrated in lower-level
jobs and paid smaller salaries than men. For example, many of these women work in call center,
data entry, and programming positionsfew are project managers. But this need not be the case:
with supportive policies from employers, complemented by enlightened national labor laws,
women can move up the professional ladder. Girls and womens low enrollment in science and
technology education is one of the main obstacles to higher-level employment in information
technology.
Recommendations
1. Address and integrate gender perspectives when developing and implementing national
policies, legislation, strategies and regulatory and technical instruments in the area of
information and communications technologies (ICT) and media and communications, and
create monitoring and accountability mechanisms to ensure implementation of gendersensitive
policies and regulations;
2. Address ICT-related infrastructural and tariff barrie rs that disproportionately affect poor
women and women living in remote and rural areas;
3. Support and encourage research on womens information needs, find ways to adapt ICT
to the needs of the poor and especially illiterate women, and study the impact of ICT on
womens social, economic and political empowerment;
4. Support and encourage of gender equality principles and pedagogic perspectives in all all
aspects of science and technology education.
5. Develop policies and mechanisms for increasing the number of female students in science
and technology and ICT related fields, and expand training and capacity building
programmes for women on the use of new technologies;
6. Ensure that women gain access to promising new employment opportunities, including

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through ICT-based economic activities


7. Strengthen the use of traditional information and communication technologies, such as
radio, TV and print, in parallel to enhancing the use of and convergence with new ICT,
towards the empowerment of women;
8. Collect, share, positively recognize and widely publicise good practices to counter gender
stereotyping and negative portrayals of women in all forms of media and communications
9. Increase efforts to compile statistics on ICT use disaggregated by sex, develop genderspecific
indicators on ICT use and needs, and generate sex-disaggregated data on
employment patterns in media and ICT professions;
10. Provide resources for innovative media and ICT projects in support of gender equality
and for the production of content that is particularly relevant to womens interests and
concerns;
11. Ensure mechanisms and resources to safeguard traditional and indigenous knowledge and
other intellectual resources that are held as public common good from being appropriated

Women and Work Challenges and Recommendations


Women workers account for about 1/3 of all workers. There are over 397 million workers in
India, out of which 123 million are women workers. Only a small proportion, 18 million, are in
the urban areas while 106 million are in rural areas. Not only do a higher percentage of women
than men work in the informal economy, women are concentrated in the lower-income segments,
working in survival activities or as casual wage workers or homeworkers. The link between
working in the informal economy and being poor is stronger for women than for men. About
30% of the total workers are poor in India (using the 1999 2000 poverty line at Rs.336 per
capita per month in rural areas and Rs.451 in urban areas). In general a large proportion were
poor.
Another way of looking at poverty amongst the women workers in India is to compare men and
women among the poor workers to their share of the total work force. So while 31% of all
workers are women, the share of women workers amongst poor workers is 36%. Among the non
agricultural workers, while 19% were women, 24% of the poor agricultural workers were poor.
The annual household income of the female headed households was lower compared to male
headed house holds. Within the female headed households, a large proportion of
households(44%) were poor, with incomes below the poverty line.
Focus Areas
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Women in Agriculture
While women have always played a key role in agricultural production, their importance both as
workers and as farm managers has been growing,as more men move to non-farm job leading to
an increased feminization of agriculture.. Today 53% of all male workers are in agriculture as
against t 75% of all female workers. and 85% of all rural female workers, are in agriculture.
Women constitute 40% of the agricultural work force and this percentage is rising. Further, an
estimated 20 percent of rural households are de facto female headed, due to widowhood,
desertion, or male out-migration. These women are often managing agriculture and providing
family subsistence with little male assistance. Hence agricultural productivity is increasingly
dependent on the ability of women to function effectively as farmers. In the above context, a two
pronged approach of :
A. Ensuring effective (rights being rights not just in law but also in practice) and independent
(rights being rights that women enjoy in their own capacity and of those enjoyed by men) land
rights for women and
B. Strengthening womens agricultural capacities is desirable.
Land Rights for Women in agriculture
Land rights can serve multiple functions in rural womens lives which are not easy to replicate
through other means. Endowing women with land would empower them economically as well as
strengthen their ability to challenge social and political gender inequalities. There are three main
sources of land for women:

Direct government transfers


The market (by purchase or lease and
Inheritance or gifts from families.

To enhance womens land access from all three sources, a range of initiatives are needed,
including land titles to women in all government land transfers, credit support to poor women to
purchase or lease in land from the market, raising legal awareness and legal support about
womens inheritance rights, supportive government schemes, recording womens inheritance
shares etc.
It will also need a new approach to enable women to retain the land they get by strongly
encouraging a group approach in land cultivation and investment in productive assets. It is
now well recognized that the poor are best empowered if they function as a group rather than as
individuals. This lesson should be incorporated in the creation of all productive assets in
womens hands.
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Recommendations for ensuring land rights for women in agriculture For Improving Womens
Claims in Private Land - Gender equality in inheritance laws The Hindu inheritance law has
recently been reformed in a major way through the Hindu Succession Amendment Act 2005.
This has brought woman on par with men in relation to agricultural land. However, the
inheritance law governing Muslim women needs amendment for agricultural land, and laws for
tribal women need codification and formalization, in keeping with the principle of gender
equality. This has to be supplemented by providing legal literacy and legal support services for
women. - Recording of womens shares The NSS, agricultural census and the cost of cultivation
surveys should collect gender-disaggregated data on land ownership and use, and origin of the
property (viz. purchase, inheritance, lease, etc.). Initially this could be done as a special module
on a pilot basis and later extended to the full survey design. Agricultural universities that
undertake surveys should also be asked to collect genderdisaggregated information on land and
other assets. A directive should be issued to all levels of government functionaries involved with
keeping land records or computerizing and updating records, that womens inheritance shares in
land as widows, daughters, etc are fully and proactively recorded. The recording should be in
women's own names, rather than jointly with other relatives.
For Improving Womens Access to Public Land - In case of displacement, a rehabilitation policy
should ensure
(a) agriculture land for land policy,
(b) employment for agricultural workers who have been displaced
(c)transfer of all rehabilitation and government grant of land to household having joint title and
(d) resident community affected by displacement have a stake in the newly created assets in the
region.
There needs to be comprehensive directive across the country that in all government land
transfers, womens claims are directly recognized, be they transfers for poverty alleviation,
income generation (crop cultivation, fish cultivation), resettlement, etc. - Where new land is
being distributed or regularized, individual titles or group titles rather than joint titles with
husbands should be provided. Joint titles with husbands give women little control over the
produce and which make it difficult for women to claim their shares in case of marital breakup,
or domestic violence. In contrast, individual titles or group pattas (to groups of women) would
strengthen womens hands. In the case of individual titles, half the land allocated to the family
should be registered in the wifes name and half in the husbands name rather than jointly in both

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names. This will give women control over their shares and greater bargaining power. However,
where possible a group approach should be followed, as already being done under some
government and NGO programmes. A group approach to land use need not be limited to crops. It
could be extended to other activities such as fish production. - Distribution of surplus land and
land under all land distribution programmes viz., land ceiling act, custodial land, bhoom-dan
land etc should exclusively be to rural landless women workers.
- Fifty percent of the land pattas given to forest communities should go to women, under any
land enactment, including those under the proposed Scheduled Tribes (recognition of forest
rights) Bill, 2005. Rather than giving joint pattas, however, women and men should be given
individual pattas. Also any new land so distributed should be in terms of group rights. For
Improving Womens Access to Land Via the Market.
- Apart from direct land transfer, the government should assist groups of women to collectively
acquire cultivable land from the market, either on lease or via purchase. Special schemes for
subsidized credit are needed for this. Mechanisms can be devised to utilize the DWCRA or IRDP
funds.
- Groups of poor women could be given land on medium or long term leases (10-20 years), again
for group farming or group fish production. Enabling women to undertake group leasing will fit
in too with ongoing discussions on tenancy reform. The formation of such groups should not be
limited to SHGs, since many SHGs are not composed of the poorest. Local NGOs could also be
consulted and inducted into this for forming groups of poor women.
- It should be ensured that women get access to new options for land uses and must also ensure
that these are not labour displacing and do not affect food security negatively. Strengthening
womens agricultural capacities
The Ministry of Agriculture is now moving from a women-only approach to programming
(hitherto confined to the extension sector) to the gender mainstreaming approach spread across
the entire establishment. Earmarking of benefits to women or of participation by women, though
a basic tool, confines itself to the quantitative dimension. Other indicators of good (and bad)
program outcomes need to be identified so that an overall conclusion can be reached that the
program and the funds invested, are making the women participants better off. Right now there
are no such qualitative or measurement tools. Successful achievement of physical and financial
targets need not lead to empowerment or rise in status. Better coordination and collaboration
between the various intra-ministry formations is vital. A broader and more inter-disciplinary

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approach by all concerned can achieve better outreach to the poorer women working in the
sector. Public investment in agriculture should be 10% of GDP with a stipulation that 50% of the
new investment be made in rural activities directly benefiting women
Recommendations for strengthening womens agricultural capacities
Agricultural extension services and other infrastructural support for women farmers should be
made available to women farmers Policies should be designed to ensure womens control over
complementary resources including irrigation, credit, water, forest, fuel, fodder, information and
training. Design women- friendly technologies. Technologies must be used that are safe for
workers i.e. reduced use of pesticides, ensure that occupational safety and health measures are in
place. Training programs covering areas such as land surveying, resource mapping, resource
management, use of technology, marketing, financial management, cooperative management and
organic farming should be made available to women Where possible women farmers should be
given financial support to create assets either as individuals or as a group, including for investing
in small irrigation systems, etc.
Measures should be taken to remove middlemen in the sale of non-timber forest products and
womens cooperatives for directly marketing these products should be formed. Resource pooling
and group investment in capital equipment; cooperative marketing
Ensuring womens effective presence in village decision making bodies
Women are major stakeholders in the protection of the environment, especially forests. Given
their stake in forests, it is critical that rural women are centrally involved in the institutions set up
for forest management across the country. All Joint Forest Management groups across the states
should allow all village adults to become members of the groups. Also these groups should have
at least one third and, if possible, 50% women in their executive committees. Within each JFM
executive committee, there should be a subcommittee composed only of women who can put
forward womens collective concerns before the Executive Committee and General Body.
Having one or two token women does not give women a say in the decisions. Where there are
well-functioning non-JFM community forestry institutions, such as van panchayats in
Uttaranchal, they should be strengthened rather than replaced by JFM, and made more gender
balanced. Gender sensitizing through the media, educational institutions, etc., for changing
social norms and social perceptions.
Strengthen existing institutions

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The National Gender Resource Centre should be strengthened to enable it to meet its gender
commitments (including gender budgeting) from a sounder technical and professional base. A
better interface with the National Centre for Research on Women in Agriculture would contribute
to this. Joint activities can be planned as part of the National Action Plan for Women.
Devise incentive mechanisms
Increase subsidies to poor farmers and non farm livelihoods (livestock, fishing, fodder etc)
Providing incentive such as provision of higher subsidies for land development, irrigation, credit
and rebate on transfer fee, house tax, sales tax and stamp duties on women owned land, housing
and rural industries.
Evolve a social security policy for farmers
Such a policy would aim to decrease the negative impact of globalization on agriculture and
allied activities on women
Corrective measures aiming to mitigate farmer suicide like (a) waiving pending loans and debt
of small and marginal farmers,
(b) conducting a census of farmers who have committed suicide and paying liberal
compensation to the victims families and
(c) designing compensation package for women and children in impacted families.

Chapter-9
THE HISTORY OF CORPORATE,
ORGANIZATIONAL, AND OCCUPATIONAL CRIME

Current publicity and concern with corporate, organizational, and occupational


crime sometimes create the false impression that such activities did not exist in
the past. Nothing could be further from the truth. In fact, history is replete with
examples of past corporate wrongdoing; the current business climates probably
set higher moral expecta- tions than ever before.
In the early history of capitalism and the Industrial Revolution, fortunes were
made by unscrupulous robber barons, who viewed the state and laws as
99

negotiable nuisances. CorneliusVanderbilt,therailroa dmagnate,when asked


whether he was concerned with the legality of one of his operations, was said
to have stated, Law! What do I care about Law. Haint I got the power?
(quoted in Browning & Gerassi, 1980, p. 201).
Journalistic muckrakers, or specialists in exposing what Becker (1954) calls
sex, sin, and sewage, preceded criminologists in analyzing abuses in high
places. Works such as Lincoln SteffenssThe Shame of the Cities(1904) and
Upton Sinclairs The Jungle(1906) dramatically focused on and aroused public
interest in corruption and abuse in public and private organizations. John
Kenneth Galbraith tells the story of John D. Rock feller,the founder of the
family fortune,and a lecture he was fond of giving to Sunday school classes:
The growth of a large business is merely the survival of the fittest.
CRIME TYPES AND CRIMINALS

Political corruption, bribery, kickbacks, and influence peddling among political office holders
federal,state,andlocalhave been rifesin cethe very beginning so fthere public. The widespread
acceptance of such corruption has given rise to a number of humorous comments,for example,the
description of Mayor Curley of Boston as having been so crooked that when they buried him,
they had to screw him into the ground. Another cynical remark claims that it was so cold the
other day,the politicians had their hand sin their own pockets. In the postCivil War period in the
United States, political machines were epitomized by
BossTweedsTammanyHall(NewYorkCitysDemocraticParty),inwhichwidespreadvice and
corruption were combined with political favoritism and voter fraud. More than one political
election was won with stuffed ballot boxes or the graveyard vote. S. Ross in Fall From
Grace:Sex, Scandal, and Corruptionin American Politics From 1702 to the Present
(1988)documents the fact that political scandals have struck in nearly every decade since before
the American Revolution. In 2007, a total of 11 New Jersey officials were charged with taking
thousands of dollar sinbri besin exchange for promising municipal business tounder cover
officers posing as insurance brokers (Chen, 2007). More than 100 public officials in New Jersey
had been convicted of federal corruption charges between 2001 and 2007.
The first years of the twenty-first century were racked with corporate scandals. On July
14,2005,Bernard Ebbers,CEO of World Com,was sentenced for what was described asthe
largest corporate fraud in U.S. history, an $11 billion accounting fraud. Around the same time,
stiff sentences were handed out to other corporate executives. Adelphi Com- munications founder
John Rigas received 15 years in prison and his son Timothy 20 years for conspiracy, bank fraud,
and securities fraud. Others included Tyco International CEO Dennis Kozlowski and Chief
Financial Officer Mark H. Schwartz, who were convicted of grandlarceny,conspiracy,securities
fraud,and falsifying business records.They were found guilty of looting the company of over
$600 million to pay for extravagant life styles. Former CEO Richard Scrushy of Health South
was acquitted on June28,2005 , on 36 counts of con- spiracy, false reporting, fraud, and money
laundering. He pointed the finger at 15 Health South executives who all pleaded guilty. Former
Chief Financial Officer of Enron, And rew Fastow,pleaded guilty to two counts of conspiracy and
received a 10 years entence, and former Enron Treasurer Bill Gilson, Jr., received a 5-year
sentence for his role in the fraud. Enron founder Ken Lay was found guilty on fraud charges in
May 2006, but he died before further charges could be prosecuted (Eichenwald, 2006).
Sometimes described as the poster girl for white collar crime, Martha Stewart was con- victed of
insider trading. She served 5 months in prison and an additional 5 months of house confinement
100

for conspiracy,obstruction of justice,andmakingfalsestatements.Her broker, Peter Bacanovic, also


served a five-month sentence. Although Stewart was a client rather than a corporate executive,
focus on her case may have been misleading. A 2004 study (AccountingWEB, 2004) by KPMG,
a corporate fraud investigation firm, found that, of the 100fraud cases they had been asked to
investigate from20022003,seniormanagers or directors committed over two thirds of the crimes.
In 72 percent of the cases, the per- petrators were allmales.Thirteen percent in volved males and
females, and only13percent of the cases involved females only. The finance department was the
most likely targeted
area with 40 percent of the cases. The Wall Street Journal (cited in Tolson, 2002) said, the
scope and scale of corporate transgressions is greater than anything Americans have seen since
the years before the Great Depression.
Awidely cited typology of white collar crime is the one proposed by Edelhertz
(1970). He identifies the following:
1.

Crimes by persons operating on an individual ad hoc basis (for example,


income tax violations, credit card frauds, bankruptcy frauds, and so on)
2. Crimes committed in the course of the occupations of those operating inside
business, government, or other establishments, in violation of their duty of
loyalty and fidelity to employers or clients (for example, embezzlement,
employee larceny, payroll padding, and the like)
3. Crimes incidental to, and in furtherance of, business operations, but not
central to the purpose of the business (for example, antitrust violations,
commercial bribery, food and drug violations, and so forth).

Chapter-10
LEGAL REGULATION
Occupations and the Law
InWestern societies ,the legal regulation of occupations is oftenself
regulation.Although law sand codes of ethic spurportedly exist to protect the
public from harmful occupational activity, much self-governance has been used
instead to protect the interests of the occupation. The more developed
professions attempt to convince legislatures they possess highly sophisticated,
useful, esoteric knowledge; that they are committed to serving societal needs
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through a formal code of ethics; and that they autonomy, since the yandonly
the yarein apositiont oevaluatethequalityoftheir service. In fact, the actual legal
codes that control occupational practice tend to be formu- lated by the
occupations themselves in order to dominate or monopolize a line of work.
Playwright George Bernard Shaw (1941) in The Doctors Dilemma has one of his
characters,state that all professions are a conspiracy against the laity (p. 9). More
developed occu- pations (professions) virtually control the law-making machinery
affecting their work. Professional organizations and their political action committees
are quite effective in blocking legislation that may be detrimental to their interests.
An example of professional power is the AMA (American Medical
Association), which Friedson (1970) describes as professional dominance
and Harmer (1975) as American Medical Avarice. The AMA as a lobbying
organization appears more concerned with guarding profit, competition, and
private enterprise in the business of medicine than supportinglegislationthatwouldimprovethequalityofmedicalcaredelivery.According
tothe
1968 Report of the National Advisory Commission on Health Manpower (cited in
Skolnick &
Currie, 1982), the health statistics of certain groups in the United States,
particularly the poor, resemble those in a developing country.
Occupational crime can be controlled by professional associations themselves,
by traditional criminal law,by civil law,and by administrative law. Actions by
professional ethics. Board scan includes uspensions,censure, temporary or
permanent removal oflicense membership,andthelike.Traditional criminal
prosecutional sooccurs,suchas for larceny, burglary, and criminal fraud; civil
actions by the government may include damage and licenses uspension
suits.Administrative proceedings may call for taking away licenses, seizing
illegal goods, and charging fines.
The FBI in its early history was involved primarily in investigating and
enforcing white collar crimes, such as false purchases, security sales violations,
bankruptcy fraud, and antitrust violations; only later did it become preoccupied
with its gangbuster image.

Organizations and the Law


A corporation is a legal entity that permits a business to make use of capital
provided by stockholders. Although the federal government has had the power
to charter corporations since the 1791McCulloch v. Maryland decision, it rarely
uses it; most chartering is done by the states. Corporations have been
considered legalpersonssinceaSupremeCourtdeci- sion of 1886 (Clinard &
Yeager, 1980, pp. 2528).
In the United States, beginning in the nineteenth century, certain business
activities were defined as illegal. These included restraint of trade, deceptive
advertisements, bank fraud, sale of phony securities, faulty manufacturing
offood sand drugs,environmental pollution, as well as the misuse of patents and
trademarks (Clinard & Quinney, 1986, p. 207). In the late nineteenth century,
concern grew about the development of monopolies,which threatened to
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control economies and stifle competition and thereby jeopardized the very philosophy of free-market enterprise.
The Sherman Antitrust Act (1890) was the first of many regulatory laws passed
to control corporate behavior. This law forbids restraint of trade and the
formation of monopolies; it currently makes price fixing a felony, with a
maximum corporate fine of $1million,and authorizes private treble(triple)
damage suits by victims of pricefixing .For them ostpart, the policing gof
corporate violation sisdone by federal regulatory agencies for example, the
Federal Trade Commission (FTC), which was set up in 1914 at the same
time as the Clayton Antitrust Act and the Federal Trade Act. There are over 50federal regulatoryagencieswithsemi-policingfunctionswithrespecttocorporateviolations.Among
theseagenciesaretheCivilAeronauticsBoard(CAB),theEnvironmentalProtection
Agency(EPA),theFederalCommunicationsCommission(FCC),theFoodandDrug
Administration (FDA), the Federal Power Commission (FPC), the Interstate
CommerceCommission(ICC),
theNationalLaborRelationsBoard(NLRB),theNuclearRegulatoryCommission(N
RC),the Occupational Safety and Health Administration (OSHA), and the
Securities and Exchange Commission (SEC). Some areas regulated by these
agencies and discussed in this chapter are air safety, air and water pollution,
unfair advertising, safe drugs and healthy food, public utility services,
interstate trucking and commerce, labor-management practices, nuclear power
plants, health and safety in the workplace, and the sale and negotiation of
bonds and securities.
Regulatory agencies have a number of sanctions they can use to force
compliance with their orders :warnings ,recalls,
orders(unilateralorders,consentagreements,anddecrees), injunctions, monetary
penalties, and criminal penalties (Clinard & Yeager, 1980, p. 83). In addition to
criminal proceedings, acts such as the Clayton Act (Section 4) permit treble
damage suits by harmed parties. Guilty companies, with their batteries of
lawyers and accountants, generally have more expertise, time, and staff to
devote to defense than the JusticeDepartment,underitsAnti-Trust Division,has
for prosecution.Indefinite delay sand appeals are not uncommon.

Crime Trends
The phenomenon of crime has baffled humankind down the ages. It is usually explained as a byproduct of the interaction that takes place between the individual and his environment. But both
these aspects being dynamic in character, the prognosis of any socially deviant behavior becomes
highly problematic. In fact, the perception of crime is dependent on several variables, such as the
fabric of a society, the extent of which a particular behaviour is deemed anti-social and the
manner in which it is sought to be tackled. For instance, in India, as in other developing
countries, much of crime has hitherto been largely pulled back or absorbed by the traditionally
operative informal controls of the family, the community and religion. Now, with changes in
socio-economic milieu, and an increasing centralization of authority in the hands of the State,
crime situation is in a state of flux. Further, in order to maintain an orderly functioning of the
society in transition, there is an exaggerated need for an effective enforcement of the existing
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laws, and even the enactment of new laws, to adequately cope with the emerging forms and
trends of crime. In any case, the reported crime would always remain a small part of crime as it
permeates society, because of the intricate relationship between the growing individual and his
fluid environment and the limitations of the formal system in plugging the malady at its genesis.
Such a reality only makes it imperative that the crime prevention and control strategies must
extend beyond the criminal justice system and integrate into sectors in which individuals are
born and they live and grow. From this viewpoint, social defence as a comprehensive approach
towards ameliorating conditions responsible for social maladjustment, deviance and crime
gains significance. Nevertheless, crime as detected and reported by the concerned official
agencies is the safest way to analyzing the problem and determining its trends. According to the
statistics published by the National Crime Record Bureau, while the incidence of crime has been
steadily rising, crime rate (incidence of crime per lakh of population) is maintaining pace with
the increase in the general population over the last five decades. Though the crime rate is still
much lower than that in many other countries, the pattern of crime surely signifies certain
alarming features. For instance, the share of violent crimes, including murder, attempt to commit
murder, culpable homicide not amounting to murder, dowry deaths, kidnapping and abduction,
decoity, preparation and assembly for decoity and robbery, riots and arson, and rape, has
increased substantially over the last four decades. These crimes not only endanger life, property
and safety of the people but also pose a serious threat to public peace. Similarly, economic
offences including smuggling, money laundering, tax evasion, export and import offences, drug
trafficking, trafficking in cultural property, bribery and corruption, etc., are also manifesting a
challenging trend in terms of sophistication, precision and modus operandi on the part of
organized syndicates. There are enough indications that, in the years to come, with the
development of information technology and telecommunications and the acceleration of
economic activities within and across national borders, organized crime is bound to acquire a
much more volitional and disruptive form. The emergence of terrorism, environmental crime,
cyber crime, etc., are most ominous for a developing country like India.

Crime and Development


The nexus between crime and development, especially in the wake of globalization,
liberalization of trade and commerce and free market economy, has been clearly recognized at
various international fora. The world community is gravely concerned about the baneful effect of
crime on the peace, progress and prosperity of nations. Many countries have seen as to how
crime thwarts the development process, undermines human dignity and disrupts the well-being
and welfare of people. It is invariably found that the development process, if not property
monitored, tends to become criminogenic. While economic development is essential to satisfy
human needs and to raise living standards it could also unleash forces of social disintegration,
disharmony and disorganization, unless prompt steps are taken to counteract its negative fall-out.
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Failure to balance both the social and economic aspects of development has led many a nation to
face a chaotic situation, rampart with crime and human misery. There is an ample evidence to
surmise that unbridled economic growth is liable to push the poor, the weaker and the
disadvantaged into further marginalization and vulnerability to abuse and exploitation and to
their eventual induction into crime, both as offenders and victims. Being in the throes of an
unprecedented development process, India has an opportunity to learn from the mistakes of
others and to vigorously pursue its declared policy of economic growth with a human face.
From the standpoint of social defence, the development process must be geared towards
ensuring social justice, protecting human rights and providing for an equitable sharing of sociocultural and economic opportunities by one and all. Any development process which destroys the
self-generating and self-sustaining capacity of the people, alienates certain sections from the
mainstream of social and economic life, widens the gap between the rich and the poor, intensifies
ethnic and caste conflicts, and erodes public confidence in the rule of law, is socially destructive
and, thus, breeds crime. History shows how an imbalanced development can stir social strife,
racial discriminations, religious bigotry and fragmentation of society, and how authoritarian
governance deprives people of a life compatible with human dignity. In a democratic structure
like that of India, the development process has to aim at economic prosperity with social justice
in which people have to be the first and the last and the poorest of the poor will have to be in the
centre-stage. Such a course would certainly call for a concerted action, on the part of both the
State and civil society, towards restoring human rights of the poor, nurturing their creative
potentials, building their capacity to assert for legitimate needs, enhancing their knowledge,
skills and competence, and reinforcing their intellectual and material resources so as to enable
them to stand on their own and to bargain for a better quality of life. While the government tends
to rely mainly on a trickle-down approach, civil society has to work from bottom upward in
helping the poor to shape their destiny and to secure their place in society with dignity.

Poverty Factor
Irrespective of the debate that continues in academic circles on whether a human being is a
rational economic or emotional-social animal, the importance of poverty factor in crime could
hardly be overlooked. While poverty per se cannot be taken as a direct cause of crime, it does
make individuals in stark deprivations more prone than the others to social maladjustment and to
their coming in conflict with law. The situation is further compounded when, in the wake of
industrialization and consequential urbanization, the poor migrants in search of livelihood, are
found to cluster around slums and squatter dwellings and to live in a state of social marginality
and economic neglect. It is, therefore, encouraging that the Government of India has provided a
major thrust to poverty alleviation in the national development plans. A three-pronged strategy
adopted to reduce poverty includes: (i) accelerated economic growth with a focus on sectors
which are employment intensive; (ii) human and social development through basic minimum
services; and (iii) targeted anti-poverty programmes. A priority is placed on agriculture and rural
development, food and nutrition, security for vulnerable sections of society, participation of the
poor in the development process, and empowerment of women, scheduled castes and scheduled
tribes and other disadvantaged groups. As a result of various measures, the poverty ratio is
reported to have considerably declined in the recent years. The present trend augers well for the
creation of just society committed to the rule of law. For this purpose, the policies for poverty
alleviation will have to be vigorously pursued in the light of various civil, political, economic,
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social and cultural rights that all people are equally entitled to under the Constitution of India.
There is a national consensus that comprehensive strategies need to be devised so that the pattern
of economic growth helps the poor and the down-trodden in improving their lot. This would
require not only a much larger investment on social services but also more effective measures to
establish that the delivery mechanisms are non-discriminatory and the facilities created are
accessible to the people at the grass-root level. In order to ascertain that the development benefits
percolate down and are shared by all on an equitable basis, irrespective of their socio-cultural
and economic status, local bodies and peoples organizations will also have to be actively
involved in the implementation of various plan schemes. People themselves will have to be
sufficiently empowered to overcome poverty through self-help endeavors, collective initiatives
and participation in decisions that affect their lives. While the government would be legitimately
responsible for policy formulation and programme development; representatives of civil society
will have to be closely associated in making the process more transparent and accountable to
people. With the globalization of national economy the obligation of multinationals, business
houses and financial institutions towards protecting the rights and interests of the poor has to
be clearly spelt out. Of course, in a free society, the media has to serve as a powerful agent in
promoting a social climate conducive to a solidarity with the poor in their fight against poverty.
It is well accepted that the strategies for poverty alleviation have to evolve within the framework
of social justice for which the rule of law is a pre-requisite. Though law by self cannot eradicate
poverty, it can definitely contribute to the national efforts towards this end by intervening
specifically in three broad areas: (i) combating such crimes as are responsible for the disruption
of economy, social cohesiveness and security of people; (ii) curbing conditions which perpetuate
abuse and exploitation of the socially marginalized or economically backward groups in society;
and (iii) protecting human rights and interests of the poor in the administration of justice. In this
process, the criminal justice system as a whole may have to undergo radical reforms by way of
the rationalization of the relevant laws and, if necessary, the enactment of new laws,
modernization and strengthening of enforcement machinery and of its methods and apparatuses,
and a purposeful use of various social support systems in enhancing its operational coverage,
institutional capacity and organizational efficiency. In responding to crimes which adversely
affect the well-being of people, the legal system must constantly sharpen its teeth and plug
loopholes as they come to fore. In the background of a fast changing socioeconomic scenario, the
courts may soon have to discard its hands off doctrine towards the issues of survival and
sustainability of people, in favour of a judicial security and even intervention when the human
rights and interests of the poor are found in jeopardy.

Vulnerable Groups
Among various groups subjected to social inequalities, cultural discrimination and economic
handicaps, the condition of women below poverty line is much more precarious than that of their
male counter-parts. Though a variety of schemes have been introduced for their emancipation,
women in India continue to be largely dependent on and subordinated to men in different walks
of life, and thus, to be devalued and socially marginalized, particularly in the lower strata. When
a family is faced with any crisis, its female members suffer most and are rendered an easy prey to
various kinds of abuse and exploitation. Even when recognized as offenders, they are more of a
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victim of situational compulsions than a perpetrator of crime. Therefore, in the planning of


programmes for social defence, a vigorous drive has to be launched towards womens
empowerment and gender justice and the criminal justice system has to act relentlessly against
unscrupulous elements degrading their status. Already, in pursuance of its Constitutional
mandate, India has enacted a number of laws to secure for women equal rights, to counter
offences and atrocities against them, and to provide support services for their special care and
protection. Along with various legal safeguards made available to them, a stringent action is
contemplated to check crimes directed against them, which broadly fall under two categories: (i)
crimes under the Indian Penal Code, such as, rape, kidnapping and abduction, homicide for
dowry or dowry death or their attempts, torture, molestation, sexual harassment and importation
of girls, and, (ii) crimes under special laws, such as, abrogation of their rights in the family,
marriage and work place, immoral traffic, dowry, child marriage, indecent representation and
commission of Sati. It is however, being strongly felt that, as law alone cannot by itself change
age-old traditions and attitudes that subjugate women, the whole society has to be mobilized in
preventing crimes against them. Doubtlessly, the economic and social marginalization of the
poor deprives a vast population of children in the country of their right to grow normally in body
and mind. Increasing population with limited resources intensifies the problem of survival and
security of the poor, creating an environment of destitution, desperation and despair for their
children. As children constitute the supreme national asset for the making of tomorrow, the
failure of society to bring them up as socially healthy individuals not only multiplies poverty but
also leaves them extremely fragile to withstand the onslaught of anti-social elements. Apart from
a widespread violence against such children within and outside the family, the problems of child
labour, child prostitution and child begging are some of the most sordid forms of child abuse. In
several cities, a large number of poor children are found to be living or working on the street in
search of livelihood through odd jobs in extremely sub-human and hazardous conditions. A rising
trend of the abuse of children for unconscionable gain and their instrumental use in crime, and of
their transportation beyond national borders for nefarious purposes under the garb of adoption,
marriage or employment, is also a matter of grave concern. Though definite provisions exist in
the substantive and special laws against all such eventualities, there is wide gap between rhetoric
and realitiy. Now that India is signatory to the United Nations Convention on the Rights
of the Child, it is obligatory that the role of criminal justice system in protecting children against
victimization is redefined and translated into concrete action. Obviously, there is a dire need for a
thorough review of all the central and state laws concerning children so as to bring these in tune
with our cherished goals. It is well accepted that the criminal justice system can function as an
enabling tool in the alleviation of extreme poverty by legally safeguarding the rights and
interests of the weaker sections of society. India has a first-hand experience of setting in motion a
host of democratic processes to resolve the problems of social inequality and class divide,
including the formulation of special laws to provide a protective umbrella to all such social
groups as are oppressed for centuries. The overall strategy is to secure distributive justice and
allocation of resources to support programmes for the social, economic and educational
advancement of the weaker sections in general and Scheduled Castes and Scheduled Tribes,
Backward Classes and Minorities in particular. The protection of Civil Rights Act, 1955 has
totally abolished untouchability in any form. The Scheduled Castes and Scheduled Tribes
(Prevention of Atrocities) Act, 1989, aims at protecting them against any injustice and any form
of abuse or exploitation. By enacting these laws, the concept of positive discrimination in favor
of the weaker has been extended to the field of criminal law. The penalties prescribed in the
special legislation, are more stringent than those for corresponding offences in other laws. A
speedy trial of cases coming within the purview of these laws has been assured by the
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constitution of special courts in major cities. While the legislation is seen to have a salutary
impact on the process of the desired social change, there is a strong public opinion that the
problems of the weaker sections of society need to be addressed in all their facets. It is also being
increasingly realized that poverty is a complex problem, both a cause and an effect of
disorganization at the individual, familial and societal levels, and, as such, has to be tackled
through mutually reinforcing coordinated efforts on the part of various law enforcement, social
welfare and development agencies. Indeed, the criminal justice system which is founded on the
principles of fairness and equity has to prove its credibility of being equally fair and equitable to
the poor as to the rich, in actual operation.

Correctional Strategy
In the backdrop of a rapidly changing crime situation, any action to interpret principles
underlying social defence into actual practices has to start with the rationalization of sentencing
policy. The penal policy should not only strive at balancing the interest of society with that of the
individual involved in crime but also at addressing the plight of the victim. The range of
dispositional alternatives has to be so widened as to enable the court to place a person found
guilty in a setting which is most conducive to his mainstreaming. The procedure to be adopted by
the court has to be so streamlined as to make it sure that a decision is arrived at not only in
relation to the crime committed but also on the basis of a thorough study of the personality and
background of the offender, and the circumstance in which the crime took place. Institutional
treatment has to be resorted to as the last measure, only when an offender poses a real threat to
public safety and peace and tranquility in the community. A community-based option for
treatment has also to be based on scientifically tested and verifiable criteria. It needs to be fully
appreciated that an offender placed on community correction will have a much greater stake in
social conformity than the one being treated in a closed institution as a social misfit. Even a
non-institutional placement has to be carefully selected so as to retain, to the maximum extent
possible, the usefulness of the offender to himself, his family and society. In order to ensure that
the sentence is delivered in a fair, just and equitable manner, irrespective of the socio-economic
status of the person involved, the State has to stand for one who cannot by himself protect his
substantive and procedural rights. More importantly, the right of an accused to a speedy trail
which, in the case of the poor, seems to have been severely trampled has to be restored by
reinforcing the judicial system.
In India, as in many other countries, where most of the persons coming within the purview of
the criminal justice system are involved in crime under various kinds of situational compulsions,
correctional approach to crime control has to be pursued as an integral part of the social
development process. An analysis of crime statistics would show that a large segment of
offenders consists of the poor, the illiterate and the unskilled. Such offenders are seen to be
victimized twice: once, when they are denied of their basic human needs in open society and
forced to live in a sub-culture of social marginality, and, again, when they are grinded in the mill
of criminal justice for having infringed the law. An increased investment on the provision of
correctional services in relation to these persons would be most productive not only in reducing
crime but also in improving the quality of life among the strata the come from and are ultimately
to return to. In this regard, a priority attention needs to be given to raising the standards of
diagnostic, educational and developmental programmes with all the necessary technical inputs,
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in close conjunction with community based welfare agencies. There is no dearth of success
stories in this regard but most of these have so far been confined to a few bold experiments or to
some individual initiatives. It is high time that correctional measures are directed towards
developing the capacity, caliber and competence of persons in conflict with system, they would
be able to stand on their own as dignified and law-abiding citizens. Of course, the approach
towards those who indulge in crime as a way of life and refuse to understand the language of
correction will have to be differentiated.

Prison Reform
Doubtlessly, prisons constitute the oldest and most widely used mode of dealing with offenders.
In the recent years, it has also been a subject of unprecedented criticism, scrutiny and debate
from the viewpoint of its social defence role. It is well recognized that as long as certain types of
offenders are to be segregated from society in the interest of public safety, and are expected to
return as better human beings than what they were when incarcerated, the institution of prison
will have to play an important in the dispensation of justice. However, there are several problems
that prison administration is presently confronted with in discharging its public safety and
reformative functions. In India, as in many parts of the world, imprisonment continues to be
applied indiscriminately and excessively, either as a convenient way of dealing with all sorts of
crime or because of the nonavailability or limited range of effective alternatives. In the face of
competing priorities, it is hard to mobilize adequate resources to bring in the desired systemic
reforms in terms of the necessary infrastructure, scientific classification of inmates,
diversification of prisons for various categories of offenders, provision of correctional services
and duly qualified and professionally trained personnel to handle custodial and correctional
tasks. The problem of overcrowding and a swelling proportion of undertrials among prison
inmates has thrown the system hay wire. As the judicial process further speeds up and the
pendency of cases in courts decreases, prison population will correspondingly multiply, because
a much larger number of accused persons are on bail and awaiting trail. There is also a real need
to establish appropriate linkages between institutional programmes and community-based
welfare resources to ensure that the processes of recovery, reeducation and rehabilitation
initiated in prisons are systematically followed up till the discharged prisoners are able to
reintegrate themselves into society. What is most urgently called for is the formulation of a
national policy and bringing in a basic uniformity in laws governing prisons, so that
imprisonment as defined in the Indian Penal Code has the same meaning, when actually
executed, in every part of the country. Apart from the imperativeness of bridging the gap that
exists between societal expectations and operational realities, the prisons administration has to
run on the premise that its rehabilitative function can be accomplished only in an atmosphere that
fosters human rights of persons in custody and generates among them a will to improve their
quality of life. In this respect, the Supreme Court of India, discarding its erstwhile hands off
doctrine in favor of a judicial intervention when the rights of prisoners are found in jeopardy, has
already enunciated three basic principles: (i) a person in custody does not become a non
person; (ii) a prisoner is entitled to all human rights within the limitations of imprisonment, and,
(iii) there is no justification for aggravating the suffering which is already inherent in the process
of incarceration. Accordingly, the apex court has issued a number of directives for prison
authorities to afford to prisoners all such facilities for self-improvement and correctional therapy
as are consistent with their conditions of imprisonment. Besides a detailed interpretation of the
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relevant Constitutional provisions, the principles embodied in various United Nations


instruments, to which India is a party, have also been invoked in guiding this process. The
framework laid down by the Supreme Court of India to protect the rights and interests of
prisoners has far-reaching implications for prison reform in a futuristic perspective. It not only
entails a thorough overhauling of the prison administration but also an enlightened participation
on the part of civil society. The current emphasis on the humanization of prisons as an essential
condition for invigorating their reformative and rehabilitative role brings into focus the issue of
torture. Despite a high level of denial among the concerned authorities, torture does exist in
prisons broadly in three different ways. First, there is a form of torture which may be intentional
in nature and resorted to against all canons of rules and regulations to discipline a prisoner or to
set him right. It may happen sporadically but does take place when the custodian under
pressure loses his balance and the prisoner is totally at his mercy. No civilized society would
ever condone such an intentional torture. Secondly, there is torture incidental to the sub-human
conditions prevailing in prisons, especially in developing countries. Such incidental torture has to
be prevented by adhering to certain minimum standards of institutional care in terms of living
conditions, basic needs and the necessary amenities and privileges to treat prisoners as human
beings. And, thirdly, there is an element of torture inherent in incarceration itself, when the
individual involved is deprived of his freedom and isolated from his family and the community
he belongs to. This form of torture can also be considerably reduced, if not eliminated altogether,
by using prisons more selectively only for offenders who endanger public safety, by enlarging
the range of alternatives to imprisonment, and, even when a offender is justifiably imprisoned, by
providing him with ample avenues to maintain ties with outside world, and a possibility for an
early release as an incentive for good behavior and responsiveness to correctional treatment.
Abolition of torture other than what is consequential to lawful sanctions is fast emerging as a
vital issue of prison reform to be addressed squarely.

Juvenile Justice
It has long been accepted that children coming in confrontation with law, because of their
physical, emotional and mental immaturity, cannot be equated with adults in terms of their
culpability and accountability to crime. It is widely held that delinquency is not merely an act of
social deviance on the part of a child but also a symptom of the failure of society to bring him up
as wholesome individual. At the same time, no society takes crime, even if it is committed by a
juvenile, as entirely value-free and expects it to be dealt with as such. There is, however, a
unanimous view that the problem must be dealt with on its growth continuum by responding to
all the situations before and after the onset of delinquency. While India has chosen to achieve this
objective through a single law in the form of Juvenile Justice (Care and Protection of Children)
Act, 2000, many countries have formulated a separate law for delinquents vis-a-vis those
vulnerable. The United National Standard Minimum Rules for the Administration of Juvenile
Justice also concentrate only on children in conflict with law and other categories of vulnerable
children are envisaged to be catered to within their families and communities under a welfare
regime. While much would depend on the manner in which the newly enacted law is
implemented on the ground, with children in the higher age group of 16 to 18 years now
increasingly emulating adult role models in criminal behaviour, the juvenile justice approach will
have to undergo a progressive refinement in the years to follow. Significantly, the United Nations
rules for juvenile justice incorporate some salutary provisions for an active involvement of civil
society at various stages of the handling of juvenile offenders through the system. At the very
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initial stage, the police, the prosecution and other concerned agencies are proposed to be
empowered with a wide discretion to divert cases from the formal system to the family and the
community on a selective basis. A variety of disposition measures are contemplated, such as,
care, guidance and supervision, probation, community service, financial penalties, compensation
and restitution, intermediate treatment, participation in group counselling and similar activities,
foster care, living in communities or other educational settings, etc. While institutionalization is
thought to be a disposition of last resort, non-institutional treatment has to provide juveniles with
necessary assistance, including education and vocational training in order to facilitate the
reformative process, and to mobilize volunteers and other community welfare resources for
rehabilitation. When a juvenile undergoes institutional treatment, early recourse to conditional
release under proper supervision and community support has been suggested. A provision for
semi-institutional arrangements such as half-way houses, educational homes, day-time centres,
etc., has also been made to assist juvenile to reintegrate into society. Though the new Indian law
on Juvenile Justice also includes some of such features, like association of volunteers and non
government organizations in the screening, treatment and rehabilitation of children, the provision
for foster care, sponsorship and adoption among the modes of disposition, and linkages with
community based welfare agencies for rehabilitative purposes, the success would naturally
require a massive effort towards the mobilisation of various social support systems.

Non-Custodial Measures
Whereas the rationale behind the segregation from society of certain types of offenders in the
public interest and their treatment in closed institutions is firmly established, the correctional
potential of non-custodial measures has yet to be fully utilized in the administration of justice.
Though probation as a form of noninstitutional treatment of offenders under conditions of good
behaviour, with or without supervision, has been in practice since the British period, the country
has yet to provide a sound basis for its application on an extensive scale. Probation is still
generally perceived as a lenient approach rather than a selective device for the treatment of
offenders who are no threat to public safety. In fact, for want of scientifically evolved criteria to
be safely relied upon in the placement of offenders in a non-institutional setting, the range of
community corrections remains limited and imprisonment continues to be followed as the most
convenient course, even for offenders whose institutionalization for short periods has no
therapeutic value. It is true that when non-custodial correctional measures are used arbitrarily,
without being resorted to on objective grounds, there is real danger of men of means taking
undue advantage and abusing the system as against those who would really deserve but have no
advocacy or support, and of the whole approach becoming counter-productive and coming into
public disrepute. It is, therefore, necessary that a ground is prepared for community correction to
prove its credentials to function, if not more, as effectively as custodial correction in reforming
and rehabilitating offenders. For this purpose, the United Nations Standard Minimum Rules for
Non- Custodial Measures which seek to strike a proper balance between the interests of the
individuals involved in crime and those of society at various stages of the criminal justice
process, offer a blue-print for action and strategy. In keeping with the principles of the
observance of human rights, the requirements of social justice, and the rehabilitation needs of
offenders, the rules spell out a wide range of disposition modalities at the pr-trial, sentencing and
post-sentencing stages. Apart from empowering the police and prosecution agencies to discharge
offenders under specified conditions, the suggested sentencing alternatives include: verbal
sanctions, such as admonition, reprimand and warning; conditional discharge; status penalties,
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economic sanctions and monetary penalties; confiscation or an expropriation order; restitution to


the victim or a compensation order; suspended or deferred sentence; probation and judicial
supervision; community service order; referral to an attendance centre; house arrest; and any
other mode of non-institutional treatment or combination of various measures. With a view to
avoiding institutionalization and to secure early reintegration of offenders into society, the postsentencing dispositions to be tried out are: furlough and half-way houses; work or education
release; parole; remission and pardon. Obviously, the implementation of such non-custodial
measures would call for the development of a scientific basis for the selection, placement and
supervision of cases, treatment processes, staffing resources, community participation, etc.
However, all these approaches are worth experimenting with so as to assess their suitability to
indigenous socio-cultural and economic conditions.

Public Participation
As crime is a social phenomenon, no system for its prevention and control could ever be
conceived without an active participation of the public. In fact, public participation is an
inseparable ingredient of the process that defines a behaviour as crime and strives to tackle it.
Whereas the critical attitude of the public that abhors crime and cries for the offender to be so
punished as to become a deterrent for the others, is clearly discernible, the positive role of the
public in preventing conditions which precipitate crime and in facilitating the offender to mend
his behaviour and to reintegrate into society has yet to be fully recognized. Of course, the public
opinion towards crime manifests in an ambivalent manner: while on one side, demanding for a
stringent action against those who offend, on the other hand, pleading for the powers of those
who administer punishment to be restrained and curbed. It is, therefore, logical that civil society
is encouraged to take a balanced view and to guide the public in subscribing to a system that
protects society against crime without impinging on the human rights of all those involved,
whether as offenders or victims. For this purpose, civil society must be closely associated with
the planning and execution of crime prevention and criminal justice strategies, so that it sets a
direction for a momentum to public participation in this field, at the individual, group and
community levels. Civil society has to serve as the primary tool for the desired transparency and
accountability in the functioning of various penal institutions established by the State to control
crime. The edifice of social defence can stand only on an enlightened participation of the public
as the harbinger, the means and the end of the process. In the prevention of crime, voluntary
organisations that spring from within society have a definite advantage over official agencies in
making a dent on the problems that culminate into crime. A variety of situation-, problem- and
individualoriented approaches to crime prevention can be devised and implemented through the
self-help endeavours and collective initiatives of the people themselves. A situationoriented
strategy would be based on an optimum use of all such voluntary agencies as are engaged in
protecting the vulnerable, like children, women and other economically weaker or socially
disadvantaged sections in society against any form of abuse or exploitation which is likely to
induce asocial reaction. A problem-oriented strategy would bring within its ambit all such
activities and programmes as are initiated through voluntary action to tackle social problems
which have a nexus with crime. An individual-oriented strategy would obviously require
working with those who, under situational compulsions, have fallen to a socially deviant
behaviour and still have a chance to redeem. In all these areas, voluntary organizations have to
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function in conjunction with families, communities and other social institutions which have a
bearing on the process of resocialization. Apart from a direct intervention in situations and
problems responsible for crime, voluntary organizations can be greatly instrumental in moulding
public opinion and in mobilizing social support for an effective implementation of social
legislation enacted to eradicate social evils such as dowry, child marriage, Sati, beggary,
prostitution, etc. Most of these laws contain specific provisions for public participation in
different forms. Experience has abundantly shown that despite severe penalties prescribed in the
law against the perpetrators, such social evils continue to persist, mainly because of the lack of
public awareness about their ill-effects and the absence of an enabling social environment for
the measures to succeed. It is distressing to note that, while a large number of voluntary
organizations in social welfare are being financially supported by the government, very few are
really coming forth to work for the mainstreaming of social deviants. The need for public
participation in the treatment and rehabilitation of offenders in equally well established. The
future of various non-custodial measures is tied with not only the offenders responsiveness to
community correction but also the extent to which the public is prepared to extend its helping
hand in the correctional process and to accept the offender within its fold. Besides adopting a
positive attitude towards the rationale and efficacy of community-based treatment, the public can
substantially contribute to the reformative process by providing social and material inputs. In the
sphere of institutional treatment, the public can play a significant role in two broad ways: first,
by supplementing correctional programmes in custodial institutions, and, secondly, by serving as
a bridge for the offenders transition from custody to free society. From this angle, the question
of even privatizing prisons is being hotly debated in many countries. While a handing over of
prisons to private agencies may not be feasible, there is a wide scope for a constructive
involvement of non-governmental organizations in strengthening the welfare content of prison
programmes, especially in the areas of education, vocational training and sociocultural and
spiritual development of inmates. Further, appropriate linkages with the private sector are
inescapable in the specialized treatment of terminal illnesses, including chronic drug addiction
and HIV infection. The role of voluntary institutions in the aftercare and follow-up of discharged
prisoners so as to facilitate their reintegration into society is quite obvious. There is, however, a
strong view that public participation in institutional treatment has to be highly selective so as not
to take any risk with security and safe custody. It, therefore, needs to be emphasized that whereas
any transfer or dilution of the responsibility that legitimately comes within the purview of the
State would be rather hazardous, civil society has every right to know as to what transpires
behind walls. In conclusion, it may be reiterated that as no formal system has a complete answer
to the problem of crime, integrated efforts are needed to tackle the problem at its very source.
The social defence approach is based on the premise that the criminal justice system by itself
cannot undo such aberration of the wider socio-economic system as are associated with crime.
However, war against crime has to be waged, if not to win, atleast to be ensure that it is not being
lost. Even the reduction in crime as a more realistic goal can be achieved only by extending
crime prevention and control measures beyond the criminal justice system and by building these
into a broader social action to curb conditions which produce crime. Such a perspective requires
focussing on two major areas: (i) prevention of crime by protecting various vulnerable groups
within the framework of social justice; and, (ii) treatment of offenders in a just, fair and equitable
manner, with due regard to their human rights, and on the basis of a differential handling of
individuals who violate law under various kinds of situational compulsion vis-a-vis those who
perpetrate crime in an organized manner. While the prevention of crime would necessitate
forging of constructive linkages between the formal system and various sectors of socio
economic development, the treatment of offenders would inevitably entail a progressive
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refinement of the criminal justice processes. With newly emerging forms and trends of
criminality, some of which are much more volitional and disruptive in nature, a holistic strategy
has to be worked out jointly by various criminal justice, social welfare and development
agencies. Such a concept of social defence warrants not only a thorough reorganization of the
traditionally operative crime control mechanisms but also innovation of and experimentation
with new approaches in coping more effectivel with the changing crime scenario.

Data on Crime
We obtained data on reported crime at the district and state level from various issues of the
Crime in India publications of the National Crime Records Bureau (NCRB) at the Ministry of
Home Affairs. The Criminal Procedure Code of India divides all crimes into two categories: (i)
cognizable which are dealt by the Police, and in which a police officer may arrest a person with
or without a warrant and (ii) non-cognizable which are generally left to be pursued by the
affected parties themselves in Courts. Only cognizable crimes are reported in the NCRB
publications. Our analysis focuses on cognizable crimes prosecuted under the provisions of the
Indian Penal Code, as well as other Special and Local Laws.
Our main variable of interest is crimes against women. These include the following crime
categories: rape, kidnapping of women and girls, dowry deaths, sexual harassment, molestation,
cruelty by husbands or relatives and importation of women and girls, prostitution, pornography,
giving and receiving dowry and sati. Appendix 1 provides details on the exact definition of these
crimes. The reporting system for these crimes changes over time, as the NCRB started reporting
additional crime categories separately. For instance, only rape and kidnapping of women were
reported in the period before 1995, while other categories such as dowry death, molestation,
sexual harassment and cruelty by husband or relatives started being recorded in 1995.
Importation of women and girls was included in 2001. In all our regressions, we will therefore
include year fixed effects to control for such nationwide changes in reporting. We will also
examine the specific crime categories of rape and kidnapping of women and girls, which are
consistently reported over a longer time period. We also examine crimes which are not
genderspecific, such as property crimes or crimes against public order. In the final section, we
examine crimes against Scheduled Castes and Scheduled Tribes, which are recorded separately
by the NCRB starting in 1992. The empirical analysis uses many control variables and additional
outcomes at the state level. These include economic variables, such as state GDP levels and
growth rates, variables related to police strength and staffing shortfalls, and additional outcomes
such as the number of arrests and convictions. We also examine survey data on the quality of
interactions with the police. These data were collected by the Public Affairs Centre (a nongovernmentalorganization) as part of their Millennial Survey to assess the functioning of a range
of public services in 2000. We examine survey data from eleven major states, after matching it
with information on whether the respondents lived in a village in which the position of the leader
of the village councilor was reserved for women.

Measures of Political Decentralization


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Our main measure of political decentralization is a dummy which equals one if marginalized
sections of society are given political representation. In the case of women, this dummy equals
one in years following the first local government election which implemented the not less than
one-third reservation scheme for women representatives. As Table 2 shows, the date of this first
election varies considerably across the major states of India.
There are three main reasons for the variation in election timing across states. First, several states
already had a system of local government even before the enactment of the 73rd Amendment. In
most of these cases, the state government waited for the term of office of incumbent local
officials to expire before conducting fresh elections in compliance with the 73rd Amendment. On
the other hand, several states chose to incorporate the provisions regarding womens
representation into their own state laws even before the constitutional amendment came into
effect. This was because they were aware of the impending legislation due to the long process of
passing this law (see Section 3.2) and had elections for local bodies scheduled as per their
existing system. For instance, West Bengal made major amendments to their state-level
legislation to provide reservation for women and SCs and STs in the 1993 election, once the
passage of the constitutional amendment was imminent. Kerala made a similar change to its
lawin 1991. Other states already had reservation for women (Karnataka) or SCs and STs
(Maharashtra and Madhya Pradesh) long before the constitutional amendment. We can, of
course, control explicitly for the presence of a pre-scheduled local government election, but since
all our regressions include state fixed effects, we expect this characteristic to be captured by the
state fixed effect. A second reason for variation in election timing is due to lawsuits challenging
certain aspects of PR implementation. For instance, elections in Bihar were delayed due to a
lawsuit challenging the proposed reservations for Other Backward Castes (OBCs) which had not
been explicitly mandated by the constitutional amendment. These can be regarded as reasonably
exogenous factors in causing the delay. A third reason is likely to be more endogenously
determined: some states simply delayed the elections due to various pretexts (the time is not
right, lack of budget etc). Assam is one example of this. The state had elections in 1992, and
therefore should have had its first Prcompliant elections in 1997, but the elections were
conducted only in December 2001. The second round of elections was also delayed, taking place
in December 2007, rather than in December 2006. However, our main results are robust to the
exclusion of any specific state.

Empirical strategy
We conduct the analysis for the 17 major states of India over the period 1985-2007.18 Table 1
provides the summary statistics for the crime data used in our analysis. To gauge the impact
ofpolitical representation, we run state-level regressions of crimes rates (per1000 population) on
the decentralization variables defined above.
One concern with the above specification is that there can be many other factors which affect the
rates of crime against women in a given time and place. Literacy rates could affect awareness of
victims legal rights and influence reporting of crimes as well. Per capita income has also been
found to be associated with higher reported rates of crime.19 Crime is typically higher in urban
areas relative to rural ones. There is some anecdotal evidence that high malefemale ratios result
in increased rates of crime. Perhaps states which implemented reforms earlier were those where
the Chief Minister was a woman, and so we might mistakenly attribute the effect of a higher
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level woman representative to a lower-level one. We explicitly control for all of these variables
in our regressions. Finally, we also include measures of the size of the statepolice force as a
control for varying levels of commitment to crime deterrence across states, though this might in
fact be the channel through which political representation affects crime. A further concern is that
the timing of policy changes may be endogenous to the trends in crime. In addition to including
state and time fixed effects, we also show specifications controlling for state-specific time trends.
Further, we should note that several of the factors affecting the timing of this reform (as detailed
in section 3.2) can be considered exogenous to the trends in crime in those states. The fact that
we mainly observe the reform to be associated with an increase in reported crimes against
women also rules out incentives of state governments to prevent reporting of crimes in an
attempt to make themselves look good.

Retaliation Against Women?


A potential alternative explanation of the results presented so far is that political power for
women may lead to a backlash against them by men who resent this outcome. For example, if
there is a perception that womens place is in the home, then they may be punished by men for
daring to come out in public life. If so, the positive coefficient on crimes against women could be
due to an actual increase in crimes against them rather than in reporting of crimes, with no
change in other non-women specific crime outcomes. However, given the large magnitude of the
effect we observe -- a 23% increase in rapes and a 13% increase in kidnapping such a story
seems less plausible. We also conducted several additional checks to examine the validity of this
explanation.
First, we examine data on murders, a category of crime for which we believe reporting problems
are likely to be minimal. An increase in the murders of women after political representation is
enacted might be indicative of retaliatory acts taking places. Unfortunately, data on gender of
murder victims is available only after 1999. We examined specific states which enacted womens
empowerment after this date: Figures 2A and 2B document the time trend in murders of women
and the ratio of female murder victims to male victims for the states of Assam and Jammu &
Kashmir, which implemented political reservations for women in 2002 and 2001 respectively.
Both states witness a decrease in the murder rates in the post-reform period. We also examined
data on murders where the motive was stated as love affairs or sexual causes; data on motives of
murders is available for our entire time period. We find no significant impact of womens
reservation on the number of such murders or their share in overall murders (results available
upon request). Second, we analyzed data on suicides by women in the pre vs. post-reform period.
If retaliation by men had been the main reason for the observed positive coefficient on total
crimes against women, we might expect an increase in suicides as desperate women are treated
worse and denied access to the criminal justice system. As with the murder data, we find no
evidence of any statistically significant increase in the percentage of female suicides. Suicides by
women increased by a statistically insignificant 6 percent in the post-reform period; suicides by
men increased by 8 percent (results available upon request). In our district level analysis below,
we also consider the district characteristics that are likely to be associated with greater retaliation
against women. Examining the interaction effects of characteristics such as female literacy and
sex ratios with the introduction of political reservations for women provides further evidence
against the retaliation hypothesis. Finally, if the observed positive coefficients are driven by
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mens resentment, we would not expect to see any responsiveness in law enforcement outcomes
(given that the police force is largely male). Our findings below on the quantity of police activity
(arrests) as well the quality of their work (charge-sheeting, i.e. convictions following arrests)
suggest otherwise.

Police Activity
One of the channels outlined in our framework was that a match in the minority identity of the
politician and victim will lead to an increase in the probability of punitive action against those
who commit crimes against those minorities. We find that the number of arrests per 1000
population increases by a statistically significant 19% after womens reservations are
implemented (Table 5, Column 3 estimates). These estimates include controls for economic and
demographic variables, as well as for overall police strength as a proxy for the resources
available to the police. Arrests for rape also show an increase of over 12% during this period
(statistically significant at 13% level). Further, we observe a significant increase in the arrests for
kidnapping of women by as much as 18%, while there is no such impact on arrests for
kidnapping of males. As for the results on reported crime, we see that the increase in arrests also
happens within a year or two of the reform being implemented, suggesting that police are
responsive to victims reporting their crimes We also examine the impact of political
empowerment of women on chargesheeting rates. As discussed in Section 3.1 above, the
chargesheeting rate, or the fraction of cases in which the police report about the crime results in a
formal chargesheet, reflects the quality of action by the police (unlike the number of arrests
which proxies for the quantity of police action). As shown in columns (4)-(6) of Table 5, political
empowerment of women has no statistically significant effect on chargesheeting rates. Hence,
there is no evidence of a decline in the quality of police action with increased political
representation of women. Overall, we do not find any evidence for police to have become more
lax in response to empowerment of women (as measured by the quantity or quality of police
action). These findings also lend support to our hypothesis that observed increase in crimes
against women is due to greater reporting rather than increased crime due to male retaliation. For
instance, actual crimes against women following their empowerment might increase because
women are incompetent leaders and/or are not allowed to exert real authority and hence police
become lax under a woman leader. Alternatively, if men resented womens greater power, the
increase in actual crime would be unlikely to result in more arrests or chargesheeting by (the
largely male) police force. Our findings above do not support these possibilities. How does the
presence of a female local leader increase reporting of crime? As discussed in Section 2, there
might be an empowerment effect where women are more likely to approachthe police, or there
may be changes in the behavior of the police when approached by a crime victim. We first note
that the presence of women political representatives does not increase the overall strength of the
police force or the presence of female police officers, which might be an important variable in
the victims decision to approach the police. This is not too surprising in light of the
administrative setting where local councils (village or district) have no direct jurisdiction over
police in terms of staffing or salaries. On the other hand, survey data from the Millennial Survey
show that women display greater satisfaction in their interactions with the police when this live
in villages with a female council head . Women are slightly more likely to approach the police in
such villages. While the sample of respondents who actually had dealings with the police is
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relatively small, we do find that women in villages with female council heads were significantly
more likely to say that the police solved their case and significantly less likely to pay bribes to
the police.They were also less likely to say that the police refused to register their complaint. We
should note that the difference in womens responses across villages that did and did not have
women council heads was larger than the difference for men in all these cases. These results are
indicative of a positive change in police attitudes towards crimes against women, in the presence
of women leaders (perhaps driven by greater confidence of the women victims).

Impact of Political Representation at Higher levels of Office in the State


At what level does political representation of women have an impact on crime outcomes? The
Panchayat Raj reforms ensured representation at both village and district councils, with the
further proviso that one-third of village councils in each district and one-third of the
districtcouncils in a state have female chairpersons. Using crime data at the district level, we are
able to examine whether having a female district chairperson has an impact on reported crimes,
over and above the representation for women in village councils, village council chairpersons
and district councils. A priori, it is not obvious whether this effect will be larger or smaller than
the overall representation effects documented earlier. If chairpersons have a greater degree of
influence with local police, this effect might be higher, while if the greater proximity of village
level leaders to both the police and the victims is a major factor, then having a female district
chairperson might not have much additional impact. We collected data on the reservation status
of the district chairperson in 10 out of our 17 major states.26 The rotation of such reservation
across districts within a state provides us with intra-state variation in the political representation
of women in local government. We run the following specification, similar to the state-level
regression in Having the district chairperson post reserved for women does not have a significant
impact on reported crimes against women in that year. Interestingly, we do find some evidence
for a long-term effect of a woman district chairperson in raising the total reported crimes against
women. Each additional year a woman has been in the district chairperson position increases the
number of reported crimes by 3.4%, which is statistically significant at the 5% level. The effect,
however, is much smaller in magnitude than the effect of broad-based overall representation of
women (roughly one-sixth).Thus, our results suggest that broad-based representation of women
through local council members has a much bigger effect on reported crimes, compared to the
additional impact of the gender of the chairperson. This is an important result in terms of
understanding the kinds of political representation which are likely to matter most for the welfare
of disadvantaged sections of society. We then explore whether the effect of a district chairperson
varies across districts where women are more/less empowered. We use two (relatively crude)
proxies for status of women the population ratio of women to men and the literacy rate of
women in a district. We interacted chair person with these two proxies, and the results are shown
in. In districts where women are more empowered, having a woman district chairperson is
associated with a larger number of reported crimes against women. The magnitude of the woman
chairperson effect in more progressive districts is economically significant as well. For a district
in the 75th percentile of the female/male ratio or the female literacy rate, having a woman
districtchairperson raises the reported crimes against women by about 8%. Notice that this is
over and above any effect of broad-based representation of women as captured by the timing of
the implementation of reservation at the state-level, we examine whether the effects of a woman
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district chairperson discussed above are driven by particular crime categories rapes and
kidnapping of women. On average, having a woman chairperson at the district level continues to
have a statistically insignificant effect on reported rapes and kidnapping of women. Surprisingly,
we do not find any evidence for a significant long-term effect, or for a significant effect in
districts where women are more empowered for these crime categories (columns 6-8 and 10-12).
Although, we do not have enough data to examine other crime categories rigorously, the results
suggest that the effect of a woman district chairperson on overall reported crimes against women,
if any, is more likely to be driven by less severe crimes. Next, we extend our analysis to consider
the effects of having women members in the state legislative assembly (MLAs). We should note
that women are significantly underrepresented at these levels of government, where no mandated
representation rules are in place. In our data set, only 5.5% of the state legislators in any given
year are female. In this sense, we should note that the Panchayati Raj rules mandated a very large
increase in womens representation over the existing status quo. This low level of representation
means that we are less likely to find any effect of state-level women representatives on rates of
reported crime. For women MLAs, we run a regression specification similar to (1), except that
the independent variable of interest is the fraction of female MLAs in power at the state level.
Since this fraction is potentially endogeneous, we instrument for the fraction of women MLAs
using the fraction of closely contested elections where the winner was female. We should note
that the OLS and IV coefficients show a positive relationship between womens representation
and reported crime, though none of these coefficients are statistically significant at the 5% level.

Effects of SC/ST Political Representatives on Crimes against SC/STs


Since the Panchayati Raj policy provided for the mandated representation of Scheduled Castes
and Scheduled Tribes (SCs/STs) in local councils, we examine whether reported crimes against
these communities also increased after such representation. The case of SCs/STs is slightly
different from the mandated representation of women. First, these communities already had
mandated representation in the state legislature (in proportion to their population share). But
given the results in Section 5.5, the presence of local leaders from these communities might be of
greater importance. Second, data on crimes against SCs/STs is only available from 1992
onwards. In order to ensure that there are sufficient pre-reform observations, we restrict our
analysis only to states which implemented the Panchayati Raj provisions for SCs/STs in 1995 or
higher. Further, some states do not have any Scheduled Tribes in their population, which restricts
our sample size for these regressions. Similar to the results for women, we find a significant
increase in the reported crimes against Scheduled Castes after these groups obtain mandated
representation in local councils. Inparticular, the largest increase is in crimes which are
prosecuted under the Prevention of Atrocities Act, which specifically includes offences
committed against Scheduled Castes by non- SCs (including stripping, insulting, forced labor
and sexual exploitation). As before, we show results controlling for a range of demographic,
economic and political controls. In addition, we also ran the regressions for non-logged crime
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variables to avoid the problem of dropping state-year observations were no crimes were reported
for some categories.
The results on overall crimes against SCs, in particular those classified as atrocities, are robust
to all these specifications.32 As for the women, the fact that we do not see such increases in
crimes which are not caste-specific (e.g. murder or rape, where the victims might be targeted for
reasons other than their caste) lends greater weight to our hypothesis that it is political
representation of such communities which is driving higher reporting of such caste-related
crimes. We do not find any significant results of political representation for Scheduled Tribes on
crimes committed against them (Table 8, Columns 5-8). This could be because of lower data
availability, or perhaps the inability of Scheduled Tribes to mobility politically as effectively as
Scheduled Castes. Other studies on Scheduled Tribes have found that mandated political
representation for Scheduled Tribes have not resulted in greater access to primary schools or
other types of infrastructure (Krishnan, 2007; Banerjee and Somanathan, 2007).

THE MEASUREMENT AND COST OF OCCUPATIONAL AND CORPORATE CRIME

Even in societies that permit a measure of freedom of information, the collection of accurate data
on most occupational and corporate crimes is difficult. Our primary sources of data (discussed in
Chapter 1), such as official statistics (the UCR), victimsurveys (the NCVS), and self-reports,
generally do not include much information on corporate or upper-level occupational crimes.
Problems faced by researchers who attempt to examine occupational crime include the
following:
1. The higher professions are self-regulating, and very often codes of silence and
protectionism rather than sanctions greet wrongdoers.
2. Many employers simply ask for resignations from errant workers in order to avoid
scandal and recrimination.
3. Occupational crime statistics are not kept on a systematic basis by criminal justice
agencies or by professional associations.
4. Probes of occupational wrongdoing by outsiders are usually greeted by secrecy or
a professional version of honor among thieves.
The cost of white collar crimes far exceeds the cost of traditional crimes as recorded in official
police statistics and as previously discussed in Chapter 1. The Senate Subcommittee on
Investigations (Senate Permanent Subcommittee, 1979) estimated that cost at roughly $36 billion
in 1976. Estimates for the early 1980s place the figure at upwards of $50 billion, a costly sum
considering that FBI estimates for all UCR property crimes such as burglary, larceny, and
robbery were in the $10 billion range in the early 1980s.Much higher estimates of costs incurred
from white collar crime have been made by the Judiciary Subcommittee on Antitrust and
Monopoly, which put the figure between $174 billion and $231 billion annually in the late
seventies (Clinard & Yeager, 1980, p. 8). By the nineties, the estimated cost of $500 billion for

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bailing out savings and loan companies alone, with 5 to 40 percent of the losses due to fraud,
justifies even higher estimates.
Among others, Clinard and Yeager (1978, pp. 255272) and Geis andMeier (1977, pp. 34)
suggest that:- there are a number of reasons for the lack of research on corporate crime in the
past:1. Many social scientists are inexperienced in studying corporate crime, which often requires
some sophistication in areas of law, finance, and economics.
2. Corporate violations often involve administrative and civil sanctions to which criminologists
have limited exposure.
3. Enforcement is often carried out by state and federal regulatory agencies rather than by the
usual criminal justice agencies.
4. Funds for such studies have not been generally available in the past.
5. Corporate crime is complicated by the very complexity of corporations.
6. Research data are not readily available because of the imperviousness of the corporate board
room.
7. Corporate crime raises special problems of analysis and research objectivity. Despite these
obstacles, rising public concern about corporate wrongdoing has encouraged increased research
into corporate crime.

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Chapter-10
E-MONEY LAUNDERING
Current publicity and concern with corporate, organizational, and occupational crime sometimes
create the false impression that such activities did not exist in the past. Nothing could be further
from the truth. In fact, history is replete with examples of past corporate wrongdoing; the current
business climates probably set higher moral expectations than ever before. In the early history of
capitalism and the Industrial Revolution, fortunes were made by unscrupulous robber barons,
who viewed the state and laws as negotiable nuisances. Cornelius Vanderbilt, the rail road
magnate, when asked whether he was concerned with the legality of one of his operations, was
said to have stated, Law! What do I care about Law. Haint I got the power? (quoted in
Browning & Gerassi, 1980, p. 201). Journalistic muckrakers, or specialists in exposing what
Becker (1954) calls sex, sin, and sewage (p. 145), preceded criminologists in analyzing abuses
in high places. Works such as Lincoln Steffenss The Shame of the Cities (1904) and Upton
Sinclairs The Jungle (1906) dramatically focused on and aroused public interest in corruption
and abuse inpublic and private organizations. John Kenneth Galbraith tells the story of John D.
Rockefeller, the founder of the family fortune, and a lecture he was fond of giving to Sunday
school classes: The growth of a large business is merely the survival of the fittest. The
American Beauty rose can be produced in the splendor and fragrance which bring cheer to its
beholder only by sacrificing the early buds which grow up around it (quoted in Peter, 1977, p.
87). Browning and Gerassi in The American Way of Crime (1980) claim that the period between
the CivilWar andWorldWar I was probably themost corrupt in U.S. history and describe this time
as a dictatorship of the rich. No one valued private property more than the industrial magnates
who were stealing it (p. 210). Jay Gould, a captain of industry, gobbled up railroads through
stock manipulation, rate wars, the falsifying of profit records, and the intimidation of competitors
bymeans of hired thugs such as the Hells Kitchenmob (pp. 133136). G. Myers in his The
History of Great American Fortunes (1936, pp. 13, 17) reports an episode in which Russell Sage
(a New York financier and politician) and his business associates masterminded a swindle against
their creditors; after it succeeded, Sage conned his own partners out of their proceeds from the
caper. Political corruption, bribery, kickbacks, and influence peddling among political
office holdersfederal, state, and localhave been rife since the very beginnings of the
republic. The widespread acceptance of such corruption has given rise to a number of humorous
comments, for example, the description ofMayor Curley of Boston as having been so crooked
that when they buried him, they had to screw him into the ground. Another cynical remark claims
that it was so cold the other day, the politicians had their hands in their own pockets. In the post
CivilWar period in the United States, political machines were epitomized by Boss Tweeds
Tammany Hall (New York Citys Democratic Party), in which widespread vice and corruption
were combined with political favoritismand voter fraud.More than one political
election was won with stuffed ballot boxes or the graveyard vote. S. Ross in Fall From Grace:
Sex, Scandal, and Corruption in American Politics From1702 to the Present (1988) documents
the fact that political scandals have struck in nearly every decade since before the American
Revolution. In 2007, a total of 11 New Jersey officials were charged with taking thousands of
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dollars in bribes in exchange for promising municipal business to undercover officers posing as
insurance brokers (Chen, 2007). More than 100 public officials in New Jersey had been
convicted of federal corruption charges between 2001 and 2007. The first years of the twentyfirst century were racked with corporate scandals. On July 14, 2005, Bernard Ebbers, CEO o of
WorldCom, was sentenced for what was described as the largest corporate fraud in U.S.
history, an $11 billion accounting fraud. Around the same time, stiff sentences were handed out
to other corporate executives. Adelphi Communications founder John Rigas received 15 years in
prison and his son Timothy 20 years for conspiracy, bank fraud, and securities fraud. Others
included Tyco International CEO Dennis Kozlowski and Chief Financial Officer Mark H.
Schwartz, who were convicted of grand larceny, conspiracy, securities fraud, and falsifying
business records. They were found guilty of looting the company of over $600million to pay for
extravagant lifestyles. Former CEO Richard Scrushy of HealthSouth was acquitted on June 28,
2005, on 36 counts of conspiracy, false reporting, fraud, and money laundering. He pointed the
finger at 15 HealthSouth executives who all pleaded guilty. Former Chief Financial Officer of
Enron, Andrew Fastow, pleaded guilty to two counts of conspiracy and received a 10-year
sentence, and former Enron Treasurer Bill Gilson, Jr., received a 5-year sentence for his role in
the fraud. Enron founder Ken Lay was found guilty on fraud charges in May 2006, but he died
before further charges could be prosecuted (Eichenwald, 2006). Sometimes described as the
poster girl for white collar crime, Martha Stewart was convicted of insider trading. She served 5
months in prison and an additional 5 months of house confinement for conspiracy, obstruction of
justice, andmaking false statements. Her broker, Peter Bacanovic, also served a five-month
sentence. Although Stewart was a client rather than a corporate executive, focus on her case may
have been misleading. A 2004 study (AccountingWEB, 2004) by KPMG, a corporate fraud
investigation firm, found that, of the 100 fraud cases they had been asked to investigate from
20022003, seniormanagers or directors committed over two thirds of the crimes. In 72 percent
of the cases, the perpetrators were allmales. Thirteen percent involvedmales and females, and
only 13 percent of the cases involved females only. The finance department was the most likely
targeted area with 40 percent of the cases. The Wall Street Journal (cited in Tolson, 2002) said,
the scope and scale of corporate transgressions is greater than anything Americans have seen
since the years before the Great Depression.
A widely cited typology of white collar crime is the one proposed by Edelhertz (1970).
He identifies the following:
1. Crimes by persons operating on an individual ad hoc basis (for example, income tax
violations, credit card frauds, bankruptcy frauds, and so on)
2. Crimes committed in the course of the occupations of those operating inside business,
government, or other establishments, in violation of their duty of loyalty and fidelity to
employers or clients (for example, embezzlement, employee larceny, payroll padding, and the
like)
3. Crimes incidental to, and in furtherance of, business operations, but not central to the purpose
of the business (for example, antitrust violations, commercial bribery, food and drug violations,
and so forth)
4. White collar crime as a business, or as the central activity (pp. 1920). [This Is Eliminating
Edelhertzs item 4 as more appropriately an example of professional crime, Crime Types 6.1
proposes an Occupational/Organizational Crime Grid, which classifies the crimes in terms of
both perpetrators and victims. Goff and Reasons (1986) have proposed a similar model for
organizational crime. covered in this text under the label professional crime; it refers to
activities such as medical and health frauds, advance fee swindles, and phony contests.]

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While many crimes in fact defy placement in mutually exclusive, homogenous categories, these
types offer a useful scheme for organizing the presentation of occupational crime and
organizational/corporate crime in this chapter.

Occupations and the Law


In Western societies, the legal regulation of occupations is often self-regulation. Although laws
and codes of ethics purportedly exist to protect the public from harmful occupational activity,
much self-governance has been used instead to protect the interests of members of the
occupation. The more developed professions attempt to convince legislatures that they possess
highly sophisticated, useful, esoteric knowledge; that they are committed to serving societal
needs through a formal code of ethics; and that they therefore should be granted autonomy, since
they and only they are in a position to evaluate the quality of their service. In fact, the actual
legal codes that control occupational practice tend to be formulated by the occupations
themselves in order to dominate or monopolize a line of work. Play wright George Bernard Shaw
(1941) in The Doctors Dilemma has one of his characters state that all professions are a
conspiracy against the laity (p. 9). More developed occupations (professions) virtually control
the law-making machinery affecting their work. Professional organizations and their political
action committees are quite effective in blocking legislation that may be detrimental to their
interests. An example of professional power is the AMA (American Medical Association), which
Friedson (1970) describes as professional dominance and Harmer (1975) as American
Medical Avarice. The AMA as a lobbying organization appears more concerned with guarding
profit, competition, and private enterprise in the business of medicine than supporting legislation
that would improve the quality ofmedical care delivery. According to the 1968 Report of the
National Advisory Commission on Health Manpower (cited in Skolnick & Currie, 1982), the
health statistics of certain groups in the United States, particularly the poor, resemble those in a
developing country. Occupational crime can be controlled by professional associations
themselves, by traditional criminal law, by civil law, and by administrative law. Actions by
professional ethics boards can include suspensions, censure, temporary or permanent removal of
license and membership, and the like. Traditional criminal prosecution also occurs, such as for
larceny, burglary, and criminal fraud; civil actions by the government may include damage and
license suspension suits. Administrative proceedingsmay call for taking away licenses, seizing
illegal goods, and charging fines. The FBI in its early history was involved primarily in
investigating and enforcing white collar crimes, such as false purchases, security sales violations,
bankruptcy fraud, and antitrust violations; only later did it become preoccupied with its
gangbuster image (Lowenthal, 1950, p. 12). As late as 1977, however, the House Judiciary
Committee charged that the FBI was soft on white collar crime and that its idea of white collar
crime was smallscale fraud (D. R. Simon & Swart, 1984).

Organizations and the Law


A corporation is a legal entity that permits a business to make use of capital provided by
stockholders. Although the federal government has had the power to charter corporations since
the 1791 McCulloch v. Maryland decision, it rarely uses it; most chartering is done by the states.
Corporations have been considered legal persons since a Supreme Court decision of 1886
(Clinard & Yeager, 1980, pp. 2528). In the United States, beginning in the nineteenth century,
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certain business activities were defined as illegal. These included restraint of trade, deceptive
advertisements, bank fraud, sale of phony securities, faultymanufacturing of foods and drugs,
environmental pollution, as well as the misuse of patents and trademarks (Clinard & Quinney,
1986, p. 207). In the late nineteenth century, concern grew about the development ofmonopolies,
which threatened to control economies and stifle competition and thereby jeopardized the very
philosophy of free-market enterprise. The Sherman Antitrust Act (1890) was the first of many
regulatory laws passed to control corporate behavior. This law forbids restraint of trade and the
formation of monopolies; it currently makes price fixing a felony, with a maximum corporate
fine of $1million, and authorizes private treble (triple) damage suits by victims of price fixing.
For the most part, the policing of corporate violations is done by federal regulatory agencies
for example, the Federal Trade Commission (FTC), which was set up in 1914 at the same time as
the Clayton Antitrust Act and the Federal Trade Act. There are over 50 federal regulatory
agencies with semi-policing functions with respect to corporate violations. Among these
agencies are the Civil Aeronautics Board (CAB), the Environmental Protection Agency (EPA),
the Federal Communications Commission (FCC), the Food and Drug Administration (FDA), the
Federal Power Commission (FPC), the Interstate Commerce Commission (ICC), the National
Labor Relations Board (NLRB), the Nuclear Regulatory Commission (NRC), the Occupational
Safety and Health Administration (OSHA), and the Securities and Exchange Commission (SEC).
Some areas regulated by these agencies and discussed in this chapter are air safety, air and water
pollution, unfair advertising, safe drugs and healthy food, public utility services, interstate
trucking and commerce, labor-management practices, nuclear power plants, health and safety in
the workplace, and the sale and negotiation of bonds and securities. Regulatory agencies have a
number of sanctions they can use to force compliance with their orders: warnings, recalls, orders
(unilateral orders, consent agreements, and decrees), injunctions, monetary penalties, and
criminal penalties (Clinard & Yeager, 1980, p. 83). In addition to criminal proceedings, acts such
as the Clayton Act (Section 4) permit treble damage suits by harmed parties. Guilty companies,
with their batteries of lawyers and accountants, generally have more expertise, time, and staff to
devote to defense than the Justice Department, under its Anti-Trust Division, has for prosecution.
Indefinite delays and appeals are not uncommon. If the government appears to have a solid case,
corporations are permitted to plead nolo contendere, or no contest, to charges. This is not an
admission of guilt, and thus enables corporations to avoid the label of criminal. Consent decrees
amount to a hand slap; that is, the corporation simply agrees to quit committing the particular
violation with which it was charged. A number of criticisms have been levied against federal
regulatory agencies and their efforts against corporate crime:
1. Lacking sufficient investigative staff, the agencies often rely on the records of the very
corporations they are regulating to reveal wrongdoing.
2. The criminal fines authorized by law are insignificant compared with the economic costs of
corporate crime and become, in effect, a minor nuisance, a crime tax, a license to steal, but
certainly not a strong deterrent.
3. Other criminal penalties such as imprisonment are rarely used and, when they are, tend to
reflect a dual system of justice: offenders are incarcerated in country club prisons or are treated
in a far more lenient manner than traditional offenders.
4. The enforcement divisions of many regulatory agencies have been critically understaffed and
cut back, as in the Reagan administrations EPA and other agencies, to inoperable levels.
5. The top echelons of agency commissions are often filled with leaders from the very
corporations or industries to be regulated, creating potential conflicts of interest.
6. Relationships between regulators and regulated are often too compatible, with some agency
employees more interested in representing the interests of the corporations they are supposed to
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be regulating than in guaranteeing the public well-being. The fact that many retiring agency
employees are hired by the formerly regulated companies lends support to this argument.
In reviewing the state of regulation of illegal corporate activity, Clinard and Yeager (1980) state,
One may well wonder why such small budgets and professional staffs are established to deal
with business and corporate crime when billions of dollars are willingly spent on ordinary crime
control, including 500,000 policemen, along with tens of thousands of government prosecutors
and officials. Gross (1980) in his book Friendly Fascism answers their question by letting us in
on what he calls dirty secrets: We are not letting the public in on our eras dirty little secret:
that those who commit the crime which worries citizens mostviolent street crimeare, for the
most part, products of poverty, unemployment, broken homes, rotten education, drug addiction,
alcoholism, and other social and economic ills about which the police can do little if
anything. . . . But, all the dirty little secrets fade into insignificance in comparison with one dirty
big secret: Law enforcement officials, judges as well as prosecutors and investigators, are soft on
corporate crime. . . . The corporations mouthpieces and fixers include lawyers, accountants,
public relations experts and public officials who negotiate loopholes and special procedures in
the laws, prevent most illegal activities from ever being disclosed and undermine or sidetrack
overzealous law enforcers. In the few cases ever brought to court, they usually negotiate
penalties amounting to gentle taps on the wrist. While every year the FBI publishes its
UniformCrime Reports to give an annual account of primarily street crime, no such annual exists
to measure the far more costly corporate crime. Robert Mokhiber (1999), editor of the
Washington-based Corporate Crime Reporter, ranked the Top 100 Corporate Criminals of the
1990s. These were only the tip of the iceberg in that the majority of corporate wrongdoing is
handled under civil law. This list includes only those who were caught and criminally fined. The
100 corporate criminals fell into 14 categories of crime:- environmental (38), antitrust (20), fraud
(13), campaign finance (7), food and drug (6), financial crimes (4), false statements (3), illegal
exports (3), illegal boycott (1), worker death (1), bribery (1), obstruction of justice (1), public
corruption (1), and tax evasion (1). The top 10 corporate criminals of the 100 identified by
Mokhiber were the following:
1. F. Hoffman-LaRoche LtdThe Swiss pharmaceutical company pled guilty and paid a record
$500 million criminal fine for fixing prices on vitamins.
2. Daiwa Bank LtdThe bank pled guilty to 16 federal felonies and paid a $340 million
criminal fine. It pled guilty to two counts of conspiracy to defraud the United States and the
Federal Reserve Bank, misprision (concealment) of felony,
10 counts of falsifying bank records, 2 counts of wire fraud, and 1 count of obstructing a bank
examination.
3. BASF AktiengesellschaftThis German pharmaceutical pled guilty and agreed to a $225
million criminal fine for fixing prices on vitamins.
4. SGL Carbon AktiengesellschaftThe worlds largest producer of graphite and carbon
products pled guilty to price fixing and paid a $135 million fine.
5. Exxon CorporationExxon pled guilty to criminal charges related to the 1989 Exxon Valdez
oil spill and paid a $125 million fine. This was the largest criminal recovery obtained in an
environmental case.
6. UCAR International IncThe largest producer of graphite electrodes in the United States
pled guilty to fixing prices and paid a $110 million criminal fine.
7. Archer Daniels MidlandPleading guilty to charges of price fixing of lysine and citric acid
markets, the company paid a $100 million fine.
8. (tie) Bankers TrustThe bank was fined $60 million for making false reports of financial
performance, having made false entries in books and records.
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9. (tie) Sears Bankruptcy Recovery Management ServicesSears pled guilty to bankruptcy


fraud and agreed to pay a $60 million fine. The company had already paid over $180 million in
restitution to 188,000 debtors and $40 million in civil fines to 50 state attorneys general. Sears
had systematically misled those in bankruptcy into believing they had to pay certain debts.
10. Haarman and Reimer CorporationA subsidiary of the German Bayer AG, the
corporation pled guilty and agreed to pay a $50 million fine for fixing prices on the citric acid
worldwide market.

Chapter-11

Prevention of socio economic offences


Barton and Butts (2008) have studied few juvenile justice programmes that have attempted to
implement some aspects of practices that are strength-based and which also focus on positive
youth development. William H. Barton and Jeffrey A. Butts viewed that these practices is
possible to implement and such implementation may be associated with staff enthusiasm and
perhaps even positive outcomes for youth. It is opined Martin (2005) that, there are many
theories that have been propounded to explain regarding the juvenile delinquency among
children. These theoretical perspectives have explained only particular aspects but not all the
aspects. He further explains that there are some factors for deviant behavior which includes
dysfunctioning of the family, substance abuse, low self-esteem, peer pressure, and socio
economic factors. Some background variables (Tidefors et al, 2011) have been studied, such as,
family problems, parents who are addicted to alcohol or drugs, etc. through self-report
instruments which explains that how an individual experiences himself or herself, the degree of
insight and how they want to disclose themselves to others. Other factors, such as anger,
depression, disruptive behavior and also children, who have lived in foster homes, have been
considered important in this study. Tatar et al (2011) examined that the individuals perception
of fair treatment by the justice system which has an effect on their attitudinal, emotional, and
behavioral outcomes. Many other measures are taken in this study such as demographics and
background variables, depressive symptoms, anger, self-esteem, attitude towards staff and
inmates, institutional offending, and institutional substance abuse. Butts et al (2005) emphasized
the role of communities which helps in the positive development of children which is known as
Community Youth Development (CYD). The search institute has considered some factors
through which a positive youth development in a juvenile can be achieved i.e. through individual
and contextual factors that helps the youth to avoid the harmful behavior and keep them engaged
in some activities that promotes to positive development within them. Another study which is
done by Richard and Lerner and his colleagues, emphasizes on the interactions between
individuals such as family, school, and community. Peiser (2001) studied that the parental
discipline style which is considered as a key variable that helps in examining the contribution of
family and personality factors to delinquency. Self-esteem is considered as an important
contributor to the development of delinquency. A comparative study was conducted between
some countries which measured the levels of self-esteem. Kaplan (1957, 1977, 1978, and 1980)
argues that negative selfesteem results from the situations in which the adolescent is unable to
defend their selfimage, the situations such as school failure, rejection by school, and parental
rejection. Somecenvironmental factors have been identified which leads to delinquency among
youths. Weatherburn and Lind (1997) observed that the reasons for delinquency in urban and
rural areas where same such as social and economic stress, child neglect, and child abuse.
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According to them the social and economic disadvantages are the root cause which leads to an
increasing rate in the offences such as theft, robbery. Comanor and Phillips (2002) observed that
fathers play a critical role in the rearing of boys at a tender age and having a step-father also
increases the delinquency among the children rather than having a step-mother.

Method of the study


Sample
The sample for the study consisted of the inmates of the Government Observation Home of
Rourkela Sub Jail, Rourkela, Odisha. A total of 50 inmates were interviewed out of 72 inmates of
the Home and a total of 5 cases of offences were studied in detail for presenting detailed case
study. Around 90% of the juveniles were from Odisha, and only 10% of the juveniles belonged to
other states. The Home housed the offenders out of which 90% were accused and under trials.
And the rest 10% of the inmates were convicted. Among them, 72% of the juveniles had stayed
in the Observation Home for less than six months, 20% were staying since less than one year,
and only 8% are staying since less than two years. Around 76% of the juveniles were found to
have already visited the court. Out of them, 34.21% of thev juveniles had visited court for two
times, 31.57% for one time, 23.68% for three times, and 10.52% of the juveniles had visited the
court for four times. Around 24% of the juveniles had not been taken to the court yet.
Tools and Instruments
Firstly, the case study method with in-depth analysis of five offenders was used to illustrate the
individual characteristics and environmental background variables underlying juvenile
delinquency. Secondly, individual interview using scheduled questionnaire has been conducted to
collect data from all inmates constituting the sample as well as officials of the Observation home.
The questionnaire included 58 questions and it was divided into various categories such as
demographic profile, educational background, family background, juveniles history, perception
of fairness and results of inquiry.
Procedure
For collection of data, permission from the Women and Child Development (WCD) Office,
Bhubaneswar, Odisha was obtained to be allowed to interact with the juveniles in conflict with
law. The primary data was collected from fifty inmates of Observation Home, Rourkela, and the
secondary sources of data were reports and booklets of the Observation Home. For collecting
information it is very necessary to make a good rapport building with the recipients. Therefore,
regular visits were made to the Home to meet the inmates and to become friendly with them, one
month before the interview took place. Finally, the data were analyzed qualitatively as per the
objectives of this study.

Socio-economic and background variables


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This section discusses the socio-economic status and other background variables like family
background, parental education and occupation, relationship with parents and peer group
influences of the juveniles, as found in this study.

Family background
Looking into the family background of the delinquents, 90% of the parents of the juveniles were
found to be illiterate, whereas only 10% of the parents were literate with matriculation as the
maximum educational level. It can be seen that most of the juveniles came from families lacking
in literacy and education. Education of the parents is an important factor in inducing right
conduct and moral of the child. In the present study, the majority of the delinquents were found
to be deprived of such advantage. Around 52% of the parents were daily wage laborers and
around 28% were engaged in agriculture and other meager occupations as mentioned in Table 5.
This shows that all the juveniles belonged to poor socio-economic status and the family income
per month on an average amounted to Rs 4000-5000.

(Parental Occupation)
a) Daily Wage Labor
b) Farmer
c) Driver
d) Domestic Servant
e) Contractor

52%
28%
4%
8%
8%

A good number of parents, i.e. around 72%, were reported by the juveniles as being free from
alcohol addiction and 28% of the parents were reported to be addicted to alcohol All the
juveniles, reporting addiction to alcohol in the family, also opined that they had poor relationship
with their fathers owing to frequent fights with wife and children during the drunken state.
Although the data shows less families being affected by alcoholism, it is assumed that the
juveniles might not have confessed the truth in this regard due to embarrassment. Therefore, it is
premature to indicate from results that alcoholism had a significant impact on parent-child
relationship.

Reporting alcohol addiction in family


a) Yes
b) No

28%
72%

The study has shown a significant result that almost all the juveniles belonged to families that did
not have a criminal record. Around 96% of the families did not have a criminal record and only
4% of the families had criminal record, as reported by the respondents. Therefore, the factor of
social learning for committing crime can be ruled out. Even without any crime record in the
family, children were still into delinquency in the absence of examples before them.

Delinquency/crime record of members in the family


a) Yes
b) No

4%
96%

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Peer group and their influences


The study found that in many cases the influence of the peer group was highly responsible to
work as stimuli for the juvenile to commit a crime. Around 66% of the juveniles were involved
in crime along with their friends. Around 34% of the juveniles reported that they were not
affected by the peer group in committing crime. Around 87.87% juveniles reported that they
liked to spend most of the waking time with their friends (some of them even bunking classes to
be with them), while 12.13% juveniles said that friends of theirs were just playmates. Around 9%
of the juveniles reported that they liked their peer group for smoking and drinking purposes.

Peer influence in crime


Peer influence in crime
Yes
No

Percentage
66%
34%

It is evident that majority of the juveniles belonged to poor socio-economic background with low
parental education and income. Even though majority of the data said that their families were not
victims of alcoholism and criminal record, these children were in conflict with law for easy
money, peer influence and pressure from the parents to have income of their own. The peer
group had significant impact on the juveniles not only in terms of amount of time spent with
friends, but also in committing any offence or acts that were in conflict with law. According to
Strain theory, (Agnew, 1992), people engage in crimes as they experience strain or stress, they
become upset, and they sometimes engage in crime as a result. They may engage in crime to
reduce or escape from the strain they are experiencing. For example, they may engage in
violence to end harassment from others, they may steal to reduce financial problems, or they may
run away from home to escape abusive parents. They may also engage in crime to seek revenge
against those who have wronged them. The data obtained in the present study supports the
perspective offered by the Theory.

Individual characteristics
There exist a lot of individual factors which are responsible for committing crime by the
juveniles. Psychological dimensions highlight the structure of delinquent personality,
emotions, motivations, motives of committing the crime, the offender's behavior in relation to
the offense committed (judgment, irresponsibility).Internal risk factors (individual) include
smoking and drinking, self-aggressive behaviors, neuroticism(a personality trait characterized
by instability, anxiety, aggression, etc.), truancy, ideas/attempts of suicide, consumption of
drugs/similar substances, mental illness, sleep disturbances, depression and so on.
In the present study, assessment of individual characteristics like emotional and personality
patterns of the juveniles was done with the help of feedback by the supervisors (3 nos.) in the
Observation Home. Around 13 juveniles were described as being aggressive, and around 16
of them were described as humble. While 12 juveniles were described as untruthful and
mendacious, 9 of them were described as being jovial in nature. Around 8% of the sample
was caught for offence like smoking and drinking. Therefore, it can be assumed that few
juveniles exhibited internal risk factors like smoking and drinking. Apart from this, no other
mental illness or any other kind of risk factors (mentioned above), were reported by the
supervisors of Home.
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During the interviewing process, it has been found that 88% of the juveniles had sound health
and rest 12% of the juveniles were in feeble condition.

Emotional and Personality make-up


a) Aggressive
b) Humble
c) Jovial
d) Mendacious

26%
32%
18%
24%

Even though no mental illness and minor risk behavior like smoking and drinking were
reported in the sample, it is important to recognize the vulnerable age at which these juveniles
were caught. All the juveniles were adolescents and this age-group is a difficult and sensitive
period in human development. It can be concluded that these juveniles could not cope with
the demands of life properly, given that they were at a difficult age and also came from a
socio-economic background not conducive for proper growth and development of a child.
Depending on the success or failure of the process of socialization (the family, school or
group membership), teenagers may face some difficulties that can guide its behavior in the
wrong direction.

Perception of Fairness
The second objective of the study was to examine the perception of fairness of justice among
the juvenile delinquents. Justice is a vital phenomenon that incorporates the perception of
fairness in the law for the juvenile delinquents. The inmates were asked as to whether they
were fairly treated by law, both before and after being caught. Majority of the juveniles
(around 58%) reported that they have been treated fairly. Rest 36% of the juveniles reported
of being arrested by mistake. Around 6% of the juveniles said that they were badly treated by
the police after being caught.
Thus, the results showed that the majority of the inmates admitted of committing the offence
for which they were caught and only a minority reported that they have been unfairly treated
by law. In other words, they were of the opinion that they did not commit anything wrong
and still they were accused of committing of some kind of offence. Very few children also
reported that they were ill-treated by the police before they were brought to the Home.

Perception of fairness
a) Juveniles admitting of committing
offence for which they were accused
b) Juveniles not admitting of committing
any offence
c) Juveniles reporting of being badly
treated by the police

58%
36%
6%

Research shows that perception of fair treatment by justice system has a significant effect on
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the attitude and emotional health of the offenders. When children perceive that they have been
unfairly treated, it can result in frustration, aggression and revengefulness. And this mental
imbalance can act as stimuli for further delinquent behavior. Therefore, fair treatment of
juveniles, both during and after the crime, is an important consideration to be followed by
administrators in Police, Court and Short Stay Homes. In the present study, a majority of the
juveniles perceived that they were being fairly treated after they were caught. This finding
indicates that, this positive perception of fairness may be conducive for the present and future
growth and development of these children in conflict with law.

Positive Youth Development


The third objective of the study was to examine the extent to which juvenile justice Programme
emphasizes building on the strength and positive youth development. The juveniles should be
treated in an absolute fair and friendly atmosphere to draw out best results of positive behavior
from the juveniles. But the results showed that around 70% of the juveniles reported that they did
not get facilities in the short stay homes which could enhance their all-round development and
positive attitude. Only 30%of them reported that they could get such facilities as studies, games,
and vocational training, even if such provisions were limited in scope. When the officials of the
Home were interviewed regarding measures taken for positive development of the inmates, they
reported that activities such as Yoga, Art of Living classes, Games, both indoor and outdoor ones
were provided to all the inmates along with formal education. However, they were painfully
aware of the limitations of each of these provisions (like lack of sufficient gaming and playing
equipments). There were very few classrooms and these classrooms were very ill-equipped due
to shortage of funds. Even if they wanted separate classrooms for different age groups, they
could not provide this provision owing to paucity of funds and space. There was not only
shortage of teaching staff and teaching materials, but also there was severe lack of basic
infrastructural facilities such as number of dormitories, beds, bedding etc. The officials also
reported that the Home could not provide the inmates with appropriate facilities with regard to
sanitation, medicine and treatment, clothing etc. The regular diet of the inmates fell far short of
the required calories for their optimal physical and mental development. The officials admitted
of lack of funding and resources as the primary cause of their inability to provide the inmates
with essential and desirable provisions for positive development of the children. The results
indicated that the Home could not provide the facilities aimed at positive youth development of
the inmates. This was primarily because of lack of funding and resources. However, the inmates
reported that they were fairly and affectionately treated by the officials in this Short stay home.
There was no case of mental or physical harassment by the Home supervisors with the inmates.
In other words, the officials recognized the need of treating these inmates with love and respect.
Therefore, with adequate resources, the Home will be able to provide the required provisions that
would facilitate positive youth development. Therefore, the hypothesis that, Juvenile Justice
Programmes will be found to build on strength and Positive Youth Development, and that there
must be provision of all facilities which helps in the positive development of the delinquents,
may be partially accepted.

Criticism of Sutherlands views on White Collar Crime

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Sutherlands definitions of white collar crime has evoked criticism from certain quarters.
Coleman and Moynihan pointed out that the lack of definite criteria of determining of white
collar crime most controversial. It seems likely that what Sutherland meant by this is absence
from convictions for crimes other than white collar crimes. The element of high social status as
used in the definition also leads to confusion: Clearly it has far narrower meaning that is given to
that term in everyday usage. Sutherland himself did not stick to this meaning and included thefts
and frauds committed by middle or even lower middle-class workers in course of their
employment or work. Some critics have suggested that such crimes should have been called as
occupational crimes instead of being termed as white collar crime. It is further argued that in
fact the important element in the definition of white collar crime and the circumstances of its
commission. These usually include pilfering, false accounting, bribery, embezzlement etc. Taxevasion is not an authentic white collar crime, at least in terms of Sutherlands definition because
although associated with work, it is not committed in the course of an occupation. Some critics
further allege that such violations come within the purview of the Special Commissions,
Tribunals and Boards instead of normal criminal justice administrators. Therefore, strictly
speaking, they cannot result into conviction of Commenting on this aspect of the issue, Tappan
observes that treating persons committing white collar crime as criminals would mean deviating
from legal definition of crime inasmuch as personal value considerations of the administrator
would gain primary in place of precision and clarity of legal provisions in deciding such case.
Sutherland, however, justifies the special procedure of trial for white collar criminals by
administrative agencies on the ground that it would protect the offender from the stigma of
criminal prosecution. Another criticism quite often advanced Sutherlands definition of white
collar crime is that it includes even those violations of law which are not committed in course of
occupation or profession and these violations do not necessarily belong to upper strata of society
or the so-called prestigious groups. For example, tax evasion is not committed by persons
belonging to middle or even lower strata of society. Yet another objection against the definition
of white collar crime is that it does not necessarily require men rea which is an essential
ingredient of a crime. The doctrine of men rea based on common law has no application to
statutory offences in India and the requirement of guilty mind may be excluded either expressly
or by implication in such cases.

Contributing Factors
Of all the factors, the economic and industrial growth throughout the world has perhaps been the
most potential cause of increase in white collar crimes in recent years. The changing socioeconomic scenario of the society coupled with increase in wealth and prosperity has furnished
opportunities for such crimes. Commenting on the growing incidence of white collar crime in
India, the Law Commission in its Twenty-ninth Report observed that modern scientific and
technological developments and monopolistic trends in business world have led to enormous
increase in white collar crimes. The post-independence period in India ushered an era of welfare
activities which necessitated regulatory measure on the part of government to control means of
production and distribution so as to subservice the common good. The contravention of such
regulatory measures generally gives rise to white collar criminality. Marshal B. Clinard asserted
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that the problem of white collar criminality has its root in competitive business community
which tries to oust their rival competitors in order to earn huge profits. Sometimes such
crimes may also be committed merely for the sake of retaining existence in the competitive
business. To illustrate, though there is a prescribed code of ethics for the practicing lawyers but
since the very nature of their profession involves the spirit of combat and competition, they often
resort unlawful tactics such as concealment or misrepresentation of facts, which if detected, is
punishable under the law. To take another example, the private educational institutions in India
which receive public-aid or grants furnish false accounts simply for the sake of retaining their
existence. Likewise, the members of industrial and business class who enjoy high status in the
society have a tendency to suppress their real profits by furnishing false and fabricated accounts
of their income and property in order to claim tax-exemptions or avoid payment of heavy taxes.
One more reason for the multiplicity of white collar crime is relatively high socio-economic
status of white collar criminals. They belong to an influential group which is powerful enough to
handle their occupation tactfully and persons affected thereby hardly know that they are being
victimized. Moreover, the public in general is also somewhat apathetic to such crimes thus
causing obstruction in prosecution and punishment of white collar criminals. It is often alleged
that criminal law administrators and Judges being members of upper strata of the society, are
generally sympathetic towards white collar criminals while dealing with them. But there seems
no justification in this assertion. If this allegation is based on the large number of acquittals of
white collar criminals, it may be pointed out that it is not because of the sympathy of Judges for
those criminals but because of the thin line of demarcation between criminality and immorality
involved in white collar crimes. The recent developments in information technology, particularly
during the closing years of the twentieth century, have added new dimensions to white collar
criminality. There has been unprecedented growth of a new variety of computer dominated white
collar crimes which are commonly called as cyber crimes. These crimes have become a matter of
global concern and a challenge for the law enforcement agencies in the new millennium.
Because of the specific nature of these crimes, they can be committed anonymously and far away
from the victims without physical presence. Further, cyber-criminals have a major advantage:
they can use computer technology to inflict damage without the risk of being apprehended or
caught. It has been predicted that there would be simultaneous increase in cyber crimes with the
increase in new internet web sites. The areas affected by cyber crimes are banking and financial
institutions, energy and telecommunication services, transportation, business, industries etc.

White Collar Crime in India


White collar criminality has become a global phenomenon with the advance of commerce and
technology. Like any other country, India is equally in the grip of white collar criminality. The
reason for enormous increase in white collar crime in recent decades is to be found in the fast
developing economy and industrial growth of this developing country. The Santhanam
Committee Report in its findings gave a vivid picture of white collar crimes committed by
persons of respectability such as businessmen, industrialists, contractors and suppliers as also the
corrupt public officials. Highlights the magnitude of white collar crime in India, the Commission
on Prevention of Corruption in its report observed: the advance of technological and scientific
development is contributing to the emergence of mass society with a large rank of file and a
small controlling elite, encouraging the growth of monopolies, the rise of a managerial class and
intricate institutional mechanisms. Strict adherence to high standard of ethical behavior is
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necessary for the event and honest functioning of the new social, political and economic
processes. The inability of all sections of society to appreciate this need in economic crimes,
renders enforcement of the laws, themselves not sufficiently deterrent, more-difficult. Tax
evasion and avoidance, share-pushing, malpractices in the share market and administration of
companies, monopolistic control, usury, under-invoicing or over-invoicing, hoarding,
profiteering, substandard performance of contracts of constructions and supply, evasion of
economic laws, bribery and corruption, election offences and malpractices are some examples of
white collar crime. The Commission broadly classified white collar and socio-economic crimes
into eight categories and suggested insertion of a new chapter on white collar crimes in the
Indian Penal Code. The matter was referred by the Government to the Law Commission of India
for consideration. The Law Commission, however, disagreed with the proposal and observed that
such offences are better left to be dealt with by special and self-contained enactment which
supplement the basic criminal law. Interestingly, the Report of the Vivin Bose Commission of
Inquiry into the affairs of Dalmia-Jain group of companies in 1963 highlights how these big
industries indulge in white collar crimes such as fraud, falsification of accounts, tampering with
records for personal gains and tax-evasion etc. Similar observations were made by Mr. Justice
M.C. Chagla about the big business magnate Mundhra who wanted to build up an industrial
empire of dubious means. There were as many as 124 prosecutions against this business tycoon
and companies owned or controlled by him between 1958 to 1960 and as many as 113 of them
resulted into conviction.

Hoarding, Black Marketing and Adulteration


The white collar crimes which are common to Indian trade and business world are hoardings,
profiteering and black marketing. Violation of foreign exchange regulations and import and
export laws are frequently resorted to for the sake of huge profits. That apart, adulteration of
foodstuffs, edibles and drugs which causes irreparable danger to public health is yet another
white collar crime common in India. The Law Commission of India has suggested drastic
measures against such offenders. In the Commissions observation the tedious prosecution
process involved in the trial of such cases frustrates the cause of justice and often results into
unjustified acquittal due to defective report of the analyst or delay in examination or samples or
lack of legal expertise etc.

Tax-evasion
The complexity of tax laws in India has provided sufficient scope for the tax-payers to evade
taxes. The evasion is more common with influential categories of persons such as traders,
businessmen, lawyers, doctors, engineers, contractors etc. The main difficulty posed before the
Income Tax Department is to know the real and exact income of these professionals. It is often
alleged that the actual tax paid by these persons is only a fraction of their income and rest of the
money goes into circulation as black money. Despite frequent modifications in the tax-laws of
the country the menace of tax-evasion continues unabated and it is causing considerable loss to
government revenue. The Supreme Court in its majority decision in R.K. Garg v. Union of India
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upholding the validity of the Special Bearer Bonds (Immunities and Exemption) Act, 1981,
observed that the Act was not intended to encourage tax evasion in future and condone such
evasion committed in past but the real object of the Act was to launch a nation-wide search to
unearth undisclosed wealth by encouraging small incentive to those who declare their
undisclosed cash. The main intention was to unearth black money so as to prevent further loss
of government revenues. It may be pointed out that the problem of generation of black money
(unaccounted money) and its proliferation is not new. The Government of India has formulated
voluntary disclosure Schemes to unearth the black money specially to be used for certain social
objectives. But the results of these schemes have not been very encouraging. The main reason for
unsatisfactory response to these schemes seems to be that tax payers do not want to be identified
as having evaded the tax in the past and the fear of re-opening of their past assessments and
facing roving enquiries also dissuade them from resorting to these schemes. It is significant to
note in this context that what constitutes crime is tax evasion and not the tax avoidance.
Though both these terms appear to be synonymous, there is a fine distinction between the two.
While the former implies non-payment of tax due to be paid, the latter signifies arranging the
spread over of ones income in such a way that it does not incur tax liability legally and lawfully.
It may be stated that the Government has introduced various regulatory legislations such as the
Essential Commodities Act, 1955, the Industrial (Development and Regulatory) Act, 1951, the
Imports and Exports (Control) Act, 1947, the Foreign Exchange (Regulation) Act, 1974,
Companies Act, 1956 as amended from time to time, the breach of which results in white collar
criminality. A large majority of white collar crimes are, however, operating within the letter and
spirit of the law and, therefore, do not call for legal action.

White Collar Crimes vis a vis Corporate crimes


Some of the professions involving technical expertise and skill provide sufficient opportunities
of white collar criminality. They include medical profession, engineering, legal practice, private
educational institutions etc.White collar crimes which are commonly committed by persons
belonging to medical profession include issuance of false medical certificates, helping illegal
abortions, secret service to dacoits by giving expert opinion leading to their acquittal and selling
sample-drugs and medicines to patients or chemists. Dilatory tactics adopted by the members of
this profession in treatment of their patients with a view ot extracting huge sums form them has
become an accepted norm, particularly with those medical men who do not have a good practice
or have only a marginal earning.The persons employed in essential services of the government or
other undertakings are often confronted with the problem of getting leave due to shortage of
staff. They, therefore, procure medical certificate regarding their false sickness and produce it to
the department to justify their absence from duty. In return, they have to pay certain amount to
the concerned medical staff. Thus, though a white collar crime, this tactics has proved a boon and
a workable alternative to employees who have difficulty in obtaining leave from the employers.
Fake and misleading advertising is yet another area in which the white collar criminals operate.
They make illegal and misleading claims of medical cure through advertisements in newspapers,
magazines, radio and television thus adding to human misery. Many patent medicines are not
only worthless but harmful. Similar advertisements for cosmetics and adulterated food are also
widespread in practice, which are injurious to public health. These persons may not break the
letter of the law but, by violating its spirit, they commit crimes which are not only anti-social, but
also injurious to public health. In the engineering profession underhand dealing with contractors
136

and suppliers, passing of sub-standard works and materials and maintenance of bogus records of
work-charged labour are some of the common examples of white collar crime. Scandals of this
kind are reported in newspapers and magazines almost every day. Construction of building,
roads, canals, dams and bridges with sub-standard material not only endangers public safety but
also results into huge loss to public exchequer. In India the lawyers profession is not looked with
much respect these days. There are two obvious reasons for this. The deteriorating standards of
legal education and unethical practices resorted to by the
members of legal profession to procure clientage are mainly responsible for the degradation of
this profession which was once considered to be one of the noblest vocations. The instances of
fabricating false evidence, engaging professional witness, violating ethical standards of legal
profession and dilatory tactics in collusion with the ministerial staff of the courts are some of the
common practices which are, truly speaking, the white collar crimes quite often practiced by the
legal practitioners. Generally, the professional crooks and criminal gangs have their own trusted
lawyers who can be depended upon to arrange things and keep himself ready with bail bond or
habeas corpus writ to avoid arrest of the gangster. If the members of the gang are arrested, the
lawyer has to find out ways and means to arrange or fix their release. There are criminal
lawyers who arrange professional alibies, cooked witnesses in close liaison with the police for
defending the gangsters. Though there is a definite code of conduct for legal profession but it is
only an ornamental document. However, this is not to say that all lawyers are corrupt and
unethical. Quite a large number of them are most sincere and honest in their profession
commanding great respect from all sections of society. Perhaps, it is because of the peculiar
nature of their profession that the lawyers and advocates have to resort to these tactics in order to
survive in the profession which is becoming more and more competitive with the passage of
time. Yet another field where collar criminals operate with impunity are the privately run
educational institutional in this country. The governing bodies of those institutions manage to
secure large sums by way of government grants of financial aid by submitting fictitious and fake
details about their institutions. The teachers and other staff working in these institutions receive a
meager salary far less than what they actually sign for, thus allowing a big margin for the
management to grab huge amount in this illegal manner. The victimised teachers can hardly
afford to complain about this exploitation to high ups because of the fear of being thrown out of
job. They are, therefore, compelled to compromise with the situation. Although the Government
has introduced the scheme of treasury-payments for teachers of private institutions, but the
problem still persists in one form or the other. That apart, fake and bogus enrolment of students
who are residing for away from the place of location of these institutions is yet another source of
illegal earning for them. They charge huge amounts by way of donations or capitation fees from
such needy students. Even rackets operate in these institutions for procuring students to appear in
different examinations on the basis of manipulated eligibility certificates or domicile certificates
in return for huge sums. These dishonest and unscrupulous practices have damaged the standard
of education in India to such an extent that it is causing an irreparable loss to the younger
generation. More often than not, these privately managed educational institutions as also those
imparting some professional education, enjoy the patronage of some influential politicians and
many of them are even owned by them. Many such institutions are virtually non-existent and are
functioning as commercial shops, enabling the students to get degrees on payment of huge sums
in blatant violation of the government rules, regulations and norms. The magnitude of this white
collar criminality has adversely affected the standard of education in most States, and, therefore,
the problem needs to be tackled through stringent statutory measures.

137

White collar crime in business deals


White collar crimes are also rampant in business world. There have always been instances of
violation of trust. Sutherland made a careful study of a number of large corporations and
business houses in United States and found that they were involved in illegal contracts,
combinations or conspiracies in restraint of trade, misrepresentation in advertising, infringements
against copyrights and trademarks, unfair labour practices, bribing public officials and so on. The
public hardly knows the trickery of business criminals as they treat it as not too important for
their purpose. Sutherland attributed the highest degree of criminality to business world which
includes traders, businessmen and industrialists. It has been held that business communities in
India of large and small merchants are basically dishonest bunch of crooks. nowhere in the world
do businessmen get rich so quickly as they do in India. The Report of the Monopolies Inquiry
Commission expressed great concern about the chronic problem of hoarding, profiteering and
black marketing of essential commodities by traders in India in the times of shortage and scarcity
of consumer commodities by traders in India. In times of shortage and scarcity of consumer
commodities, the traders withdraw the stock and subsequently dispose it of at exorbitant prices.
The Santhanam Committee Report on Prevention of Corruption observed that Indian
businessmen build up secret hoards of foreign exchange abroad through under-invoicing of
exports and over-invoicing of imports violating the Imports & Exports Laws and Foreign
Exchange Regulations. Although bribery is an offence under the Prevention of Corruption Act,
1988 and both, bribe-taker as well as the bribe-giver both are equally punishable, but commercial
agents and public officials indulge in illegal gratification for their personal gain and the legal
restraints provided for the purpose are hardly adequate to cure this menace. It may, however, be
pointed out that all bribery cases are not necessarily white collar crimes because white collar
criminality is confined to only those illegal activities which the persons of prestigious group,
high social status commit in course of their legitimate business or occupation for financial gain.
Adulteration of edible foodstuffs is also frequently committed by businessmen which injurious to
public health. The sale and production of spurious drugs and sub-standard medicines by
manufacturers is yet another white collar crime which enables businessmen to earn huge illegal
profits. The evil has become so widespread and persistent that it is difficult to get even air, water
and light unpolluted. The constant rise in price and cost of living has made the consumers costconscious. The unscrupulous traders take undue advantage of the situation and provide
adulterated articles of food, drinks or drugs etc. at a cheaper rate and earn huge profits. They
even do not hesitate to add poisonous constituents to articles of food and drinks which are
injurious to health. A number of deaths are reported every year due to consumption of spurious
liquor or food poisoning.
Some of the common adulterants used in various edibles and articles of foodstuffs are:(i) Injurious colours such as sacrol, saccharin etc. in preparation of icecream and kulfi;
(ii) Addition of blotting paper or soapstone in panir;
(iii) geru, ratanjot and powdered husk of rice or bran in powdered chillies and spices;
(iv) coal-tar in batasha and other sweets;
(v) horse-dung, powdered bran etc. in dhania. There are only a few examples of adulteration in
food and drinks. Despite stringent provisions in IPC, Adulteration Act, Drugs Act and Opium
Act, the menace of adulteration still subsists and laws have failed to eradicate this evil. White
collar crimes also operate in insurance business where both the insured as well as insurer earn
considerable profit by making false and fabricated claims. Instances are not wanting when
138

intentional houseburning, automobile destruction and even murders are planned by the persons
of respectable community in order to make good fortunes from the manipulated insurance
claims.

Fake Employment Placement Rackets


A number of cheating cases are reported in various parts of the country by the so called
manpower consultancies and employment placement agencies which deceive the youth with
false promises of providing them white collar jobs on payment of huge amount ranging from 50
thousands to two lakhs of rupees. The modus operandi of these placement racket operators is
simple. They issue advertisements in leading dailies offering jobs in blue-chip companies. When
highly educated and professional approach them, the person running the placement office
convinces them that he is in good books of the management of some reputed firms and
companies. He collects an amount ranging from Rs. 100/- to 200/- as registration fee from them
and contacts the applicants at their residences claiming himself to be a companys representative
or conducts interviews on telephone. After he is convinces that he won the confidence of the jobseekers, he extracts money from them and issues fake appointment orders. These racketeers give
a fake address of their office so that they can escape detection and police action. Due to the acute
unemployment problem, fake placement consultancies have become money-spinning machines
for several cheats who are white collar criminals. These agencies thrive because of the absence
of data relating to genuine job providers and there being no adequate monitoring of such
agencies.

Modern Conceptualizations of White-Collar Crime


Today, criminologists and social scientists offer various ways to define white-collar crime. These
variations tend to overlap with one another and include the following:
.White-collar crime as moral or ethical violations
.White-collar crime as social harm

.White-collar crime as violations of criminal law


White-collar crime as violations of civil law
White-collar crime as violations of regulatory laws
White-collar crime as workplace deviance
White-collar crime as definitions socially constructed by businesses
White-collar crime as research definitions
White-collar crime as official government definitions
White-collar crime as violations of trust
White-collar crime as occupational crimes

White-collar crime as violations occurring in occupational systems

WHITE-COLLAR CRIME: A TEXT/READER


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Defining white-collar crime as moral or ethical violations follows ideals inherent within
principles of what is known as natural law. Natural law focuses on behaviors or activities that
are defined as wrong because they violate the ethical principles of a particular culture,
subculture, or group. The immoral nature of the activities is seen as the foundation for defining
certain types of white-collar activities as criminal. Some individuals, for example, define any
business activities that destroy animal life or plant life as immoral and unethical. To those
individuals, the behaviors of individuals and businesses participating in those activities would be
defined as white-collar crimes.
Some prefer to define white-collar crime as violations of criminal law. From this framework,
white-collar crimes are criminally illegal behaviors committed by upper class individuals during
the course of their occupation. From a systems perspective, those working in the criminal justice
system would likely define white-collar crime as criminally illegal behaviors. Crime, in this
context, is defined as an intentional act or omission committed in violation of the criminal law
without defense or justification and sanctioned by the state as a felony or misdemeanor (Tappan,
1960, p. 10). Applying a criminal law definition to white-collar crime, white-collar crimes are
those criminally illegal acts committed during the course of ones job. Here are a few examples:
An accountant embezzles funds from his employer.
Two nurses steal drugs from their workplace and sell them to addicts.
A financial investor steals investors money.
A prosecutor accepts a bribe to drop criminal charges.
Two investors share inside information that allow them to redirect their stock purchases.
A disgruntled employee destroys the computer records of a firm upon her resignation.

These acts are instances where the criminal law has been violated during the course of
employment. As such, members of the criminal justice could be called upon to address those
misdeeds.
Certainly, some rule breaking during the course of employment does not rise to the level of
criminal behavior, but it may violate civil laws. Consequently, some may define white-collar
crime as violations of civil law. Consider cases of corporate wrongdoing against consumers. In
those situations, it is rare that the criminal law would be used to respond to the offending
corporation. More often, cases are brought into the civil justice system. When the Exxon Valdez
ran aground in Prince William Sound, Alaska, and caused untold damage to the environment, for
example, the case was brought into the civil justice system. Eventually it was learned that the
cause of the crash could be attributed to the ships overworked crew. To date, Exxon has paid $2
billion in cleanup efforts and another $1 billion in fines. Ongoing legal battles are focusing on
whether Exxon should pay even more in damages.
Individuals have also defined white-collar crime as violations of regulatory law. Some
workplace misdeeds might not violate criminal or civil laws, but may violate a particular
occupations regulatory laws. Most occupations and businesses have standards, procedures, and
regulations that are designed to administratively guide and direct workplace activities. The
nursing home industry provides a good example. The government has developed a set of
standards that nursing home administrators are expected to follow in providing care to nursing
home residents. At different times during the year, government officials inspect nursing homes to
see if they are abiding by the regulations. In most instances, some form of wrongdoing is
uncovered. These instances of wrongdoing, however, are not violations of criminal law or civil

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law; rather, they are violations of regulatory law. Hence, some authors focus on white-collar
crimes as violations of regulatory laws.
Sometimes behaviors performed as part of an occupational routine might be wrong, but not
necessarily illegal by criminal, civil, or regulatory definitions. As a result, some prefer to follow
definitions of white-collar crime as workplace deviance. This is a broader way to define whitecollar crime, and such an approach would include all of those workplace acts that violate the
norms or standards of the workplace, regardless of whether they are formally defined as illegal or
not. Violations of criminal, civil, and regulatory laws would be included, as would those
violations that are set by the workplace itself. Beyond those formal violations of the law,
consider the following situations as examples of workplace deviance:
Professors cancel class simply because they dont feel like going to class.
A worker takes a 30-minute break when she was only supposed to take a 15-minute break.
A worker calls his boss and says he is too sick to come to work when in fact he is not

actually sick (but he uses that fake sick voice as part of his ploy).
A wedding photographer gets drunk at a clients wedding, takes horrible pictures, and hits
on the groom.
An author uses silly examples to try to get his point across.
In each of these cases, no laws have necessarily been broken; however, one could argue that
workplace or occupational norms may have been violated.
Somewhat related, one can also define white-collar crime as definitions socially constructed
by businesses. What this means is that a particular company or business might define behaviors
that it believes to be improper. What is wrong in one company might not necessarily be wrong in
another company. Some businesses might have formal dress codes while others might have
casual Fridays. Some companies might tolerate workers taking small quantities of the goods it
produces home each night, while other companies might define that behavior as inappropriate
and criminal. The expectations for workplace behavior, then, are defined by the workplace.
Incidentally, some experts have suggested that expectations be defined in such a way as to accept
at least minor forms of wrongdoing (see Mars, 1983, for a description of the rewards individuals
perceive from workplace misconduct). The basis for this suggestion is that individuals are more
satisfied with their jobs if they are able to break the rules of their job at least every now and then.
As a simple example, where would you rather work: (1) in a workplace that lets you get away
with longer breaks every now and then or (2) in a workplace where you are docked double pay
for every minute you take over the allotted break?
In some cases, workplace behaviors might not be illegal or deviant, but might actually create
forms of harm for various individuals. As a result, some prefer to define white-collar crime as
social harm. Those defining white-collar crime from this perspective are more concerned with
the harm done by occupational activities than whether behavior is defined either formally or
informally as illegal or deviant. According to one author, by concentrating on what is defined as
illegal or criminal, a more serious threat to society is left out (Passas, 2005, p. 771). Galbraith
(2005, p. 731) offers the following examples: The common practices of tobacco companies, hog
farmers, gun makers and merchants are legal. But this is only because of the political nature of
the perpetrators; in a democracy free of their money and influence, they would be crimes.
Additional examples of white-collar crimes that are examples of this social harm perspective
have been noted by Passas (2005), who highlighted the following crimes that occur without
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lawbreaking occurring: cross-border malpractices, asymmetrical environmental regulations,


corrupt practices, child labor in impoverished communities, and pharmaceutical practices such as
those allowing testing of drugs in third world countries. Passas emphasized that lawbreaking
does not occur when these actions are performed, but argues the actions are, in fact, criminal.

WHITE-COLLAR CRIME: A TEXT/READER


Another way to define these behaviors is to consider white-collar crime as research
definitions. When researchers study and gather data about white-collar crime, they must
operationalize or define white-collar crime in a way that allows them to reliably and validly
measure the behavior. As an example, in 2005, the National White-Collar Crime Center
conducted its second national survey on white-collar crime. The results of this survey will be
discussed later. For now, the way that the researchers defined white-collar crime illustrates what
is meant by research-generated white-collar crime definitions. The researchers defined whitecollar crime as: illegal or unethical acts that violate fiduciary responsibility or public trust for
personal or organizational gain (Kane & Wall, 2006). Using this definition as their foundation,
the researchers were able to conduct a study that measured the characteristics of white-collar
crime, its consequences, and contributing factors. Note that had they chosen a different
definition, their results may have been different. The way that we define phenomena will
influence the observations we make about those phenomena.
Another way to define these behaviors is to consider white-collar crime as official
government definitions. Government agencies, and employees of those agencies, will have
definitions of white-collar crime that may or may not parallel the way others define white-collar
crime. The Federal Bureau of Investigation (FBI), for example, has used an offense-based
perspective to define white-collar crime as part of its Uniform Crime Reporting program. The
FBI defines white-collar crime as:
Those illegal acts which are characterized by deceit, concealment, or violation of trust
and which are not dependent upon the application or threat of physical force or violence.
Individuals and organizations commit these acts to obtain money, property, or services; to
avoid payment or loss of money or services; or to secure personal or business advantage.
(United States Department of Justice, 1989, p. 3; as cited in Barnett, no date)
In following this definition, the FBI tends to take a broader definition of white-collar crime
than many white-collar crime scholars and researchers do. Identity theft offers a case in point.
The FBI includes identity theft as a white-collar crime type. Some academics, however, believe
that such a classification is inappropriate. One research team conducted interviews with 59
convicted identity thieves and found that offenses and offenders did not meet the traditional
characteristics of white-collar crimes or white-collar offenders. Many offenders were
142

unemployed and working independently, meaning their offenses were not committed as part of a
legitimate occupation, or in the course of their occupation (Copes & Vieraitis, 2009).
Another way to define white-collar crime is to focus on white-collar crime as violations of
trust that occur during the course of legitimate employment. To some authors, offenders use their
positions of trust to promote the misconduct (Reiss & Biderman, 1980). Criminologist Susan
Shapiro (1990) has argued for the need to view white-collar crime as abuses of trust and she
suggests that researchers should focus on the act rather than the actor. She wrote:
Offenders clothed in very different wardrobes lie, steal, falsify, fabricate, exaggerate,
omit, deceive, dissemble, shirk, embezzle, misappropriate, self-deal, and engage in
corruption or incompliance by misusing their positions of trust. It turns out most of them
are not upper class.
In effect, Shapiro was calling for a broader definition of white-collar crime that was not limited
to the collar of the offenders shirts.
Others have also called for broader conceptualizations that are not limited to wardrobes or
occupational statuses. Following Clinard and Quinneys 1973 conceptualization, some have
suggested that these behaviors be classified as white-collar crimes as occupational crimes. One
author defines occupational crimes as violations that occur during the course of occupational
activity and are related to employment (Robin, 1974). Robin argued vehemently for the broader
conceptualization of white-collar crime. He noted that various forms of lower class workplace
offenses are more similar to white-collar crime methodologically than behaviorally, suggesting
that many occupational offenders tend to use the same methods to commit their transgressions.
He further stated that the failure of scholars to broadly conceive white-collar crime results in
underestimating the amount of crime, distorts relative frequencies of the typology of crimes,
produces a biased profile of the personal and social characteristics of the violators, and thus
affects our theory of criminality.
Criminologist Gary Green (1990) has been a strong advocate of focusing on occupational
crime rather than a limited conceptualization of white-collar crime. He defined occupational
crime as any act punishable by law which is committed through opportunity created in the
course of an occupation that is legal (p. 13). Green described four varieties of occupational
crime: (1) organizational occupational crimes, which include crimes by corporations, (2) state
authority occupational crimes, which include crimes by governments, (3) professional
occupational crimes, which include those crimes by individuals in upper class jobs, and (4)
individual occupational crimes, which include those crimes committed by individuals in lower
class jobs. The strength of his conceptualization is that it expands white-collar crime to consider
all forms of misdeeds committed by employees and businesses during the course of employment.
Using each of the above definitions as a framework, white-collar crime can also be defined as
violations occurring in occupational systems. This text uses such a framework to provide broad
systems perspective about white-collar crime. White-collar crime can therefore be defined as
any violation of criminal, civil, or regulatory lawsor deviant, harmful, or unethical actions
committed during the course of employment in various occupational systems. This definition
allows us to consider numerous types of workplace misconduct and the interactions between
these behaviors and broader systems involved in preventing and responding to white-collar
crimes. As will be shown in the following paragraphs, the extent of these crimes is enormous.

143

Extent of White-Collar Crime


Determining the extent of white-collar crime is no simple task. Two factors make it particularly
difficult to accurately determine how often white-collar crimes occur. First, many white-collar
crimes are not reported to formal response agencies. One study found that just one third of whitecollar crime victims notify the authorities about their victimization (Kane & Wall, 2006). When
individuals are victims of white-collar crimes, they may not report the victimization because of
shame, concerns that reporting will be futile, or a general denial that the victimization was
actually criminal. When businesses or companies are victims, they may refrain from reporting
out of concern about the negative publicity that comes along with being duped by an
employee. If victims are not willing to report their victimization, their victimization experiences
will not be included in official statistics.
A second factor that makes it difficult to determine the extent of white-collar crime has to do
with the conceptual ambiguity surrounding the concept (and discussed above). Depending on
how one defines white-collar crime, one would find different estimates about the extent of whitecollar crime. The federal government, and other government agencies, offer different definitions
of white-collar crime than many scholars and researchers might use. The result is that whitecollar crime researchers typically observe caution when relying on official statistics or
victimization surveys to determine the extent of white-collar crime victimization. Despite this
caution, the three main ways that we learn about the extent of white-collar crime are from official
statistics provided by government agencies, victimization surveys, and research studies focusing
on specific types of white-collar crime.
With regard to official statistics and white-collar crime, the FBIs Uniform Crime Reports
(UCR) and National Incident Based Reporting System (NIBRS) provide at least a starting point
from which we can begin to question how often certain forms of white-collar crime occur. These
data reflect crimes known to the police. The UCR includes eight Part I (or index offenses:
homicide, robbery, rape, aggravated assault, motor vehicle theft, larceny, arson, and burglary)
and 29 Part II offenses, which are typically defined as less serious crimes. With regard to
white-collar crime, Part II offenses have been regarded as possible white-collar crimes. Table 2.2
shows the number of times these crimes occurred between 1990 and 2008. As shown in the table,
the number of forgery/counterfeiting and embezzlement cases increased somewhat dramatically
between 1990 and 2009, while the number of fraud cases was lower in 2009 than in 1992, though

144

the number of fraud cases fluctuated significantly over this time frame. Also, note the increase in
all arrests for all three offense types between 2008 and 2009.
A word of caution is needed in reviewing these estimates. Not all criminologists agree that
these offenses are appropriate indicators of white-collar crimes. Many of these offenses may
have occurred outside of the scope of employment. Also, because the UCR does not capture
information about offender status, it is not possible to classify the crimes according to the
occupational systems where the offenses occurred.
Limitations in the UCR prompted the federal government to expand its efforts in reporting crime
data through the National Incident Based Reporting System. NIBRS data provide more
contextual information surrounding the crimes reported to the police. For example, this reporting
system provides information about where the crime occurred, the victim-offender relationship,
victim characteristics, and so on. While more contextual information is provided from NIBRS
data, the same limitations that plague the UCR data with regard to the measurement of whitecollar crime surface: (1) not everyone would agree these are white-collar crimes, (2) the database
was created for law enforcement and not for researchers, (3) many cases are reported to
regulatory agencies rather than law enforcement, (4) some white-collar crime victims are
unaware of their victimization, and (5) shame may keep some victims from reporting their
victimization (Barnett, no date). Also, the NIBRS data are not as user friendly as UCR data at
this point.
Victimization surveys offer an opportunity to overcome some of these problems. These surveys
sample residents and estimate the extent of victimization from the survey findings. The 2005
National White-Collar Crime Center (NW3C) Victimization.

Arrests Reported in UCR for Three White-Collar Offenses, 19902009, U.S.


Department of Justice, Available online.
Year
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007

Forgery/Counterf
eiting
50403
53853
66608
69063
71322
84068
81319
77773
70678
56813
58493
77692
83111
79188
73082
87346
79477
78005

Embezzlement

Fraud

7708
7458
8860
8886
9155
10832
11763
10935
10585
9692
10730
13836
13416
11986
9164
14097
14769
17015

182752
188100
279682
246127
233234
295584
248370
298713
220262
166413
155231
211177
233087
208469
235412
231721
197722
185229

145

2008
2009

68976
85844

16458
17920

174598
210255

Survey is the most recent, and most comprehensive, white-collar crime victimization survey
available. The results of this survey, a phone interview with 1,605 adults in the United States,
found that 46.5% of households and 36% of individuals reported experiencing forms of whitecollar crime in the prior year (Kane & Wall, 2006). Nearly two thirds of the respondents reported
experiencing some form of white-collar victimization (as measured by the researchers) in their
life time.
Table 2.3 shows the types of victimization reported by respondents in the NW3C victimization
survey. As shown in the table, more than a third of the respondents indicated that they had been
lied to about prices in the prior year, and one fourth reported being victims of credit card fraud.
Also, about one fifth reported being victimized by unnecessary object repairs and corporate
scandals.
The NW3C also asked victims about their decisions to report their victimization to various
agencies. Table 2.4 shows the formal agencies that respondents reported their victimization to
(among those who did report the victimization). As shown in the table, respondents tended to
report their victimization either to their credit card company or the entity involved. Perhaps most
interesting is how infrequently respondents reported their victimization to formal governmental
agencies of social control. Less than one fifth of respondents reported their victimization to the
police, one seventh of them notified the Better Business Bureau, one in 14 notified the district
attorney, and about one in 20 notified a personal lawyer or the consumer protection agency.
Researchers have also used specific studies to gauge the extent of various forms of white-collar
crime. One author, for example, cites a study by the Government Accountability Office that
found fraud in every single case of the Savings and Loan institutions included in the study
(Galbraith, 2005). Another study found that one in 30 employees (out of 2.1 million employees)
was caught stealing from his or her employer in 2007 (Record Number of Shoplifters, 2008). A
Federal Trade Commission (FTC) survey of 2,500 adults in the United States found that
consumer fraud was rampant (Anderson, 2004). Based on the survey findings, Anderson
estimates that nearly 25 million adults in the United States11.2% of the adult population
were victims of one or more of the consumer frauds covered in the survey during the previous
year (p. ES-2). Anderson further estimated that 35 million cases of consumer fraud occur each
year.
Figure 2.2 shows the extent of the types of consumer fraud considered in the FTC survey. As
shown in the figure, the most common frauds were paying an advanced fee for a loan/credit card,
fraudulent billing for buyers club memberships, and purchasing credit card insurance. Note that
these are only estimates about the extent of victimization. Accurately determining the extent of
white-collar crime remains a difficult task.

146

Table 2.3 Household Victimization Trends (12 months)


False Stocbroker info
Illegimate e-mail
Business Venture
New Account Fraud
Unnecessary Repair(Home)
Monetory Loss(Interest)
Existing Fraud Account
Unnecessary Repair(Object)
Affected byNational Corporate Scandal
Credit Card Fraud
Price Lie

4.4%
5.5%
5.9%
8.1%
11.7%
12.4%
12.6%
20.8%
21.4%
24.5%
35.9%

Table 2.4 Household Victimization Reporting Trends


Internet Crime Complain Center
Consumer Protection Agency
Personal Lawyer
District Attorney or State Attorney General
Better Business Bereau
Police/Law Enforcement
Entity Involved
Others
Credit Card Company

2.6%
4.5%
4.9%
7.7%
14.2%
19.3%
31.8%
32.1%
34.9%
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Consequences of White-Collar Crime


Crime, by its very nature, has consequences for individuals and communities. White-collar
crime, in particular, has a set of consequences that may be significantly different from the kinds
of consequences that arise from street crimes. In particular, the consequences can be
characterized as (1) individual economic losses, (2) societal economic losses, (3) emotional
consequences, (4) physical harm, and (5) positive consequences.
Individual economic losses refer to the losses that individual victims or business lose due to
white-collar crimes. One way that criminologists have captured these losses is to compare them
to losses
Common Types of Consumer Fraud 01234567 Paid an advance fee to obtain a loan or credit
card that you were promised or guaranteed you would receive Billed for buyers club
memberships you did not agree to purchase Purchased credit card insurance Purchased credit
repair Paid money or made a purchase to receive a promised prize and did not receive the prize
or was not as promised Billed for Internet services you did not agree to purchase Purchased a
membership in a pyramid scheme Number of victims (millions of adults) Number of incidents
(millions) experienced by victims of conventional crimes. By some estimates, the average
amount lost to embezzlement, for example, is about $1,000,000 (The Marquette Report, 2009).
By comparison, consider the following:
The average street/highway robbery entails losses of $1,032
The average gas station robbery entails losses of $1,007
The average convenience store robbery entails losses of $712 (Federal Bureau of

Investigation, 2009b).
It is important to note that a small group of offenders can create large dollar losses. One
study found that 27 white-collar offenders were responsible for dollar losses in the amount of
$2,494,309 (Crofts, 2003). Each offender stole an average of $95,935. Other studies have also
found large dollar losses as a central feature of white-collar crimes (Wheeler, Weisburd, & Bode,
1988). In fact, Sutherland (1949) argued that white-collar crimes cost several times more than
street crimes in terms of financial losses. While his estimate may be a little dated, the fact
remains that a white-collar crime will likely cause larger dollar losses to victims than a street
crime would.
Societal economic losses entail the total amount of losses incurred by society from whitecollar crime. Kane and Wall (2006) cite estimates suggesting that white-collar crime costs the
United States between $300 and $600 billion a year in financial losses. These costs are increased
when considering the secondary societal economic costs such as business failures and recovery
costs. In terms of business failures, one estimate suggests that one third to one half of business
failures are attributed to employee theft (National White Collar Crime Center, 2009). With regard
to recovery costs, taxpayers pay billions of dollars to support the efforts of the criminal, civil,
and regulatory justice systems. As an illustration of how these costs can quickly add up, one
white-collar criminal involved in a $7 million Ponzi scheme eventually lost everything and was
unable to afford his own attorney. In this case, the federal public defenders office was assigned
the task of representing the accused (Henning, 2010). Attorney costs in white-collar crime cases
are believed to be particularly exorbitant.

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Emotional consequences are also experienced by victims of white-collar crime and all
members of society exposed to this misconduct. These emotional consequences include stress
from victimization, violation of trust, and damage to public morale. With regard to stress, any
experience of victimization is stressful, but the experience of white-collar crime victimization is
believed to be particularly stressful. Much of the stress stems from the violation of trust that
comes along with white-collar crimes.
According to Sutherland (1941), the violation of trust can be defined as the most general
characteristic of white-collar crime. Victims of a street robbery didnt trust the stranger who
robbed them in the first place. Victims of a white-collar crime, in addition to the other losses
incurred from the victimization, have their trust violated by the offender. There is reason to
believe that the level of trust may be tied to the specific level of trust given to different types of
white-collar offenders (e.g., we trust doctors and pharmacists at a certain level, but auto
mechanics on another level).
Researchers have used various strategies to consider how these trust violations manifest
themselves in white-collar crimes. Spalek (2001) interviewed 25 individuals who lost some of
their pension funds to a fraudulent scheme by Robert Maxwell. She focused on the degree to
which victimization bred distrust. She found that many of the victims already distrusted their
offender before the victimization came to light. The victims said that they felt forced or coerced
into trusting the offender as part of his investment scheme. In terms of trust, they placed their
trust in outside agencies to protect them from the offender. The following comments from
Spaleks participants highlight this pattern:
Ive always mistrusted Maxwell. But I felt that because pensioners were, to a large extent,
the province of the state . . . that there was very little Maxwell could do to make off with
the money.
I suppose at the time I actually thought that the law would actually safeguard against
anything that was mine so I wasnt too worried about it, although I thought that Maxwell
would do his best to get his hands on the money (n.p.).
With regard to public alienation, violations of trust potentially do damage to the economy
and social relationships. According to Frankel (2006), with few exceptions, trust is essential to
economic prosperity. If individuals do not trust financial institutions, they are not likely to
invest their funds in the economy. Sutherland (1941) recognized this relationship between trust,
the economy, and social relationships. He wrote:
The financial loss from white-collar crime, great as it is, is less important than the
damage to social relations. White-collar crime violates trust and therefore creates distrust;
this lowers social morale and produces disorganization. Many white-collar crimes attack
the fundamental principles of the American institutions. Ordinary crimes, on the other
hand, produce little effect on social institutions or social organization.
Building on Sutherlands ideas, Moore and Mills (1990) described the following
consequences of white-collar crime:
Diminished faith in a free economy and in business leaders
Erosion of public morality
Loss of confidence in political institutions, processes, and leaders

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Physical harm may also result from white-collar crime victimization. Sometimes, physical harm
may be a direct result of the white-collar offense. For example, cases of physical or sexual
patient abuse will result in physical harm for victims. Other times, experiencing financial harm
can lead to physical problems. The loss of ones entire retirement savings, for example, has been
found to contribute to health problems for white-collar crime victims (Payne, 2005).
Death or serious physical injury is also a possible consequence of white-collar crimes. In one
case, for instance, seven people died after a doctor used lemon juice instead of antiseptic on
patients operation wounds (Ninemsn Staff, 2010). In another case, Reinaldo Silvestre was
running a medical clinic in Miami Beach when it was discovered that he was practicing without a
license, using animal tranquilizers as sedatives for humans, and performing botched surgeries. In
a widely publicized case, a male body builder was given female C-cup breast implantshe had
requested pectoral implants to make his chest look bigger (Fugitive Phony Doctor Nabbed,
2004).
It is possible to more generally highlight the physical harm stemming from white-collar
crime. Consider the following estimates, quoted verbatim from their sources:
Research from the U.S. Consumer Product Safety Commission indicates that defective or

unsafe products cause 29.4 million injuries and 21,400 deaths each year. (Ria, 2009)
As many as 231,000 people have died from asbestos-related diseases in the U.S. since
1980; an equal number could die by 2040 according to testimony given at the [Senate]
hearing. Dr. David Weissman, from the National Institute for Occupational Safety and
Health, informed the Senate Committee that deaths from the asbestos cancer mesothelioma
are increasing. (Kazen-Allen, 2007)
At least 12,000 Americans die each year from unnecessary surgery, according to a Journal
of the American Medical Association report. And tens of thousands more suffer
complications. (Black, 2005)
An estimated 7.5 million unnecessary medical and surgical procedures are performed each
year, writes Gary Null, PhD, in Death by Medicine. (Black, 2005)
An average of 195,000 people in the USA died due to potentially preventable, in-hospital
medical errors in each of the years 2000, 2001 and 2002. (Loughran, 2004)
The National-Scale Air Toxics Assessment . . . study is used by the EPA to identify parts of
the country where residents could face the greatest health threats from air pollution. . . .
Almost 2.2 million people lived in neighborhoods where pollution raised the risk of
developing cancer to levels the government generally considers to be unacceptable. (Heath
& Morrison, 2009)
In line with the objective approach presented in Section I, it is important to stress that not all
consequences of white-collar crime are necessarily bad. Sociologist Emile Durkheim has
highlighted four functions of crime that illustrate how crime in some ways has positive
influences on individuals and communities (see Martin et al., 2009). These four functions can
also be applied to white-collar crime. They include: warning light syndrome, boundary
maintenance, social change, and community integration.
The warning light syndrome refers to the fact that outbreaks of white-collar crime could
potentially send a message to individuals, businesses, or communities that something is wrong in
a particular workplace system. If an outbreak of employee theft occurs in a hospital, for example,
the administrators would be warned that they need to address those aspects of the occupational
routines that allowed the misconduct to occur.
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In terms of boundary maintenance, it is plausible to suggest that individuals learn the rules
of the workplace when some individuals are caught breaking those rules. In effect, they learn the
boundaries of appropriate and acceptable behaviors by seeing some individuals step over those
boundaries. Some even recommend that white-collar offenders, when caught, be arrested at times
when the vast majority of workers would be able to see the arrests (Payne & Gray, 2001). This
recommendation is promoting a strategy to promote boundary maintenance.
With regard to social change, our society has changed significantly because of white-collar
misdeeds. Some people have talked about how survivors of violent crime actually become
stronger because of their experience with violence. Following this same line of thinking, those
who survive white-collar crime victimization might actually become stronger. As well, when
cultures and societies survive corporate victimization, they too may actually grow stronger.
Community integration is a fourth function of white-collar crime. In particular, groups of
individuals who otherwise would not have become acquainted with one another may come
together in their response to white-collar crime. When there is a crime outbreak in a
neighborhood, those neighbors come together to share their experiences and make their
neighborhood stronger (Martin et al., 2009). A crime outbreak in a business could have the same
result. Coworkers who never talked with one another might suddenly become lunch buddies
simply because they want to get together to talk about the crimes that occurred in their
workplace. As well, at the societal level, new groups have been formed to prevent and respond to
white-collar crime.
Consider the National White Collar Crime Center (NW3C). Formed in 1992, the center
includes professionals, academics, and researchers interested in addressing white-collar crime on
different levels. The NW3Cs mission is: to provide training, investigative support, and research
to agencies and entities involved in the prevention, investigation, and prosecution of economic
and high tech crime (National White Collar Crime Center, 2009). Without the problem of whitecollar crime, this center would never have been created and its members would never have been
brought together (or integrated as a community).
Other possible positive consequences of white-collar crime can be cited. For example, some
criminologists have noted that occasional forms of deviance might be enjoyable or pleasurable to
commit. The 2010 Conan OBrien/Jay Leno debacle comes to mind. It was announced in January
2010 that OBrien was to be replaced by Leno after he had been promised a long-term contract to
host The Tonight Show. In the last several episodes of his NBC show, OBrien spent much of his
show trashing his bosses at NBC. He even had skits suggesting that he was blowing NBCs
money on pointless props for his show. The studio and home audiences raved about these skits.
Who wouldnt want to go on national television every now and then and blow their companys
money while trashing their bosses? (For the record, the thought never entered my mind.) In a
similar way, some cases of workplace deviance might have the positive benefit of making the
worker a more satisfied worker (see Mars, 1983). Authors have talked about the joy of
violence (Kerbs & Jolley, 2007). In some ways, there might also be the joy of white-collar
deviance.
For some students, the numerous careers available to respond to white-collar crime might also be
seen as a positive. Whenever I teach my criminal justice classes, I always ask my students if they
would make crime go away if they could. Seldom do any students indicate that they would make
crime disappear. In their minds, if they made crime disappear, theyd have to change their
majors! So, in some ways, white-collar crime helps keep some criminal justice officials
employed. A few of these careers can be particularly lucrativeone defense attorney was
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recently paid $50,000 simply for providing counsel to a white-collar worker who had to testify in
a grand jury proceeding (Nelson, 2010).

Public Attitudes About White-Collar Crime


A large body of criminological research has focused on public attitudes about crime and different
crime policies. Unfortunately, of the hundreds of criminological studies focusing on attitudes
about crime, only a handful have focused on what the public thinks about white-collar crime. Yet
research on white-collar crime attitudes is important for empirical, cultural, and policy-driven
reasons (Piquero, Carmichael, & Piquero, 2008). In terms of empirical reasons, because so few
studies have considered what the public thinks about white-collar crime, research on this topic
will shed some light on how members of the public actually perceive this offense type. As well,
such research will provide interesting, and important, insight into a particular culture or
subculture. Perhaps most important, such research provides policy makers information they can
use to implement prevention, response, and sentencing strategies.
In one of the first studies on public attitudes about white-collar crime, Cullen and his
colleagues (Cullen, Clark, Mathers, & Cullen, 1983) surveyed a sample of 240 adults and
assessed various perceptions about this behavior. The researchers found that the sample (1)
supported criminal sanctions for white-collar offenders, (2) viewed white-collar crimes as having
greater moral and economic costs than street crimes, and (3) did not define the offenses as
violent. They also found that perceptions of seriousness of white-collar crime increased more
than any other offense type in the 1970s and that physically harmful offenses were viewed as the
most serious forms of white-collar crime.
Other studies have shown similar results. A study of 268 students found that perceptions of
the seriousness of white-collar crime have increased over time and that these perceptions were
tied to wrongfulness and harmfulness (Rosenmerkel, 2001). The NW3C National Victimization
Survey also included items assessing perceptions of seriousness. The researchers found that the
sample of 1,605 adults viewed (1) white-collar crime as serious as conventional crime, (2)
physically harmful white-collar offenses as more serious than other white-collar crimes, (3)
organizational offenses as more serious than individual offenses, and (4) offenses by higher
status offenders as more serious than offenses by lower status offenders (Kane & Wall, 2006).
More recent research has built on these findings. A telephone survey of 402 residents of the
United States focused on perceptions about white-collar crime and the punishment of whitecollar offenders (Holtfreter, Van Slyke, Bratton, & Gertz, 2008). The authors found that one third
of the respondents said that white-collar offenders should be punished more severely than street
criminals. They also found that two thirds of the respondents believed that the government
should devote equal or more resources towards white-collar crime control (p. 56).
Around the same time, telephone interviews with 1,169 respondents found that the majority of
respondents defined white-collar crime as equally serious as, if not more serious than, street
crime (Piquero, Carmichael, & Piquero, 2008). They also found that the presence of a college
education impacted perceptions of seriousness. Those with a college education were more likely
to define street crime and white-collar crime as equally serious. Another study using the same
dataset found that respondents believed that street criminals were more likely than white-collar
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offenders to be caught and to receive stiffer sentences (Schoepfer, Carmichael, & Piquero, 2007).
Respondents also believed that robbery and fraud should be treated similarly. Another way to
suggest this is that the respondents believed that robbers and occupational offenders committing
fraud should be handled the same way. In addressing this point, it is important to call attention to
similarities and differences between conventional criminals and white-collar criminals.

Characteristics of White-Collar Offenders


Because white-collar offenses are viewed as equally serious as street crimes, there may be a
tendency among some to view white-collar criminals as similar to street criminals (Payne,
2003b). Such an assumption, however, is misguided and represents an inaccurate portrait of the
white-collar criminal. As well, focusing narrowly on white-collar offenders may result in
individuals failing to recognize the interactions between the offenders background
characteristics and their offensive behavior (Wheeler et al., 1988).
Criminologists have devoted significant attention to describing the characteristics of various
types of white-collar offenders. Comparing records of street offenders and white-collar
offenders, Benson and Moore (1992) concluded: Those who commit even run-of-the-mill
garden variety white-collar offenses can, as a group, be clearly distinguished from those who
commit ordinary street offenses (p. 252). In one of the most comprehensive white-collar crime
studies, Wheeler and his colleagues (1988) found that white-collar offenders were more likely
than conventional offenders to (1) have a college education, (2) be white males, (3) be older, (4)
have a job, (5) commit fewer offenses, (6) start their criminal careers later in life, and (7) be
Jewish. Focusing on the interactions between offender characteristics and offense characteristics,
the same research demonstrated that white-collar crime was more likely than street crime to:
Be national or international in scope
Involve a large number of victims
Have organizations as victims
Follow demonstrated patterns
Be committed for more than a year
Be committed in groups

Recognizing the differences between white-collar crime/white-collar offenders and street


crimes/street offenders is significant for theoretical and policy reasons. In terms of theory, as will
be demonstrated later in this text, if one of the criminological theories can explain both types of
crimes, then that theory would be seen as having strong explanatory power. In terms of policy, it
is important to recognize that different criminal justice strategies may be needed for the two
types of offenses and that street offenders and white-collar offenders may respond differently to
the criminal justice process.
Consider efforts to prevent crime. Strategies to prevent street crimes might focus on community
building and poverty reduction; preventing white-collar crime is much more complex
(Johnstone, 1999, p. 116). The impact of convictions and incarceration is also different between
street offenders and white-collar offenders (Payne, 2003b). While such events may actually allow
street offenders to gain peer group status, the white-collar offender would not experience the
same increase in status as the result of a conviction (Johnstone, 1999; Payne, 2003b). At the most
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basic level, recognizing the differences between street offenders and white-collar offenders helps
to promote more useful prevention and intervention strategies. On a more complex level,
recognizing these differences fosters a more objective and accurate understanding about the
dynamics, causes, and consequences of the two types of behavior.

LEGAL REGULATION
InWestern societies, the legal regulation of occupations is often self-regulation. Although laws
and codes of ethics purportedly exist to protect the public from harmful occupational activity,
much self-governance has been used instead to protect the interests of members of the
occupation. The more developed professions attempt to convince legislatures that they possess
highly sophisticated, useful, esoteric knowledge; that they are committed to serving societal
needs through a formal code of ethics; and that they therefore should be granted autonomy, since
they and only they are in a position to evaluate the quality of their service. In fact, the actual
legal codes that control occupational practice tend to be formulated by the occupations
themselves in order to dominate or monopolize a line of work. Playwright George Bernard Shaw
(1941) in The Doctors Dilemma has one of his characters state that all professions are a
conspiracy against the laity (p. 9). More developed occupations (professions) virtually control
the law-making machinery affecting their work. Professional organizations and their political
action committees are quite effective in blocking legislation that may be detrimental to their
interests. An example of professional power is the AMA (American Medical Association), which
Friedson (1970) describes as professional dominance and Harmer (1975) as American
Medical Avarice. The AMA as a lobbying organization appears more concerned with guarding
profit, competition, and private enterprise in the business of medicine than supporting legislation
that would improve the quality ofmedical care delivery. According to the 1968 Report of the
National Advisory Commission on Health Manpower (cited in Skolnick & Currie, 1982), the
health statistics of certain groups in the United States, particularly the poor, resemble those in a
developing country. Occupational crime can be controlled by professional associations
themselves, by traditional criminal law, by civil law, and by administrative law. Actions by
professional ethics boards can include suspensions, censure, temporary or permanent removal of
license and membership, and the like. Traditional criminal prosecution also occurs, such as for
larceny, burglary, and criminal fraud; civil actions by the government may include damage and
license suspension suits. Administrative proceedingsmay call for taking away licenses, seizing
illegal goods, and charging fines. The FBI in its early history was involved primarily in
investigating and enforcing white collar crimes, such as false purchases, security sales violations,
bankruptcy fraud, and antitrust violations; only later did it become preoccupied with its
gangbuster image (Lowenthal, 1950, p. 12). As late as 1977, however, the House Judiciary
Committee charged that the FBI was soft on white collar crime and that its idea of white collar
crime was smallscale fraud (D. R. Simon & Swart, 1984).

Organizations and the Law


A corporation is a legal entity that permits a business to make use of capital provided by Stock
holders. Although the federal government has had the power to charter corporations since the
1791 McCulloch v. Maryland decision, it rarely uses it; most chartering is done by the states.
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Corporations have been considered legal persons since a Supreme Court decision of 1886
(Clinard & Yeager, 1980). In the United States, beginning in the nineteenth century, certain
business activities were defined as illegal. These included restraint of trade, deceptive
advertisements, bank fraud, sale of phony securities, faultymanufacturing of foods and drugs,
environmental pollution, as well as the misuse of patents and trademarks (Clinard & Quinney,
1986, p. 207). In the late nineteenth century, concern grew about the development ofmonopolies,
which threatened to control economies and stifle competition and thereby jeopardized the very
philosophy of free-market enterprise. The Sherman Antitrust Act (1890) was the first of many
regulatory laws passed to control corporate behavior. This law forbids restraint of trade and the
formation of monopolies; it currently makes price fixing a felony, with a maximum corporate
fine of $1million, and authorizes private treble (triple) damage suits by victims of price fixing.
For themost part, the policing of corporate violations is done by federal regulatory agencies
for example, the Federal Trade Commission (FTC), which was set up in 1914 at the same time as
the Clayton Antitrust Act and the Federal Trade Act. There are over 50 federal regulatory.
agencies with semi-policing functions with respect to corporate violations. Among these
agencies are the Civil Aeronautics Board (CAB), the Environmental Protection Agency (EPA),
the Federal Communications Commission (FCC), the Food and Drug Administration (FDA), the
Federal Power Commission (FPC), the Interstate Commerce Commission (ICC), the National
Labor Relations Board (NLRB), the Nuclear Regulatory Commission (NRC), the Occupational
Safety and Health Administration (OSHA), and the Securities and Exchange Commission (SEC).
Some areas regulated by these agencies and discussed in this chapter are air safety, air and water
pollution, unfair advertising, safe drugs and healthy food, public utility services, interstate
trucking and commerce, labor-management practices, nuclear power plants, health and safety in
the workplace, and the sale and negotiation of bonds and securities. Regulatory agencies have a
number of sanctions they can use to force compliance with their orders: warnings, recalls, orders
(unilateral orders, consent agreements, and decrees), injunctions, monetary penalties, and
criminal penalties (Clinard & Yeager, 1980, p. 83). In addition to criminal proceedings, acts such
as the Clayton Act (Section 4) permit treble damage suits by harmed parties. Guilty companies,
with their batteries of lawyers and accountants, generally have more expertise, time, and staff to
devote to defense than the Justice Department, under its Anti-Trust Division, has for prosecution.
Indefinite delays and appeals are not uncommon. If the government appears to have a solid case,
corporations are permitted to plead nolo contendere, or no contest, to charges. This is not an
admission of guilt, and thus enables corporations to avoid the label of criminal. Consent decrees
amount to a hand slap; that is, the corporation simply agrees to quit committing the particular
violation with which it was charged.
A number of criticisms have been levied against federal regulatory agencies and their efforts
against corporate crime:
1. Lacking sufficient investigative staff, the agencies often rely on the records of the very
corporations they are regulating to reveal wrongdoing.
2. The criminal fines authorized by law are insignificant compared with the economic costs of
corporate crime and become, in effect, a minor nuisance, a crime tax, a license to steal, but
certainly not a strong deterrent.
3. Other criminal penalties such as imprisonment are rarely used and, when they are, tend to
reflect a dual system of justice: offenders are incarcerated in country club prisons or are treated
in a far more lenient manner than traditional offenders.
4. The enforcement divisions of many regulatory agencies have been critically understaffed and
cut back, as in the Reagan administrations EPA and other agencies, to inoperable levels.

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5. The top echelons of agency commissions are often filled with leaders from the very
corporations or industries to be regulated, creating potential conflicts of interest.
6. Relationships between regulators and regulated are often too compatible, with some agency
employees more interested in representing the interests of the corporations they are supposed to
be regulating than in guaranteeing the public well-being. The fact that many retiring agency
employees are hired by the formerly regulated companies lends support to this argument. In
reviewing the state of regulation of illegal corporate activity, Clinard and Yeager (1980) state,
One may well wonder why such small budgets and professional staffs are established to deal
with business and corporate crime when billions of dollars are willingly spent on ordinary crime
control, including 500,000 policemen, along with tens of thousands of government prosecutors
and officials. (p. 96) Gross (1980) in his book Friendly Fascism answers their question by letting
us in on what he calls dirty secrets: We are not letting the public in on our eras dirty little
secret: that those who commit the crime which worries citizens mostviolent street crimeare,
for the most part, products of poverty, unemployment, broken homes, rotten education, drug
addiction,
alcoholism, and other social and economic ills about which the police can do little if anything.
But, all the dirty little secrets fade into insignificance in comparison with one dirty big secret:
Law enforcement officials, judges as well as prosecutors and investigators, are soft on corporate
crime. The corporations mouthpieces and fixers include lawyers, accountants, public
relations experts and public officials who negotiate loopholes and special procedures in the laws,
prevent most illegal activities from ever being disclosed and undermine or sidetrack
overzealous law enforcers. In the few cases ever brought to court, they usually negotiate
penalties amounting to gentle taps on the wrist. While every year the FBI publishes its
UniformCrime Reports to give an annual account of primarily street crime, no such annual exists
to measure the far more costly corporate crime. Robert Mokhiber (1999), editor of the
Washington-based Corporate Crime Reporter, ranked the Top 100 Corporate Criminals of the
1990s. These were only the tip of the iceberg in that the majority of corporate wrongdoing is
handled under civil law. This list includes only those who were caught and criminally fined. The
100 corporate criminals fell into 14 categories of crime: environmental (38), antitrust (20), fraud
(13), campaign finance (7), food and drug (6), financial crimes (4), false statements (3), illegal
exports (3), illegal boycott (1), worker death (1), bribery (1), obstruction of justice (1), public
corruption (1), and tax evasion (1). The top 10 corporate criminals of the 100 identified by
Mokhiber were the following:
1. F. Hoffman-LaRoche LtdThe Swiss pharmaceutical company pled guilty and paid a record
$500 million criminal fine for fixing prices on vitamins.
2. Daiwa Bank LtdThe bank pled guilty to 16 federal felonies and paid a $340 million
criminal fine. It pled guilty to two counts of conspiracy to defraud the United States and the
Federal Reserve Bank, misprision (concealment) of felony,
10 counts of falsifying bank records, 2 counts of wire fraud, and 1 count of obstructing a bank
examination.
3. BASF AktiengesellschaftThis German pharmaceutical pled guilty and agreed to a $225
million criminal fine for fixing prices on vitamins.
4. SGL Carbon AktiengesellschaftThe worlds largest producer of graphite and carbon
products pled guilty to price fixing and paid a $135 million fine.
5. Exxon CorporationExxon pled guilty to criminal charges related to the 1989 Exxon Valdez
oil spill and paid a $125 million fine. This was the largest criminal recovery obtained in an
environmental case.

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6. UCAR International IncThe largest producer of graphite electrodes in the United States
pled guilty to fixing prices and paid a $110 million criminal fine.
7. Archer Daniels MidlandPleading guilty to charges of price fixing of lysine and citric acid
markets, the company paid a $100 million fine.
8. (tie) Bankers TrustThe bank was fined $60 million for making false reports of financial
performance, having made false entries in books and records.
9. (tie) Sears Bankruptcy Recovery Management ServicesSears pled guilty to bankruptcy
fraud and agreed to pay a $60 million fine. The company had already paid over $180 million in
restitution to 188,000 debtors and $40 million in civil fines to 50 state attorneys general. Sears
had systematically misled those in bankruptcy into believing they had to pay certain debts.
10. Haarman and Reimer CorporationA subsidiary of the German Bayer AG, the
corporation pled guilty and agreed to pay a $50 million fine for fixing prices on the citric acid
worldwide market.

OCCUPATIONAL CRIME
Crimes by Employees
Although there are cases of overlap, both crimes by employees and crimes by individuals
can be examples of occupational crimecrime committed in the course of a legitimate
occupation for ones own benefit. While the types of activities to be discussed in this section are
executed by employees (those who work for someone else), those to be examined in crimes by
individuals will primarily be crimes by professionals.
Edelhertzs Typology
One attempt to delineate white collar crime is the widely cited typology and examples provided
by Edelhertz .

Edelhertz(1970)Typology of White Collar Crime


Edelhertzs typology of white collar crime details a variety of offenses:
A. Crimes committed in the course of their occupations by those operating inside business,
government, or other establishments in violation of their duty of loyalty and fidelity to employer
or client.
1. Commercial bribery and kickbacks, i.e., by and to buyers, insurance adjusters, contracting
officers, quality inspectors, government inspectors and auditors, etc.
2. Bank violations by bank officers, employees, and directors
3. Embezzlement or self-dealing by business or union officers and employees
4. Securities fraud by insiders trading to their advantage by the use of special knowledge
5. Employee petty larceny and expense account fraud
6. Frauds by computer, causing unauthorized payments
7. Sweetheart contracts entered into by union officers
8. Embezzlement or self-dealing by attorneys, trustees, and fiduciaries
9. Fraud against the government:
a. Padding of payrolls
b. Conflict of interest
c. False travel, expense, or per diem claims

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B. Crimes incidental to and in furtherance of business operations, but not the central purpose of
the business
1. Tax violations
2. Antitrust violations
3. Commercial bribery of anothers employee, officer, or fiduciary (including union officers)
4. Food and drug violations
5. False weights and measures by retailers
6. Violations of Truth-in-Lending Act by misrepresentation of credit terms and prices
7. Submission or publication of false financial statements to obtain credit
8. Use of fictitious or overvalued collateral
9. Check kiting to obtain operating capital on short-term financing
10. Securities Act violations, i.e., sale of non-registered securities to obtain operating capital,
false proxy statements, manipulation of market to support corporate credit or access to capital
markets, etc.
11. Collusion between physicians and pharmacists to cause the writing of unnecessary
prescriptions
12. Dispensing by pharmacists in violation of law, excluding narcotics trafficking
13. Immigration fraud in support of employment agency operations to provide domestics
14. Housing code violations by landlords
15. Deceptive advertising
16. Fraud against the government:
a. False claims
b. False statements
(1) Statements made to induce contracts
(2) Aiding fraud
(3) Housing fraud
(4) Small Business Administration fraud, such as bootstrapping, self-dealing, crossdealing, etc.,
or obtaining direct loans by use of false financial statements
c. Moving contracts in urban renewal
17. Labor violations (Davis Bacon Act)
18. Commercial espionage While Edelhertz had two other types of white collar crime in his
classification, many of those listed in his crimes by persons operating on an individual basis
are not necessarily occupational in nature, except that the victims often happen to be
organizations (business or the state). Some examples that he gives include bankruptcy frauds and
violations of Federal Reserve regulations by pledging stock for further purchases, flouting
margin requirements. His category of white-collar crime as business, or as the central activity
better fits the definition of professional crime as defined in the preceding chapter. Edelhertzs
category A fits our discussion of occupational crime, while category B better fits our definition
of corporate crime.

Crimes by Employees Against Individuals (the Public)


Self-aggrandizing crimes by employees against the public (type 2 in Crime Types 6.2) take the
form of political corruption by public servants or office holders (public employees), or
commercial corruption by employees in the private sector. These activities are distinguished from
corporate or organizational criminal activities of the same type by the fact that in this case the
employee personally benefits from the violation.

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Public Corruption
Cigar smoke, booze, and money delivered in brown paper bagsthis is how Hedrick
Smith envisions the backroom world of politics in the PBS telecast The Power Game (1989).
The list of occupation-related crime on the part of political employees or office holders may
include furnishing favors to private businesses such as illegal commissions on public contracts,
fraudulent licenses, tax exemptions, and lower tax evaluations (Clinard & Quinney, 1973, p.
189). As an example, health inspectors in New York City (City Inspectors, 1988) turned the
Department of Health into the Department of Wealth and doubled or tripled their salaries by
extorting payments from restaurants, threatening to cite them for health code violations if they
did not pay up. In 1999, eight federal food inspectors were arrested in a bribery and kickback
scheme that permitted wholesalers to cheat their suppliers. The scheme involved the inspectors
grading fruit and vegetables as low quality, gaining lower prices for the wholesalers who then
turned around and sold the items as Grade A produce. Some of the inspectors earned over
$100,000 a year in payoffs (Weiser, 1999). Mark Twain (1899) once said, There is no distinctly
American criminal class except Congress (p. 98). The use of public office for private gain
defines political corruption. Twain was not quite accurate in his observation in that such behavior
is widespread internationally. The Transparency International Corruption Perception Index (CPI)
rates countries on the basis of seven surveys of business people, political analysts, and the
general public. The CPI for the year 2006 ranged from a high of 10 (highly clean) to 0 (highly
corrupt). Some selected country ranks and scores included the following:

Corruption Perception Index


RANK
COUNTRY

CPI SCORE

1
2
3
6
11
12
17
20
42
59
64
123
131
133
144
145

9.6
9.6
9.5
9.2
8.6
8.5
7.3
7.3
4.9
3.3
3.3
2.3
2.8
2.4
2.2
1.8

Finland
New Zealand
Denmark
Sweden
United Kingdom
Canada
USA
Belgium
Italy
Brazil
Mexico
Venezula
Ukraine
Indonesia
Nigeria
Haiti

After a 1999 report commissioned by the European Parliament indicated that 210 percent of the
value of business transactions involves bribery, 20 European commissioners resigned en masse
after criticism of their failure to do anything about it (Partridge, 1999). Dolive (1999), in
examining systematic corruption in Italy, Japan, and Russia, claims that the corrupt politicians in
those countries were the initiators and perpetuators of systematic corruption. Rather than the
system being dependent on particular individuals who are at times exposed or removed,

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successors continue the system of corruption, which is the driving force of both the economy and
politics.
In France, in the Elf scandal (named for state-owned oil company Elf Aquitane), slush funds
and corruption were traced to former foreign minister Roland Dumas and, in 2000, to former
interior minister Charles Pasqua. Also implicated was former German Chancellor Helmut Kohls
political party (Ignatius, 2000).
In Russia, a group of gangster capitalists called the oligarchs looted the assets of the state
during the 1990s.
In the United States, officials at Citibank operated as the private bank for unsavory figures
such as Raul Salinas, brother of the former president of Mexico, who is now in prison for
murder; Asif Zardari, former husband of former Pakistani prime minister Benazir Bhutto, who is
in prison for kickbacks; and two daughters of former Indonesian President Suharto, who
allegedly stole billions of dollars from that country.
A Swiss investigation in 1999 uncovered evidence that Mabetex, a construction company, paid
$1015 million to Russian officials, including then-President Boris Yeltsin, in order to obtain
contracts (LaFraniere, 1999). Joel Henderson and David Simon in their book Crimes of the
Criminal Justice System (1994) document widespread and persistent corruption and wrongdoing
throughout the criminal justice system.

Police CorruptionThe Mollen Commission


Between 1992 and 1993, the Mollen Commission, named after a former New York City Deputy
Mayor for Public Safety, conducted an investigation of corruption in that citys police department
and focused attention on police wrongdoing the likes of which had not existed for 20 years (since
the Knapp Commission of the 1970s revealed widespread corruption, particularly associated with
narcotics enforcement). The investigation was ordered because five New York City officers had
been arrested by Suffolk County (Long Island) police for selling cocaine; Mollen Commission
hearings featured informants from within the ranks who revealed police extortion practices, theft
and reselling of drugs, rolling of drunks, robbing of dead people, snorting cocaine while on duty,
and indulging in brutalityparticularly in poor sections of the city. Often higher-ups in the
department had blocked investigations (NYCs Mollen Commission, 1993). A blue wall of
silence and loyalty to peers can take precedence over concerns about graft and violation of oath
of office (see also Kappeler, Sluder, & Alpert, 1994). Certainly police wrongdoing was not
limited to the nations largest department:
In New Orleans in 1993, over 50 officers were convicted on charges including murder, rape,
assault, and drug trafficking. One was convicted of killing another police officer while robbing a
convenience store.
In Jersey City, NJ, police officers were accused of, among other things, participating in what
police investigators called Operation Boneyard: stolen and illegally parked cars were towed to
the city car pound and converted to city property without the owners being notified.
In 1987, nearly 100 Miami police officers (1 in 18 on the force) were believed to be involved in
serious corruption primarily related to drug trafficking (Miami Police Scandal, 1987).
In Cleveland, an FBI sting operation resulted in the arrest of 23 police officers who had served
as security guards for illegal gambling dens and warned them of impending raids (FBI
Gambling Sting, 1991).
In Detroit, former Police Chief William Hart was convicted of helping embezzle $2.6 million
from a special police fund to give his girlfriend lavish gifts (Detroits Former Chief Convicted,
1992).
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In 1999, at Rampart Community Police Station in Los Angeles, 20 police officers were involved
in systematic corruption. Their crimes included planting illegal drugs on innocent people,
planting guns on suspects who had been shot by police, burglarizing the homes of petty
criminals, and framing roughly 100 people. In a plea bargain, one officer testified that prisoners
were routinely railroaded by fabricated evidence and police lies. As a result, a large number of
previous convictions have been overturned. In 2000, a jury acquitted four New York officers who
mistakenly gunned down innocent citizen Amadou Diallo with 41 rounds, killing him instantly.
In 2000, New York City police officer Justin Volpe was sentenced to 30 years in prison for
torturing Abner Louima in the bathroom of a Brooklyn stationhouse by sticking a broom handle
up his rectum, doing considerable physical harm. As a result of cover-ups by police during the
initial stages of these incidents, juries have become more skeptical of testimony by police
officers and other witnesses. While public preoccupation with police corruption is viewed
defensively by police, for most people the police officer symbolizes the law and engenders
higher public expectations of proper conduct (Barker & Carter, 1986). Coleman (1994) explains
that police officers simply have more opportunities to receive illegal payments than other public
employees because they are asked to enforce inadequate vice laws that try to control very
profitable black markets. Police corruption is mirrored in other agencies of government, in
industry, in labor, and in the professions. In Pennsylvania, a large-scale police raid of Graterford
Prison by the state police, correctional officers, and U.S. Customs officers closed down wide
scale drug trafficking in the prison. Thirteen guards were arrested because they were believed to
have been instrumenta in the drug overdose deaths of 11 inmates (Drug Raid, 1995). In 1988,
an undercover investigation in Philadelphia city jails (T. Jacoby, 1988) found over 30 guards
involved in, among other offenses, smuggling drugs, money, and weapons into the prison;
helping inmates escape; and taking bribes from reputed mobsters. The fact that not much has
changed at Graterford was demonstrated by the arrest of four guards in 2007 who were charged
with taking cash and drugs in exchange for smuggling drugs to inmates. A fifth guard was
charged with helping a murderer with an attempted escape.

JudgescamOperation Greylord
In 1983, Federal Bureau of Investigation agents revealed that for 3 years they had posed as
lawyers and criminals to run a sting operation on the Cook County, Illinois, criminal justice
system. The sting was code-named Operation Greylord (referring to the powdered wigs
historically worn by judges). This was the largest and most successful investigation into judicial
misconduct in U.S. history, and by the fall of 1987 it had resulted in convictions of 61 persons,
including 11 judges, as well as police officers, lawyers, and court officials, with additional trials
and indictments ongoing (Bensinger, 1987).
In 1998, the Pittsburgh Post Gazette published a 10-part series that alleged that federal agents
and prosecutors repeatedly broke the law in the pursuit of convictions (Moushey, 1998).
Investigators claimed to have found examples of prosecutors lying, hiding evidence, distorting
facts, engaging in cover-ups, paying for perjury, and setting up innocent people in order to obtain
indictments, guilty pleas, and convictions. Some criminals walked free as a reward for conspiring
with the government.
Watergate
Perhaps no one event evokes images of official corruption, deceit, and subterfuge as much as
Watergate. This story began with the discovery of an illegal break-in at the Democratic National
Committee Headquarters located in the Watergate complex in Washington, D.C. The burglary
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was carried out by agents in the employ of then-President Richard Nixon. Nixon certainly was
not the first U.S. president to be involved in crooked practices (see Chambliss, 1988a). He was,
however, the first to be driven from office in disgrace because of the extent of his activities and
the first to be saved from certain criminal prosecution through a full pardon before-the-fact
(issued by his successor, President Gerald Ford). At the time, President Nixons attitude toward
the probe appeared in one of the later-to-bereleased missing tapes: I dont give a shit what
happens. I want you to stonewall it. Let them plead the Fifth Amendment, cover up, or anything
else if itll save the plan (cited in The Case of the Doctored Transcripts, 1974). Among the
offenses of the Watergate team were burglary, illegal surveillance, attempted bribery of a judge
(Ellsberg case), selling ambassadorships in return for illegal campaign donations, maintenance of
an illegal slush fund, destruction of evidence, use of dirty tricks in political campaigns
planned by the FBI director and the president, requests by U.S. Attorney General John Mitchell
(the nations top law enforcement officer) for IRS audits on opponents, use of the CIA and FBI to
attempt to halt the investigation, perjury, withholding information, altering evidence, and
deliberate lying to the American public by the nations top officeholder (D. R. Simon, 1996, p.
3).
Abscam
Abscam (Arab or Abdul Scam) was an FBI sting operation in which agents posing as rich oil
sheiks bribed a number of members of the U.S. Congress. Whether we call it baksheesh (Middle
East), bustarelle (Italy), pot de vin (France), mordida (Latin America), or just plain bribes (North
America), kickbacks and corruption are apparently both widespread and international in scope.
Individuals in their occupational roles may give or receive bribes for their own personal benefit
(occupational crime) or for the benefit of the organization/corporation (organizational/corporate
crime). Bribery, influence peddling, and corruption are acceptable patterns of international
commerce and are not even illegal in many countries. Particularly revealing in the Abscam
operation was the relative ease with which foreign agents were able to bribe members of the U.S.
Congress. Although many regard such federal sting operations as entrapment (causing a crime to
happen that would not have occurred if the stimulus had not been put there by the government),
others perceive such aggressive tactics as the only means of ferreting out upper-world crime.
Private Corruption
Commercial bribery and kickbacks (in which the individual personally benefits) can take place in
a variety of ways. Buyers for large retail chains may accept gifts or cash in return for placing
orders. At the expense of the general public in the form of higher prices, insurance adjusters,
contracting officers, and quality control inspectors may all be willing to accept bribes in return
for overlooking their duties to employers. Auto dealers can be both perpetrators and victims of
sharp practices. In analyzing what they call coerced crime, Leonard and Weber (1970)
describe how the four major domestic auto producers pressure their roughly 30,000 dealers (who
are technically independent proprietors) into bilking their customers. These dealers commit
coerced crime because in order to retain their franchises, they must meet minimum sales
quotas, and in order to meet these, they must often employ shady practices. The latter include
forcing accessories on the customer, service gouging, high finance charges (at times even
employing loan sharks), overcharging for parts, misuse of book time (preset and inflated
charges for labor time on repairs), and odometer (mileage meter) tampering.

162

Crimes by Employees Against Employees


While a variety of crimes like theft may be committed by an employee against another employee
for personal benefit (type 5 in Crime Types 6.1), many such violations would not necessarily be
occupationally related and, therefore, would not be appropriate examples for the
Occupational/Organizational Crime Grid. But one type of violation that certainly fits is the
sweetheart contract in labormanagement negotiations, which involves labor officials and
negotiators secretly making a deal with management to the disadvantage of the workers whom
the labor officials represent. For example, the union president and representatives might make a
deal with management to take a bribe of $50,000. They then might indicate to the workers that
they have examined the company books and found that management can only afford a 20 cent
per hour raise rather than the 50 cents originally promised. Depending on the size of the
workforce, management could save millions of dollars.
Another example is workplace violence perpetrated by a fellow employee. Such perpetrators take
out their frustrationsusually associated with loss of jobon their fellow workers and
supervisors. While murder is the most highly publicized form of workplace violence, other forms
include assaults, rapes, suicides, as well as psychological and mental health episodes. Drug and
alcohol abuse may create hazardous work conditions. Hostile, intimidating, and offensive work
environments may also foster sexual harassment, sexual assault, and other psychological and
emotional damage.

Crimes by Employees Against Organizations


Organizations are vulnerable to a variety of offenses that employees can commit against them
(type 8 in Crime Types 6.1). In this section, we will briefly focus on employee pilferage,
computer crime, and embezzlement; but employee crimes obviously include many types of
offenses discussed under Crimes by Employees Against Individuals (Public), corporate bribery,
and the like.
Embezzlement
One form of stealing from ones employer is through embezzlement, which is theft from an
employer by an individual who has reached a position of financial trust. The classic work on the
subject is Donald Cresseys Other Peoples Money (1953), which contains interviews with 133
incarcerated embezzlers. He proposes the following explanation of why trust-violators steal:
1. Individuals who have achieved a position of trust are faced with what they conceive of as a
non-shareable financial problem.
2. They feel they can resolve this problem by violating their position of trust, that is, by
temporarily borrowing from their employer.
3. This rationalization of borrowing eventually breaks down as embezzlers realize they have
been discovered and cannot make repayment in time . Gambling, sexual affairs, and high living
are often the factors behind the unshareable nature of the financial problem. The typical
embezzler does not fit the stereotype of the criminal. Most are middle-aged, middle-class males
who have lived relatively respectable lives and lack a history of criminal or delinquent activity;
however, in Women Who Embezzle or Defraud, Zeitz (1991) notes increased embezzlement by
women as managerial and executive positions open up for females. One example is the case of
Dorothy Hutson, a Merrill Lynch stockbroker who systematically cheated investors out of $1.4
million and used the money to finance Las Vegas and Lake Tahoe gambling junkets (Siconolfi &
Johnson, 1991). In one of the larger embezzlements, Phar-Mor, Inc., a discount drug store chain,
disclosed that two executives had allegedly embezzled more than half of the companys net
worth. The company estimated its losses at $350 million (Phar-Mor Discloses, 1992). In
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December of 1995, Michael Modus, former president of Phar-Mor, was sentenced to nearly 20
years in prison for fraud, tax evasion, and embezzlement. In 2000, Merrill Lynch discovered a
$40 million embezzlement had been perpetrated by a former employee who stole from elite,
private banking clients by using the name of a dead person to transfer the securities from Arab
International Bank to Swiss bank accounts (Huang, 2000). Cresseys analysis of embezzlers has
been criticized by Schuessler (1954, p. 604), who claimed that it was limited to an ex post facto
(after the fact) study of only caught embezzlers and that his descriptions may not be
characteristic of most embezzlers. Nettlers (1974) study found embezzlers to be motivated by
greed and temptation as well as by the opportunity to commit the crime. Unlike Cressey, Nettler
did not find a non-shareable problem that was a necessary component of embezzlement. Smigel
and Ross in Crimes Against Bureaucracy (1970) indicate that individualsparticularly
employeesfeel less guilt the bigger the victim organization. Many individuals, who would
consider themselves criminals were they to steal from other persons, rationalize their theft from
large, impersonal organizations by saying that they can afford the loss. According to Smigel
and Ross, the very size, wealth, and impersonality of large bureaucracies, whether governmental
or business, provide a rationalization for those who wish to steal from such organizations. The
Robin Hood myth holds that theft from such organizations really hurts no one, since the victim
is a large, wealthy organization. Combined with this is a certain public antipathy toward the large
corporation or big government. Obviously, the Robin Hood rationalization breaks down when we
consider the higher cost of goods consumers must pay because of inventory shrinkage. A 1997
study of the crimes of 1,324 employees by the Ethics Officer Association and the American
Society of Chartered Life Underwriters and Chartered Financial Consultants found that 48
percent of U.S. workers admitted to unethical or illegal activities in the previous year. This
included cheating on expense accounts, discriminating against coworkers, participating in
kickbacks, forging signatures, trading sex for sales, and violation of environmental laws. Over
half (57 percent) indicated that they felt more pressure to be unethical than 5 years ago, and 40
percent believed that it had gotten worse over the past year (Jones, 1997). Cameron, in her
classic work on retail theft, The Booster and the Snitch (1964), suggested that inventory
shrinkage (loss of goods) in retail establishments was primarily caused by employee theft rather
than shoplifting. Store security personnel concur, estimating that as much as 75 percent of such
loss is due to employee theft. A familiar story relates to security personnel who suspected that an
employee was ripping off the company because every day he left work with a wheelbarrow full
of packages. Every day they carefully checked the packages to no avail. When finally
discovered, the employee had stolen over a thousand wheelbarrows. Employees can be quite
ingenious in illegally supplementing their wages at the expense of their employer. Some common
techniques in employee retail theft include
1. Cashiers who ring up a lower price on single-item purchases and pocket the difference, or who
ring up lower prices for needy friends going through the checkout.
2. Clerks who do not tag some sale merchandise, sell it at the original price, and pocket the
difference.
3. Receiving clerks who duplicate keys to storage facilities and return to the store after hours to
help themselves.
4. Truck drivers who make fictitious purchases of fuel and repairs, and split the gains with truck
stop employees.
5. Employees who simply hide items in garbage pails, incinerators, or under trash heaps until
they can be retrieved later (McCaghy, 1976b, p. 179). Abuses of expense accounts, travel
allowances, and company cars are additional means by which employers are robbed of
organizational income.
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Crimes by Individuals (or Members of Occupations)


Crime in the Professions
Medicine. Medical quackery and unnecessary operations may very well kill more people every
year in the United States than crimes of violence. A House subcommittee estimated that the
American public was the victim of 2.4 million unnecessary surgical procedures per year, which
resulted in a loss of $4 billion and in 11,900 deaths (Coleman, 1994, p. 37). A Harvard study
(Gerlin, 1999) estimates that 1 million American patients are injured yearly by hospital errors
and 120,000 die as a result. This is equivalent to a jumbo jet crash every day and is 3 times the
43,000 people killed each year in U.S. automobile accidents. Americans may be becoming
overdoctored, having twice the per capita number of surgeons, anesthesiologists, and operations
as England and Wales, yet higher mortality rates. Jesilow, Pontell, and Geis (1985) estimate that
U.S. physicians defraud federal and state medical assistance programs of up to 40 percent of all
program monies. Some violations that physicians may become involved in include practices such
as fee splitting (in which doctors refer patients to other doctors for further treatment and split the
fee with them). Ping-ponging doctors refer patients to other doctors in the same office,
steering entails directing patients to particular pharmacies, and gang visits involve billing for
unnecessary multiple services (White-Collar Crime, 1981). Quinneys (1963) analysis,
Prescription Violations by Retail Pharmacists, reveals higher numbers of violations among
pharmacists who see themselves as business persons rather than as professionals. If clients
(whom the professional views with concern for their health and the provision of ethical service)
are seen as customers (whose greater consumption equals greater profit), then more frequent
occupational violations are likely to ensue. With the end of the Cold War in the nineties, the FBI
reassigned agents from counterespionage activity to the investigation of health care fraud, and
this began to show dividends. In a 1992 undercover operation, FBI agents arrested 82
pharmacists and physicians for cheating private insurance companies and Medicaid. Some of the
schemes involved pharmacists filling prescriptions with generic drugs, billing for brand-name
products, and charging payers (insurance or Medicaid) multiple times for the same prescription
or for prescriptions that were never written or filled. In 1994, the Public Citizens Health
Research Group claimed that some 420,000 Caesarean baby deliveries are performed
unnecessarily each year in the United States. It is currently the most common surgery performed
in the country. In 1970, C-sections accounted for only 5.5 percent of births, but were nearly 25
percent by 1988. The most Caesareans are performed in for-profit hospitals (Neergaard, 1994).
Another survey of 449 programs in adult and pediatric critical care found that 39 percent used
the bodies of people who had just died to teach medical procedures, but only 10 percent required
that the patients family give consent (Kolata, 1994). In 1993, National Medical Enterprises, an
operator of psychiatric and acute care hospitals, agreed to pay $125 million to settle charges by
three major insurers for filing fraudulent claims. The company also faced charges by 130 former
psychiatric patients who claimed that the company held them against their will, misdiagnosed
patients, physically abused them, and administered unnecessary medications and treatments in
order to run up bills (Kerr, 1993). In 1998, Allstate Insurance Company sued 45 doctors, lawyers,
chiropractors, and others for alleged involvement in systematically staging fake auto accidents
and filing phony insurance claims (Abram, 1998). In 2007, as many as 30,000 Medicaid
providers were charged with cheating the Internal Revenue Service in seven states and failing to
pay more than $1 billion in federal taxes in 2006. This amounted to 5 percent of Medicaid
providers in those states (R. Wolf, 2007). Finance.Wrongdoing has certainly not been limited to
the health and medical professions. The Great Savings and Loan Scandal, to be discussed, was
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the biggest financial public policy failure in U.S. history, with estimated costs of $500 billion. In
The Greatest-Ever Bank Robbery: The Collapse of the Savings and Loan Industry, Mayer (1990)
indicates, What makes the S&L outrage so important a piece of American history is not the
hundreds of billions of dollars, but the demonstration of how low our standards for professional
performance have fallen in law, accounting, appraising, banking and
politicsall of them. (p. 298) The federal government has sued many of these professionals and
their firms for collusion in S&L collapses. In The Big Six: The Selling Out of Americas Top
Accounting Firms,Mark Stevens (1991) asks, if CPA firms are truly independent of the clients
they audit (who foot the bill), how can accountants be truly independent of the cash register that
pays their bills? Berton (1991) notes, Many legislators and the General Accounting Office, an
arm of Congress, are rapidly losing confidence in accountants because their independence seems
tarnished and they still duck the job given them by government of protecting the public against
financial fraud (p. A12). Law. Illegal and unprofessional activities by lawyers may include
ambulance chasing, that is, soliciting and encouraging unnecessary lawsuits (such as
fraudulent damage claims) in order to collect commissions (M. H. Freedman, 1976; Reichstein,
1965). Describing the practice of law as sometimes constituting a con game against clients,
Blumberg (1967) mentions activities in which the lawyer collects fees for defending a client and
then simply plea bargains to expedite the case, with little concern for the clients well-being.
Other legal rackets include real estate home closings (in which fees are collected on a regular
basis for very little work) as well as the collection of contingency fees on liability cases (in
which lawyers receive a percentage of anything won) (Merry, 1975, p. 1). Concern has been
raised that, with nearly 1 million lawyers, the United States is becoming an overlitigious society
that is, one in which too many resources are expended on legal actions. Olson (1991) notes
that the United States has 3 times as many lawyers per capita as Great Britain, 10 times the
number of lawsuits per capita, 30 to 40 times the number of malpractice suits, and nearly 100
times the number of product claims. The United States is the only society that encourages such
lawsuits through our way of financing litigation. Only in the United States must the winning
party pay his or her lawyer. Such conduct was even illegal under English law and called
champerty (lawyers receiving fruits of the successful action) and barratry (instigating and
maintaining suits and quarrels in courts) (Crovitz, 1991, p. A17). In 1990, three members of a
personal injury law firm in Manhattan were indicted for bribing witnesses to perjure themselves
in court and for falsifying evidence in 19 accident cases dating from 1979 (Hevesi, 1990).
Firemans Fund, an insurance company, hired an auditor to examine how their defense attorneys
were spending their funds and exposed 20 lawyers, representing plaintiffs and defendants, who
had cooperated in manipulating lawsuits and billing up to $100 million in dubious fees to
insurance companies (Schmitt, 1992, p. Al). In explaining rising thievery by lawyers, bar
association officials, while noting that only a minority are involved, point to tough economic
times, the high cost of practicing law, substance abuse, and even glamorized images of lawyers
on television (A. D. Marcus, 1990). Until recently, bar associations published minimum fees and
sanctioned attorneys who charged less, even though the Sherman Antitrust Act made no
exceptions for professional associations in prohibiting price fixing (Coleman, 1994, p. 61). The
concentration of legal talent in the defense of wealthy and corporate violators and the
underconcentration in representing their victims (the state and the public) raise questions
regarding the ethics of the legal profession itself. Other occupations. Examples of crimes against
consumers by professionals, merchants, and members of other legitimate occupations are
numerous:
The greasy thumb on the scale, or short-weighting customers and overcharging for products

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Bait and switch techniques by small merchants, in which the product advertised is
unavailable and a more expensive product is pushed on the customer
Phony or unnecessary repair work
Security violations by stockbrokers, such as misleading clients or insider trading (making use
of inside information for personal benefit)
Abuses in the nursing home industry in which private owners often place profit ahead of the
health and safety of elderly residents. Such practices are described by M. A. Mendelson (1975)
as tender loving greed.
While not a blanket indictment of the profession as a whole, Mitfords The American Way of
Death (1963, p. 8) describes illegal or unethical activities of funeral directors, including: misuse
of the coroners office in order to secure business, bribery of hospital personnel to steer cases,
the reuse of coffins, and duplicate billings in welfare cases.
Churning by stockbrokers, which involves collecting high commissions by running up sales
with unnecessary buy-and-sell orders
In pump and dump stock scams, online brokers (day traders) buy an inexpensive stock and
then hype it to drive up the price, enticing others to buy the stock. Then the stock is sold at the
high price after which the stock dives, costing unaware investors plenty. One such price-rigging
scam caused $10 million in losses to thousands of customers. Fraud charges were brought by the
Manhattan district attorney against three securities firms and 21 brokers. This group manipulated
the prices of over-the-counter stocks in certain companies by buying and selling over and over
again among themselves (21 Brokers Charged, 1991). Insider trading occurs when agents,
brokers, or company officials who are aware of pending developments make use of this
privileged information to buy or sell stocks before the public learns of these events. Revelations
of such wrongdoing led to the collapse and declared bankruptcy of Drexel Burnham Lambert, a
major Wall Street investment banking firm. However, in 1989, only 2 months before declaring
bankruptcy, the company gave out over $260 million in bonuses to employees, twice the amount
of the debt on which Drexel defaulted. A few executives received $10 million each while Drexel,
on paper, lost $40 million.
While not illegal, such activity certainly fits C. Wright Millss (1952) theme of the higher
immorality. In 1995, the SEC, in the largest settlement of its kind, had Merrill Lynch and
Lazard Frres each agree to pay about $24 million to settle charges that they were involved in a
secret fee-splitting scheme with municipal bond underwriters and officers and municipalities
(Theres a New Sheriff in Town, 1995, pp. C1, C7). In 2003, major Wall Street brokerage firms
including Saloman, Smith Barney, Credit Suisse, and Merrill Lynch pleaded nolo contendere
and agreed to pay approximately $1.4 billion for knowingly causing investors to lose trillions of
dollars in bad investments. Dubious research and insider preference in allocation of new stock
shares contributed to huge losses (Morgenson, 2002). In 2007, the backdating of stock options, a
practice in which executives improperly change the dates of stock-option grants to increase the
value of the grants when cashed in, may be the largest business scandal since the 1980s.
Prosecutors charge that backdating is hard-core fraud that hurts earnings and siphons millions
from investors (Iwata, 2007). In one case, William McGuire, former chief executive of United
Health, agreed to forfeit $418 million in order to settle claims related to backdated stock options.
This was in addition to $198 million he had previously agreed to return to his former employer.
These represent the first forfeitures exacted by the SEC based on laws put in place after the
Enron collapse that forced executives to disgorge ill-gotten gains (Dash, 2007). Scandals in
education are yet another growth industry in the world of crime. The Coded-Pencil-Caper,
which took place in 1996, took advantage of the U.S. time zone difference to assist people in
cheating on the Graduate Record Exam (GRE), Test of English as a Foreign Language (TOEFL),
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and Graduate Management Admission Test (GMAT). Those taking the test on the East Coast
would phone the questions and answers to collaborators on the West Coast, who prepared coded
pencils with the answers written on them to be used during the tests. Hundreds of prospective
test takers paid the American Test Center $6,000 each. The company had advertised a unique
method for preparing for the exams. The test takers were flown to the West Coast to take the
tests and receive the promised uniquely high scores before the whole scheme was busted (D.
R. Simon & Hagan, 1999, p. 83).
In 1999, a total of 52 educators from 32 New York City public schools were charged with
helping students cheat on the standardized reading and math tests. In some cases, teachers
actually erased and corrected answers. Many teachers felt pressured by their principals to cheat
because success on the tests was tied to school funding (K. Kelly, 1999). In 1995, Steinmetz
High School (Chicago) won a statewide academic contest, the Academic Decathlon, by
memorizing the answers to a stolen copy of the test. Sponsors of the event became suspicious
when they noticed that only 12 students in the country had scored 900 or better on the math quiz
and 6 of them were from Steinmetz, a working-class high school. The title was revoked when the
students refused to take a validation test. At a 5-year reunion, some of the students indicated they
would do it again, with no guilt, because that is the way the world works (D. Johnson, 2000, p.
A6).

CORPORATE CRIME
Organizational crime refers to crime committed on behalf of and for the benefit of a legitimate
organization. Corporate (business) crime is a type of organizational crime committed in free
enterprise economies and thus involves criminal activity on behalf of and for the benefit of a
private business or corporation. Corporate crime takes many forms, including price fixing,
kickbacks, commercial bribery, tax violations, fraud against government, and crimes against
consumers, to mention a few (Blankenship, 1995). Sutherlands studies of white collar
criminality in the 1940s set a tone and sparked other studies during that initial period.
Surprisingly, however, with the exception of a few scholarly works, investigative journalistic
pieces, and consumer studies (particularly by Ralph Nader and associates), there was a
considerable hiatus of research activity in this area until the middle to late seventies. In 1977,
Geis and Meier (1977, p. 1), in revising their classic reader on white collar crime originally
published 9 years previously, found that they were able to add less than a third new material.
With the exception, then, of works by Sutherland (1940, 1941, 1945, 1949, 1956a), Clinard
(1946, 1969), Hartung (1950), and Nader and associates (see especially Nader, 1965, 1970,
1973), white collar crime was ripe for the research picking. A new renaissance in studies of white
collar crime took place in the late seventies with publications by Clinard and Yeager: Illegal
Corporate Behavior (1979) and later Corporate Crime (1980). Other than Sutherlands
pioneering effort, which was modest by comparison, the research conducted by Clinard and
Yeager represents a landmark: the first large-scale, comprehensive investigation of corporate
crime. They conducted a systematic analysis of administrative, civil, and criminal actions either
filed or completed by 25 federal agencies against 477 of the largest manufacturing corporations
in the United States during 19751976. In addition, they performed a less comprehensive survey
of 105 of the largest wholesale, retail, and service corporations (Clinard & Yeager, 1980, p. 110).
Among their findings were the following:

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Sixty percent of the large corporations had at least one action initiated against them during the
period.
The most deviant firms (multiple violators) accounted for 13 percent of those charged (8
percent of all corporations studied) and for 52 percent of all offenses. The average for these
corporations was 23.5 violations per firm, while the average for all corporations was 4.2.
Large corporations were the chief violators, with oil, pharmaceutical, and automobile industries
the biggest offenders and the most often cited. These three groups alone accounted for almost
half of all the violations.
The general leniency with which corporate violators are treated, noted over 40 years previously
by Sutherland, appeared to persist.

Crimes by Organizations/Corporations
Against Individuals (the Public)
Included in the discussion of crimes by organizations against individuals (the public) are
multinational bribery, corporate fraud, price fixing, manufacturing and sale of faulty or unsafe
products, inequitable taxes, and environmental crimes, to mention just a few.
Multinational Bribery
Embarrassed by the public disclosure and international scandal of American-based multinational
corporations expending millions of dollars to bribe foreign officials, the U.S. Congress passed
the Foreign Corrupt Practices Act (1977). This law forbids the payment of bribes in order to
obtain business contracts. Earlier in this chapter, Transparency Internationals Corruption
Perceptions Index (CPI) was discussed. In 1999, this same organization began producing a
Bribe Payers Index (BPI). The questions used in the construction of the index related to leading
exporters having to pay bribes to senior public officials. Only 19 countries were analyzed. A 10
on the index represents negligible bribery, while a zero indicates high levels of bribery. Some
select countries and their 2006 bribery scores appear below :

Australia
Sweden
Canada
United Kingdom
Germany
USA
Japan
Italy
South Korea
China

8.5
8.4
8.1
6.9
6.3
5.3
5.3
4.1
3.9
3.5

Corporate Fraud
In 1989, an FBI undercover sting operation of commodities traders at the Chicago Board of
Trade uncovered traders who overcharged customers, did not pay customers the full proceeds of
sales, used their knowledge of customer orders to inside trade for their own benefit, and
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executed orders for fictitious practices (Berg, 1989). Perhaps one of the biggest computer
swindles in history, amounting to an estimated $2 billion, came to light in 1973 with the
bankruptcy of the Equity Funding Corporation of America. Executives at Equity Fundings life
insurance subsidiary used the company computer to create roughly 56,000 phony or ghost
policies (about 58 percent of all policies the company held). Reinsurers who bought the rights to
the dummy policies were out millions of dollars; stockholders alone lost over $100 million.
Using computer records rather than hard copy records, the Equity Funding executives mixed
genuine and phony policies in the master tape files; thus, printouts showed that the company had
nearly 100,000 policies. When auditors took samples to check against hard copies, they were
held off for a day or two during which phony hard-copy records were produced (Conning by
Computer, 1973). The president and 24 other employees and officers were indicted. While the
former received an 8-year sentence, the others received shorter terms (Blundell, 1978).
Convicted of complicity in the case, outside auditing firms were ordered to pay $39 million to
former equity shareholders (Ermann & Lundman, 1982,).
In 1990, Chrysler Corporation pleaded guilty to selling previously wrecked vehicles as new and
disconnecting the odometers on about 60,000 vehicles. Chrysler pleaded no contest and was
fined $7.6 million (Chrysler Fined for Violations, 1990). In 2001, Chrysler was accused of
having spent $1.3 billion since 1993 in buying back vehicles with chronic defects (lemons) and
then reselling the bulk of these to consumers (Suhr, 2001). Other examples of corporate fraud
include a 1985 plea bargain by E. F. Hutton for 2,000 counts of defrauding hundreds of U.S.
banks through a check-kiting scheme. Hutton agreed to a record $2 million fine and other
settlements (S. Taylor, 1985). In 1992, Sears was accused of overcharging and making
unnecessary repairs to customers vehicles at their auto service centers in California and New
Jersey. Undercover investigators documented a systematic fraud in California involving
overselling 90 percent of the time (Yin, 1992). Stanford University was accused in 1991 of
overcharging the federal government for contracted research. One overcharge was for $7,000 for
bed sheets for the president of the university (Stout, 1991). General Electric (GE) was fined $10
million and two executives were sentenced to prison for cheating the government on a contract
for battlefield computers in 1990. In 1985, GE paid a fine of roughly $1 million for illegally
claiming cost overruns on Minuteman missiles (Stieg, 1990a, p. 2A). An example of serial
fraud, in 1992 GE pleaded guilty to defrauding the federal government in the sale of military
engines to Israel and agreed to pay $69 million in a settlement of criminal charges and a civil
lawsuit (GE Pleads Guilty to Fraud, 1992). The Big Four superbrokers of the Japanese stock
market admitted to reimbursing 231 major investors to the tune of $933 million for losses
suffered in the 1987 stock market crash. While their actions were not technically illegal, smaller
and foreign investors felt they were on the outside of an insiders game (Ohmar, 1991). In 1999,
Cendant Corporation, which owns Days Inn and Ramada hotels, agreed to pay $2.8 billion to
stockholders. The company admitted to irregular accounting practices that were used to inflate
earnings and permit insiders to sell at a profit (Cendant to Pay, 1999). In 1994, Prudential
Securities, a division of the Prudential Insurance Company of America, paid out over $1 billion
in settlements and regulatory fines levied by the SEC and state securities regulators. This is a
recordthe costliest fraud scandal for any investment in Wall Streets history, exceeding the
previous record by Drexel Burnham Lambert of $650 million in 1989 (Eichenwald, 1994).
Clients were fraudulently sold risky investments and were lied to and deceived with sales
materials. In 1996, Prudential agreed to pay a record fine of more than $20 million and repay
policyholders millions more for having churned (caused unnecessary sales to gain
commissions) customers accounts. Agents talked customers into trading in paid-up policies in
order to finance new, more expensive ones. Some estimate that Prudential may have to pay
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between $280 million and $1 billion in order to reimburse cheated customers (Prudential Fined
Millions, 1996). In 1998, Hertz, the rental car company, admitted to overcharging customers
and insurance companies $13 million for accident repairs in which employees forged repair bids
(Hertz Admits, 1988). However, this was minor fraud compared with the operations of defense
firms. In 1989, the FBI launched a major investigation into massive fraud, bribery, and bid
rigging in defense industry bids on Pentagon contracts. Particularly under attack was the
revolving door, a system in which defense company executives serve stints as Pentagon officials
and then return to the industries they previously oversaw as contract officers. Such obvious
conflict of interest might be viewed as deferred bribes in which cooperative defense
contract officers will be later rewarded with defense industry jobs. The losers, of course, are the
nations armed forces and the nations taxpayers (Waldman & Gilbert, 1989). The medical and
insurance business has been a particular area of fraud. The United States is the only developed
country in the world without national health insurance. It pays 50 percent more to run its system,
and special interests effectively block any attempt to extend guaranteed health care to all, as is
the case in other developed countries. Big profits attract big fraud. In 1997, Blue Shield of
California paid $12 million to settle charges for submitting false Medicare claims (Howe, 1997).
Systematic fraud by Medicare providers is estimated to cost about 10 percent of total Medicare
costs in the United States. Some examples of such fraud include the following (Sparrow, 1998):
In March 1995, the FBI director said intelligence had indicated that cocaine traffickers in
Florida and California were switching from drug dealing to the safer and more lucrative health
care fraud business.
A Medicare contractor in 1998 agreed to pay $144 million in civil and criminal penalties for
concealing poor performance in reviewing and paying claims of Medicare beneficiaries.
In an early 1998 scheme, more than $1 billion in phony medical bills using names of
unsuspecting patients and doctors had been submitted to private insurers.
In 1995, Caremark International pled guilty to paying kickbacks to doctors for steering patients
its way. The company agreed to pay $159 million (Burton, 1995). In the largest health care
settlement in U.S. history, National Medical Care, Inc., agreed to pay $500 million in civil fines
penalties, and restitution including $101 million in criminal fines for requiring needless tests of
Medicare recipients and paying kickbacks for referrals (Dialysis Chain Agrees, 2000). While
there is no annual index of white collar crime comparable to the UCR for street crime, in 2002
the FBI began publishing an annual Financial Crimes Report to the Public. While limited to
crimes being investigated in a given year by the Financial Crimes Section of the bureaus
Criminal Investigation Division, it serves as one measure of federal activity in investigating
corporate fraud, securities fraud, health care fraud, mortgage fraud, and insurance fraud (see
Crime File 6.1). The FBI works closely with other regulatory agencies in undertaking these
investigations.
Price Fixing
Collusion and price fixing to set artificially high prices had become the norm in the electrical
industry, with the firms taking turns (rotational bidding) submitting the lowest bid. This cost the
American public untold millions, perhaps billions, of dollars in higher prices. The Great
Electrical Industry Conspiracy. This conspiracy involved price fixing on Tennessee Valley
Authority equipment. In February 1961, seven of the highest executives in the electrical industry,
from firms such as General Electric and Westinghouse, were given jail sentences of 30 days, an
unprecedented benchmark decision that sent a warning to corporate price fixers, bid riggers, and
market slicers. In addition, General Electric was fined $437,500 and Westinghouse $372,500. In
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all, 29 companies and 45 executives were convicted of bid rigging and price fixing estimated at
approximately $2 billion (Herling, 1962). The conspirators were well aware of the illegality of
their activities: they met under fictitious names in hotel rooms, called their meetings choir
practice, and referred to the list of participants as the Christmas card list. Plumbers fix more
than leaks. In 1975, the U.S. Department of Justice filed an antitrust suit against three plumbing
manufacturers (American Standard, Borg Warner, and Kohler) and three executives for
conspiring to fix prices on $1 billion worth of bathroom fixtures. The case actually began in 1966
with 17 corporate and individual coconspirators named. The others pleaded no contest to the
charges, got short jail terms, and were fined a total of $370,000 (U.S. Begins Price-Fixing
Prosecution, 1975). The $1 billion stolen by these organizations from the public dwarfs by far
the more mundane criminal activity that gains so much media attention. For instance, the
Boston Brinks robbery netted only $2 million and the largest robbery in U.S. history as of 1980
that of the Lufthansa airport warehouse in New York Cityscored only $4 million (Clinard &
Yeager, 1980, p. 8). This was superseded in 1983 by the $11 million robbery of a Sentry Armored
Car warehouse in New York City (Wells Fargo Guard Dopes Boss, 1983). Thus the great
plumbing equipment rip-off, which is far less dramatic and well-known, cost the American
public the equivalent of 500 great Brinks robberies. The U.S. Justice Department filed suit in
1994 against General Electric Company for fixing prices on industrial diamonds in consort with
DeBeers Centenary A.G., which controls 90 percent of the billion-dollar market for synthetic
diamonds. This trial constituted the first antitrust case to go to trial in about two decades. In
1980, the U.S. Department of Energy filed suit against 15 major refining companies and charged
them with more than $10 billion in possible pricing violations. As part of some out-of-court
settlements, several of the corporations agreed to reimburse overcharged customers; pay the
government; give rebates on past charges; cut prices; and accelerate investment in refining,
exploration, and production (Lyons, 1980). The most expensive series of white collar frauds in
U.S. history was The Great Savings and Loan Scandal. Crime File 6.2 provides a brief
account.
Sale of Unsafe Products
The Ford Pinto case. In what turned out later to be a bad pun, the advertising slogan for the Ford
Pinto was Pinto leaves you with that warm feeling. In the early sixties, in order to compete
with compact foreign imports, the Ford Motor Company rushed the compact Pinto model into
production. Since retooling for the assembly line was already a costly investment, the company
chose to proceed with production despite the results of its own crash tests, which indicated that
the gas tank exploded in rear-end collisions. Choosing profit over human lives, the company
continued to avoid, and to lobby against even 8 years later, federal safety standards that would
have forced modification of the gas tank (Cullen, 1984; Dowie, 1977). An estimated 500 persons
were burned to death because of the firetrap engineering of the tanks. Once the word spread,
Ford withdrew the commercial that the car gave one a warm feeling. Mother Jones (an
investigative magazine) collected documents and called to public attention Fords wrongdoing
(Cullen, Makestad, & Cavender, 1987; Dowie, 1977). While the company estimated that it could
have made the necessary modifications for about $11 per car, Mother Jones estimated the cost at
half that. Using the National Highway Traffic Safety Administration estimate of the cost per
fatality (assuming lawsuits) of roughly $200,000, Ford had, according to a company
memorandum, performed a cost-benefit analysis of the problem.
Paying for deaths, injuries, and damages without changing the tanks was guessed to cost about
$49.5 million, while the cost of modifying the 12.5 million vehicles would run $137 million. It
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was cheaper to ignore the problem and face the lawsuits. In May of 1978, the U.S. Department
of Transportation finally recalled all 1971 to 1976 Pintos and, although it was the biggest auto
recall up to that time, the decision amounted to too little too late for the conservatively estimated
500 dead, maimed, or scarred victims (Ermann & Lundman, 1982, p. 18). The Ford Pinto case
was also a landmark, representing the first time in U.S. history that a corporation was indicted
for murder. In 1978, Indiana prosecutors charged Ford with homicide after three people were
burned alive in a Pinto (Browning & Gerassi, 1980, p. 406). Even though Ford was acquitted, the
trial of a corporation for murder may have served as a signal that the public reaction to corporate
crime was changing (Swigert & Farrell, 1980). When asked what fate Lee Iacocca, then president
of Ford, deserved, one person sarcastically suggested that someone buy him a Ford Pinto
complete with Firestone 500 tires (yet another dangerous product whose manufacturer hid
its defects until an unacceptable number of human sacrifices sparked federal action). The Ford
Explorer-Firestone tires recall. In 2000, executives of the Ford Motor Company and
Bridgestone/Firestone, Inc., both appeared before the U.S. Congress to answer questions
regarding possible cover-ups of defects in the Ford Explorer (sport utility vehicle), particularly
when equipped with Firestone tires. The tread on Firestone ATX and Wilderness tires would peel
off, forcing the Ford Explorer to roll over. By 2000, it became apparent that numerous accidents
had taken place due to defects that compounded when the two products were combined. By
February 2000, tires were recalled in Thailand and Malaysia. In May, a National Highway Traffic
Safety Association (NHTSA) study was begun and Ford recalled 30,000 tires in Venezuela,
Ecuador, and Colombia. In August, Firestone recalled 6.5 million tires; Ford CEO Jacques
Nasser apologized on television, and Bridgestone/Firestone CEO Masatoshi Ono apologized to
the U.S. Congress. By August 31, 2000, NHTSA labeled 1.4 million more tires defective and
estimated fatalities at 88 and injuries at 250. Ford had recalled the tires in 16 countries, but had
not issued a U.S. recall until later. While both companies pointed the finger at the other for the
defects and crashes, in fact neither was as forthcoming as it could have been in identifying
problems; it took congressional pressure to force them to act as good corporate citizens.
Reminiscent of C. W. Millss (1952) higher immorality notion, Heilbroner et al. (1973) in their
book In the Name of Profit: Profiles in Corporate Irresponsibility maintain that the people who
run our supercorporations are not merely amoral, but positively immoral. They and other authors
cite examples like these:
B. F. Goodrich plotted to sell defective air brakes to the U.S. Air Force by faking test records
and falsifying laboratory reports. National security and the lives of fighter pilots appeared to be
of little concern.
In the early 1970s, a General Dynamics engineer warned his superiors of dangerous defects in
DC-10 cargo doors. They ignored this warning. Two years later, a DC-10 crashed in France when
the cargo doors opened in flight, killing all 346 passengers (Nader, Green, & Seligman, 1976).
Theo Colburn in Our Stolen Future (1996) claims that toxic chemicals released in the last 50
years mimic natural hormones and may be responsible for human male sperm counts decreasing
50 percent since 1938 and growing infertility, genital deformities, breast and prostate cancer, and
neurological disorders.
In the 1990s, Ford Bronco IIs rollover accident rate for rear-wheel drive was double the sport
vehicle average. In 1992, Ford had spent $113.4 million to settle 334 lawsuits for rollovers.
In 1994, U.S. Secretary of Transportation Federico Pena made a deal with General Motors
(GM) not to order recall of its pickup trucks, whose defects cost 150 lives, in return for a
payment of $51 million to support safety programs. The latter were calculated to have the benefit
of saving more lives than the calculated 32 more people who would die due to faulty design of
the trucks (J. Bennett, 1994).
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In the largest product liability settlement in U.S. history, a federal judge in 1994 granted $4.25
billion in a class action suit against 60 silicone breast implant manufacturers. Dow Corning
Corporation agreed to pay the biggest share$2 billion. The largest previous settlement had
been by asbestos manufacturer Manville Corporation for $3 billion. One study showed that Dow
knew of the dangers as early as 1975 (Blakeslee, 1994).
In 1994, the FBI employed a GE engineer to infiltrate a GE jet engine plant to spy on managers
who were later charged with compromising the safety of military and commercial aircraft by
covering up engine flaws. GE had been involved in more cases of contractor fraud against the
Pentagon than any other manufacturer (Frantz & Nasar, 1994). This included 16 criminal
convictions and civil judgments.
In 1995, top executives of seven tobacco companies told a Congressional committee under oath
that they did not know for certain that tobacco was addictive or caused disease. Attorney General
Janet Reno asked the U.S. Justice Department if the companies were guilty of fraud and perjury
when it was revealed that Brown and Williamson Tobacco Corporation documents indicated that
the companys own research had shown for years that cigarettes were addictive and harmful, and
it had covered up such knowledge (Hilts, 1995). A record $368 billion deal was agreed to by the
tobacco companies with 40 states, affecting everything from how cigarettes are advertised and
sold to punitive damage awards of $50 billion. The National Consumer Product Safety
Commission estimates that 20 million serious injuries and 30,000 deaths a year are caused by
unsafe consumer products (Coleman, 1994,). When Richardson-Merrells MER/29, a cholesterol
inhibitor, was tested, all the rats died; nevertheless, the company falsified the data and marketed
the product. When over 5,000 users suffered serious side effects, it was withdrawn from the
market and the company received a minor fine (Coleman, 1994, p. 84). In 1988, the Cordis
Corporation pleaded guilty in federal court to concealing defects in thousands of pacemakers
(implanted in heart patients to regulate the heartbeat). The company agreed to a fine of $264,000
plus court costs. Executives were charged separately (4 Indicted Over Pacemaker Scam, 1988).
Defective products continue to plague consumers. More recent examples are defective breast
implants that maim, deform, and destroy immune systems; and flawed heart valves (Ingersoll,
1991).

Environmental Crime
In 1962, the publication of Rachel Carsons Silent Spring signaled the beginning of the age of
environmental awareness. Specifically attacking toxic chemicals and pesticides, Carsons work
very dramatically called attention to the irreversible and final genetic and biological harm the
poisoning of the environment could bring about. According to Regenstein (1982), The accuracy
and validity of Silent Spring was no inhibition to the chemical industrys attacking and
attempting to discredit it, a vicious campaign which started even before the work was published
and continues today (p. 132). Three Mile Island. Ironically, in the film The China Syndrome (sonamed because of the false belief that a nuclear meltdown in the United States would bore
through the earth to the other sideChina), a character indicates that a nuclear mishap could
render an area the size of Pennsylvania uninhabitable. Almost prophetically, after the release of
the film, the worst potential nuclear plant disaster in history occurred at Three Mile Island,
Pennsylvania. The accident released radioactivity into the surrounding area and required the
temporary evacuation of young children and pregnant women from the immediate vicinity. On
November 7, 1983, a federal grand jury indicted Metropolitan Edison, the owners of the Three
Mile Island (TMI) facility, on criminal charges of faking safety test records before the accident.
The indictment alleged that the company attempted to conceal from the Nuclear Regulatory
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Commission the rate of leakage in the main cooling system, in which water passes over the
reactors radioactive core (Feds Indict TMI, 1983). Allegations had been made that the
corporation was eager to have the reactor online by a certain date in order to take advantage of
tax benefits. In April 1984, Metropolitan Edison pleaded guilty to knowingly using inaccurate
and meaningless testing methods and agreed to pay a $1 million fine. The company also pleaded
no contest to six other criminal counts, including manipulating test results, destroying records,
and not filing proper notice of cooling system leaks (Judge Agrees to TMI Plea Bargain, 1984).
Toxic criminals. Potential environmental hazards created by new technologies require that
corporations and businesses exercise a higher level of ethical behavior than that exhibited in the
Ford Pinto incident or other cover-ups and deceptions of the public and of government regulatory
agencies. Bhopal (India), Love Canal, Times Beach, Seveso (Italy), and Chernobyl are wellknown environmental disasters. Each year, about 300 health care workers die from hepatitis B
after exposure on the job (J. Anderson & Van Atta, 1988a). Toxic wastes also expose the public
to possible harm. In 1979, the EPA estimated there were 109 very hazardous dumpsites and
32,254 sites where hazardous wastes were buried. That latter figure was subsequently raised to
51,000, with significant problems existing at between 1,200 and 34,000 (M. H. Brown, 1982,
p. 305). In the late 1980s, beaches in various parts of the United States had to be closed because
illegally dumped medical wastes were washing ashore. Blood gushing out of trash compactors
and body parts found in trash piles illustrate the ghoulish proportions of such hazards. Crime File
6.3 reports on the deadliest air pollution disaster in American history, the Donora Fluoride Death
Fog. Alcoa agreed to pay criminal penalties of $7.5 million to the State of New York for illegally
holding 33 rail cars full of PCB-tainted soil at a Massena, New York, facility over several months
while preparing fake documents to dispose of the material as nonhazardous (Milbank & Allen,
1991). U.S. v. Allied Chemical. In 1976, Judge Robert Merhige (Richmond, VA) fined Allied
Chemical $13.2 million after it pleaded nolo contendere to 153 charges of conspiracy to defraud
the EPA and Army Corps of Engineers. Allied had polluted the James River and had deceptively
blocked the efforts of these agencies to enforce water pollution control laws. In justifying the
largest fine ever imposed in a single environmental case, the judge stated, I dont think that
commercial products or the making of profits are as important as the God-given resources of our
country (Beauchamp, 1983, p. 97). Much of the work social scientists or federal agencies
should have been doing in investigating corporate crime has until relatively recently been
shouldered by investigative journalists and consumer advocates, such as Ralph Nader and his
associates. A partial list of such studies and their subject matter includes the following: Cox,
Fellmuth, and Schulz (1969), a report on the FTC Esposito and Silverman (1970), Vanishing Air,
on air pollution regulation J. S. Turner (1970), The Chemical Feast, on the FDA H. Wellford
(1972), Sowing the Wind, on health and environmental hazards M. J. Green et al. (1973), The
Monopoly Makers, on antitrust activity Page and OBrien (1973), Bitter Wages, on occupational
safety and health In addition to these, Nader and his associates have generated numerous other
investigations and reports (Nader, 1965; Nader & Green, 1973; Nader, Green, & Seligman, 1976;
Nader, Petkas, & Blackwell, 1972). Some success has occurred in the battle against polluters. In
2007, the American Electric Power Company agreed to pay $4.6 billion to settle 8 years of
charges that its acid raincausing chemicals ate away at parks, bays, and the Statue of Liberty
(Barrett, 2007). On the subject of environmental and health assaults on consumers, D. R. Simon
(1999) describes some cases of corporate dumping, a practice whereby corporation sell
overseas products that have been deemed unsafe in the United States by the EPA, FDA, or other
federal agencies. Toxic crime may indeed be the ultimate and most insidious of crimes. Birth
defects, long-term genetic damage and mutation, congenital heart defects, and disorders in
childrenmany of these effects may turn up 20 to 30 years later and be difficult to link to the
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original causative agents or toxic criminals. In that sense, those who commit environmental
crimes may represent the first intergenerational criminals the victimized may not have been
born at the time the crime was perpetrated, and the criminal may be deceased by the time the
victimization takes place. Radiation leaks. In 1988, in the wake of the Chernobyl disaster in the
Soviet Union, investigations began to reveal a massive cover-up by the U.S. federal government
of the dangers and harm its nuclear facilities and testing program had posed to unwarned workers
and neighbors. Fallout from atomic tests in the 1950s and 1960s resulted in little warning by the
Atomic Energy Commission of exposure hazards such as birth deformities, cancer, and early
death (McGrory, 1988). The Department of Energy runs federally owned nuclear plants that
produce the fuel for the nations nuclear weapons. These obsolete plants have worse safety
features than most privately owned plants. The radioactive waste problem at the Energy
Departments Hanford nuclear weapons reserve in the state of Washington is unbelievable. It is
described as (T. W. Lippman, 1991) the most polluted and dangerous nuclear compound in the
United States and perhaps the worldthe submarine hulks [21 buried radioactive reactor
vessels] are little more than a novelty. In fact, they are a stable controllable form of waste in a
nightmare world of volatile, explosive, toxic and radioactive junk. So great is the mess, so
diverse the streams of wastesolids and liquids, above ground and beneath, in the water and in
the soil, stationary and migratingthat the most optimistic forecasts say it will take at least 30
years and $30 billion to clean it up. And thats if all goes well, if none of the tanks of lethal
liquids explodes and if scientists can figure out what to do with material for which no disposal
technology exists. Thats if all the waste can be contained before any more of it seeps into the
Columbia River. (p. 33) More and more of our food is processed and packaged by large
corporations and, if recent investigations are to be believed, the food processors have not
improved much since Upton Sinclairs (1906) exposs in The Jungle. Despite a 1906 federal
Meat Inspection Act and a 1967 Wholesome Meat Act, abuses continue. In a Hormel plant in
1969, a Department of Agriculture inspector was bribed $6,000 annually for overlooking the
production of Number 2 meat (McCaghy, 1976b): When the original customers returned the
meat to Hormel, they used the following terms to describe it: moldy liverloaf, sour party hams,
leaking bologna, discolored bacon, off-condition hams, and slick and slimy spareribs. Hormel
renewed these products with cosmetic measures (reconditioning, trimming, and washing).
Spareribs returned for sliminess, discoloration, and stickiness were rejuvenated through curing
and smoking, renamed Windsor Loins and sold in ghetto stores for more than fresh pork chops. (
Corporate violence. From what has been said so far it should be clear that, while the general
public tends to view corporate crime as nonviolent, we might be more persuaded by S. L. Hills,
who in Corporate Violence (1987) describes respectable business executives who
impersonally kill and maim many more Americans than street muggers and assailants. He notes
that the tools of such violence include exploding autos, defective medical devices, inadequately
treated drugs and other hazardous products that are manufactured and marketed despite
knowledge by corporate officials that such products can injure and kill consumers. There are
reports of toxic chemical dumps that have poisoned drinking supplies, caused leukemia in
children and destroyed entire communities; of cover-ups of asbestos-induced can and the gradual
suffocation of workers from inhaling cotton dust; of radioactive water leaking from improperly
maintained nuclear reactors; of mangled bodies and lives snuffed out in unsafe coal mines and
steel millsand other dangers to our health and safety.

176

Crimes by Organizations Against Employees


Organizational (corporate) crime against employees (type 6 in Crime Types 6.1) may take many
forms; the most insidious relates to purposive violation of health and safety laws that may not
only threaten workers lives, but may also genetically damage their offspring. During World War
II, the large German manufacturing corporation I. G. Farben worked captive workers (slave
labor) to death in its factories. More recently, according to Harry Wu, a former Chinese political
prisoner, many Chinese exports sold in the United States have been produced in the harsh
conditions of Chinese labor camps (Southerland, 1991). While most modern manufacturers do
not directly kill their workers, health and safety violations by corporations and organizations
against their employees can take many forms (see Frank, 1985). Some occupational exposure to
injury and disease may be a necessary part of employment, but unnecessary, preventable hazards
and their disregard by employers in the United States are regulated by OSHA and can incur
criminal penalties. Terms such as black lung (due to coal exposure), brown lung (due to cotton
mill exposure), and white lung (due to asbestos exposure) have become familiar to U.S. workers.
The sheer number of new chemicals to which workers are exposed and their long-term impact
are enormous. Occupational hazards are not new. In 1812 in Lawrence, Massachusetts,
sweatshop conditions in the textile mills produced death in one third of the workers by the age of
25 (Browning & Gerassi, 1980, p. 237). Just to cite one example of corporate negligence and
cover-up, an examination of the asbestos industry is enlightening. Carlson (1979), appearing
before a Congressional Subcommittee on Compensation, Health, and Safety indicated the
following:
Examination of corporate memos, letters, and other documents from as early as 1934 showed
that senior executives at Johns-Manville and Raybestos-Manhattan (two of the biggest asbestos
producers) knew of and covered up companysponsored research findings that described asbestoscaused diseases.
Asbestos industrysponsored research in the 1930s and 1940s also showed asbestos dangers,
and researchers were prevented from publishing their results.
One company, Philip Carey, fired its medical consultant when he warned of possible lawsuits
from workers exposed to asbestos.
Years before the companies acknowledged any awareness of asbestos dangers, documents
demonstrated that they had quietly settled injury and death claims from workers who had
handled asbestos.
Johns-Manville purposely did not notify employees of the results of their medical examinations
that showed asbestosis, despite executives knowledge that the disease was progressive and fatal
unless treated at an early stage. In 1988, OSHA fined meatpacker John Morrell and Company
$4.33 million for having forced hundreds of injured workers in its Sioux Falls, SD, plant to keep
working even right after surgery. This was the largest fine against a single employer in the
agencys history. Workers in this industry chronically suffer from carpal-tunnel syndrome and
tendonitis, in which joints stiffen because of the erosion of soft tissue (Meatpackers Hit With
Record OSHA Fine, 1988).
In 1990, USX agreed to pay $3.25 million for hundreds of alleged worker safety violations,
including what OSHA called fatal, uncorrected hazards (K. Ball, 1990). That same year, a federal
jury awarded damages of $26.3 million to a retired insulation worker. Materials once made by
Owens Corning Fiberglas Corporation had not been properly labeled as dangerous, causing the
worker to develop asbestosis (W. E. Green & Geyelin, 1990). Larry Agran in Getting Cancer on
the Job (1982) documents that the cancer epidemic has been primarily fed by many industries
systematic unconcern for workers health, in which company physicians cover up evidence of
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unsafe exposure to carcinogenic substances. He concludes that the government regulatory


agencies are either too timid to enforce the law or lack staff or resources with which to protect
workers. In 1999, apparel workers and human rights groups filed the largest legal challenge ever
against sweatshops on American soil. The suit alleged that major American retailers conspired to
place thousands of workers in involuntary servitude and horrible work conditions (Greenhouse,
1999). Poor young women from China, the Philippines, Bangladesh, and Thailand are led to
believe that they are going to the United States to work; instead, they are taken to Saipan
(Mariana Islands), a U.S. possession where many work 12 hours a day, 7 days a week,
sometimes without pay if they fall behind in their quotas. In some cases, exits are locked,
pregnant workers are forced to have abortions, and workers are housed in barracks surrounded
by barbed wire. On top of all of this, the clothing labels can read Made in USA.
In 2007, it was reported that in 2001 nine workers in a microwave popcorn plant came down
with a rare lung disease due to exposure to an additive that added a buttery taste. OSHA dragged
its feet in responding to or enforcing standards even as more workers became ill. The George W.
Bush administration vowed to limit cumbersome regulations that it viewed as unnecessary costs
on business and consumers (Labaton, 2007). Such activity represents only the tip of the iceberg
in economic globalization, which often represents a race to the bottom in a search for the
cheapest labor possible, including child labor or, as in China, labor by prisoners. These activities
are all in violation of the United Nations Universal Declaration of Human Rights. In
Nobodies: Modern American Slave Labor and the Dark Side of the New Global Economy, John
Bowe (2007) uses his 6-year field study to describe migrant workers who were murdered as a
warning to their peers and workers who are threatened with physical retaliation if they attempt to
escape servitude. If there are any heroes or heroines in the world of corporate crime, they can be
found among the ranks of whistle-blowersemployees who are willing to step forward, usually
at great personal sacrifice, to reveal wrongdoing on the part of their employers (see Westin,
1981). You dont bite the hand that feeds you, states the old adage. The decision to inform on
organizational violations has often meant firing; family disruption; ostracism from friends and
former coworkers; as well as the end of ones career, as employers retaliate against the
squealer or stool pigeon. In 1990, jurors ordered Lockheed Corporation to pay $45.3 million
in damages to three former employees who had been fired for being whistle-blowers regarding
safety problems of C-5B military cargo planes. According to the workers, some of these planes
with defective mainframes had been used to transport troops to Saudi Arabia (Lockheed
Ordered to Pay, 1990).
Some examples of well-known whistle-blowers include
Frank Serpico, former New York Police Department officer, who informed on fellow officers
during the Knapp Commission investigation in the 1960s.
John Dean, former legal counsel for President Nixon, who cooperated with the government in
the Watergate investigation.
Daniel Ellsberg, who revealed The Pentagon Papers to the press, alleging the government was
misleading the public regarding the Vietnam War.
Engineers at Morton-Thiokol, who had warned NASA regarding unsafe O-rings before the
Challenger space shuttle disaster, and who later testified before Congress.
Ernie Fitzgerald, a U.S. Defense Department employee, who testified regarding a $2 billion
cost overrun in the production of C-5A transports.
In extreme cases, an employer may even threaten an employees life. While the following horror
story is by no means typical, it profiles a true hero in the fight against corporate crime (see
Mokhiber, 1988).
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The Karen Silkwood case


Congressional hearings (U.S. Congress, 1976) and Rashkes The Killing of Karen Silkwood
(1981) describe the Silkwood episode. She was an employee of the Kerr-McGee nuclear plant
in Guthrie, Oklahoma. The company used plutonium, one of the most lethal of substances,
in its plant. A union activist for stricter safety standards at the company, Silkwood had
gathered considerable information documenting the firms negligence of health and safety
measures for employees, as well as dangerous defects in the plutonium compounds being used.
On the evening of November 13, 1974, Silkwood was enroute with documents to a meeting
with a union official and a reporter from the New York Times when her auto crashed into
a ditch, killing her. The documents, which had been observed at the scene by state troopers,
disappeared. In a subsequent trial investigating her death, Kerr-McGee was found guilty
of negligence in health and safety practices, as well as criminally liable in Silkwoods
contamination by radiation leaks during her employment. The Atomic Energy Commission
found the company to be in violation in the majority of the union complaints, including in
the contamination of 73 employees in 17 safety lapses over a 5-year period (Rose, Glazer,
& Glazer, 1982, p. 407). The jury also ordered the company to pay Silkwoods estate $10.5
million in damages (Silkwood Vindicated, 1979, p. 40). The company appealed the case,
and in January 1984, the decision was upheld by the U.S. Supreme Court.
In 1986, the U.S. Congress passed additional legislation to protect whistle-blowers jobs,
as well as reward them for whistle-blowing. They are entitled to as much as 15 percent of
what the government collects. Some whistle-blowers have collected millions.
Environmentally dangerous occupations include those of chemical and insecticide
workers, miners and shipyard workers who deal with asbestos, petrochemical and refinery
workers, coal miners, coke-oven workers, textile and lead workers, medical radiation
technicians, and those employed in the plastics industry. The exposures and risks are enormous;
since most workers cannot easily switch jobs, they are even more dependent on federal
regulatory agencies to protect their health and safety. Occupational hazards may be a necessary
evil in modern industrial societies, but corporate subterfuge in unnecessarily exposing
workers to such threats is not. Weak enforcement of OSHA regulations has resulted in the
United States having 5 times as many work-related deaths per capita as Sweden and 3 times
as many as Japan (J. A. Kinney, 1990).

Crimes by Organizations (Corporations) Against Organizations


Criminal activity by organizations against other organizations (type 9 in Crime Types 6.1)
may take many forms, including crimes by private corporations against the state (e.g.,
wartime trade violations, cheating on government contracts, or income tax violations) and
crimes by corporations against corporations (e.g., industrial espionage and illegal competitive
practices).
Wartime Trade Violations
Because of their international structure, multinational corporations can sometimes play both
sides of the fence in wartime. In Trading With the Enemy, Higham (1982) raises eyebrows with
the following accusations:
While gasoline was being rationed in the United States, managers of Standard Oil
of New Jersey were shipping fuel through Switzerland to the Nazis.
Ford trucks were produced for German occupation troops in France with
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authorization from Ford executives in the United States.


Chase Manhattan Bank did business with the Nazis during the war.
An early, classic study of white collar crime by Marshall Clinard (1969), originally published
in 1952, was entitled The Black Market. Using records of federal regulatory agencies
during World War II, Clinard examined wartime trade violations on the part of businesses.
He found extensive violations of rationing, price-ceiling offenses, tie-in sales, and lack of
quality control. In a study conducted about the same period, Hartung (1950) found many
violations of wartime economic regulations in the Detroit wholesale meat industry.
While it is not uncommon for victors to demand that losing countries pay reparations
or war debts for damages, it is surprising that the United States paid for damages to U.S.
multinational plants that were ruined during Allied bombing of Nazi-occupied Europe.
Parenti (1980, p. 76) describes such postwar payments to GM and International Telephone
and Telegraph (ITT). ITT had produced Nazi bombers and received $27 million in damages,
while GM had produced Nazi trucks and obtained $33 million in compensation. Public
furor arose after World War II when it was revealed that many oil companies had collaborated
with the Nazis during the war. Although President Truman ordered that the Justice
Department investigate and prosecute, the case was finally settled after 15 years of litigation
with a minor consent decree (Coleman, 1985, p. 178). In 2007, the U.S. House of
Representatives passed new legislation making it easier to convict private contractors who
defraud the U.S. government during wartime. Of particular concern were contractors who
were charged with overstating the value of goods and services or concealing information
or presenting false statements (Flaherty, 2007).
In the 1990s, a renewed effort was undertaken internationally to recover the money of
Holocaust victims held in Swiss banks. In addition, survivors of the Holocaust sued German
and Japanese companies for damages for slave labor during World War II. Charges were also
made that subsidiaries of U.S. auto manufacturers were key elements of Hitlers war
machine. Chase National Bank is also being investigated, along with law firms, for collaboration
(Hirsh, 1998).
Industrial Espionage
Until recently, industrial espionage has been a relatively neglected area of investigation by
criminologists. Much of the work in this area has either appeared in trade magazines or has
been done by journalists (see Barlay, 1973; Engberg, 1967; P. Hamilton, 1967). Such espionage
(literally spying, or the acquiring of information through deceptive or illegal forms) is
performed by three different groups: (1) intelligence agencies, (2) competing firms, and
(3) disloyal employees. Bergiers highly readable Secret Armies (1975, p. 51) tells the story of
an industrial-espionage agent who traveled from office to office of a corporate headquarters
with a pushcart telling everyone that he was doing a check on secret documents, which he
then proceeded to wheel away. The documents and their collector were never seen again.
Industrial spying goes back at least as far as 3000 B.C., when industrial and commercial
secrets relating to silkworms and porcelain were stolen from China by Europeans. In
the Middle Ages, it was so widespread that it led to patent laws. Bergier (1975, p. 15) claims
that piracy by industrialists and governments was a significant factor in the spreading of
the Industrial Revolution. From 1875 to World War I, Japan had the best industrial spies,
after which Nazi Germany and the USSR dominated European spying. In the recent
Hitachi case, a Japanese corporation attempted to steal state-of-the-art computer secrets
from International Business Machines (IBM). Some examples provided by Bergier include
the following:
One large Detroit company found nine television transmitters hidden in the air
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vents of the main drafting room; these were probably transmitting the companys
latest drawings to the competition.
A telephone tap discovered in Manhattan covered 60,000 phone lines, presumably
to pick up useful market tips, blackmail information, and the like.
Several cases in England involved spies posing as typewriter repairmen and
removing typewriters for repair in order to peruse used ribbons.
Cars of important figures are stolen only to be quickly recoveredthe aim is to bug them.
In free societies, about 95 percent of industrial information is available in the trade and
popular publications. In fact, a growing area of investigation is called competitive intelligence,
which involves the use of open sources (unclassified documents) to gather information
on ones competition. Sources of information on U.S. industry range from legitimate
to illegal, as described by the Wade System of Sources of Information on American Industry
(P. Hamilton, 1967, pp. 222223). There has been an unexpected wave of foreign espionage
with the end of the Cold War. Some examples of such activity include the following:
A South Korean rival plants a radio transmitter on the target companys fax machine.
IBM claims to have lost $1 billion because of French and Japanese espionage.
The French Intelligence Service, the Direction Generale de la Scurit Exterieure
(DGSE), has been most brazen, even bugging seats of businesspeople on flights and
ransacking their hotel rooms for documents.
Many companies are canceling plant tours. Americans used to be amused by the
number of pictures Japanese business tourists would take when touring their
plants. Many of these photographs proved very useful (Hamit, 1991).
In 2000, countries of the European Union alleged that U.S. Intelligence agencies (specifically,
the Central Intelligence Agency and the National Security Agency [NSA]) were using
Echelon, a worldwide electronic spy network to benefit U.S. companies in gaining a
competitive edge. In effect, the agency had redirected some of its Cold War assets toward
economic intelligence. Despite denials, the information is believed to have helped Boeing sell
747s to Saudi Arabia, Raytheon sell a surveillance system to Brazil, and the Hughes Network
in contracts for a telecommunications system in Indonesia (Windrem, 2000). The European
Parliament alleges that all e-mail and worldwide telephone and fax communications in
Europe are intercepted. Whether this is true or not, the NSA appears to have that capability.
A National Institute of Justice survey of the American Society of Industrial Securitys list
of directors of security in major industries found that 48 percent had experienced the theft
of trade secrets (proprietary information) within the past year, and over 90 percent had
encountered some theft within the past 10 years (Mock & Rosenbaum, 1988, p. 18). The
major targets were research and development data, new technology, customer lists, program
plans, and financial data. Misuse of authority/position was the principal method employed,
followed by physical theft, computer penetration, subversion of employees, and false documents/
authorization (p. 22). Crime File 6.4 gives an account of the Pirates of the Internet.
In 1998, textile manufacturer Milliken and Company was charged with hiring consultants
to steal customer, supplier, and manufacturing information from nine competitors. They
hired a private firm for $500,000 to conduct illegal spying operations (Peterson, 1998). The
U.S. Economic Espionage Act (EEA) of 1996 now criminalizes the theft of trade secrets. Two
of the earliest cases prosecuted under the act were the Avery Dennison case and the PPG
case. In the first example, involving the Avery Dennison Corporation near Cleveland, Ohio,
two Taiwanese citizens were charged with stealing millions of dollars worth of trade secrets
by bribing an Avery Dennison employee. In the PPG case, the company was informed by a
competitor that someone had offered to sell them PPG trade secrets. The suspect (a former
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PPG employee) had carried secrets out of PPG headquarters in a gym bag. Cooperation of
the competitor may have been gained by the fact that under the EEA, they could have been
prosecuted as a coconspirator had they not been forthcoming (Nasheri & OHearn, 1998).
Warez (pronounced wares) is derived from the plural form of the word software and
it means copyrighted material that is illegally traded. It specifically refers to releases by
organized groups, a form of commercial profit piracy (Agents Crack Down on Global Piracy
Rings, U.S. Department of State, 2001).
Crimes by private organizations against other private organizations raise problematic
areas in jurisprudence, what if the perpetrator is a country? In the 1990s, China and other
countries in Asia tolerated widespread patent and trademark violations within which fake
name-brand products were copied and sold at a fraction of their cost. While the United
States and other countries continue to threaten trade sanctions over such violations, China
seems to make only halfhearted attempts to comply. Calling China The Pirate Kingdom,
Choate (2005) estimates Chinas bogus goods as costing at least $29 billion annually.

182

Chapter-12
CRIMINAL CAREERS OF OCCUPATIONAL
AND ORGANIZATIONAL OFFENDERS
Occupational and corporate offenders generally do not view their activities as criminal; their
violations are usually part of their occupational environment. Such offenders maintain a
commitment to conventional society while violating some of its laws, because their activities
often are supported and informally approved of by occupational or corporate subcultures
or environments (see Frank & Lombness, 1988).
Sutherland (1956a) sees many parallels between the behavior of corporate criminals and
that of professional and organized criminals:
1. They are recidivists, committing their crimes on a continual and frequent basis.
2. Violations are widespread, and only relatively few are ever prosecuted.
3. Offenders do not lose status among their peers or associates as a result of their
illegal behavior.
4. Like professional thieves, businesspeople reveal contempt for government
regulators, officials, and laws that they view as unnecessarily interfering with their
behavior.

Corporate Environment and Crime


Corporate crime does not occur in a vacuum, but is affected by characteristics of an
organization and its market structure. For instance, in an analysis of auto makers,
Leonard and Weber (1970) found that price fixing requires two market forces: a few suppliers
and inelastic demand (i.e., a steady need or demand for a product irrespective of
a rise or fall in cost).

Corporate Concentration
The marketplace in postindustrial or advanced capitalistic societies has moved from
competitive capitalism among companies to shared monopolies controlled by huge corporations
and conglomerates. The growing concentration of markets can be demonstrated
by the fact that, in 1960, a total of 450 U.S. firms controlled about 50 percent of
all manufacturing assets and made 59 percent of all profits. By 1979, as much as 79 percent
of the assets and 72 percent of the profits were controlled by these firms (D. R.
Simon, 1999).
Overpricing of products is more likely to occur when four or fewer companies
control a market. As a result of such shared monopolies, the FTC estimates that prices
are 25 percent higher than they should be and that such concentrated market firms
enjoy profits that are 50 percent higher than those of less concentrated industries (D. R.
Simon, 1999). In size, complexity, assets, and power, these large corporations dwarf most
states and most national governments. Their wealth and power in elections, in private
foreign policy, and in the international economy make public sector regulation increasingly
difficult.

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Rationalizations
Having little or no criminal self-concept, offenders view violations as part of their work.
Among the rationalizations, or ways of explaining away responsibility, for white collar
criminality
are those below (Clinard & Yeager, 1980):
Legal regulations of business are government interference with the free enterprise
system.
Such regulations are unnecessary and reduce profits.
Such laws are too complex, create too much paperwork, and are
incomprehensible.
Regulatory laws are not needed and govern unnecessary matters.
There is little deliberate criminal intent (mens rea) in corporate violations.
Everybody is doing it, and I have to keep up with competitors.
The damage and loss are spread out among large numbers of consumers, thus
little individual loss is suffered.
If corporate profits do not increase as a result of the violation, there is no wrong.
Violations are necessary in order to protect consumers.

SOCIETAL REACTION
The UCR for the early twenty-first century estimated that property crimes such as robbery,
burglary, and larceny cost U.S. society nearly $9 billion. Federal investigators estimate that
the federal government is being ripped off by at least $50 billion a year, primarily through
fraud. In terms of threat and damage to property, health, theft, and corruption of law
enforcement agencies, then, corporate crime is the big leagues. The cost of the savings
and loan scandal of the 1980s was estimated at $500 billion, while the celebrated Great
Brinks Robbery netted only $2 million. The latter is much better known and has received
more publicity than the former, even though 250,000 Brinks robberies would be required
to equal the cost of bailing out the S&Ls.
Despite growing public pressure for more severe treatment of higher occupational and
corporate offenders, the likelihood of prosecution and conviction remains rare. When
offenders are convicted, the penalties remain rather minuscule, considering particularly the
economic loss to society. High recidivism rates among such criminals continue. Many are
even deadbeats in paying assessed fines. The big dirty secret remains true: judges and
government agencies are soft on corporate crime. In 2007, it was reported that enforcement
against polluters during the George W. Bush administrations in prosecutions, investigations,
and convictions was down by more than one third (Solomon & Eilperin, 2007). EPA
civil lawsuits were down 70 percent. The number of investigators at the agency had been
cut back.
Returning to the previous example of the Great Savings and Loan Scandal, the costliest
series of white collar crimes in American history, by 1994 the average sentence given for
major thrift cases was 36 months compared to 38 months for car thieves and 56 months for
burglars. It should be noted that most of the sentences were handed down before more strict
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federal sentencing guidelines were instituted in 1989 (Pontell, Calavita, & Tillman, 1994).

Why the Leniency in Punishment?


If white collar crimes are economically the most costly crimes to society, why are such acts
seldom punished? A number of reasons have been suggested:
Many acts were not made illegal until recently. For example, many environmental
and occupational health and safety regulations are of postWorld War II vintage,
and not until the twentieth century were false advertising, fraud, misuse of
trademarks and patents, and restraint of trade considered criminal matters.
American business philosophy has been dominated by beliefs in laissez-faire
economics (government noninterference in business) as well as the notion of
caveat emptor (let the buyer beware).
Public concern with corporate crime is a recent phenomenon. Once this
resentment becomes organized, public pressure against white collar crime and
pressure for legislation and enforcement can be expected. At least one national
survey suggests the general public regards white collar crimes as even more
serious than conventional crimes such as burglary, robbery, and the like
(Wolfgang, 1980a, p. E21). Thus, it seems lenient treatment of elite offenders is not
supported by the public.
In the past, white collar crimes were given less publicity; sometimes the media
were owned by businesses that themselves were violators (Snider, 1978). Fear of
loss of major advertising revenue may also have an impact.
White collar criminals and those who make and enforce the laws share the
same socioeconomic class and values. They fail to match the public stereotype
of the criminal. Vilhelm (1952) suggests that citizens dont oppose such crime
because they themselves often violate many of these same laws on a modest
scale.
Political pressure groups often block effective regulation or enforcement. Some of
the biggest campaign contributors are also the biggest violators. Funding for such
groups may come from previous tax avoidance, laundering, and other shady
practices. Since such criminals are seldom prosecuted, many are first offenders
and thus are treated with leniency.
It is easier for politicians and public officials to concentrate on the crimes of the
young and lower class, groups that lack political clout.
The long-term nature of corporate violations and court delays make sanctions
difficult.
Black (2004) suggests a main problem with federal regulatory agencies is that they
are in desperate need of criminological expertise. No federal, state, or local
government agency has a chief criminologist position, and criminologists are
excluded from policy debates on these issues.
A 1999 National Public Survey of White Collar Crime conducted by the National White
Collar Crime Center (Rebovich & Layne, 1999) revealed that the public regarded many types
of white collar crime as serious, or more serious than traditional street crime. For instance,
in answering which was more serious, they responded in the following way:
Someone steals $100 on the street or a contractor cheats someone out of $100:
Robbery, 41 percent; Fraud, 40 percent; Equal, 20 percent.
185

Someone steals $100 on the street or a bank teller embezzles $100 from his
employer: Robbery, 27 percent; Embezzlement, 54 percent; Equal, 18 percent.
Person robs someone at gunpoint or auto maker fails to recall a vehicle with a
known defective part: Armed Robbery, 46 percent; Defective Product, 40 percent;
Equal, 14 percent.
Person robs someone at gunpoint or a store owner sells a shipment of meat he
knows is bad: Armed Robbery, 39 percent; Tainted Product, 42 percent; Equal,
19 percent.
In response to the large number of corporate scandals at the turn of the last century, the
U.S. Congress passed the Sarbanes-Oxley Act that compels the SEC to address weaknesses
in corporate oversight. Among the reforms were the following:
Accountants will no longer be considered independent and objective if they or their
auditing partners receive non-audit (consultant) pay from publicly traded clients.
Lawyers are required to become whistleblowers and must report legal violations
to company officers or the board of directors.
Mutual fund managers must ensure that shareholder proxies are voted in the best
interest of investors and not insiders.
Finally, in reading the remaining chapters of this text, keep in mind that if we ended our
discussion of crime with this chapter, we would have covered the largest, most costly category
of crime. All the other forms of criminal behavior together do not equal the costs of
occupational and organizational (corporate) crime.

186

Chapter-13
THE GENESIS OF SOCIO-ECONOMIC OFFENCES
(i) Emergence of Socio-Economic Offences
The Socio-Economic Offences have been incepted since times immemorial, but remained
dormant until the beginning of World War II, However, according to Prof. Albert Morris the first
paper entitled "Criminal Capitalists" on the subject was presented by Edwin C.Hill before the
International Congress on the Prevention and Repression of Crime at London in 1872. Prof,
A.Morris himself had drawn the attention of criminologists towards this newer form of
criminality in 1934.1 Nevertheless, the statue of this newer form of criminality was for the first
time shaped by a well known criminologist Prof. Edwin H. Sutherland in 1939. Sutherland
described these newer crimes as White Collar Crimes.
The two world wars badly affected the whole set-up of our community at large, resulting in the
sudden upsurge of many problems. One of the major problems was the scarcity of the essential
things and a mounting demand, for them. The people occupied in trade (i.e. businessmen) started
to take advantage of the war situation; thereby avarice and rapacity developed among them,
which accelerated the growth of the newer form of criminality in a substantial way. For instance,
the big business corporations of America as noticed by Sutherland indulged in the
commission of various white collar crimes, which are as follows:
Promulgating false or misleading advertising, illegal exploitation of employees, mislabelling of
goods, violation of weights and measures statutes, conspiring to fix prices, selling adulterated
food stuffs and evading corporate taxes etc.
The present century is well known for the remarkable development in the field of science and
technology; simultaneously industry and commerce have also spreaded the wings of revolution
all over the world. This Industrial Revolution abruptly changed the entire social, economical and
political structure of our society throughout the world, such that people have abandoned the high
cultural goals and socially approved techniques of achieving them, because an overwhelming
emphasis is made on achieving certain objectives, e.g. political powers, monopolistic control
over business and high economic status without due regard to the question of whether they can
be achieved by legally approved means or not. Therefore, high ethical standards and moral
values were discarded in favour of power, money and material things. Such circumstances have
made the environment more conducive for the monstruous growth of the newer form of
criminality, particularly in developing countries like India. Thus all sorts of anti-social activities,
i.e. frauds, corruption, adulteration of food stuffs, misappropriation and misrepresentations are
now carried on a large scale by the .persons of upper and middle socio-economic class in the
course of their trade, commerce, industry and other professions as well.
The policy of Laissez-faire or non-interference of the State in the material pursuits of the
individuals and associations created an atmosphere of extreme business competitiveness for
monopolistic advantages; which resulted in the multiplicity of the socio-economic offences
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beyond recognition, specially in the industrial countries. Thus unbridled capitalism posed a
serious threat to the social welfare.
However, the State in its turn did no longer remain a silent spectator to the victimization and
sufferings of the general masses. It began to realize the dangers inherent in unrestricted
capitalism, so the governments in different countries decided to come out with welfare schemes
for improving the living standards of the common masses and bringing about social and
economic justice In the society by putting an effective check on the nefarious activities (socioeconomic offences) of many categories of anti-social elements so as to preserve the morality, and
protect the public health, and material welfare of the community as a whole.
Today, the State being a Welfare State tends to control a vast number of means of production and
distribution of goods and material services, etc. Therefore the activities of the State multiplied to
a greater extent. But unfortunately the heavy responsibility of the State over burdened its
administration, which led to the inefficient functioning of the governmental machinery. In
addition to the above, some incompetent, dishonest and inscrupulous persons made their way
into various public services. Both the aforesaid factors became fertile grounds for the expansion
of socio-economic offences, e.g. bribery, corruption, favouritism and nepotism in public services
and among persons in high authority, Trafficking in licences, permits and quotas, embezzlement,
misappropriation and frauds relating to public property, and violation of specifications in public
contracts, etc.
Besides the fields of socio-economic offences mentioned above, there are many other areas
where new offences are emerging in menacing proportions such as smuggling and violations of
foreign exchange regulation , under-invoicing, over-invoicing, black marketing and hoarding,
profiteering, racketeering, share pushing, tax evasion, adulteration of drugs and cosmatics,
narcotic drugs peddling, and many other violations by men in legal profession.
The Medical Profession is well known for the service of mankind. And perhaps till recently, the
cirminality in this profession was either little or negligible. But today the newer form of
criminality has taken roots in this profession too, such as:
Illegal sale of alcohol and narcotics, abortions (illegal)., illegal services to under world
criminals, fraudulent reports and testimony in accident cases, fraud in income tax returns,
extreme cases of unnecessary treatment and surgical operations, fake specialists, restriction of
competition, and fee splitting.3
Thus slowly and gradually, the socio-economic criminality has spreaded its wings all over the
world and has become today a large phenomenon of anti-social activities, which endanger the
morality, public health and material welfare of the community at large.

(ii) Emergence of Socio-Economic Offences in India


By turning the pages of History, it is learnt that India was the land of believers, where trust,
honesty, truth and benevolence were prevailing in the processes of life, and decision making
policy. But after the British emerged victorious in the war of succession to the Mughal rule,
adverse changes began to appear in the social and economic structure of this country. In 1717 the
Mughal Emperor issued a Royal farman, which granted the freedom to East India Company to
import and export its goods in Bengal without paying taxes. That farman also gave a right to the
company for issuing dastaks (passes) for the movement of its goods. This farman provided
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conducive circumstances for the servants of the British company to commit economic offences.
Bipan Chandra observes:
...the power to issue dastaks(Passes) for the company's goods was misused by the company's
servants to evade taxes on their private trade.5
In this way the newer form of criminality emerged in India, and the socio-economic offences
gradually started to develop. It is more evident from the statement made by Lord Clive:
I shall only say that such a sense of anarchy, confusion, bribery, corruption and extortion was
never seen or heard of in any country but Bengal; nor such and so many fortunes acquired in so
unjust and rapacious a manner...
With the passage of time the East India Company in the pretext of business establishment,
acquired political powers, and greater the power acquired, higher the degree of greed and
rapacity in the area of "business developed, and a time came when the emperors had no powers
to fight against the newer form of criminality committed by the company and its servants in this
country. Ultimately the high moral standards of Indian social and economic setup degenerated
absolutely.
The second phase of socio-economic offences started with the freedom and partition of India. At
the time, when India won freedom, it was suffering from the scarcity of everything including an
administrative machinery, because when the Britishers left India it was too difficult to setup
immediately an efficient and honest administrative machinery. Further because of partition the
crowd of Hindu refugees reached India from Pakistan. It created economic problem and social
disorganization. In this way the commerce and social structure of India was hit badly. All these
causes paved a fertile ground for the wide spread of Socio-Economic Offences in India. The third
phase came through rapid industrial development and urbanization, where socio-economic
offences got much more chance for their growth and development. Thus for knowing the extent
of the emergence of socio-economic offences in this country, it is required to make a reference to
the list prepared for socio-economic offences by the Santhanam Committee though the list is not
comprehensive. The categories of socio-economic offences noted by that committee are as
follows:
...Such offences may broadly be classified into: (1) offences calculated to prevent or obstruct the
economic development of the country and endanger its economic health; (2) Evasion and
avoidance of taxes lawfully imposed; (3) Misuse of their position by public servants in making
of contracts and disposal of public property, issue of licenses and permits and similar other
matters;(4) Delivery by individuals and industrial and commercial undertakings of goods not in
accordance with agreed specifications in fulfilment of contracts entered into with public
authorities; (5) Profiteer-ing, black marketing and hoarding; (6) Adulteration of food stuffe and
drugs; (7) Theft and misappropriation of public property and funds; and (8) Trafficking in
licenses and permits etc.
Besides the above offences there are many others e.g. smuggling, violation of foreign exchange
regulation , bank frauds, offences in medical and legal profession and corruption in politics, etc.
The legal history of India has many ups and down. During the time of Mughal Emperors Muslim
law was implemented In India, which was administered by Kazis courts. The Holy Quran was
the primary source of both civil and criminal law. However, there was no uniform system of law
even after Britishers came to India, until 1862.
Sometime after 1840, the first Law Commission of India was appointed under the stewardship of
Lord Macaulay, who submitted a piecemeal report, which was finally passed by the Legislative
Council on October 6, 1860. Thereby Indian Penal Code XLV of 1860 came into operation on
the 1st day of January, 1862. And Cr. P.C. was passed in 1898.
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Thus Indian Penal Code, is the first law containing some provisions for curbing socio-economic
offences. However, the Santhanam Committee declared that IPC in day-to-day context of socioeconomic offences cannot operate in any satisfactory manner.8
After the first quarter of nineteenth century other statutes for combating with Socio-Economic
Offences were made in India, particularly after independence many statutes were passed and
amendments were made. The Government of India after the appointment of the Santhanam
Committee had appointed the Wanchoo Committee on 2nd of March, 1970. The duty of this
committee was to focus its attention on the problem of black money which is accumulated
through violation of foreign exchange regulation, blackmarketing and hoarding etc. That
committee made valuable suggestions for certain amendments in statutes dealing with SocioEconomic Offences. The suggestions of those committees led the Indian legislature to enact
more laws, e.g. The Foreign Exchange Regulation Act 1973; The Smuggling and Foreign
Exchange Manipulators Act 1976; The Control of Foreign Exchange and Prevention of
Smuggling Act 1974; and Criminal Procedure Code 1973 etc. Similarly Law Commission of
India had suggested many changes in the statutes dealing with socio-economic offences9, so as
to make the punishments more stringent for punishing the socio-economic offenders. Besides the
above mentioned Acts, some main enactments which deal with socio-economic offences are as
follows:
The Prevention of Corruption Act.
The Prevention of Food Adulteration Act.
The Prevention of Immoral Traffic (Amendment) Act, 1986.
The Drugs and Cosmetics Act.
The Essential Commodities (Amendment) Act.
The Dowry Prohibition Act.
The Narcotic Drugs Psychotropic Substances Act, 1985.
The Standard of Weights and Measures Act.
The Customs Act.
The Drug (Control) Act.
The Income Tax Act,
The Anti-Corruption Laws (Amendment) Act,
The Indian Penal Code, etc.

Ross's Typology
The earliest major statement regarding the kinds of behaviour which later came to be classified
as white-collar crime was made by an American sociologist, Edward A. Ross (1866-1951).
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However, the initial public use of the term itself was made by his contemporary Edwin H.
Sutherland (1883-1950) in his presidential address to the American Sociological Society in
193911.
Lambroso, the father of criminology believed that, criminals were different physically from
normal persons and they had physical characteristics of savage and inferior nature, which gives
them atavistic qualities. Criminals in whom atavistic qualities manifested were categorized as
"born criminals" the other group known to him were insane criminals and the third are "those"
Criminaloids, who are persons who commit criminal acts or vicious acts under certain
circumstances. There is no physical stigma, nor is there mental aberration. Otherwise than their
malicious act, they are quite normal persons.
It is this third category which was utilized to characterize the class of offenders known as whitecollar criminals. He identified the following typical characteristics of criminaloid.
(1) The key to the criminaloid is not evil impulse, but moral insensibility. They want nothing
more than what we all want i.e. money, power, consideration, in a word success. But they
are in hurry and they careless as to the means. More often they are consumers of
customer - made crime. They are buyers than practitioners of the sin.
(2) Criminaloids are not anti-social by nature. Nonetheless, they are adulterators, rebaters, free
booters, and fraud promoters. They receive from the community the credit for the good they did,
but not shame of the evil deed they have worked for relentlessly.
(3) The Criminaloids practice a protective mimicry of the good-honest man. They are often to be
found in the assemblies of the faithful. They counterfeit good citizen. They are patriotic and
party supporters.
(4) The criminaloids play with-the support of his local people as his party members,
congregation, against the larger group. Their victim is the weak, consumers, for instance. Their
ally is the strongman the politician the official, the paster.
In all criminaloids flourish until such time the growth of morality and law co-jointly overtakes
the growth of opportunity. It is of less use to bring law abreast of time if morality lags far behind.
Ross concluded by saying "the prophet message, the sage's lesson, the scholar's quest and the
poets dream would be sacrificed to the God of Things.

RESULT
In a country like India where large scale starvation, mass illiteracy
and ignorance affect the life of the people, white collar crimes are bound to
multiply in large proportion. Control of these crimes is a crucial problem for
the criminal justice administration in this country. However, some of the
remedial measures for combating white collar criminality may be stated as
follows:1. Creating public awareness against these crimes through the media
of press, platform and other audio-visual aids. Intensive legal literacy
191

programmers may perhaps help in reducing the incidence of white


collar criminality to a considerable extent.
2. Special tribunals should be constituted with power to award
sentence of imprisonment upto ten years for white collar criminals.
3. Stringent regulatory laws and drastic punishment for white collar
criminals may help in reducing these crimes. Even legislations with
retrospective operation may be justified for this purpose. Dr.
Radhakrishan, the Second President of India, in this context once
observed:
the practitioner of this evil (i.e. white collar and socioeconomic
crimes) the hoarders, the profiteers, the black
marketers, and speculators are the worst enemies of our
country. They have to be dealt with sternly, however wellplaced, important
and
influential they may be, if we acquiesce
in wrong-doing, people will lose faith in us.
The penalty for white collar crime which are a potential risk to
human lives may even be extended to the imprisonment for life or
even to death if the circumstances so demand.
4. A separate chapter on white collar crimes and socio-economic
crimes should be incorporated in the Indian Penal Code by
amending the Code so that white collar criminals who are convicted
by the court do no escape punishment because of their high social
status.
5. White collar offenders should be dealt with sternly by prescribing
stiffer punishments keeping in view the gravity of injury caused to
society because of these crimes. The Supreme Court, in M.H.
Haskot v. State of Maharashtra, in this context observed, soft
sentencing justice is gross injustice where many innocents are the
potential victims.
6. There is an urgent need for a National Crime Commission which
may squarely tackle the problem of crime and criminality in all its
facets.
7. Above all, public vigilance seems to be the cornerstone of anti-white
collar crime strategy. Unless white collar crimes become abhorrent
to public mind, it will not be possible to contain this growing menace.
In order to attain this objective, there is need for strengthening of morals particularly, in the
higher strata and among the public
services. It is further necessary to evolve sound group-norms and
service ethics based on the twin concepts of group-norms and
services ethics based on the twin concept of absolute honesty and
integrity for the sake of national welfare. This is possible through
character building at grass-root level and inculcating a sense of real
concern for the nation among youngsters so that they are prepared
and trained for an upright living when they enter the public life.
Finally, it must be stated that a developing country like India where
populations is fast escalating, economic offences are increasing by leaps
and bound besides the traditional crimes. These are mostly associated
with middle and upper class of society and have added new chapter to
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criminal jurisprudence. To a great extent, they are an outcome of industrial


and commercial developments and progress of science and new
technology. With the growing materialism all around the world, acquisition
of more and more wealth has become the final end of human activity.
Consequently, moral values have either changed or thrown to winds and
frauds, misappropriation, misrepresentation, corruption, adulteration,
evasion of tax etc. have become the techniques of trade, commerce and
profession. It is for the criminal law administrators to contain this tendency
by stringent legislative measures. It is rather disappointing to note that
though white collar crimes such as black market activities, evasive price violations, rent-ceiling
violations, rationing-law violations, illegal financial
maneuvering etc. by businessmen are widespread in society, no effective
programs for repressing them has so far been launched by the law
enforcement agencies. Perhaps the reason for white collar crimes being
carried on unabated is that these crimes are committed generally by
influential person who are shrewd enough to resist the efforts of law
enforcement against them.
The economic offences which are often referred as white collar
crimes are master-minded and carried out in a planned manner by
technocrats, highly qualified persons, well to do businessmen, corporate
officials in the form of scams, frauds etc. facilitated by technological
advancements. In these offences, often damage the economy and the
national defense. The offences such as smuggling of narcotic substances,
counterfeiting of currency, financial scams, frauds etc. are some of the
white collar crimes which evoke serious concern and impact on national
security and governance. A Table listing the various economic offences,
the relevant legislation and the enforcing authorities is laid below to give an
birds-eye view about the wide range over which these offences are spread
over. Economic offences may either be cognizable or non-cognizable in
nature. Local police deals with a considerable number of economic offences falling under the
broad category of Cheating, Counterfeiting and
Criminal Breach of Trust.
The aforesaid special laws regulating customs, excise, taxes, foreign
exchange, narcotic drugs, banking insurance, trade and commerce relating
to export and import have been enacted and enforced by the respective
departmental enforcement agencies created under the statutory
provisions. Legal powers for investigation, adjudication, imposing of fines,
penalties and under special circumstances arrest and detention of persons
are derived from the same legislation. The officers of the enforcement
agencies are also vested with powers to summon witnesses, search and
seize goods, documents and confiscate the proceeds. However, despite
the special laws and independent enforcement agencies for handling
economic crimes there is no decline in the crime rate, instead it is
constantly rising, which is a serious cause of concern of all those who are
concerned with the administration of criminal justice.

193

RECOMMENDATION
India to maintain its growth story needs to reduce fraud and corruption in government
and private sector. As previously mentioned corruption and fraud stop multinationals from
investing in the country. The decrease in foreign direct investment in 2011 and the
international financial institutions outflow of funds from stock markets are clear indicators of
the negative impact of fraud and corruption.
Therefore, Indian government must improve governance and take strict action against the
offenders. Comptroller Auditor General is showing the way forward, the need of the hour is
for political parties to have the spirit to clean up the mess. The private sector must implement
fraud prevention measures and focus on ethics to reduce frauds. Both sectors have to
collaborate to minimize fraud risks in India. The reasons of justifications are there for the
methods used for the control of white collar crimes, the ambivalence of the social response to
this sort is so related to wider social factors which have both objective and subjective
dimensions. As has been so mentioned a more subjective source of ambivalence in the social
response to white collar crimes is the assumption that there is less public concern about these
behaviours so termed as white collar crimes, and therefore there is a less support for severe
sanctions than in the cases of crimes which are traditional street crimes. But even if there was
greater public ambivalence towards white collar crimes in comparison to the traditional
crimes, writers such as Box has regarded this as a further challenge to sensitize people to not
seeing processes in which they are victimised disasters or accidents.
Therefore, the motto should always be prevention is better than cure. Since the acts involved
defrauding public faith and belief, public as a whole mass should come forward to protect the
whole society from these greedy people who are destroying the ethics and morality of the
society slowly and slowly for their sole aim of pursuing narrow self.

(i) VOHRA COMMITTEE REPORT, 1993:


In 1993, Government of India appointed a Committee under the Union Home Secretary, which
reported on the activities of organized crime and the links between organized crime and politics.
The report revealed not that it was unknown the powerful nexus between those who broke
the laws especially in the police, customs and direct and indirect taxes, all of which resulted in

194

protection of large scale economic crime and in those cases which became public, nominal action
was taken against the offenders which bore no relationship to the benefits from crime.

(ii) THE MITRA COMMITTEE REPORT, 2001:


The Report given to the Reserve Bank of India prefaced its report by admitting the fact that
criminal jurisprudence in the country based on proof beyond doubt was too weak an
instrument to control bank frauds. The committee contended that Financial fraud is not an
offence inspite of the fact that the banks and financial institutions suffer heavily in frauds
committed by the borrowers, more often than not, in collusion with the employees of the banks
and financial institutions the situation is becoming explosive and can lead to anarchy at any time
unless the scams are legally contained.
The committee recommended a two-fold approach to tackle bank and financial frauds. It
suggested a preventive strategy by system reform through strict implementation of Regulators
Guidelines and insisting on obtaining compliance certificates. Secondly, a punitive approach by
defining Scams (financial frauds) as a serious offence with burden of proof shifting to the
accused and with a separate investigating authority for serious frauds, and special courts and
prosecutors for typing such cases and with increased powers to the investigating agency of
search, seizure and attachment of illegally obtained funds and properties. The committee
suggested a Statutory Fraud Committee under the Reserve Bank of India.
As it stands, the Criminal Justice System is ineffective in handling major economic crimes. UK
set up a Serious Frauds Office under the Criminal Justice Act 1987 to deal with investigation and
prosecution of serious economic crimes with extensive powers including search and seizure.
Similar arrangements have been made in the European Union and in the U.S. In our country too,
we need to put in place better legislation, improved Criminal Justice System and a strong
Regulatory enforcement system to prevent, investigate and prosecute major economic crimes.
It will be useful to have a quick look at the various types of major economic crimes (including
cyber crimes), that have to be tackled so that we can appreciate the extent and complexity of
these crimes. This does not include the conventional and organized crimes, which have been
dealt with in the Penal Code.

(iii) THE MASHELKAR COMMITTEE REPORT ON SPURIOUS DRUGS:


The Committee endorsed the views expressed by the DGHS Committee and also the views that
emerged as outcome of discussion at the meeting of State Health Ministers, The members reemphasised several of these suggestions as remedial measures to eliminate/reduce the menace of
spurious drugs in the country. In summary, the gist of the recommendations is:
Effective interaction between the stakeholders i.e. industry and regulators, industry and
consumers, trade and regulators and medical professional and regulators.
Creation of intelligence cum legal cells in State and Central offices.
Discouraging proliferation of drug distribution outlets.
Changes in law to provide enhanced penalties, making the offences cognisable and nonbailable in the light of similar provisions in Narcotic Drugs and Psychotropic Substances Act.
Designation of special courts to try the cases of spurious drugs,
Preparation of dossiers of suspected dealers and manufactures.
195

Provision of secret funds and incentives to informers.


Effective networking system between States.
Check on drug supplies to practitioners who buy and supply drugs to their patients.
Industry to have its counterfeit drug strategies, better surveillance and efficient complaint
handling system,
Trade associations to have better surveillance on defaulting members and to take strict action
against them.
Creation of better awareness amongst consumers.
The Committee recommends that each State should have a designated officer trained in
investigation of spurious counterfeit drugs and there should be a central nodal officer to establish
a countrywide network. The Central Government should assist in providing training to all the
State intelligence cum legal officers.
The Committee observed that there is a considerable apprehension that many of the registered
medical practitioners, who dispense drugs to their patients, do not always purchase their supplies
from authorized sources. They are, thus, likely to be supplied with spurious/ counterfeit and
substandard drugs. This is corroborated by the fact that there are reports of manufacture and sale
of drugs without proper documents. It is necessary to have a better control and monitoring of
these supplies to practitioners.
In this regard the Committee noted that the present Schedule K provides exemption to
registered medical practitioners, who supply drugs to their own patients from the provisions of
the Act and Rules in that they do not have to take any sales license but this exemption is subject
to certain conditions. These conditions include that the drugs should be purchased only from a
licensed dealer or a manufacturer and records of such purchases showing the names and
quantities of such drugs, together with batch numbers and the names and addresses of the source
shall be maintained. The Drugs Inspectors are authorized to inspect the records, make enquiries
and if necessary, take samples for test etc. There are no data to indicate as to whether drugs
inspectors routinely go and check the records of purchase of these practitioners or not. The
Committee recommended that the state authorities should implement this provision more
stringently in order to ensure that the drugs purchased by these practitioners for dispensing to
their patients are supported by proper purchase records and are of standard quality.
The Committee also felt that there should be some restriction for issuing retail and wholesale
licenses, since agglomeration of chemist shops results in cutthroat competition and indulgence in
possible purchase of drugs from unauthorized sources for economic reasons. The feasibility of
this suggestion needs to be examined.
If a spurious drug is detected in one State, the source of its origin is usually from another State.
By the time the concerned State drug authorities are contacted, the evidence normally is
destroyed at the source. The real offender escapes detection and may keep on indulging in this
trade. The actual supply of spurious drug remains untraceable and recoveries are not affected. It
is, therefore, necessary that there should be a speedy information exchange mechanism. This will
enable a functional coordination with all States in the count.
The Committee felt that there was a strong need for an effective communication system by
means of computer networking in all States that would help in rapid investigation of spurious
drugs. In this regard the Committee noted that the Central Government has already initiated a
major project to provide state-wide computer interlinking.56
The Committee recommends the following measures for quality assurance and testing
laboratories:

196

(a) Drugs and Cosmetics Rules should be amended to include GLP norms as statutory
requirement for approved testing labs and also the in house testing labs of manufacturers;
(b) Accreditation with NABL should be made mandatory for all testing laboratories including the
Government laboratories;
(c) The Central Government should initiate a programme to have coded samples of the same
product tested at different central and State labs from time to time and have the results assessed
by experts for their proficiency testing;
(d) The State testing labs should be frequently audited by a team of experts to ensure their proper
functioning; and
(e) A separate Division needs to be established under CDA to oversee the overall working of
drug testing laboratories in the country.
(f) Upgrading the Central Drug Standards Control organization (CDSCO) to monitor the menace
should form a central Drug Administration (CDA).
(g) The penalty for manufacture and sale of spurious drugs causing grievous hurt or death should
be enhanced from life imprisonment to death.
(h) A provision should be made in the Drug and cosmetics Act declaring all offences related to
spurious drugs as cognizable and non-boilable.
(i) A fine or Rs. One lakh or up to three times the worth of the spurious drugs held by a seller
should be charged (12).
(j) Police authorities and drugs inspector should be authorized to file prosecutions under the
Drugs and Cosmetics Act
(k) A separate provision should be made for speedy trials of such offences.
(l) No court lower than a Sessions court should try these offences.
(m) State governments should strengthen and support their drug control organizations.
(n) Industry and trade associations should play an active role to arrest the menace.

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