Political Irony

I’ll believe that corporations are people when “three strikes” laws are enforced against them.

Because Diebold, the world’s largest maker of banking ATMs and for years one of the largest manufacturers of electronic voting systems, would have enough strikes against them to be locked up for life.

The latest charges against them are for bribery and falsifying documents, which a federal attorney says are due to “a worldwide pattern of criminal conduct“. Over six years, Diebold paid at least $1.75 million in bribes and falsified records to disguise the bribes (reporting them as “training” or funneling them through third-party companies). But instead of taking them to trial, the government has agreed to defer criminal prosecution and even drop the charges if Diebold pays a fine of less than $50 million and implements internal controls on its behavior.

A fine of nearly $50 million may sound like a lot of money to you or me, but last year their revenues were $3 billion. To put that in perspective, for a real person with an income of $120,000 that would be equivalent to a fine of under $2000. Not that bad for a “get out of jail free card”.

So what are some of the other strikes against Diebold?

In 2010, the company was allowed to settle fraud charges by paying a fine of $25 million to the SEC for inflating earnings reports in order to manipulate their stock price. Improper accounting practices were used to overstate Diebold’s reported earnings by at least $127 million, according to the SEC.

And in 2008, Diebold admitted that it had overstated revenues of its election systems division by more than 300%. They were caught because of blatant insider trading by a number of company executives who all sold off large numbers of shares of company stock on the exact same day, less than a week before their stock plunged more than 50% as several states announced that they had decertified Diebold electronic voting systems because they were easily hacked and had crippling bugs that caused them to report incorrect election results.

And in 2004, Diebold illegally used uncertified election hardware and software in an election and planned to lie about it to government investigators. This time, they were caught because of a whistleblower. In that case, it was the whistleblower who ended up being punished for sending confidential Diebold legal memos (which showed that Diebold violated election laws) to state elections officials and to the media.

That’s at least four strikes, and there are more. But in every case, nobody at Diebold ever went to jail, and any fines amounted to a slap on the wrist. If you or I ran into such repeated trouble with the law, we should be so lucky.