“Corporations are people, my friend.”
– Mitt Romney, 2012
Indeed they are, for all legal intents and purposes, thanks to a generation of dismantling regulations limiting what corporations can spend to influence elections, the deal sealed and delivered by the U.S. Supreme Court’s now-infamous Citizens United decision. Today, corporations claim the full range of human rights, though rarely are they called to account for human accountability.
However, it should be kept in mind that in the end, a “corporate person” cannot exist nor function without natural humans to carry out the day-to-day tasks required to operate it – such as shareholders, employees, and the corporate officers. Except for the obsequious logo, the Chief Executive Officer, or CEO, is the most prominent and visible face of a corporation. If criminal charges or a civil lawsuit are leveled at a corporate “person” and the case goes to trial, it is the CEO and fellow officers that wind up on the witness stand.
Can a Corporation “Plead The Fifth”?
The Fifth Amendment is possibly the most familiar passage of the Bill of Rights, particularly to fans of films and television shows featuring police procedures and courtroom drama. The heart of it is the right to not incriminate one’s self:
“No person shall …be compelled in any criminal case to be a witness against himself…”
Does this include corporate “persons”?
First of all, note that the above passage refers to criminal cases. While there are some similarities (the primary one being the adversarial procedure), civil cases are quite different, and the right protecting against self-incrimination is inapplicable. Therefore, the defendant in a civil lawsuit case cannot “plead the Fifth,” whether corporate or natural. (The exception is when a witness’ testimony in a civil case might open them up to criminal charges.)
This being said, as a legal “person,” a corporation can indeed face criminal charges. However, the right of protection against self-incrimination has yet to be extended to corporate “persons.” On the other hand, natural persons within that corporation do enjoy those rights. When a CEO exercises his/her rights under the Fifth Amendment during a criminal trial, it may have the same practical result as if Global MegaCon, Inc. had taken the Fifth itself.
Who is the Defendant?
All state laws contain provisions recognizing that corporations can, like natural persons, engage in criminal actions. However, the fact remains that behind these criminal acts are natural humans who give the orders, ignore situations, or otherwise enable the crime. In some states, a prosecutor must demonstrate before the court that the corporation’s officers or board of director authorized the actions leading to the crime.
Here is the rub: the CEO in this case can plead the Fifth, but only if he himself is facing criminal charges, or answering the question may expose him to criminal charges. He and/or any other officer or employee of the corporation can be compelled to testify against the company.
In 2012, the a U.S. district attorney in Texas filed criminal charges against Apothécure, Inc. as well as the company’s owner and president, one Gary D. Osborn. According to allegations, Apothécure had shipped two lots of a medication that had been mixed improperly, resulting in the deaths of three patients. Amazingly, neither Osborn nor Apothécure was charged with felony murder; instead, it was violation of the Federal Food, Drug and Cosmetic Act (FDCA), under which Osborn and his company allegedly shipped mislabeled products resulting in patient deaths – and that Osborn (whether he knew about the situation or not) had been in a position to prevent the violations.
Assuming the case had gone to trial, it is possible that Osborn could have invoked his Fifth Amendment right against self-incrimination when it came to his own actions. In essence, that would have amounted protecting his company from self-incrimination as well. However, Osborn as well as any or all of his employees could – and would – have been compelled to testify against the company as well as each other. (As it turned out, Osborn pleaded guilty and was sentenced to probation and a $100,000 fine.)
The Bottom Line
Theoretically, if a corporation is charged with a felony and all natural persons (including the CEO, the board of directors, shareholders, employees and others) allegedly involved in and charged with the crime choose to exercise their rights under the Fifth Amendment, a corporate “person” could in effect avoid incriminating itself. In practice, this is highly unlikely, particularly with large corporations and “whistleblower laws” that encourage people with knowledge of wrongdoing to come forward.
It is one of the drawbacks of being “too big to fail.”