SHORT TAKES #9: CRIME AND PUNISHMENT, OR NOT
Here are short takes on two important stories that have gotten little attention in the mainstream media. Each provides a quick summary of the story, a hint as to why it’s important, and a link to more information. They describe two very different crimes and a little perspective on who gets punished and who doesn’t. It seems like our criminal justice system is sometimes more focused on protecting the wealthy and powerful than meting out justice.
STORY #1: A former Internal Revenue Service (IRS) contractor, Charles Littlejohn, who leaked the tax information of thousands of wealthy individuals (including President Trump) was just sentenced to five years in prison, six times the maximum under sentencing guidelines. Stealing tax information is a crime and he pleaded guilty, but the sentence is much longer and harsher than the sentencing guidelines call for or than sentences in other similar cases. He is appealing his sentence. When President Nixon’s tax return was leaked in the 1970s, the leaker was not even indicted. [1]
In some ways, Littlejohn performed a public service. The information he leaked revealed how little many of the very rich pay in U.S. income taxes. ProPublica published dozens of articles analyzing the data, showing, among other things, that for the first time in history U.S. billionaires had a lower effective tax rate than working-class Americans. In many countries, tax information is public information so the public and lawmakers know how the tax system is or isn’t working. The tax returns of presidents and presidential candidates have been made public for decades because they contain valuable information for the voting public. Trump broke this tradition and refused to release his tax returns. So, leaking his information also performed a public service. [2]
The judge stated in sentencing Littlejohn that deterrence was necessary and, shockingly, even compared him to some of the January 6th insurrectionists. However, deterrence is hardly necessary in this situation as IRS workers rarely leak information, in part because they are likely to be caught due to the IRS’s security systems that track who accesses every tax return. Unauthorized accessing of tax returns will cost someone their job and may well put them in jail. This is plenty of deterrence and a ten-month jail sentence, in alignment with sentencing guidelines, seems like plenty to underscore the deterrence of getting caught. Moreover, this harsh sentence makes it seem like the IRS is more focused on protecting the interests of wealthy taxpayers than exposing tax cheats and unfairness in our tax system.
Many wealthy tax evaders have been sentenced to more lenient sentences than Littlejohn, even though deterrence is truly necessary to reduce tax evasion. Tax evaders are many and are rarely caught and rarely punished, despite stealing millions of dollars from the government (and, in effect, from other taxpayers). So, deterrence is truly important in their cases.
STORY #2: In 2021 and 2022, Scott Sheffield, the CEO of a Texas oil and gas corporation, Pioneer Natural Resources (Pioneer), manipulated the price of oil and gas. This cost every American consumer an estimated $2,100. This is one piece of the “inflation” in the post-Covid period that clearly wasn’t inflation but reflected the greed and manipulative power of an American corporation and its CEO. Over those two years, Sheffield exchanged hundreds of communications with leaders of the Organization of Petroleum Exporting Countries (OPEC), which is led by Saudi Arabia, about reducing oil production to maintain high prices and high profits. It’s estimated that this scheme and collusion accounted for 27% of the increase in gas prices. Industry profits in this period hit a record high of $205 billion and, in 2021, Pioneer enjoyed its highest profits in ten years. [3]
Sheffield has significant influence in the federal government due to his $281,000 in campaign contributions to congressional and presidential campaigns since 2006. In addition, his known contributions to political action committees (PACs) are $200,000 and, since 2012, his corporation’s PAC and employees have contributed $1.2 million to campaigns.
This influence allowed him to spearhead the successful effort in 2014 to get the longstanding ban on the export of U.S. oil overturned. The ban had been in place for national security purposes and also had the effect of keeping oil and gas prices down in the U.S. In 2021, he personally and successfully lobbied President Trump to use his leverage with OPEC and the Saudis to constrain oil production, which increased prices and profits.
This scheme and collusion were uncovered by the Federal Trade Commission (FTC) while it was reviewing the recently completed merger between Pioneer and ExxonMobil. Because of Sheffield’s actions and as a condition of approving the merger, the FTC banned Sheffield from serving on the Board of the combined corporation. It could refer Sheffield to the Department of Justice for prosecution.
I urge you to contact President Biden and ask him to encourage the FTC to make a criminal referral of Sheffield. Corporate crime needs to be appropriately punished. Executives responsible for corporate crime need to be tried and, if convicted, given serious penalties, including jail time, to provide strong incentives to other executives and corporations to obey the law. Unfortunately, criminal charges for executives rarely happen.
You could also ask Biden to commute Littlejohn’s sentence if it isn’t reduced on appeal.
[1] Avi-Yonah, R., 5/21/24, “A five-year prison sentence for a public hero,” The American Prospect (https://prospect.org/justice/2024-05-21-five-year-sentence-public-hero-charles-littlejohn/)
[2] Eisinger, J., Ernsthausen, J., & Kiel, P. 6/8/21, “The secret IRS files: Trove of never-before-seen records reveal how the wealthiest avoid income tax,” ProPublica (https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax)
[3] Goldstein, L., 5/7/24, “The mega-donor who colluded with OPEC,” The American Prospect (https://prospect.org/power/2024-05-07-mega-donor-scott-sheffield-opec-exxonmobil/)