By on July 18, 2014

Sens Casey + Blumenthal

Wednesday, Sens. Richard Blumenthal of Connecticut and Bob Casey of Pennsylvania introduced the Hide No Harm Act of 2014, which would criminalize the act of corporate concealment.

Automotive News reports the act would deliver prison terms of up to five years and fines for corporate executives who know about a given product’s defects and their potential to do harm, yet do nothing to warn their consumer base or employees.

Blumenthal noted that the act — meant to serve as a deterrent to future cases should Congress approve the bill — would not apply to the ongoing General Motors debacle, believing current criminal law was the right fit for the case.

The Hide No Harm Act of 2014 is co-sponsored Sen. Tom Harkin of Iowa, and provides legal protections for executives who do notify regulators and consumers about potential problems.

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28 Comments on “Blumenthal, Casey Introduce Hide No Harm Act...”

  • avatar

    Fine, as long as the law includes similar provisions for public sector executives, members of Congress and their staffs, as well as the White House staff and executives. Make Harkin, Blumenthal and Casey live up to the same ethical, legal and criminal standards as they make others do.

    I wonder, also, about setting aside a special class of people that must comply with special laws. It smacks of a bill of attainder. How will they define corporations? Will non-profits be included? What about political parties? Ecclesiastical corporations?

    • 0 avatar

      If corporations are “people” with the same rights as those of real persons then they should be subject to the same penalties as real people. As far as I know not one person has spent a night in jail as a result of the banking crisis.

    • 0 avatar
      Jeff Waingrow

      Ronnie, there are an endless number of laws that apply specifically to particular groups. It’s nothing new, and it’s something entirely necessary. So, for example, doctors or school bus drivers or train operators, or commercial pilots are subject to standards that others may not be. While you make a valid point about some groups currently exempt from criminal penalties like those proposed for the “Hide No Harm” targets, it’s really an argument for a more inclusive law perhaps, but not for no law at all. Perhaps you might even agree? BTW, a bill of attainder forecloses the prospect of a proper trial, whereas the opposite would apply for violating this statute. Did you mean to make the case that there would be a denial of equal protection?

      • 0 avatar


      • 0 avatar

        I said that I was fine with the law as long has it has equivalent penalties for politicians and public employees who abuse the public in a similar manner. I’m a supporter of the 2nd Amendment but feel the same way about gun laws – make them apply equally to all government employees. A company can only harm however many people are exposed to their products. Someone who abuses the machinery of government can harm us all.

        Of course, insisting that the aforementioned public officials be as accountable as they want to make those in the private sector be would mean that no such law would ever be passed.

        • 0 avatar

          That’s the main point. I’d love to see a similar law at work aiming at politicians and public administrators, e.g., “who know about a given law’s defects and their potential to do harm, yet do nothing to warn voters or people affected”.
          There needs to be the same laws applying for both industries and politics and the public sector.

  • avatar

    The Supremes have decided that corporations are people, my friend – so will the bill apply to everyone?

  • avatar
    Greg Locock

    I haven’t thought long hard and deeply about this, but it seems to me that big Pharma will oppose this to the full extent of their wallets.

  • avatar

    “…nor shall be compelled in any criminal case to be a witness against himself…”

  • avatar

    Lots of lawyers smiling today

  • avatar
    S2k Chris

    Sigh. Clearly more politicians with no understanding of how large companies work, creating legislation designed to appeal to the heartstrings of the average idiot with no understanding of how large companies work.

    In general, low-level employees have very little ability to make significant decisions about these types of things, and they pass on reports that are just slightly sanitized at each level, so by the time they reach the top they are so scrubbed and attenuated that a flaw is basically a great new feature.

    And the problem is, no single person did ALL the scrubbing and mitigation and took the teeth out, it’s death by 1000 cuts. And how do you hold 1000 people responsible for doing something just SLIGHTLY wrong, but not breaking a law?

    For example:

    Ground level engineer says “this WILL fail.”
    Manager says “Will? Always?” “Well, not always” “So it MIGHT fail”
    His manager says “Might fail? How often?” “Oh, 1 time in 1000?” “Okay, “MIGHT fail IN VERY LIMITED CIRCUMSTANCES”
    His manager says “Might fail in very limited circumstances? Like if improperly used?” “Yeah, if the customer uses it wrong, like with a keychain that’s too heavy…” “Okay, so ‘might fail in very limited circumstances if the customer uses it outside of design specifications..”

    And then the CEO gets that and says “well, that doesn’t seem like a big deal, who cares?”

    Which one of those people needs to GO TO JAIL for their role in that “coverup?”

    I get the anger, but if nothing egregious happened, what can we realistically do about it?

    • 0 avatar

      This was my exact thought.

      I’m all for changing the incentive system for corporate executives – but I’m skeptical about methods.

      My suspicion is that IF this law were to pass and IF it became enforced to any degree, all you would see is this pattern amplified even more. There would be a tacit (or explicit, but unwritten) agreement within a company that executives are never to be explicitly informed of product defects.

      In the rare case that an actual PR disaster occurs, the executives will simply blame game some low-level employee, saying “they never told us!”. Then they’d fire a few working saps, and claim they fixed the problem. Basically what happens now, just more often…

  • avatar

    I will say this for the proposed law (which I doubt will pass regardless):

    Sarbanes Oxley, which is the law that forces public companies to make public their finances and prevents their auditors from performing management functions, has had a very strong and mostly positive impact on American business. Even though very few (if any) CFOs have gone to jail for violating Sarbox, the fact that their freedom is at stake has really changed behavior.

    What this will mean is that anyone with responsibility for product safety will be much more careful in avoiding liability, which should prevent the kind of situations GM is now in with the ignition recalls.

  • avatar

    GM’s going to jail…

  • avatar

    Absurd law.
    If a corporation hides factual information to the detriment of others they are liable.
    Apply that to the public sector and many in Washington would be incarcerated.

  • avatar

    Engineers aren’t paid enough to also have to worry about this sort of shit.

    • 0 avatar
      S2k Chris

      Actually, I think Professional Engineers (like the certification) ARE held to standards where this sort of thing must be reported, blah blah. But honestly, if it’s reported and you’re told STFU we’ll handle it, what are you supposed to do? You can’t be legally compelled to commit career suicide unless it’s far more cut and dried than this.

      • 0 avatar

        If you can go to your boss and say: “Look, you and I could both do time for this” then you may find a more receptive audience than usual.

      • 0 avatar

        PEs are non existent outside of building and structure design. In my experience. Which is over a decade of design and validation. I haven’t known one PE. It’s simply not a req for this work. I believe the company is assuming the liability and not the individual. If that’s something the bureaucrats want to break down, then welcome to the world of insurance and much higher engineering wages.

        • 0 avatar
          S2k Chris

          Granted, but the point is that the idea of engineers being held liable for things they work on or sign off on is not ridiculous, it does exist.

          • 0 avatar

            Hey Chris,

            I dug up this comment I wrote from when GM placed some engineers on paid leave in April. Note, this is regarding Canadian engineers.

            “To become a Professional Engineer, one must have a bachelors level degree in engineering from an accredited educational instituion, and then mentor under a P.Eng for 4 years. Once registered as a professional, the engineer in question must both pursue continuing education, but most importantly NOT TAKE RESPONSIBILITY FOR SOMETHING FOR WHICH THEY ARE NOT QUALIFIED. Since the associations are administrated by professional engineers, they rigorously investigate every complaint or perceived infraction. We are allowed to regulate ourselves, so it is taken extremely seriously lest that privilege is taken away. An engineer regulated in Canada’s first duty of care is to public safety. This is why I mention that sometimes we might have to be willing to have a pair and leave a job where the Code of Ethics of the profession are being compromised. I can’t speak for anyone else but I take it pretty seriously. I am extremely cognizant of the consequences of mistakes I might make.”

            You are absolutely right, at least in my case, anything that bears my professional seal and signature, is my responsibility.

            And, sometimes an engineer sort of HAS to ruin their own current career path to protect the integrity of the profession. I consider myself lucky that my bosses are also P. Eng., so I have never had to worry about that.

            Disclosure, I am a professional structural engineer.

        • 0 avatar

          We all want buildings that stand up, sewers that don’t back up, roads that don’t have dodgy bridges, dangerous curves and poor lines of sight, etc. PEs who stamp off on these projects have a degree of liability that if applied to many other professions would give those professionals the willies. I believe in Roman times, a bridge or aqueduct builder would guarantee his design, and supervision of the work, by standing under the keystone when the supports were removed. Now there is some liability.
          Most products don’t require PE stamps and there is a carve out for engineers who work for manufacturers outside infrastructure as well. There are also professional codes and standards that apply to some critical areas that also go beyond proscriptive design. The ASME BPVP Code is one such.

        • 0 avatar

          I know a few Electrical PE’s but most industries don;t require it. I’m not sure anyone at the engineering firm I work for has a PE.

  • avatar

    “Automotive News reports the act would deliver prison terms of up to five years and fines for corporate executives who know about a given product’s defects and their potential to do harm, yet do nothing to warn their consumer base or employees.”

    Two problems: 1. Due to the vague wording, 80%+ of corps in America could be liable. What constitutes harm? What constitutes a defect?
    2. A better worded bill needs to include actions undertaken by USG.

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