More Corporations Stiffing Gov't on Fines

Associated Press

When a gasoline spill and fiery explosion killed three young people in Washington state, officials announced a record penalty against a gas pipeline company: $3 million to send the message that such tragedies "must never happen again."

When nuclear labs around the country were found exposing workers to radiation and breaking other safety rules, assessments totaling $2.5 million were quickly ordered.

When coal firms' violations were blamed for deaths, injuries and risks to miners from Alabama to West Virginia, they were slapped with more than $1.3 million in penalties.

What happened next with these no-nonsense enforcement efforts? Not much. The pipeline tab was eventually reduced by 92 percent, the labs' assessments were waived as soon as they were issued, and the mine penalties largely went unpaid.

The amount of unpaid federal fines has risen sharply in the last decade. Individuals and corporations regularly avoid large, highly publicized penalties for wrongdoing — sometimes through negotiations, sometimes because companies go bankrupt, sometimes due to officials' failure to keep close track of who owes what under a decentralized collection system.

These are conclusions of an Associated Press examination of federal financial penalty enforcement across the nation, which also found:

_The government is currently owed more than $35 billion in fines and other payments from criminals and in civil cases, according to Justice Department figures. This is almost five times the amount uncollected 10 years ago — and enough to cover the annual budget of the Department of Homeland Security. A decade ago, Congress mandated that fines be imposed regardless of defendants' ability to pay, which has added tremendously to outstanding debt.

_In 2004, federal authorities ordered $7.8 billion in 98,985 fines, penalties and restitution demands in criminal and civil cases, but collected less than half of that.

_White-collar crime cases account for the largest amount of uncollected debt. In a study, Government Accountability Office investigators found that just 7 percent of restitution in such cases is paid.