Possible Punishment
Why Judges Impose Criminal Sentences
By Maggie Braun
There are four possible reasons why the government decides to prosecute and impose criminal sentences upon conviction. The options for punishment are limited to incarceration in prison or jail, probation, or a fine.
The first possible reason for imposing sentences on the defendants is to deter future crimes. The government wants this type of criminal activity to stop. There is specific deterrence, meant to halt this particular offender from committing this particular crime. In this case, the government wants to deter W.R. Grace and its executives from violating the Clean Air Act, for example. General deterrence is another important reason for imposing criminal sentences. General deterrence is aimed at the general public and is intended to prevent others similarly situated from committing this type of criminal activity. General deterrence makes an example of a specific individual to show the community what can occur if an individual violates the law.
Another reason for criminal sentences is incapacitation. This is achieved primarily through incarceration. Criminal sentences are imposed because the prosecution wants to make it physically impossible for the offender to continue committing the crime. This is a preventative reason for sentencing, because it averts possible future crimes which the offender could commit.
Similarly, rehabilitation is intended to prevent future crimes. The purpose of rehabilitation is overcoming criminal tendencies. Typically, this type of sentence is imposed because of drug or alcohol problems. The offender is sent to a mandatory drug or alcohol treatment program, for example.
Finally, retribution is an important reason for sentencing convicted offenders. The offender is punished because the offender violated the law, and the level of the offense limits the severity of that punishment. By holding offenders responsible for their crimes, sentencing is intended to restore the victim and the community.
During the criminal trial, defendants have a wide variety of constitutionally protected rights, which include, but are not limited to, the right to confront and cross-examine a hostile witness. In contrast, constitutional rights are limited in the sentencing process. The Sixth Amendment protects the right to counsel during sentencing. Furthermore, the defendant has the right to access and rebut the presentence investigation report under the Due Process of law guarantee in the Fifth Amendment in federal prosecutions. There is also a right to make a statement to the sentencer and to present evidence at the sentencing hearing in some instances.
The standard of proof for a sentencing hearing rests on the defendant to show mitigating factors, which can lessen the sentence imposed. The defendant has already been convicted “beyond a reasonable doubt,” and there is not a right to be sentenced by the jury, even in capital cases.
Pursuant to the Federal Rules of Criminal Procedure, the probation officer “must conduct a presentence investigation” and submit a report to the court before it imposes a sentence. This report is not limited to the evidence presented at trial, and the probation officer reports information such as the defendant’s history and characteristics, including any prior criminal records, the financial condition of the defendant, and any behavior which would assist the court in imposing a sentence. Furthermore, the report includes interviews with counsel for both parties, law enforcement officers who investigated the case, victims, the defendant’s family, employers, school officials, and others.
The purpose of the report is to allow the sentencing judge to obtain the broadest scope of possible information concerning the defendant’s life and characteristics so that the judge is able to impose the most appropriate sentence. According the Advisory Notes for the Federal Rules, an “interview” is any communication initiated by the probation officer where he or she is asking the defendant to provide information which will be used in preparation of the presentence investigation.
In the present case, a probation officer will investigate W.R. Grace and its executives if convicted. This officer will submit a presentence investigation report, which Judge Molloy will use in determining the most appropriate sentences for this case if the defendants are convicted.
The Process and Guidelines of Punishment
By Noelle Harrison
Punishment for corporations includes monetary fines and probation. Probation for a corporation means they will be closely monitored or prevented from carrying on with business for a specified time. Individuals involved in corporate crimes face monetary fines and / or time in prison depending on the circumstances and discretion exercised by the trial judge.
I. The Process
The process of sentencing begins with probation officers writing their report and providing it to the parties. The prosecution and defense then have the opportunity to object. After receiving objections, the probation officer drafts a resolution, includes the written objections, and gives it to the judge. The judge then makes the final decision on what the sentencing should be. The report written by the probation officers is comparable to a biography. Interview with Marty Hylland Interview, U.S. Probation Officer, Missoula, Mont. (April 15, 2009). Everything from birth to present is included in this report. Id. For a corporation, this would include when it began, what it does, financial information, any prior violations, and everything and anything about the corporation the parole officer chooses to include in the report. The same is done for individuals but the report would include information such as where they are from, their education, family, and any prior violations. Id.
The Federal Sentencing Guidelines discuss all the different crimes and assign each type of offense a base level. Application of fines according to the level of offense is differentiated between individuals and organizations. U.S. Senten. Guidelines (Nov. 2008). Chapter eight of the manual discusses sentencing of organizations and specific offenses are listed to which the fine table applies to. Environmental offenses remain one of the few excluded due to the nature of the offense.
According to Win Swenson, the commission’s deputy general counsel and legislative counsel in 1996, response to corporate crime is difficult because research indicates that fines average less than the cost corporations have to pay to obey the law. Matthew J. Merrick, Organizational Fines for Environmental Offenders, 8 Fed. Senten. Rep. 204 (1996). W.R. Grace and individual executives of W.R. Grace were indicted with one count of conspiracy, three counts of clean air violations, and four counts for obstruction of justice. Superseding Indictment, U.S. v. W.R. Grace (June 26, 2006).
II. Organizational Punishment
Fines and probation are the two types of punishment for organizations. Chapter eight of the U.S. Federal Sentencing Guidelines Manual was added in 1991 and designed to provide “just punishment,” “adequate deterrence,” and “incentives” for organizations to maintain internal mechanisms for preventing, detecting, and reporting criminal conduct. Douglas A. Berman, Editor, Organizational Fines for Environmental Offenders, 8 Fed. Sent. Rep. 204 (1996).
Most of the different types of crimes are listed under § 8C2.1 of chapter eight and the applicable offense level can be determined. Next, the base fine is determined by taking the greater of either the amount listed in the fine table, or the pecuniary gain or loss from the offense caused by the organization, to the extent the loss was caused intentionally, knowingly, or recklessly. U.S. Senten. Guidelines § 8C2.3 (Nov. 2008). The base fine is then multiplied by a minimum and maximum multiplier determined by the culpability score, ranging from zero to above ten.
In determining the culpability score, involvement in or tolerance of criminal activity, prior history, obstruction of justice, and effective compliance are considered. Id. § 8C2.5. Culpability scores warranting increases are based on the degree of discretion a managing officer has, willful ignorance, and the size of the organization. The multipliers range from .05 to 4.00. This score is determined by the involvement or tolerance of criminal activity, prior history, violations of any orders, obstruction of justice, compliance, and self-reporting. Id. § 8C2.6.
Finally, in determining the amount of the fine within the applicable guideline range, it is recommended the court consider eleven different factors. These factors include the seriousness of the offense, the organization’s role, any collateral consequences, any non-pecuniary loss caused, vulnerability of the victim, prior civil or criminal misconduct, any culpability score above ten or lower than zero, mitigating or aggravating factors set forth in the culpability score, any factor listed in 18 U.S.C. § 3572(a), and compliance. Id. § 8C2.8.
A. Organizational Fines Involving the Environment
As noted above, chapter eight currently does not extend to all organization offenses. Concluding that environmental offenses were a “distinct breed” of organizational crime, the commission expressly made chapter eight inapplicable to environmental offenses. Id. Sixteen lawyers and two Commissioners drawn from the public and private sectors assembled to make further recommendations as to appropriate methods for calculating organizational fines for environmental offenses, but as of November 2008, there are no sentencing guidelines for organizations that commit environmental crimes. Id.
Criminalization of environmental offenses began nearly a century ago with the Refuse Act of 1899. Id. Since then, most major environmental statutes have included provisions that warrant criminal penalties. Id. To achieve uniform results in these prosecutions, the U.S. Sentencing Commission is still considering standards for sentencing corporate citizens convicted of environmental crimes. Id.
There are guidelines in chapter eight suggested for punishing corporations who are found guilty of committing environmental crimes. “If the offense presented a threat to the environment, an upward departure may be necessary.” U.S. Senten. Guidelines § 8C4.4 (2008). A base increase is also warranted when the offense resulted in death or bodily injury, or involved a foreseeable risk of death or bodily injury. Id. § 8C4.2. A departure is also based on the nature of the harm and intention or knowingly risk. Id.
The U.S. Sentencing Commission recommended a combination of individual environmental guidelines with organizational guidelines. Lucia Ann Silecchia, Michael J. Malinowski, Organizational Fines for Environmental Offenders, 8 Fed. Sent. Rep. 204 (1996). For example, under the individual guidelines for environmental offenses, the base offense level for Knowing Endangerment Resulting from Mishandling Hazardous or Toxic Substances, Pesticides or Other Pollutants is 24. U.S. Senten. Guidelines, §2Q1.1 (Nov. 2008). The following tables are taken from the U.S. Sentencing Guidelines.
Fine Table for Organizations
| Base Level
|
| 18 | $350,000 |
| 19 | $500,000 |
| 20 | $650,000 |
| 21 | $910,000 |
| 22 | $1,200,000 |
| 23 | $1,600,000 |
| 24 | $2,100,000 |
| 25 | $2,800,000 |
| 26 | $3,700,000 |
Id. § 8C2.3.
The guidelines for determining the culpability score starts with 5 points and increases or decreases depending on different factors. Id. § 8C2.5. For example, 5 points are added if the organization had 5,000 or more employees, an individual within high-level personnel participated in, condoned, or was willfully ignorant of the offense. Id.
On November 1, 2006, the Commission deleted part of an application note to § 8C2.5 that provided the waiver of an attorney client privilege and of work product protections. Currently, it is not a prerequisite to a reduction in culpability score unless it is necessary to provide disclosure of all pertinent information because it “could be misinterpreted to encourage waivers.”
Id. § 8C2.5.
Minimum and Maximum Multipliers
| Culpability Score | Minimum Multiplier | Maximum Multiplier |
| 10 or more | 2.00 | 4.00 |
| 9 | 1.80 | 3.60 |
| 8 | 1.60 | 3.20 |
| 7 | 1.40 | 2.80 |
| 6 | 1.20 | 2.40 |
| 5 | 1.00 | 2.00 |
| 4 | 0.80 | 1.60 |
| 3 | 0.60 | 1.20 |
| 2 | 0.40 | 0.80 |
| 1 | 0.20 | 0.20 |
Id. § 8C2.6.
In 1993, in effort to determine guidelines for organizational environmental offenses, the U.S. Sentencing Commission drew on two sentencing schemes already in place – the guidelines governing individuals convicted of environmental crimes and the guidelines for organizations convicted of non-environmental criminal offenses. Lucia Ann Silecchia, Michael J. Malinowski, Organizational Fines for Environmental Offenders, 8 Fed. Sent. Rep. 204 (1996). The Proposed Guidelines would revolve around the nature of the wrongful act. The base offense level would be determined by classifying the act. Id. Categories of environmental offenses for individuals range from knowing endangerment resulting from mishandling hazardous toxic substances with a base offense level of 24, to simple record keeping & reporting offenses with a base offense level of 5. Id. An increase of nine levels would be warranted if there was substantial likelihood of death or serious bodily injury, and an increase of six levels if the organization attempted to conceal the act, or failed to adopt environmental compliance program. Id. The base level could be mitigated up to 6 levels if there is cooperation, self reports or the organization provides prompt remedial assistance. Id.
The proposal uses a point system that calculates corporate criminal conduct in a way similar to the system used for individuals convicted of environmental crimes, replacing jail time with monetary fine amounts. Id.
Differences between environmental offenses and traditional crimes may include the amorphousness of the harm, the relative absence of a mens rea / scienter element, and the wide spectrum of environmentally harmful activities which may be criminalized. Id. Environmental offenses, unlike most crimes, are often not the result of acts by single individuals done with full knowledge of the nature, illegality and consequences of those acts. Id. However, in light of the potential impact of environmental crimes on individuals and entire communities, deterrence should be an important objective of the enforcement effort. Id.
Furthermore, differences between environmental offenses and traditional crimes are exacerbated because corporations are non-traditional defendants that “have no arms, no legs, no conscience – if you cut them, they don’t bleed, you can’t put them in jail, and you can’t fine them enough to get their attention.” Id.
W.R. Grace is charged with knowingly releasing and causing to be released into the ambient air the hazardous air pollutant, asbestos, and at that time, knowingly placed other persons, namely W.R. Grace employees and the residents of the town of Libby and Lincoln County, in imminent danger of death or serious bodily injury in violation of 42 U.S.C. § 7413 and 18 U.S.C. § 2. U.S. v. W.R. Grace, Superseding Indictment (June 26, 2006).
W.R. Grace, Alan R. Stringer, Jack W. Wolter, and Robert J. Bettacchi are charged with two additional counts of the Clean Air Act Violation by knowingly selling real property known as the Screening Plant to the Parkers and real property known as the Export Plant to the Burnetts and to the City of Libby. Id.
B. Individual Fines for Environmental Offenses
Individuals face different punishments. Any person who knowingly releases into the ambient air any hazardous air pollutant listed pursuant to section 7412 of this title (which includes asbestos), and who knows at the time that he thereby places another person in imminent danger of death or serious bodily injury shall, upon conviction, be punished by a fine under title 18 or by imprisonment of not more than 15 years, or both. 42 U.S.C. § 7413(c)(5)(A) (2008). An organization shall, upon conviction, be subject to a fine of not more than $1,000,000 for each violation. Id.
The base offense level for Knowing Endangerment Resulting from Mishandling Hazardous or Toxic Substances, Pesticides or Other Pollutants for individuals, as stated above, is 24. U.S. Senten. Guidelines, §2Q1.1 (Nov. 2008). This guideline applies to offenses committed with knowledge that the violation placed another person in imminent danger of death or serious bodily injury. Id. If death or serious bodily injury resulted, an increase may be warranted. Id.
The lesser mishandling offense only has a base level of 8 but several increases from 8 are warranted under specific situations. For example, continual discharge (6 level increase), substantial likelihood of death or serious injury (9 level increase), disruption of public utilities (4 level increase), transportation without a permit (4 level increase), and false record keeping (2 level increase) all provide for increases from the base level. Id. The following table is taken from the U.S. Sentencing Guidelines.
Fine Table for Individual Defendants
| 23-25 | $10,000 | $100,000 |
| 29-31 | $15,000 | $150,000 |
| 32-34 | $17,500 | $175,000 |
| 35-37 | $20,000 | $200,000 |
| 38 and above | $25,000 | $250,000 |
Id. § 5E1.1.
The Second Circuit found a substantial risk of serious bodily injury where asbestos workers who had worked without respirators on an asbestos project with visible emissions for two to four years. U.S. v. Thorn 317 F.3d 107 (2d Cir. 2003). Another case upheld this enhancement for a defendant who allowed the release of asbestos dust into the air, finding that asbestos is a “recognized health hazard” that can cause a number of serious diseases. U.S. v. Pearson, 274 F.3d 1225 (9th Cir. 001) (upholding the district court’s finding that defendant caused a risk of serious injury).
The Ninth Circuit requires proof of actual contamination. The Ninth Circuit upheld an enhancement to the base level of a mishandling environmental offense where evidence showed the defendant allowed the release of asbestos dust into the air and nearby drains. U.S. v. Pearson, 274 F.3d 1225 (9th Cir. 2001); (defendant was convicted of removing asbestos without complying with regulations); U.S. v. Technic Services, Inc., 314 F.3d 1031 (9th Cir. 2002) (finding environmental contamination where defendant regularly washed asbestos waste down drains into the ocean, and removed filters to prevent improper waste from clogging drains). U.S. Senten. Guidelines § 2Q1.2 (Nov. 2008). Repetitive discharge was established in one case by the dumping of substances on two consecutive days. The defendant here left some opened garbage bags containing asbestos outside the building on the sidewalk. U.S. v. Chau, 293 F.3d 96 (3d Cir. 2002) (in addition, there was substantial evidence that defendant disturbed the asbestos in the building and that some asbestos became exposed to the air). Repetitive discharge was also found where the removal of asbestos from one address occurred during two separate one-week periods, two months apart. U.S. V. Rubenstein, 403 F.3d 93 (2d Cir. 2005) (affirming increase for “ongoing, continuous, or repetitive” discharge of asbestos under § 2Q1.2(b)(1)(A)).
III. Offenses Involving Conspiracy
Conspiracy is a separate offense from the crime that is the object of the conspiracy. It is an agreement by two or more persons to commit an unlawful act, coupled with an intent to achieve the agreement’s objective and action or conduct that furthers the agreement. 18 USCA § 371.
The base offense level is taken from the guideline for the substantive offense, plus any adjustments from such guideline for any intended offense conduct that can be established with reasonable certainty. U.S. Senten. Guidelines §2X1.1 (Nov. 2008). The defendant does not have to be convicted of the underlying offense where there is conspiracy. Id.
W.R. Grace, Inc. and individual executives involved in this case are charged with conspiracy. U.S. v. W.R. Grace, Superseding Indictment (June 26, 2006). It is alleged that in order to avoid liability and increase profits W.R. Grace mislead the government and prevented the government from using its authorities to protect against risks to human health and the environment associated with the manufacture, processing, distribution, commerce, use, handling, disposal, and release of tremolite asbestos contaminated vermiculite. Id.
W.R. Grace and executives are also charged with defrauding the United States and others by impairing, impeding, and frustrating the governmental functions of the United States, including the Environmental Protection Agency, and the Department of Health and Human Services, and the National Institute for Occupational Safety and Help. Id.
If convicted of Conspiracy, defendants may face fines and imprisonment. The maximum penalty for conviction of conspiracy as stated in the indictment is five years imprisonment, a $250,000 fine, and three years supervised release for individuals, and $1,000,000 fine per violation for the corporation. Id.
IV. Offenses Involving Obstruction of Justice
If the defendant willfully obstructed or impeded, or attempted to obstruct or impede, the administration of justice with respect to the investigation, prosecution, or sentencing of the instant offense of conviction, and the obstructive conduct related to the defendant’s offense of conviction and any relevant conduct or a closely related offense, the offense level is increased by 2 levels. U.S. Senten. Guidelines §3C1.1 (Nov. 2008). The offense level may be increased if the obstructive act was an overt act of a conspiracy. Id.
W.R. Grace and Alan Stringer are charged with multiple counts of Obstruction of Justice in violation of 18 U.S.C. §§ 1505, 1515(b), 2. U.S. v. W.R. Grace, Superseding Indictment (June 26, 2006).
In late November of 1999, W.R. Grace allegedly provided false and misleading information in its Response to an Environmental Protection Agency (EPA) Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) 104(e) request for information. Id. Further, pending a proceeding before the EPA, W.R. Grace allegedly denied the EPA Superfund Response Team access to the property known as the “Mine Site,” the “Flyway,” and the “Bluffs.” Id. On or before April 10, 2002, W.R. Grace allegedly provided additional false and misleading information to the EPA. Id.
V. Multiple Counts for Criminal Convictions under Federal Law
When convicted of more than one count, the court groups the counts resulting in conviction into distinct groups. Counts are determined to have substantially the same harm under four different scenarios, set out in § 3D1.2. Under (d) of this section, if the offense characteristic is determined largely on the basis of the total amount of harm or some other measure of aggregate harm, or if the offense behavior is ongoing or continuous in nature, then multiple counts may be grouped. U.S. Senten. Guidelines § 3d1.2 (Nov. 2008)
If counts are grouped together, the most serious of the counts is the count that becomes applicable to the group. If a combined offense level is applied, then the highest offense level is still used but increases by the following guideline:
| Number of Units | Increase in Offense Level |
| 1 | None |
| 1.5 | Add 1 level |
| 2 | Add 2 levels |
| 2.5 – 3 | Add 3 levels |
| 3.5 – 5 | Add 4 levels |
| More than 5 | Add 5 levels |
Id.
An additional unit is added for each group that is equally serious or from one to four levels less serious. One-half a unit is added for a group that is 5 to 8 levels less serious than the group with the highest offense level, and groups that are 9 or more levels less serious that the highest level is to be disregarded. Id.
In the W.R. Grace case, individuals will face punishment separately from the corporation. However, the crimes will consist of one group with the base level increasing if there are obstruction and / or conspiracy convictions. In this case, obstruction and conspiracy are tied with the environmental crimes.
VI. Society at Large as the “Victim”
Where the “victim” is society at large, the particular “societal interest” should be identified. Id. In such cases, the offenses should be grouped “when the societal interests that are harmed are closely related.” Id. If counts involve the same victim and two or more transactions are connected by a common scheme or plan. Id. Conspiracy is to be grouped with any substantive offense that was the sole object of the conspiracy. Id.
The Ex Post Facto Clause is not violated if the sentencing guidelines were in effect at the time he committed the last in a series of grouped offenses. Id. (This Clause encompasses law that changes the punishment, and inflicts a greater punishment, than the law annexed to the crime, when committed. Calder v. Bull, 3 U.S. 386, 390 (1798).)
VII. Fines
The amount of the fine should always be sufficient to ensure that the fine, taken together with other sanctions imposed, is punitive. U.S. Senten. Guidelines, § 5E1.1 (Nov. 2008). If the defendant knowingly fails to pay a delinquent fine, the court shall resentence him in accordance with 18U.S.C. § 3614. Id.
VIII. Fines for Individual Defendants are Mandatory
The court shall impose a fine in all cases, except where the defendant establishes that he is unable to pay and is not likely to become able to pay any fine. Id., § 5E1.2. On the other hand, where there is reason to believe that defendant is concealing significant assets courts may impose large fines. Id. In one case, the court upheld a 2.25 million dollar fine on a defendant convicted of loan sharking. Id; U.S. v. Orena, 32 F.3d 704 (2d Cir. 1994).
Another court upheld considering the wife’s assets where defendant had recently transferred his house to his wife. U.S. Senten. Guidelines § 5E1.2 (Nov. 2008). Other courts have found that although defendant had placed property in the names of relatives, the transfer was either fraudulent, or defendant retained a concrete interest in the properties. Id; U.S. v. Gabel, 85 F.3d 1217 (7th Cir. 1996).
A fine may be the sole sanction if the guidelines do not require a term of imprisonment. U.S. Senten. Guidelines, § 5E1.2 (Nov. 2008). However, if the fine is not paid in full at the time of sentencing, it is recommended that the court sentence the defendant to a term of probation, with payment of the fine as a condition of probation. Id. If a fine is imposed in addition to a term of imprisonment, it is recommended that the court impose a term of supervised release following imprisonment as a means of enforcing payment of the fine. Id.
The determination of the fine guideline range is in the discretion of the court’s determination of present and future ability to pay any fine. Id. The commission envisions that for most defendants, the maximum of the guideline fine range will be at least twice the amount of gain or loss resulting from the offense. Id. However, if two times either the amount of gain to the defendant or the amount of loss caused by the offense exceeds the maximum of the fine guideline, an upward departure from the fine guideline may be warranted. Id.
Additional levels from the fine guideline may be necessary where a sentence within the applicable range would not be sufficient to ensure both the disgorgement of any gain from the offense, and if it is not an adequate punitive fine. Id.
IX. Fines for Organizations
Immediate payment of the fine shall be required unless the court finds that the organization is financially unable to make immediate payment or that such payment would pose an undue burden on the organization. U.S. Senten. Guidelines § 8A1.1 (Nov. 2008). If the court permits other than immediate payment, it shall require full payment at the earliest possible date, either by requiring payment on a date certain or by establishing an installment schedule. Id.
In deciding the amount of fines to be imposed upon convictions, the judge has a lot of discretion. Further reporting on the sentencing of fines for the W.R. Grace Case in Missoula, Montana, may be completed upon actual convictions.