“Swear Jars” Are Great Public Policy

Citizen Wealth Financial Justice

barbaramorganswearjarjpg-2558081_p9New Orleans      Senator Elizabeth Warren from Massachusetts is getting a bit of ribbing from the Fox News types out there for her proposal to create the equivalent of a “swear jar” for big drug companies when they are paying fines for illegal activity and other violations.  What a great idea!

Over the past decade, big Pharma has paid more than $8 billion in fines for fraudulent practices involving Medicare and Medicaid billing according to USA Today.   Meanwhile the federal government has to continue to do business with these blockbuster drug companies because often they are the only ones offering certain drugs.  The Huffington Post reports that,

“Warren’s proposal would only apply to the biggest companies — those that sell “blockbuster” drugs, often defined as a drug with annual sales of more than $1 billion. Only those companies that relied on federally funded research to develop a blockbuster drug would be subject to the punishment. The penalty would be 1 percent of the company’s total annual profit for each blockbuster drug.”

In Warren’s proposal, the money would not only be a real incentive to stop the company’s rip-and-run policies, but would also fund the FDA and National Institute of Health research budgets that have been hit by almost a 25% funding cut in recent Congressional austerity financing.   That’s what I call a constructive and creative public policy proposal!

I think the idea should not only be adopted but should spread to other corporate scofflaws so that there is a culture shift when their lawyers settle, not just a big check cut.

When banks pay for foreclosing on peoples’ mortgages illegally, they should have to pay directly to a housing fund that not only provides counseling on foreclosure modifications but has the bank employees, including the top execs, down in the trenches working with victims, perhaps even helping them move into new houses as well.  When companies pay for firing workers illegally, some of the big dogs should have to do some community service and actually pull some shifts on the line, in the nursing home or hospital, at the back of the truck or wherever.   When companies pay for price fixing, they should not only pay, but they should have to spend time seeing what it’s like to shop on their victim’s budget.   We have to shrink the distance between anonymous corporate crime and people’s experience with punishment in such a way that there is really altered behavior rather than something that is seen as simply part of doing business.   We need to not just have payment, but a probation of sorts that creates good behavior.

Warren is right about where some of the money should go.  Just like lawyers pick cy pres organizations to provide remediation for class action settlements, the government should earmark some of fines to remedy the initial crimes, rather than just washing the money into the overall budget somewhere between bread and bullets.  I would just add to Warren’s “swear jar” concept, the fact that the corporate scofflaws should also have the hold the jar in their own hands for a while and not just throw some money into it for their bad behavior.


Please enjoy Tom Morello of Rage Against the Machine performing the Union Song in Chinatown at the largest ever Wal-Mart protest organized by the California Labor Unions.