‘Three Strikes’ for Firms in California

Published on

The London Times (UK)

Companies doing business in California may soon get the same warning as drug dealers in South Central Los Angeles: three strikes and you are out.

The proposed law, a response to more than a year of multibillion-dollar scandals on Wall Street, would ban a company from operating in the Golden State indefinitely if it were convicted of three felonies within a ten-year period.

It is modelled on the “three strikes” law for individuals, which can see criminals put away for 25 years-to-life on their third felony, no matter how trivial.

Although it is thought that only one US company, Teledyne Technologies, has been convicted of three felonies over the past decade, many other firms have racked up at least one or two, including two British-owned companies: BP was convicted of disposing of hazardous waste in Alaska, and Princess Cruises of dumping rubbish in the Atlantic.

“If this is good enough for individual felons in California, it’s certainly appropriate for the Enrons of the world,” said Carmen Balber, a consumer activist at The Foundation for Taxpayer and Consumer Rights, a pressure group.

California was particularly affected by the collapse of Enron, the first big post-boom scandal in the US. The state blames the Houston energy company for its huge electricity-related losses, which helped swell its budget deficit to $ 35 billion (Pounds 22 billion).

The bill is being sponsored by Senator Gloria Romero, a Democrat from Los Angeles.

So far it has been approved by the Senate Judiciary Committee and has only one other committee vote to go before it reaches the full California Senate in Sacramento.

Critics say the corporate three-strikes legislation would be the toughest anywhere in the US and would add to California’s reputation of being unfriendly to business.

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