Corporate Environmental Crime and Environmental Justice

Abstract

Executive Order 12898 (42 U.S.C. § 4321 [2000]) mandates that federal agencies in the United States make it their purpose to achieve environmental justice. As a result, agencies often rely on empirical studies to provide crucial information that can be used to implement policies to combat inequality. Although numerous studies now examine the distribution of environmental burdens and benefits, there are no systematic empirical studies that examine inequality in criminal penalties. This study corrects that omission by presenting findings on the relationship between community demographics and monetary penalties against corporations for 121 criminal violations of federal environmental law that were adjudicated between the years 2005 and 2010. Our results suggest that monetary penalties are not correlated with the demographics of residents living near the crime. That is, corporations that committed their environmental crimes in minority and poor areas did not receive lower monetary penalties as a result. Thus, environmental justice concerns appear to be satisfied with respect to federal criminal prosecutions.

Keywords

punishment sentencing environmental crime environmental justice corporate crime

Introduction

In 1990, Michael Lynch suggested that “a green criminology” should be at the center of the discipline’s development. Within this new green criminology, environmental justice is a central concept (Stretesky, 2008). White (2008, p. 50), for instance, elaborates that green criminology must emphasize “environmental justice with a special focus on human rights, social equity and ecological justice.” Whether one is using an environmental justice perspective or some other perspective such as ecological justice to inform their research, most green criminologists now study a range of environmental harms some of which are legal and/or illegal (White, 2013; White & Heckenberg, 2014). This study extends the green criminology tradition by focusing on environmental justice concerns identified in Executive Order 12898 (42 U.S.C. § 4321 [2000]), which mandates that federal policies should encourage the “fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.”¹ Specifically, we examine whether the composition of race/ethnicity and/or poverty of communities surrounding environmental violations is inversely correlated with the monetary penalties assessed by the federal government for those violations. If penalties are, on average, lower in communities that are minority and/or poor, then national polices may need to be adopted to tackle that problem.

The current study is focused specifically on illegal behavior; however, green criminologists adopt a framework for studying environmental harm that is inclusive and often examines both criminal and non-criminal behavior (Stretesky & Lynch, 2003). This approach is advantageous, and studying the adverse effects of legal and illegal actions is nothing new in the discipline. That is, criminologists and legal researchers often study activities that are considered legal and legitimate, but nonetheless have detrimental impacts on people and environments (Hillyard & Tombs, 2007; Sutherland, 1949; White, 2003). The emphasis green criminologists place on studying both legal and illegal activities is most easily recognized as advantageous within the real-world applications of environmental law. For instance, in United States v. White (1991) the testimony from the Environmental Protection Agency’s (EPA) assistant administrator emphasizes that the definition of environmental hazards is constantly changing as the Agency modifies its administrative rules. Therefore, a flexible conceptual framework like green criminology is necessary to study the full array of environmental harms that may fluctuate between criminal and non-criminal behavior over time and place (Long, Stretesky, Lynch and Fenwick, 2012).

Furthermore, a green criminology framework is advantageous because it allows researchers to use traditional criminological theories and/or draw upon theories from other fields, such as environmental sociology, when analyzing crimes against the environment (Stretesky, Long, & Lynch, 2014).² Although environmental justice is not nested within a traditional criminological theory, it is highly relevant for this study since prosecutors are explicitly mandated by executive order 12898 (42 U.S.C. § 4321 [2000]) to take environmental justice considerations into account when prosecuting individuals and corporations for violation of environmental criminal laws (Dighe & Pettus, 2011; Stretesky et al., 2014; White, 2013). As such, we examine hypotheses derived from an environmental justice perspective to analyze the outcomes of 121 plea bargains³ obtained via a Freedom of Information Act (FOIA) from the U.S. Department of Justice (DOJ) between the years 2005 and 2010 against corporations that were prosecuted for environmental crime.⁴

Environmental Justice

The environmental justice (sometimes referred to as environmental equity—see generally Atlas, 2001; Rhodes, 2005; Schlosberg, 2007) movement is a grassroots movement that developed out of the civil rights and environmental movements (Cole & Foster, 2001; Taylor, 2000). Movement advocates seek greater levels of environmental protection and an end to policies that perpetuate environmental inequality (Meyers, 2000). The movement became prominent in 1983 when Reverend Benjamin Chavis—a prominent civil rights activist—held a 6-week protest (which resulted in over 550 arrests) to rally against the siting of a toxic waste landfill in Warren County (North Carolina). The Warren County landfill was constructed to store polychlorinated biphenyls (PCBs) that were illegally dumped along hundreds of miles of North Carolina road (Bullard, 1994).⁵ As Bullard (1994) notes, Warren County residents were poor and African American and believed that the PCBs were being stored in their community because the government viewed it as expendable.

The Warren County protests brought issues of environmental justice to the forefront of the environmental and civil rights movements and served as a springboard for subsequent research that revealed that poor and minority communities were overburdened by environmental harms (Bullard, 1990; United Church of Christ, 1987; U.S. General Accounting Office, 1983). This research, and the work of grassroots advocates, eventually influenced the federal government to concern itself with environmental justice. As noted, on February 11, 1994, President Bill Clinton issued Executive Order 12898 that assigned each and every federal agency make environmental justice a part of its mission of service (42 U.S.C. § 4321 [2000]).

Shortly after executive order 12898 (42 U.S.C. § 4321 [2000]) was signed, the U.S. DOJ created an environmental justice strategy that laid out the way in which administrative, civil, and criminal legal actions would be carried out (U.S. DOJ, 1995).⁶ Although the DOJ and other federal agencies recognize environmental justice concerns and state they are actively working toward alleviating the burden of disproportionate impact from environmental harms faced by disadvantaged communities, there is still much work to be done. Indeed, in 2010, the EPA and White House Counsel on Environmental Quality met for the first time in over a decade and stated there was still a need for better strategies that incorporate environmental justice concerns into criminal prosecutions for violations of environmental laws (Dighe & Pettus, 2011).

Whereas the federal government admits the need for better strategies, no one, to our knowledge, has actually determined if environmental injustices are occurring in criminal prosecution outcomes for violation of environmental criminal laws. Some may argue that there is reason to believe environmental injustice is not occurring because federal agencies have been cognizant of environmental justice concerns. For example, each year the EPA releases progress reports and details various civil and criminal legal actions taken against individuals and corporations where environmental justice concerns were a determinant in the punishment levied.⁷ However, the cases listed in these progress reports are limited to only a handful of the many civil and criminal actions taken each year and are thus anecdotal and likely to show success stories rather than drawing attention to agency problems.⁸ Therefore, independent research is needed to learn if environmental justice concerns are being taken into consideration on a larger scale—not just with a select few cases highlighted on website.

Prior Studies

Environmental justice research has focused upon two main tracts of inquiry that are generally in line with the EPA definition of environmental justice. The first tract of inquiry focuses upon determining whether or not poor and minority communities are unduly burdened by environmental hazards because of the community’s proximity to hazardous waste disposal sites and other polluting facilities. If researchers find that these facilities are located disproportionately in poor and/or minority communities, then there is reason to believe environmental injustice is occurring. A majority of studies in this first tract of inquiry provide evidence that poor and minority communities are more likely to be located near hazardous waste disposal sites and/or living near a high concentration of polluting facilities (Brown, 1995; Bryant, 1995; Bullard, 1994; Downey, 1998; Mohai & Bryant, 1992; Pastor, Sadd, & Hipp, 2001; Ringquist, 2005; Stretesky & Hogan, 1998). There are some methodological challenges to these conclusions (e.g., Anderton, Anderson, Oakes, & Fraser, 1994), but a detailed discussion on these debates is not necessary for the present analysis.⁹

The second tract of inquiry looks at environmental justice issues within the legal system. Specifically the research focuses upon determining if corporations located in poor and minority communities are (1) more likely to be subject to regulatory inspections and (2) punished more severely for violating environmental laws in these communities (Atlas, 2001; Konisky, 2009; Lavelle & Coyle, 1992; Lynch, Stretesky, & Burns, 2004; Mennis, 2005; Ringquist, 1998). If corporations in poor and/or minority communities are inspected less frequently and punished less severely for violations, then there is reason to believe environmental injustice is occurring within the legal system by perpetuating environmental inequality within these communities. It is this second tract of inquiry that is most relevant to our study.

Konisky (2009) discovered that regulatory agencies carry out fewer inspections in poorer counties. Furthermore, Konisky (2009) found that while facilities in poor counties are inspected less frequently, there is no evidence suggesting race-based disparities are occurring in the case of inspections. Thus, in Konisky’s (2009) study, the environmental injustice regarding inspections is experienced by class—not race.

Unfortunately, there are only a small number of studies that draw upon an environmental justice framework to analyze legal outcomes assessed against corporations for violating environmental laws. These studies investigate cases handled in state court or federal court and focus on civil and administrative law outcomes—not criminal law. At the state level, Mennis (2005) found air-polluting facilities in New Jersey located in high percent minority areas received fines that were lower than facilities located in predominantly White areas. Also, Lynch et al. (2004) examined penalties assessed against oil refineries in Texas between the years 2001 and 2003 for environmental law violations. Lynch et al. (2004) found that the penalties assessed against refineries tended to be smaller in zip code tracts made up primarily of Hispanic and low-income residents.

At the federal level, there are only three studies that examined legal outcomes for civil law violations. In 1992, the National Law Journal (hereinafter “NLJ”) published a series of articles looking at the fines assessed against corporations for civil environmental violations and how those fines varied in size based upon how many minorities lived near a hazard site (Lavelle & Coyle, 1992). The NLJ findings claimed that the EPA and the courts engaged in a pattern of discriminatory practices—more specifically, as the number of minorities increased around a hazard site, the size of the fine assessed against a corporation would decrease. In particular, the NLJ articles claimed penalties in communities predominately occupied by Whites were found to be 46% higher than penalties in zip codes with minority residents ($153,067 vs. $105,028), and penalties in zip codes with high-income residents were 53% higher than penalties in zip codes with low-income residents ($146,993 vs. $95,664).¹⁰

The NLJ study stimulated significant controversy and additional research. The two major studies that followed the NLJ article were (1) Evan Ringquist’s article “A Question of Justice: Equity in Environmental Litigation, 1974-1991” (Ringquist, 1998) and (2) Mark Atlas’s follow-up to Ringquist’s article, titled “Rush to Judgment—An Empirical Analysis of Environmental Equity in U.S. EPA Enforcement Actions” (Atlas, 2001). Ringquist’s study adhered to the methods used in the NLJ study as much as possible in an effort to replicate their findings; however, he improved on the NLJ study by controlling for judicial and corporation status¹¹ among other factors (Ringquist, 1998). Ringquist concluded that there was no negative statistically significant relationship between percentage of minority residents, income, and the civil fines assessed against corporations for environmental hazards (Ringquist, 1998, p. 1162).

Following Ringquist (1998), Atlas (2001) set out to create the definitive study regarding legal outcomes and environmental justice. Atlas (2001) improved upon Ringquist’s research by using one-mile concentric rings around a hazard site rather than the larger zip codes where the civil violation occurred to better measure the population affected by the hazard. Furthermore, Atlas (2001) attempted to control for the particular circumstances surrounding each case—arguing that the potential danger posed by the environmental hazard would be the major determinant for receiving a high fine. Atlas (2001) ultimately concluded that there was no negative statistically significant relationship between race, income, and monetary penalties assessed against corporations for environmental hazards.¹² Finally, Atlas (2001) found that the facts of a case best predict the outcome of legal actions against corporations for violating environmental law—a finding seen in other studies on criminal justice outcomes (see generally Steffensmeier & Demuth, 2004). At the federal level, both Ringquist (1998) and Atlas (2001) found that environmental injustice was not occurring in civil litigation outcomes involving corporate violation of environmental laws. Atlas (2001) rightly argues that only looking at civil case outcomes does not represent a holistic view of litigation outcomes—researchers also need to look at administrative and criminal case outcomes.

This study was designed to answer part of Atlas’ call as we examine criminal case outcomes at the federal level—a context that has not been previously investigated in environmental justice research. Criminal cases have serious implications for issues of environmental justice. First, criminal prosecutions are supposed to be reserved for only the most severe offenses (Black, 1976; O’Hear, 2004; Situ & Emmons, 2000). This means that if a corporation violates an environmental law, it can be both civilly and criminally liable; however, the criminal prosecution should only occur if the violation is so severe that a civil penalty would not be enough to compensate victims, pay for cleanup, and serve as an adequate deterrent against future crimes. For instance, 33 U.S.C. §1321(b)(7)(D) is a civil statute allowing federal authorities to claim up to $100,000 per day if an oil spill results from the “gross negligence” of a corporation. On the other hand, the criminal statute 33 U.S.C. §1319(c)(1)(A) allows federal authorities to claim up to $250,000 per day if a corporation’s oil spill results from criminal negligence.

Second, in criminal prosecutions the defendant must be proven to have a specific mindset when they committed the crime and that mental state along with all other evidence must be proven beyond a reasonable doubt. For instance, 33 U.S.C. §1319(c)(2)(A) requires the defendant “knowingly” committed the crime. Knowing intent is generally defined as engaging in conduct where a defendant is practically certain an outcome will occur. Civil cases, however, rarely have to prove a mental state, and responsibility must be proven by a preponderance of the evidence (e.g., more likely than not something is true). Therefore, the overall evidentiary burden is much greater in criminal court than civil court because of the severity associated with criminal sanctions. Third, there is a reason to believe that the social ramifications of a criminal conviction and a subsequent labeling of a corporation as “criminal” has a much greater negative societal effect than simply being found liable for violating a civil statute (Weissmann, 2007).

With the abovementioned literature and legal context in mind, we have formed two hypotheses to inform the present study.

Hypothesis (H1): Penalties levied against corporate actors that committed an environmental crime will be less severe as the percentage of minorities living near that environmental crime increases.

Hypothesis (H2): Penalties levied against corporate actors that committed an environmental crime will be less severe as the percentage of poor that reside near the environmental crime increases.

Data and Methods

To examine the relationship between race, ethnicity, poverty, and penalty outcomes, we first collected data about the criminal prosecutions of corporations that occurred in the United States between 2005 and 2010 (n = 245).¹³ Basic case information about environmental prosecutions (case numbers and venue) was obtained by a Freedom of Information request from the EPA for all cases that were forwarded and accepted for criminal prosecution by the DOJ. In the United States, the DOJ acts as the prosecutor for federal agencies in criminal cases—though DOJ attorneys often collaborate with attorneys from the agencies forwarding cases to them for prosecution. The information from the EPA allowed us to match DOJ case numbers to online electronic case files submitted to a legal database called PACER.^14,15 PACER contains the electronic copy of every document filed in federal court. The following information was collected from PACER: (1) the original criminal complaint or indictment, (2) plea agreements, (3) the factual basis for the plea agreement, and (4) official sentencing documents.¹⁶ There are two additional points that need to be made about PACER cases. First, these cases follow the typical pattern of adjudication of all criminal cases because they are nearly all settled by plea-bargain. Second, over half of the criminal cases were violations of 33 U.S.C. 1319 (1) & (2), a knowing or negligent discharge of pollutants into water from a point source. The next most common environmental crime was a violation of 42 U.S.C. 7413 (c) (1), a knowing violation of the Clean Air Act. Other common criminal violations include the illegal disposal of hazardous waste, the illegal use of pesticides, and discharge of waste on protected lands.

Data on the number of employees and company revenue were obtained from ReferenceUSA and Dunn and Bradstreet. Both ReferenceUSA and Dunn and Bradstreet are business databases that contain financial and demographic information for over 14 million companies.¹⁷ We first consulted Dunn and Bradstreet and if company data were missing from that source, we then consulted ReferenceUSA as a backup. As a result, we were able to obtain data on nearly every company prosecuted. Finally, community demographics were obtained from the EPA’s Enforcement and Compliance System Online (ECHO) database, which estimates demographic characteristics for one-mile radii around various EPA permitted companies. All demographic data in ECHO that are used in this study are based on the U.S. Census Bureau’s STF 3A files (see http://echo.epa.gov/). While we are interested in race, ethnicity, and poverty, there are a variety of demographic data available in ECHO, including data on education, age, and sex. It would have been ideal to estimate demographic conditions around the hazardous waste sites at the time the company was sentenced, but census are carried out every decade so these data were only available once every 10 years. However, 2009—the year when census data were collected—is relatively close in temporal proximity to the time of sentencing for the cases in our data set (e.g., 2005 to 2010). Thus, if associations between demographics and monetary penalties do exist, the mismatch in temporal order is likely to introduce a small amount of random error that serves to decrease those associations.

Missing Cases

All criminal cases were not posted in PACER because the court will sometimes order documents should not be released to public access. Reasons that cases are not released vary, but prohibited documents may contain things such as trade secrets or names of victims who are minors among numerous other possibilities. Moreover, sometimes the court clerks simply become overburdened and do not scan in the documents. A total of 98 of the 245 cases we obtained from the EPA contained missing documents because information is not in electronic format. As a result, these cases are excluded from the sample. In addition, 11 corporations are not listed in the ReferenceUSA or the Dunn and Bradstreet databases and therefore are excluded from the analysis. Finally, 15 crimes occurred at corporate facilities not located in areas where nobody was living and therefore also excluded from study. This left us with a total of 121 cases to analyze or 49% of the initial sample.

Dependent Variable

The dependent variable in this analysis represents monetary sanctions assessed by the federal court (in dollars) against corporations that plead guilty to an environmental criminal violation between January 1, 2005, and December 31, 2010. Monetary penalties for these criminal violations ranged from $500 to $6,179,634 across the 121 cases in the analysis. We study monetary sanctions because corporations cannot be imprisoned for violations of criminal law and corporate actors rarely serve prison time for environmental crime.¹⁸ Therefore, monetary penalties are the primary punitive action taken by the government against a corporation that violates a criminal law (Stretesky, 2006). We believe that larger financial penalties generally are more indicative of the severity of the crime (Atlas, 2001; Mann, 1992; Ringquist, 1998; Stretesky, 2006). Thus, we would expect that race and poverty are extra legal factors that should not be related to monetary penalties. If the race, ethnicity, and poverty composition of a community are related to environmental hazards, then this indicates potential environmental injustice may be occurring in the prosecution of environmental crimes.

Independent Variables

The ECHO database (previously discussed in the Data and Methods section) provided demographic information for residents residing within a one-mile radius of the environmental crime. We chose the one-mile radius to stay consistent with previous research examining environmental hazards (e.g., Atlas, 2001; Liu, 2001).¹⁹ The first variable of interest that we examine is the percent of minorities (Hispanic and Black) living within a one-mile radius from where the environmental crime occurred. We examine the total percent of minorities because environmental justice theories do not distinguish between the discrimination these two groups might face and both are generally likely to be faced with higher levels of environmental hazards in their communities (Bullard, 1983). Moreover, this variable is consistent with the work of Atlas (2001), who examined civil and administrative penalties. To compute the percentage of minorities in an area, we simply summed the percentage of African American and Hispanics living within one mile of the environmental crime.

The second variable of interest that we examine is poverty. Consistent with previous environmental justice research, it is the poor who are more likely to be exposed to environmental hazards. Thus, the percentage of households that have combined annual incomes below the poverty line and reside within one mile of an environmental crime are examined in this analysis.

Control Variables

In addition to environmental justice concerns, we control for additional variables that may impact penalty outcomes. Specifically, we control for company characteristics and case characteristics. Company characteristics impact criminal penalties because larger companies can afford to pay higher penalties (Stretesky, Long & Lynch, 2013). Indeed, 18 USC §3572 allows prosecutors and judges to create fines that take into account the defendant’s financial situation, number of employees, independent actions taken by the corporation to assist in cleanup, and overall cooperation of the corporate defendant regarding the environmental hazard (18 USC § 3572(a)(1)-(8)).²⁰ Moreover, 18 USC § 3573 even allows for modification or remission of fines assessed against a corporate defendant if the fine becomes too cumbersome to pay. This is demonstrated in U.S. v. ECO Finishing Company. In this case, the prosecutors openly stated in the plea agreement (subsection: Sentencing Position of the United States, pages 8-10) that the maximum fine they could assess against the defendant was incredibly high in light of the actual crime. Therefore, the fine assessed needed to be crafted in a way that is punitive, but also feasible, so as to not ruin a business. It is of particular interest that every case we analyzed made reference to 18 USC § 3573 as the statutory authority guiding the prosecutor’s decisions in assessing fines.

With this in mind, we control for (1) corporate annual sales and (2) the number of employees working for corporate defendants. Annual corporate sales (in millions of dollars) were collected from ReferenceUSA and Dunn and Bradstreet for the company being charged with a criminal violation.²¹ The number of employees was also gathered from ReferenceUSA and Dunn and Bradstreet and represents the overall number of employees in the corporation charged with a crime. As company sales and employees increase, we hypothesize that monetary penalties will also increase.

Any analysis of penalty outcomes in law must also attempt to control for case characteristics—often referred to by lawyers as “the facts of a case.” More specifically, we control for: (1) offense severity differentiating whether the case represents a felony or misdemeanor prosecution, (2) how many aggravating circumstances exist in each case, and (3) if the corporate defendant has previously been fined civilly or criminally prior to the current prosecution being analyzed.

With these case characteristics in mind, we first created a dummy variable to differentiate between felonies (coded as “1”) and misdemeanors (coded as “0”). Every environmental statute that proscribes criminal sanctions distinguishes between felony and misdemeanor crimes. Generally, felony charges are reserved for the most severe violations of criminal law whereas misdemeanor charges are for minor violations. For instance, 18 U.S.C. § 1319(c)(2)(A) is a felony statute and allows for a punishment up to $500,000 for each violation whereas 33 U.S.C. §1319(c)(1)(A) is a misdemeanor statute and only allows for a punishment up $250,000 for each violation. Therefore, we expect if a case is prosecuted as a felony it will be directly related to having a higher fine.

Another important case characteristic involves aggravating circumstances. An aggravating factor is “any circumstance attending the commission of a ‘crime’ or ‘tort’ which increases its guilt or enormity or adds to its injurious consequences, but which is above and beyond the essential constituents of the crime or tort itself” (Black, 1991). It is important to keep in mind that federal sentencing guidelines are no longer mandatory but merely advisory per the Supreme Court in United States v. Booker (2005). Prior to the Booker ruling, courts and prosecutors relied upon the mandatory sentencing guidelines put forward by the U.S. Federal Probation Office. Though the sentencing guidelines are no longer mandatory, courts and prosecutors still rely upon them to determine appropriate fines to assess against corporations that commit environmental crimes. The full list is found in statutory provisions U.S.S.G. § 2Q1.1 through § 2Q1.6. The following are just examples of aggravating circumstances: (1) actual release of regulated substance,²² (2) violation of permit requirements,²³ (3) continuous release of regulated substance,²⁴ and (4) release of regulated substance without a permit.¹⁴ Each PACER document listed the aggravating circumstances associated with the case. We count the total number of aggravating circumstances and then use those values as a proxy for case seriousness. The number of aggravating circumstances range from 0 to 6 (median = 3). The greater number of aggravating circumstances,²⁵ the higher the fine should be.

Our final case characteristic is the number of pervious corporate violations. Lynch et al. (2004) argue that a corporation’s criminal history is one possible penalty predictor such that violations in the past make future violations more likely. As discussed above, environmental crime statutes require prior history be a factor in determining penalties. As a result, we code for the past violation history of corporate defendants by counting the number of previous administrative, criminal, and civil violations. This information is reported by the EPA in its public database and was reported in PACER. Prior violations ranged between 0 and 9.²⁶

Analysis and Results

To carry out our analysis of monetary fines, we examine the relationship between minority composition, poverty, and monetary penalties for the one-mile radii surrounding the location of the criminal violations. As indicated by our hypotheses, an inverse association between criminal monetary violations and fines indicate that when environmental crimes occur in minority and poor areas, the courts do not punish those crimes as severely. Such a finding would be indicative of environmental injustice. To estimate the relationships between demographic characteristics and penalty amounts, we first examine mean and median relationships between minority, poverty, and penalty amounts. Next, we examine relationships controlling for company and case characteristics through ordinary least squares (OLS) regression analysis. OLS is an appropriate statistical technique that can be used to estimate linear associations between interval/ratio level variables. In the present analysis, monetary penalties, percent minority, and percent in poverty represent a ratio level variables. Another advantage of OLS is that it allows us to estimate the effects of variables of interest and controls simultaneously to rule out potential alternative explanations to environmental injustice that may also explain variation in penalty outcomes.

To begin, it is worth examining average fines and the average percent of poor and minority individuals living within one mile of each criminal violation. This information is included in Table 1. Table 1 demonstrates that while the demographic variables (percent in poverty and percent minority) are relatively normally distributed across the one-mile radius areas surrounding environmental violations, the dependent variable (penalty amount) is significantly skewed, as indicated by the large difference in the between the mean ($935,559) and median ($100,000) penalty. This skewdness contributes to the non-normally distributed residuals in the OLS models, which violates a primary statistical assumption. Thus, we transformed the dependent variable (as did Atlas, 2001) to its natural logarithm to improve the normality of the residuals. After the transformation of the penalty variable, the residuals in the regression models were normally distributed and so no further corrections were warranted.

Table 1.

Mean and Median Scores for Dependent Variable and Variables of Interests.

	Penalty amounts	Percent minorities	Percent below poverty line
Mean	$935,559	23	29
Median	$100,000	12	30

Table 2 begins our statistical analysis using Pearson’s r estimates with bivariate correlations between percent minority, percent poverty, and the natural log of the penalty amount (the full correlation matrix is Appendix). Both relationships were negative, suggesting that there could be some potential merit to the environmental injustice hypotheses (H1 and H2). However, these relationships are not statistically significant. Specifically, the correlation between percent minority and penalty amount is −0.072, which represents a very weak relationship between the two variables (see Appendix). In addition, the correlation between poverty and penalties is −0.075 (see Appendix). Again this relationship is very weak. Therefore, we suggest that in the case of bivariate relationships, there is little indication of environmental injustice when it comes to criminal fines.

Table 2.

Bivariate Correlations.

	Fine	% minorities	% below poverty line
Fine	0
% minorities	−.072	0
% below poverty line	−.075	.538**	0

p < .05. **p < .01.

Before turning to the multivariate findings, it is important to point out that we encountered problems with hetroskewdasticity²⁷ and multicollinearity.²⁸ This occurred because the percentage of minority residents and poor residents are highly correlated (see Appendix). As a result, the demographic variables were analyzed in two separate series of models (Tables 3 and 4). After separating out the poverty and percent minority population variables, heteroskedasticity and multicollinearity issues were no longer problematic for this analysis of crime penalties.

Table 3.

Ordinary Least Squares Regression Results (Unstandardized Coefficients) for the Natural Log of Monetary Penalties on Minorities and Controls (n = 121).

	Model 1	Model 2	Model 3
Minorities	−0.010	−0.011	−0.011
Corporate revenue		0.00001*	0.00001**
Number of employees		−0.0003	−0.0004
Aggravating factors			0.845**
Felony			1.020**
Prior actions			0.514
Constant	11.362**	11.274**	7.965**
R ²	.007	.06	.43

p < .05. **p < .01.

Table 4.

Ordinary Least Squares Regression Results for the Natural Log of Monetary Penalties on Minorities and Controls (n = 121).

	Model 4	Model 5	Model 6
Below poverty line	−0.012	−0.011	−0.011
Corporate revenue		0.00001*	0.00001**
Number of employees		−0.0003	−0.0004
Aggravating factors			0.845**
Felony			1.020**
Prior actions			0.051
Constant	11.362**	11.275**	7.965**
R ²	.01	.06	.43

p < .05. **p < .01.

Our regression results are displayed in Table 3. The results indicate there is no support for our first hypothesis. Though in the predicted direction, the percentage of minorities living around an environmental violation is not statistically significant in relation to penalty amounts in any of the three regression models estimated.

Although not the focus of our analyses, the results do indicate that corporate revenue, aggravating factors, and felony status are the significant predictors of penalty amounts in criminal prosecutions. In both models 2 and 3, we see that as corporate revenue increases, the overall fine increases as well. This relationship is exactly what we would expect if prosecutors rely upon 18 USC § 3573 when they are crafting fines in a plea agreement. Furthermore, we also found that corporations prosecuted for a felony rather than a misdemeanor generally receive a larger fine. This relationship is of no surprise because felony statutes—as we discussed above—generally have larger fines associated with them. Finally, we find that as the number of aggravating factors increase so does the amount of the penalty (p < .01).

Turning to our second hypothesis, our results do not provide a statistically significant relationship between populations below the poverty line and fines. Like Table 2, the coefficients are in the predicted direction. This suggests that environmental injustice is not a serious problem in criminal cases. As is the case in Table 3, the results in models 5 and 6 also show that corporate revenue, aggravating factors, and felony status are significant predictors in criminal prosecutions.

Discussion and Conclusion

This study is the first of its kind to analyze environmental justice concerns in the context of criminal penalties and therefore moves beyond basic descriptive statistics often presented by traditional legal scholars (Brickey, 2001; Cohen, 1991; O’Hear, 2004). This research also contributes to the handful of studies (Atlas, 2001; Ringquist, 1998) on civil outcomes and lends support to the trends observed in those studies—namely that we are unable to document the existence of systemic environmental injustice suggesting that prosecutors take the environmental justice mandate seriously (or at least in their plea negotiations regarding penalties). That is, consistent with prior environmental justice research examining civil and administrative fines, we find no statistically significant relationships between fines, minority status, and poverty (Atlas, 2001; Ringquist, 1998). In fact, our results suggest that crime severity is the best predictor of penalties from prosecutions against corporations violating environmental criminal statutes. The argument that the severity of a crime is the best predictor of an outcome is traditional in legal scholarship and is a doctrine consistently taught in law school. Our results are right in line with this traditional way of thinking.

Like Atlas (2001) and Ringquist (1998), we do not find any evidence of systemic environmental injustice. However, based on the wider body of environmental justice scholarship we do not argue that there is an absence of environmental injustice in disadvantaged communities. Indeed, as we have pointed out, there are a significant number of empirical and case studies that suggest the opposite is true (Bullard, 1990). For example, it may be the case that more severe crimes occur in communities that are primarily composed of disadvantaged residents. If this is true, it could impact the analysis by artificially increasing the penalty amounts in poor and minority areas relative to more White and affluent areas that experience few environmental crimes. There is some support for this position as these crimes occur in those areas where the percentage of residents in poverty tends to be nearly double the level of poverty in the nation (i.e., 14.5%). That is, it may simply be the case that environmental injustice occurs when corporations most likely to violate environmental laws located in the most disadvantaged neighborhoods. Future research should examine this potential hypothesis. As a result, we suggest that environmental injustice is more likely to manifest itself within citing—especially related to the type of organization—regarding the location of hazardous waste and polluting facilities (as long argued by Bullard, 1994; Pastor et al., 2001; and others) and is not attributed to penalty amounts associated with environmental crime prosecutions.

This study is not without limitations. First, because there are few criminal prosecutions for environmental violations at the federal level, we examine relatively few cases. Moreover, data on corporate crime are often hard to gather and while we were able to pull many case files, there were also many that were not released to the public. Thus, we also lost a number of cases from our analysis which limit the generalizability of our findings, though it is unclear how missing data might impact the strength of the associations between race, ethnicity, and penalties. A second limitation is that we do not know anything about the processes leading to the detection of the environmental crimes that occurred and whether environmental injustices manifest themselves in that arena. Second, we recognize that some prosecutions were declined by DOJ and left to the states to prosecute if they choose to do so. Not only do we not know the outcome of these cases and how they compare to federal outcomes, we do not know why these cases were declined by the federal authorities.

Footnotes

Appendix

Correlation Matrix.

	Revenue	Employees	Fine	Felony	Aggravating factors	Prior actions	Minorities
Revenue
Employees	.181*
Fine	.177^†	−.012
Felony	−.171^†	−.115	.102
Aggravating factors	.045	.089	.436**	.092
Prior actions	.125	.002	.171	.192	.192*
Minorities	.055	.027	−.072	.220*	.110	.075
Below poverty line	.040	.097	−.075	.068	.068	.038	.538**

†

p < .10. *p < .05. **p < .01.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Notes

Author Biographies

Matthew Greife is a PhD candidate at the University of Georgia and a practicing criminal defense and environmental lawyer in Colorado and California. His research interests are on law and society, white collar crime, and the death penalty.

Paul B. Stretesky is a professor of criminology in the social sciences and languages at Northumbria University (Newcastle, England). His recent books include Exploring Green Criminology (2014, with M.J Lynch) and Treadmill of Crime: Political Economy and Green Criminology (2013; with M. Long & M.J Lynch).

Tara O’Connor Shelley is an associate professor with the Center for the Study of Crime and Justice in the Department of Sociology at Colorado State University. Her current research interests include punitive attitudes, environmental crime and justice, policing, and comparative crime and justice.

Mark Pogrebin is a professor of criminal justice in the School of Public Affairs at the University of Colorado at Denver. He has published six books and numerous journal articles and has had over 40 of his articles reprinted in anthologies. His current research is in the areas of death penalty defense lawyers and prisoner reentry and financial obstacles.

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