White Collar Crime and Residential School Compensation

            White Collar Crime and Residential School Compensation
          On September 20, 2011, Bill C-10, commonly known as Harper’s Omnibus Crime Bill, was introduced into the House of Commons. The bill proposed changes to existing pieces of legislation and also proposed new legislation. Part of the legislative changes included amendments to the Criminal Code of Canada with new mandatory minimums and amendments to the Youth Criminal Justice Act with a focus on detention for re-offending youth (Barnett, Dupuis, Kirkby, MacKay, & Nicol, 2011). The ultimate goal of the bill was to combat the allegedly increasing crime rates especially among young people (Barnett et al., 2011). Yet, the media frenzy surrounding the contentious bill ignored the realities surrounding youth crime. Bell (2012) reports that youth crime rates are actually lower than they were ten years ago overall. Even when adult crime rates exceed youth crime rates, there exists this media preference to focus on crimes that are likely to induce public fear and moral outrage (Bell, 2012). In addition to this, a tendency to focus on marginalized groups, like young people, as being dangerous and violent often instigates hateful and stereotypical views of their criminal conduct (Bell, 2012). Drawing attention to the political and social context that surrounds how the majority of Canadians receive their information on crime rates, like the media, highlights the need to reframe the way we conceptualize crime. As such, I will argue for a re-conceptionalization of crime to address white-collar criminality within a Canadian context especially as it pertains to the typology of victims and offenders. I will employ a case-study analysis on a set of related cases regarding Canada’s compensation plan for survivors of residential schools. Friedrichs (2010) argues that a case-study approach to the analysis and research of white-collar crime (WCC) provides a significant advantage by analyzing the realities of distinct WCC.
            When it comes to the conceptualization of crime, including all those involved, such as the offenders and the victims, the focal point is often situated on the Other. For example, the media reports on crime often draw attention to youth crime (Bell, 2012). An investigation of crime reporting in various Canadian media outlets found that the focus on youth violent crime was reported at a rate of 52%, yet youth violent crime only accounted for 18% of the overall youth crime rate (Bell, 2012). Even though youth crime rates tend to be the centre of media attention, there are other groups that are affected by this media bias in selective crime reporting. One such group includes Indigenous people in Canada. Indigenous people in Canada make up 3.8% of the total population, yet represent 33.3% of the total population in federal institutions (Correctional Services Canada [CSC], 2007). Further to this information, offenders to Canadian society are often victims of Canadian society, and Indigenous populations are regrettably a perfect example of this conundrum.
            In 2008, the Canadian government had made a public apology for Canada’s role in the failed attempts at forced assimilation through the institutionalization of Indigenous people via residential schools (Truth and Reconciliation Commission [TRC], n.d.). In addition to this apology the Canadian government had set aside a $1.9 billion settlement package for survivors of the residential school era (Gatehouse, 2006). Even though there were strict limitations on how survivors could apply for compensation for the trauma they experienced in the residential schools, there was little focus on the treatment of survivors, as clients, from their corresponding lawyers or legal team. By 1998, two hundred claimants received $20 million compensation overall (Sillars, 1998). The context of this legal situation can be described as a breeding ground for white-collar criminality, and it did not take long for the exploitation of these vulnerable clients to occur.
            Before a re-conceptualization of white-collar crime (WCC) can take place, a working definition of WCC must be provided for purposes of this paper. Given that the scope of WCC ranges across a broad spectrum of varying types of definitions, I will focus on occupational crime, a specific type of WCC. To begin with, the majority of academics agree that term WCC originated from Edwin H. Sutherland’s work which began during the 1930s in the United States (Friedrichs, 2010). The literature also highlights that the definition of WCC is a three-prong one that involves crime taking place within a legitimate occupational context, has an objective of economic gain or occupational success, and is not characterized by violence that is traditionally found in conventional definitions of crime (Friedrichs, 2010). Critics to the definition of WCC also highlight that there is this need to focus on the harm done to others, the crime, as opposed to focusing on the stigma, the deviance, associated with WCC (Friedrichs, 2010). As such, the term occupational crime is more suitable than occupational deviance for this case study.
            Again, specific to WCC, occupational crime is a type of WCC behaviour that satisfies the three-prong definition of WCC, as outlined above. However, this term, as a form of WCC, also comes with difficulties regarding its own conceptualization. According to Friedrichs (2010), the term occupational crime is sometimes confused with terms like occupational deviance and workplace crime. The major differences in these terms from occupational crime is that occupational deviance is best suited for WCC that violate non-criminal norms and workplace crime is a more general term for petty WCC (Friedrichs, 2002). Further, and in relation to WCC, when defining occupational crime the focal point should be on financially motivated offenses, in a legitimate occupational context that is made possible vis-à-vis that occupation (Friedrichs, 2010; Friedrichs 2002). One such recognizable legitimate occupation is associated with legal professionals, specifically lawyers. This is referred to as legal crime.
Legal crime is a crime that occurs within the context of a lawyer’s duties. Specifically, as a form of occupational crime, legal crime relates to deviations from the norms of professional associations which include illegal or criminal activity (Friedrichs, 2010). The most commonly cited form of legal crime is fraud, which is a form of victimization that allows a lawyer to exploit their clients in various ways like charging exceptionally high legal fees or complex billing reports (Friedrichs, 2010). Regarding the compensation for residential school survivors, and as stated earlier, with the amount of monies set aside for these survivors and the vulnerability of the survivors, who have little or no knowledge of the justice system, the context was almost a breeding ground for white-collar criminality
The first reported form of legal crime began in 2012. Lawyers have been criticized for their legal fees and their recruitment process of residential school compensation clients (Sillars, 1998; Gatehouse, 2006). Three known lawyers had been either dismissed from representing residential school survivors or disbarred from practicing law altogether due to the level of exploitation that occurred regarding their respective clients’ cases (Martens, 2013). One west coast Canadian firm, Blott and Company, was found to have violated trust within the scope of a legitimate occupational context (Barnsley & Martens, 2012). Within her decision, J. Brown highlights the hidden intentions of the firm by writing, “The only interests to be served in letting Mr. Blott continue would be his own economic interests” (Barnsley & Martens, 2012). These three variables, legitimate occupational context, trust, and pursuing individual economic interests, are essential to the conceptualization of white-collar criminality, and more specifically, occupational crime.
This type of occupational crime, legal crime, also presents the need to reconceptualize crime to address white-collar criminality as it pertains to the typology of victims and offenders. It can be agreed upon that victims are often seen as vulnerable individuals. However, victims who deviate from the white, middle-class norms are often criticized for the supposed preferential treatment that they receive within the justice system. The public perception of the payments to the residential school survivors was predicted to go one of two ways. As outlined by the Canadian Bar Association (2005), it would either go positive or negative, which included affirming a victim’s right to be compensated or inciting hateful and often racist perspectives to persist, respectively. While the public perception is not the focus of this paper, I would like to highlight the fact that the perceptions prevalent throughout Canadian society are often the negative perceptions; thereby, highlighting the need to re-conceptualize the typology of victims of crime.
In addition to re-conceptualizing the typology of victims of crime, WCC presents the fact that we need to reframe how we see offenders to Canadian society. Friedrichs (2010) highlights that offenders to conventional forms of crime include individuals under the age of 25 years and individuals who are often racialized or already marginalized through their socioeconomic status. However, when it comes to WCC, offenders are described as predominantly male, older, white, and occupy a higher socioeconomic status (Friedrichs, 2010). In contrast to the statistics of institutionalized individuals, white-collar criminals, or white criminals in general, very rarely receive media attention. Thus, the differences in public perceptions relating to offenders and victims can be attributed to these media biases and its selective reporting.
            This media bias and selective reporting is also evident in the residential school compensation case. For instance, a basic Google search of the residential school compensation case scarcely shows the incidents that some of these survivors have been victimized by their lawyer through the aggressive recruitment techniques, signing retainers without interpretation of what the retainer actually means, and through exorbitant legal fees. Gatehouse (2006) documents the work of Tony Merchant, another lawyer who has been criticized for exploiting residential school survivors. A former Supreme Court justice, Frank Iacobucci, suggests that many of Merchant’s clients do not actually exist and has been condemned for his dubious billing practices and for charging higher legal fees for his work on residential school compensation cases (Gatehouse, 2006). For example, the legal fee for Merchant’s work on residential school compensation cases is set at $750 per hour, while his non-residential school compensation legal fees are set at $450 (Gatehouse, 2006). One might argue that due to the complexities of the residential school compensation cases that these fees are acceptable. However, Merchant has been not only been criticized for his high legal fees by Indigenous peoples, Indigenous communities and by Ottawa, but also been denounced for his disrespecting behavior towards the courts (Gatehouse, 2006). Not only does Merchant victimize his vulnerable client, but he also demonstrates little respect towards courts and the court process.
            With having little respect towards the courts and its processes, the Merchant example providers further support regarding the reconceptualization of crime within a Canadian context. In relation to Bill C-10 mentioned in the introduction, it was also criticized for not paying particular attention to marginalized populations like Indigenous peoples who already over-represent the prison population (Canadian Civil Liberties Association, n. d.; John Howard Society, 2011; Canadian Bar Association [CBA], 2011). The focus of justice should not be primarily through prisons and harsher sentences since most often those sentenced are those with less privilege and resources to fight their charges. Regarding the reconceptualization of crime, this also highlights how our criminal system works in general. Traditional criminal justice systems are often cited with a focus on finding blame or guilt (Bell, 2012; CBA, 2011). For some cultures, including Indigenous cultures, focusing on blame or guilt inflicts more harm on the community as opposed to helping the community.
            A justice model that focuses on community as a whole is the restorative justice model. This restorative justice model adopts a holistic approach to justice by addressing the harm caused by a crime and amends the harm done through a non-hierarchal approach involving the community, the offender, and the victim (Bell, 2012). The Canadian Bar Association (2005) suggests that the restorative justice model should be central to the residential school compensation cases. However, this type of model also has its own flaws. Bell (2012) highlights that the restorative justice model allow the current injustices that Indigenous peoples experience to subsist. For instance, the restorative justice model subjects certain groups to further oppression by dominant, and privileged groups, which does not address the structural injustices that marginalized groups already experience (Bell, 2012). This restorative justice model is also advocated in much higher instances than other types of non-hierarchal justice models. Yet, the model is rarely critiqued in this manner. Consequently, to aid in the reconceptualization of crime within Canada, I propose that the less-often cited transformative justice model substitute the restorative justice model.
            While the restorative justice model and the transformative justice model both focus on all parties involved including the community itself, the restorative justice model does little to address distributive injustices. Distributive justice is associated with the allocation of social goods and resources including income, wealth, education, and equal access to opportunities (Fulfer, 2013). Given that individuals who occupy a higher socioeconomic status often commit WCC, there is already a considerable imbalance of resources between offenders and victims, especially with the residential school compensation case. Thus, the transformative justice model addresses the distributive injustices by focusing on the victim’s needs, empowering the community, and placing the offender within the social context of the crime (Bell, 2012).
            The transformative justice model also allows the reconceptualization of WCC from a theoretical perspective when the Sykes and Matza’s techniques of neutralization are utilized (Friedrichs, 2010; Bereska, 2011). The techniques of neutralization, in relation to WCC, indicate how offenders rationalize their illegal activities, which is a characteristic of white-collar criminals (Friedrichs, 2010). The techniques of neutralization include the following: denial of responsibility, denial of injury, denial of the victim, condemnation of the condemners, and appealing to higher loyalties (Bereska, 2011). The Merchant case is an example where these techniques of neutralization occurred. For Merchant, as a lawyer, he prefers to describe himself as “hero” (Gatehouse, 2006). The obvious neutralization and rationalization of his criminal behaviour begins at this point. He also further describes himself as one of the “few people with the vision and drive to obtain justice for Aboriginals” (Gatehouse, 2006). By referring to himself as a hero and as one of few people with the interests of Indigenous people as his starting point, Merchant displays these techniques of neutralization by denying any responsibility in the exploitation of his vulnerable clients’ position, denying any injury, denying of the victim in general, and appealing to higher loyalties. When it comes to condemnation of his condemners, Merchant has made it particularly difficult for an external investigation to happen with respect to his residential school compensation files (Gatehouse, 2006). He often cites the solicitor-client privilege that is central to any legal case as reasons for not agreeing to an external investigation (Gatehouse, 2006). By highlight the solicitor-client privilege central to legal cases, it emphasizes that legal crime committed by lawyers is almost legitimized through such standards of professional conduct, and further emphasizes the notion of trust that clients must have in their lawyers to do the right thing. This notion of trust is also significant to WCC (Friedrichs, 2010).
Focusing back on the issue of distributive injustices that Indigenous people experience through their marginalization, the focus in WCC should not be the traditional one-dimensional form of justice; rather the focus should be on distributive justice. By focusing on restoring the balance with respect to distributive justice, WCC addresses the power differentials between WCC offenders and victims. One might argue that it would be more productive and protective for society to administer traditional justice through the form of traditional punishment via longer and harsher prison sentences. However, as indicated earlier, white-collar criminals usually occupy a higher socioeconomic status and will ultimately have access to the resources to help fight their criminal charges.
When it comes to the conceptualization of crime in general, a shift needs to occur. The focus should not be primarily on harm, but also focus on all parties involved including the offender, the victim, and the community. As highlighted by Friedrichs (2010) regarding the invisibility of WCC from the general public, the shift also needs to occur within the public realm. Specific guidelines on reporting crime by marginalized groups should be implemented to help combat the selective reporting and media bias among Canadian media outlets. This is not to suggest that there should be an increased reporting of WCC. In fact, there should be a consideration of all parties involved when reporting any type of crime, WCC or not. More importantly a contextualization of the crime should be applied to all reporting of crime. Often the media will decontextualize conventional forms of crime, which removes the crime from the political, social, and economic context it is situated in (Bell, 2012). By adding these contexts to the reporting of crime, perhaps public perceptions on marginalized groups, like young people or Indigenous people, will begin to shift as well. When it comes to the fraudulent and criminal behaviours committed by lawyers against their clients, especially vulnerable ones like residential school survivors, the standard of professional conduct needs to go beyond appreciating the client’s special needs that include the complexities of such intimate and personal cases.
In an article entitled “Chasing Indian Ambulances,” the then-AFN chief, Phil Fontaine, cites his concerns regarding lawyers who might begin to take advantage of the residential school compensation process (Sillars, 1998). His concerns for residential school survivors care was condemned as focusing on his lost of control in the compensation cases (Sillars, 1998). However, his concerns, although not evident then, were legitimate concerns. With the first case of legal crime coming to light in 2012 and Fontaine addresses his concerns over a decade ago, a higher standard of professional conduct needs to be implemented and enforced by an external organization other than the Law Society of Upper Canada (LSUC). The LSUC is a professional association that governs all lawyers in Canada through their Rules of Professional Conduct (The Law Association of Upper Canada [LSUC], n. d.). However, in their guidelines for lawyers representing residential school survivors, they stated that the guidelines were only advisory and educational in nature (LSUC, n. d.). Given the nature of these guidelines, it seems that the standard of professional conduct is only limited to the official rules in the Rules of Professional Conduct which does not discuss distributive injustices experienced by marginalized groups.
By shifting the focus to one that highlights distributive justice and the transformative justice model, a reconceptualization of crime begins to occur that includes WCC. This reconceptualization includes an examination of the differential treatment of certain types of offenders and victims. As such, this reconceptualization of crime, not only address the social injustices that marginalized groups experience, it also addresses the distributive injustices readily apparent in a white-collar criminality context. If Indigenous populations make up 3.8% of the total Canadian population, there should be an acknowledgement of the trauma they experienced from residential schools that goes beyond the billions of dollars set aside by the government. The Canadian government needs to address Indigenous people over-representing the prison population, not with harsher punishment, but with concentrating on new kinds of justice: transformative justice and distributive justice.
Barnett, L., Dupuis, T., Kirkby, C., MacKay, R., & Nicol, J. (2011). Bill C-10:  An Act to enact the Justice for Victims of Terrorism Act and to amend the State Immunity Act, the Criminal Code, the Controlled Drugs and Substances Act, the Corrections and Conditional Release Act, the Youth Criminal Justice Act, the Immigration and Refugee Protection Act and other Acts. Retrieved from http://www.parl.gc.ca/Content/LOP/LegislativeSummaries/41/1/c10-e.pdf
Barnsley, P. & Martens, K. (2012). “Judge punishes lawyer for ‘loan scheme’ targeting residential school survivors.” Aboriginal Peoples Television. Retrieved from http://aptn.ca/pages/news/2012/06/06/judge-punishes-lawyer-for-loan-scheme-targeting-residential-school-survivors/
Bell, S. J. (2012). Young Offenders and Youth Justice: A Century after the Fact. 4th ed. Toronto: Nelson Education Ltd.
Bereska, T. M. (2011). Deviance, Conformity, and Social Control in Canada. 3rd ed. Toronto: Pearson Canada.
Canadian Bar Association. (2005). The Logical Next Step: Reconciliation Payments for All Indian Residential School Survivors. Retrieved from http://www.cba.org/CBA/Sections/pdf/residential.pdf
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Correctional Services Canada. (2007). Facts and Figures. Retrieved from http://www.csc-scc.gc.ca/text/prgrm/abinit/know-eng.shtml
Friedrichs, D. O. (2002). “Occupational Crime, Occupational Deviance and Workplace Crime: Sorting out the difference.” Criminal Justice 2(3): 243-255.
Friedrichs, D. O. (2010). Trusted Criminals: White Collar Crime in Contemporary Society. 4th ed. California: Wadsworth Cengage Learning.
Fulfer, K. (2013). Work, Marriage, and Property. Lecture conducted from Western University, London ON.
Gatehouse, J. (2006). “White Man’s Windfall.” MacLean’s 119(36-37): 18-24, 26.
John Howard Society. (2011). Press Release. Retrieved from: http://www.johnhoward.ca/media/Press%20Release%20Omnibus%20Bill.pdf
Martens, K. (2013). “Outgoing chief adjudicator criticizes lawyers in residential school compensation process.” Aboriginal Peoples Television. Retrieved from http://aptn.ca/pages/news/2013/03/11/outgoing-chief-adjudicator-criticizes-lawyers-in-residential-school-compensation-process/
Sillars, L. (1998). “Chasing Indian Ambulances.” Alberta Report 52(25): 29.
The Law Association of Upper Canada. n. d. Guidelines for Lawyers Acting in Cases Involving Claims of Aboriginal Residential School Abuse. Retrieved from http://www.lsuc.on.ca/media/guideline_aboriginal_res.pdf
Truth and Reconciliation Commission. n. d. About Us. Retrieved from http://www.trc.ca/websites/trcinstitution/index.php?p=4 


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