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State and White-Collar Crime: Saving the Savings and Loans

NCJ Number
Law and Society Review Volume: 28 Issue: 2 Dated: 1994 Pages: 297-324
Kitty Calavita; Henry N. Pontell
Date Published
28 pages

This study examined law enforcements response to the savings and loan scandal of the late 1980s and early 1990s, as well as the larger pattern of white-collar crime enforcement.


Based on the study findings, the authors argue that the response to savings-and-loan fraud was unprecedented at the time, both in terms of the extensive resources committed to the law enforcement response and the prosecution of thousands of white-collar offenders. In order to understand the Federal Government's response to offenses involved in the savings and loan crisis, the study examined the nature of the State itself and its relationship to the industrial and financial sectors it is charged with regulating. The law enforcement response to the savings and loan crisis is consistent with the proposed structural model under which the State is highly motivated to act so as to maintain and advance financial stability that in turn sustains government through tax revenues. This suggests that priority will be given to financial institutions on the verge of failure or already insolvent and in which fraud played a significant role in the collapse. This set of priorities is confirmed by a General Accounting Office report that of the approximately 1,000 major savings-and-loan cases under investigation in fiscal year 1991, one-third involved failed institutions, and the other two-thirds were for investigations of fraud that contributed to major losses. This law-enforcement response to the savings and loan crisis, however, was not indicative of a general crackdown on corporate crime. This study thus concludes that the priorities for the State in punishing corporate offenders depends on the nature of the relationship between the state at various points in time and across agencies as well as the threat posed to economic prosperity by the offenses, which undermines tax revenues. 84 references