Can charitable donations offset despicable behavior?

By Felix Salmon
October 26, 2012
only two years on Wednesday.

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It was quite surprising when Jed Rakoff, scourge of Wall Street, sent Rajat Gupta down for only two years on Wednesday. After all, federal sentencing guidelines suggested that Gupta should get a sentence four times longer than that. And Gupta wasn’t some small-time crook grubbing for dollars with inside information, either: he did enormous damage to the reputations of central icons of our capitalist system, like McKinsey and Goldman Sachs. But for all that, said Rakoff, he is at heart a good man:

“The court can say without exaggeration that it has never encountered a defendant whose prior history suggests such an extraordinary devotion, not only to humanity writ large, but also to individual human beings in their times of need,” Judge Rakoff said.

This kind of reasoning is found outside the courthouse, too. For instance, Gary Belsky defends Lance Armstrong in New York magazine this week, on the grounds that the ends (raising lots of money for charity) justify the blood-doping means. “If you’re an obsessed sports fan”, says Belsky, then Armstrong’s actions can’t be excused. But for the rest of us, isn’t it great that he managed to use that activity to raise so much money for cancer research?

Belsky’s column is unconvincing, not least because he seems inordinately impressed by charities’ overhead ratios. Doesn’t he know that cheating on overhead ratios — which mean nothing at the best of times — is a lot easier than sports doping? Especially when it comes to a charity with as vague a mission as Livestrong (“we empower the cancer community”), just about anything can be classed a programmatic expense, rather than overhead. Still, the principle — that the scales of justice can offset despicable behavior with charitable acts — seems to be deeply ingrained.

There are limits to how far this kind of argument can be taken. The Jimmy Savile scandal in the UK, for instance, is made worse, not better, by the fact that Savile spent nearly all of his career raising huge sums of money for children’s charities. Similarly for Jerry Sandusky here in the US.

But there’s something that Gupta and Armstrong have obviously in common with other high-profile philanthropists, and that’s their wealth. Poor people, by definition, can’t give millions of dollars to charity. Neither Gupta nor Armstrong ever had to make choices between their own lifestyle and the charities they supported: neither ever had less spending money for himself because he gave so much money away.

At these levels, when you have a net worth in the eight- or nine-digit range, philanthropy starts to become a consumption good: something you spend money on in order to bolster your reputation and your place in society. That’s not necessarily the only or the primary motivation, of course. But there’s an uneven playing field here: the rich have the opportunity to offset their misdeeds with money, in the way that poorer people don’t. (Exhibit A: Martin Erzinger.)

I’ve always been suspicious of so-called “transactional philanthropy” — the kind of tit-for-tat deals where I give you $X, and you give me Y. (My name on a building, for instance.) But now Gupta and Armstrong are making a case that all charity is transactional, in a sense: it’s a kind of favor bank, which comes in very useful when you get into trouble. In the case of Gupta, for one, it seems to have saved him six years in the clink.

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Comments
10 comments so far

That’s ‘Judge Rakoff’ to you – boy.

Posted by MrRFox | Report as abusive

So it has always been; back in medieval times robber Barons and Kings were persuaded to offset their misdeeds with large donations to projects for the Church, which as a consequence has many hundreds of beautiful monuments decorated in the most lavish of styles across Europe.

The high proportion of such Churches in Italy is not an indicator for how that country is in the mess it is in today of course, but wherever there is an overly ornate and rather big Church, usually someone somewhere has been on the fiddle. Historically speaking, of course.

Posted by FifthDecade | Report as abusive

That decision is a travesty. I nearly puked in my mouth when I heard it.

Didn’t it occur to Rakoff that those charity donations were paid with stolen money in the first place?

It makes me think of those drug lords in Mexico donating boatloads of money to the Catholic Church.

http://www.nytimes.com/2011/03/07/world/ americas/07church.html?pagewanted=all

Posted by Frwip | Report as abusive

In Slate (I know….) criminal defense attorney (I know, I know…) Harlan Protass argues that relative to their respective roles in the crime, for Gupta to receive anywhere near as long a sentence as Rajaratnam would be absurd.

http://www.slate.com/articles/news_and_p olitics/jurisprudence/2012/10/sentencing _rajat_gupta_for_insider_trading.html

Rajaratnam got 11 years, so 2 years sounds relatively reasonable from the facts, even completely ignoring any previous acts of charity.

Posted by AlexR | Report as abusive

Charity is always a consumption expense, but I think I get what you’re trying to say.

I think most people who buy into this reasoning would not accept it if it appeared that the philanthropy was deliberately intended to buy leniency for later crimes; if someone says, “hey, I’ve raised a lot of money for charities, that’s enough to morally counterbalance a rape or two,” I don’t think anyone would buy that, in a way they might be inclined toward leniency on philanthropic grounds if it didn’t seem to be directly transactional in the same way. Partly the issue might be whether we’re punishing the person or the crime; someone who engages in philanthropy and then kills someone in a bar fight maybe is a good person who screwed up, unless he shouts “I paid for that children’s hospital over there” while plunging in the knife, in which case he’s just that much more conniving and evil. There might be good utilitarian reasons for what I’ve labeled “punishing the person” — the first stories that come to mind involve imperfect monitoring and the idea that anyone can make a few mistakes.

Posted by dWj | Report as abusive

Judges have charities too. And trusts. Because they are all, at heart, good men. Capisci?

Posted by Eericsonjr | Report as abusive

I share Felix’s skepticism about how much charity or more general “hey, I’m a good person” defenses should influence sentences. Circumstances surrounding the crime – e.g., degree of premeditation and knowledge of the extent of harm being caused – clearly should influence a sentence, as should factors indicating a risk of recidivism, such as a history of law-breaking. My underlying problem, however, is that granting shorter sentences for just being a sort of generally nice person necessarily implies that someone gets a longer sentence if the judge thinks they’re a mean person, even if those other actions are legal. Doesn’t seem quite right to lengthen a prison sentence for actions, or lack thereof, that don’t violate any law.

Also, a factual correction to Frwip’s point about the source of Gupta’s money. Gupta made little, if any, money from providing insider information to Rajaratnam, which was part of Gupta’s (unsuccessful) defense and a peculiarity of the case. It’s in no way accurate to say that Gupta’s charitable donations were paid for with stolen money in the first place.

Posted by realist50 | Report as abusive

Felix,

Example #1 is Mitt Romney. Apparently it’s OK to put companies, communities and employees through an LBO meat grinder if one tithes to one’s church. And we’re not supposed to take into consideration that such giving is required to receive the social benefits and privileges of membership in the Mormon faith. Or, for that matter, the surprisingly small amount of LDS church income that go to genuine, non-mission (aka marketing) related giving.

Posted by BSharkey | Report as abusive

KInda like the one who steals, lies, commits adultery, etc. and then goes to chruch on Sunday and repents – then goes out on Monday and repeats the same acts – then goes to church on Sunday and – get the picture?

Old cowbo saying “The best sermons are lived – not preached” or proselytized or only on a Sunday.

Posted by AZreb | Report as abusive

What a concept – the Sale of Indulgences to save sinners from guilt.

Posted by LHTan | Report as abusive
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