Friday, March 12, 2010

Life in the corporatocracy

This story about how Bank of America has accidentally foreclosed on several homes was in my news feed this morning. First of all, I have to admit that as an undergrad I worked for a CPA who specialized in landlord-tenant lease audits, and one of our main clients, as well as one of the big retail landlords we often did landlord lease audits on (on behalf of the tenant), was Bank of America. Based on that experience I can tell you that Bank of America is really an awful company. Any time they can fuck over their small business tenants and get away with it, they do. And any time an even small and unintentional error is made on the part of the tenant, BofA hits them with the biggest fees and penalties possible. They frequently even hit them with fees and penalties that aren't allowed under the terms of the lease agreement or under local municipal codes, but unless that business can afford an attorney and/or a savvy CPA to decipher leases and codes, they're pretty much fucked. So in general I have no respect or sympathy for BofA.

However, I am somewhat sympathetic to Bank of America on this one. Given the number of foreclosures that are happening right now, and the possibility of human error, and the fact that BofA has to use whatever contractors it can hire locally to take possession of repossessed homes, it seems inevitable that errors will be made. Nobody's perfect, right? But what does piss me off about this kind of story is the way BofA handles it when an error of this kind does occur. When it's just a wronged homeowner versus Bank of America, BofA's attitude is basically fuck-you-shut-up-already. This has been documented in at least three individual cases. BofA does not see itself as responsible for repairing the damages and restoring the wronged homeowner to their original condition after their contractors accidentally foreclose on the wrong home. Homeowners are told that they can drive 80 miles to pick up their pets that were taken from the home, and any cut power and water lines are repaired at the homeowners expense. Food that spoils due to the shut-off power, and furniture and carpeting that's damaged or taken by contractors? All the problem of the homeowner. Homeowners are told to stop calling BofA, and to call the police if they're really that pissed off. That is, until national media attention is brought to the situation, and lawsuits are filed. Then it's a complete reversal on the part of BofA. Then they're doing everything they can to right the wrongs. Then they suddenly have "zero tolerance" for this kind of stuff. Because now it's a PR issue.

And the attorney of one client who was wrongfully evicted sums it up best

If you or I had done to Bank of America what Bank of America did to my client we’d be in prison for 10 years.
This is the truest thing I've heard all week. I remember being amazed when I read in the paper that a man who had broken into a local restaurant and did $10,000 of damage faced a possible sentence of 10 years while my molesting, child-raping, predatory uncle had just gotten sentenced to 4 years that same week. Four. Four years in prison after sexually assaulting several of his nieces, members of the church youth group he was allowed to lead in spite of his known predatory history, and his own daughter, for YEARS and YEARS. Ten years for smashing some light fixtures, overturning some tables, and leaving several beer taps running until they were empty. Four years for sexually assaulting multiple victims.

Beyond the infuriating fact that crimes against property are often disproportionately punished in our country as compared to crimes against persons, crimes against corporate property are taken especially seriously. I remember listening to news coverage during the battle in Seattle, and marveling at the way the media just could not get over the fact that the big window of "the Starbucks" (as if there is only one Starbucks in downtown Seattle, haha) had been smashed by protesters (of course they didn't mention that this was a small anarchist group acting independently of the rest of the protest), while the hundreds of peaceful protesters who were physically assaulted by police in a confrontation that was started by the police weren't even mentioned. Broken noses and ribs, bruises from rubber bullets, and pepper-sprayed eyes? No biggie. A broken business window? ZOMG!!! I get that to people who don't live in Seattle, Starbucks is kind of iconic and symbolizes the city in the popular imagination. I understand that the media focused on it because of this sort of symbolic significance. But it's still the case that a pane of glass on a business is not more valuable than a person's body. Any person. Any window. Any business. Not equal in value or worth. Ever.

So this case is particularly interesting. As our legal system moves deeper and deeper into the stance that corporations are legal persons with legal rights, these kinds of glaring inconsistencies become more and more relevant. If you broke into a bank and did thousands of dollars of damage, confiscated belongings, and padlocked the door, you would be in prison for years. But there is no prison sentence applicable to the legal person that is Bank of America. You can bring a civil case against them and perhaps recover some of your damages. But BofA will not spend a single day in prison or experience all the negative consequences of having a criminal record for the rest of their life, in spite of the fact that they trampled your dignity, damaged or discarded your belongings, shattered your peace of mind within your own home, and destroyed your reputation in your community. Many ethical theories hold that rights always carry reciprocal responsibilities. But in our legal system, corporate persons have many rights bestowed on them for which there are no reciprocal responsibilities, or penalties for a failure to uphold those responsibilities. And this is a prime example of corporate entitlement and essentially risk-free fucked-up behavior. Yay for corporatocracy! Unbridled capitalism FTW!


  1. Anonymous3/13/2010

    Great post!

  2. brilliant observations. the evil corporations should just give everyone houses for free, especially under-privileged minorities and single parents in need.

  3. Braley3/13/2010

    Haha. Very clever, Eric. You've brilliantly refuted a bunch of claims that the OP never made. Nice work. Keep up the red herrings and non sequiters. It makes you look extra-smart!

  4. Anonymous3/13/2010

    Ah, but it's just so damn cute when they can't read but they just have to put their oar in anyway and spout off about some totally unrelated shit. Endearing, really.

  5. Eric,

    I think perhaps you misunderstood. The article linked to above dealt with people whose homes had been wrongfully repossessed - they weren't behind on the payments at all, and in some cases didn't even have a mortgage with B of A. The bank just accidentally broke into, ransacked, damaged, and padlocked the wrong house, and then did nothing to reverse the damages once the mistake was discovered. In one cases the people didn't even have a mortgage since they had paid cash. So I'm a little confused my your assertion that I'm saying banks shouldn't repossess houses. All I'm saying here is that if they accidentally take possession of the wrong house, they should be held to the same standards that you or I would be held to if we accidentally entered the bank and did considerable damage. Does that make it any clearer?

  6. Anonymous3/14/2010

    Thelack of symmetry between corporations and private citizens really is an important issue that needs to be discussed openly and often. Adam Smith never envisioned the kinds of mega-corporations we have now with their stranglehold on the market and the gov't, and yet he is most often appealed to in defense of free-market cspitalism. Thanks for writing this post and reminding us of this important asymetry.

  7. Hey Rachel,

    WTF?!? I assumed you were still preoccupied with your important mission to make the streets of Laramie safe for early morning drivers. I'm looking forward to that CSI episode.

    While I appreciate that you had the summer job and all it seems like a major league leap of logic to say BofA is an Awful Company based upon that exposure. Are they awful because they expect their customers to adhere to the contracts they sign and when they don't BofA then enforces the contract? Or, are they an Awful Company because when their customers can't perform under the terms they agreed to they cast BofA as the evil empire to rationalize their inability to perform as agreed? In any case, what would you suggest to BofA relative to enforcing these contracts so they could become less Awful? Should someone subjectively enforce some contracts and not others, just to be "fair and / or sensitive"? If that is the solution how should BofA decide who gets the break and who doesn't? Maybe they should ask Barney Frank, he's got all kinds of experience with preferential treatment. Let's see how this plays out…after we decide to subjectively select some people or businesses that are going to get preferential contract enforcement shouldn't we go back and modify the terms of all of the folks that actually adhered to the terms of their agreements? Seems like that would be fair, right?

    Let's put it in terms that your college student clones can understand. Let's say my tuition for the spring semester is $3,000 and I pre-register & agree to the whole bit. Let's then assume that I pay my three grand as I agreed in the contract with the school. Let's also assume that Suzy who also attends my school entered into the same agreement, but Suzy decides to go to Cozumel for spring break and blows a grand on booze, gambling and dudes of questionable character. So now Suzy has a problem…she can't fulfill her part of the contract. Does that make the college Awful because they won't let Suzy attend school unless she performs under the contract and pays her full tuition? Maybe they should be sensitive to Suzy and allow her to attend school for two grand, but that really doesn't seem fair now does it? Actually that would penalize me for adhering to my agreement, plus I didn't get to party on top of it all. So I'd be getting screwed, right?

    In any case, BofA may well be Awful, but it certainly isn't because they reasonably expect to be able to enforce their contracts as written. If they're doing shit outside the terms of their contracts they are liable and remedies are available. Here’s a free lesson for you non-business majors…don't sign contracts unless you read, understand and plan to adhere to the terms. It's pretty basic shit that most adults should be able to understand.

    I need to respond to the rest of the goofiness in your post, but I've got basketball to watch right now. I see your boyfriends out in Seattle finally won a Pac 10 Tourney and to top it off they beat Berkeley! Is that a defeat for the Progressives?

  8. Burn,

    Three years, one summer, whatever. I'm sure it's all the same to you. But for the record, in the three years I worked there we did thouhsands and thousands of landlord-tenant audits. Over that three years, in a staggering 81% of the cases BofA overcharged tenants for common area expenses that were generally based on the percentage of square-feet occupied by the tenant, and capital improvements that cannot ever be charged back to the tenant. Not once did BofA willingly pay the penalties specified in the lease. The tenant always had to take them to court. However, if a tenant had underpayed, often as a result of underreported sales, but just as often a result of miscalculations in the comlicated formulas that were used to calculate the rent, the penalty had to be paid immediately or BofA would terminate the lease. No taking them to court, no dragging their feet for months and months to pay the penalty that was clearlyu specified by the lease... And this is what I mean by non-reciprocal treatment for corporations. I haven't tried to argue here that lease agreements shouldn't be enforced, and I'm amused that you believe I have. Agaion, quotes please. What I am saying is that it should be reciprocal. If small businesses and private citizens are going to be held to a standard of behavior, then businesses should be too. If the tenant has to pay a penalty for underpaying, then the landlord should also have to pay the penalties for overcharging as specified by the lease. But that's not how BofA operates, and that makes them a company of entitled, bullying assholes.

  9. Minerva3/14/2010

    So then, Burn and Eric, do you disagree with Rachel's critique of the way our legal system appears to take damage to property more seriously than damage to persons?

  10. Ms. Rachel - 1 of 2

    As I stated in my original response all parties' rights and obligations are in the contract and they should comply with those terms, period. All parties also have the right to enforce the terms of their contracts in the event of default. If they don't take those actions it is on them. In the real business world there are many ways to deal with contract disputes short of hiring lawyers and / or CPAs, not that I'd expect you to have a much of a clue about the real business world.

    Given your self-righteously indignant worldview I'd have thought you would have pitched a fit when you discovered these supposed sins being committed by BofA. I mean if they are as Awful as you say at a minimum I would have thought you'd have resigned your job in protest of these obvious ethical lapses to demonstrate your unwillingness to accept a paycheck from a CPA firm that would stoop to contract with the likes of BofA, but I guess that didn't happen, huh? Seems kind of out of character for you to put up with this injustice for three whole years. Evidently your paycheck was more important than taking a real world position on the injustice. As long as we're busy finding shit that's amusing that seems kind of funny to me.

    If you're goofy enough to believe that BofA has or had an actual business policy of intentionally mistreating people that got caught up in the wrongful foreclosure scenario you are just showing your lack of understanding of how business actually works. There is no dispute that these actions were taken by third party contractors for BofA. I'm sure BofA will be taking the appropriate actions against these contractors and BofA is most likely liable for the contractors' actions on a civil basis. As you know this isn't the first time a contractor has screwed up and it won't be the last. The fact that you thought that the attorney quote was the truest thing you read all week has more to do with the quality of your weekly reading list than any truth that may have escaped from the attorney's lips. While lawyer boy was all kinds of dramatic and indignant sounding it's purely a PR move to try to position his client to sue BofA on a civil basis for money damages.

    Maybe it's lost on you, but a third party contractor making an unintentional mistake in the normal course of business on a foreclosure action is significantly different than some asshole breaking into a business intentionally and trashing the place just for the hell of it. Maybe you don't make a distinction as to these facts, but most reasonable people do. Frankly if the guy was enough of an idiot to break into the restaurant he may well have had a prior record which would probably go a ways toward explaining the district attorney looking for a ten year sentence. For all you know the guy is a career criminal. It's pretty incredible that you would try to compare an intentional criminal act to an unintentional business screw up.

    On a much more serious note, I'm truly sorry about your perverted pedophilic uncle and the damage he has done. I can't speak to the short sentence, but frankly based upon my understanding of pedophilia, there is little proof that any legal remedies including sentence length have much if any impact on the exceptionally high recidivism rates for these pervs.

  11. Rachel - 2 of 2

    If he was a known predator for years and years I have to wonder why someone didn't do something about him or to him long ago and I'm not talking about legal action. The incompetent fools in this mix don't include your mentally ill uncle. They are any and all of the people that allowed him to screw around with little girls and did nothing if they already knew he was a sick pervert.

    Feel free to quote your source to support the infuriating fact that corporate property crimes are disproportionately punished versus crimes against people as I don't believe it's true. The fact that some spoiled goofball protestors in Seattle got roughed up when they didn't do what the police told them to do certainly doesn't support that argument. Just in case you haven't been paying attention to protests like this over the past several years whether it be against the World Bank, IMF, WMF, the Olympics or whatever, any violence is always blamed on a small number of anarchists and the protests almost always get out of hand and the police almost always get blamed when morons don't do what they've been told to do. Anyone participating in this type of activity needs to be prepared for the consequences. Most people of average intelligence understand that their strategy is to go out to intentionally cause trouble and then bitch, complain and play the victim card when the inevitable reaction takes place.

    Something your readers should understand about our legal system is that corporations cannot and do not bring criminal actions. Only the government can go after people criminally, period. Point being that if in fact crimes against corporate properties were being prosecuted more enthusiastically than other types of crimes it's not on the corporations, it's on District Attorneys, the Feds and their ilk. They bring criminal charges. Corporations are limited to civil actions. If you think corporations are in some sort of collusion with the government in this plot then you haven't been paying very close attention to where Holder and Obama are taking the country from a legal perspective.

    To be clear, corporations have always been separate legal entities with rights and obligations. Further corporations have also always had Boards of Directors and Corporate Officers who most certainly can be personally legally responsible for the activities of the corporations. Maybe you missed it, but Corporate Officers for Enron, Worldcom and many other companies are currently serving sentences in federal prison. If you'd like to get up to speed on the issue check out the SEC website (

    @ Minerva - I think she just made it up, but what do I know? I also think in Rachel's alternate reality where she and her friends are eternal victims of the Patriarchy and Corporations they've become so used to getting away with making claims with no empirical proof or objective back up they think it is their right to spout off like this and not be questioned.

  12. Burn,
    1) Why would I have resigned my job? Many of the lease audits we did were on behalf of the tenant, and our findings gave them the documentation they needed to take BofA to court, so I'm not following you here.
    2) I don't believe BofA has any explicit policy of mistreating people, and you'll note that I didn't say that in the post. I do believe that they know many people won't catch overcharges and fees that should not have been assessed. This is also how they got into some serious trouble over the "computer error" charges they were routinely hitting their banking customers with on their "free" checking accounts a few years ago. No doubt they were just assuming that most people wouldn't notice the small random charges, and over time it adds up.
    3) I already said in the post that mistakes are common since we're all human. My issue is with the way BofA handles it when one of their contractors siezes the wrong house. Reading skills, Burn, reading skills.
    4) I have never suggested that corporations can bring criminal charges. However, the state is generally more than willing to bring charges against citizens who cause property damage to corporate property, while corporations who cause damage to a citizen's property may be sued in a civil case by the damaged party, but you may rest assured that criminal charges will never be brought. Please do not put words in my mouth.

  13. Rachel,

    1) I get that you're working the whole "Burn is an Idiot" angle on this deal, but I must tell you darlin, that probably won't fly here. Speaking of reading / writing skills, you original post was much less than clear about who was paying the freight. Turns out you were working for the ambulance chasers?!? If that's the case it's not much of a surprise that you found the 81% BofA violation rate…your boss told you to. It's also no coincidence that you (and your ex-boss) feel the errors on the part of your clients were innocent on their part and mostly due to how complicated the agreements were, but based on their actions BofA must have had a plan to screw people. Did we talk about the fact that the large majority of these tenant calculated innocent mistakes were to the financial advantage of the tenant? As someone that has actually had a senior management position that babysat agreements like you describe it was always amazing to me how often tenants made "math errors" when they calculated their obligations. Frankly the fact that you quote an 81% violation rate but no attorney miscreant ever filed a class action against BofA on the issue speaks more to the validity of your post than I could ever hope to. Save that shit for someone foolish enough to believe you. Do me a favor, now that you're hanging in the business department forward this to someone that actually has some professional experience in business arena for their opinion.

    Actually, now that I understand you spent three years working for the ethical equivalent of the guys with the funny hats that do 3:00 A.M. infomercials about how your rights are being violated I'm starting to expand my understanding of where you're coming from.

    2) Please…I know I'm just a goofy guy from Montana but even I understand when someone is talking Shit about someone or something. Frankly I'm cool with it as long as you don't deny having a huge hard on for BofA. With your attorney connections I'd think that you morons would have already made your first fortune if you could have proven that BofA had a plot to screw their clients. Since you and your esquire asshole friends haven't done it to date I think we know the answer to that question. I challenge any attorney reading this post to step up and debate on this issue. Do your readers a favor…call out your ex-employer and I'll have a conversation with them also. If BofA is wrong I'll be the first person to call BS on them. If not, it's on you. You just saying it doesn't make it true.

    3) I addressed the issue concerning the third party vendors in my post. Unlike you, I've actually worked for a company like BofA. At the time they become clearly aware that there is a legitimate issue it normally gets dealt with aggressively. Is there something new on this issue or are you just being a pain in the ass?

    4) Thanks for confirming that you don't get it and you're posting disingenuous bullshit. If you have facts then share them. If not it's just your biased perspective. I don't have to put words in your mouth, you just said it. Since all reasonably bright Americans understand we have the right to say just about anything we want I'd suggest you give some empirical proof before you pop off going forward.

  14. Wow. Terrifically amusing, Burn. Read the original post one more time. We did tenant landlord audits. Period. On behalf of the tenant or on behalf of the landlord. We didn't care. We audited tenants on behalf of landlords and landlords on behalf of tenants. We did more audits for BofA than of BofA. And for the record, unlike attorneys, CPAs have nothing to gain by chasing ambulances, so your wording is kind of bizarre.