— In the wake of the General Motors scandal of hiding known ignition switch defects for over 10 years, U.S. Sen. Richard Blumenthal (D-Conn.), has introduced a bill called the Hide No Harm Act. The legislation would allegedly hold corporate executives criminally responsible for hiding safety problems that could cause injuries or deaths.
While many corporate execs have faced jail time over theft or embezzlement, hiding a defective product won't get a corporate officer behind bars, at least under current laws.
In the case of GM, documents prove some corporate bigwigs knew the ignition switch had serious problems as early as 2001. GM can (and has) faced fines and public ridicule, but its officers won't see any time in the slammer even though the defect was causing injuries and deaths.
While the Hide No Harm bill was created with GM in mind, the legislation would target any "responsible corporate officer" with any company who knowingly hides serious safety defects.
Safety advocates have long argued financial penalties aren't enough to keep corporations in line, as in the case of a $35 million fine against GM. That's a big chunk of money to most of us, but it's a financial slap on the wrist to a company like GM.
The Hide No Harm Act sounds reasonable, but keep in mind the same government that bailed GM out of bankruptcy is the same government creating and enforcing the law. Although violating the law could mean up to five years in prison, it would probably take a miracle for anyone to be convicted under the law.
The proposed law specifically says a corporate officer or director could be charged with a crime if they wait longer than 24 hours after “acquiring actual knowledge of a serious danger" about a product that could cause injuries or deaths.
The phrase "serious danger" means a "danger, not readily apparent to a reasonable person, that the normal or reasonably foreseeable use of, or the exposure of an individual to, a covered product, covered service, or business practice has an imminent risk of causing death or serious bodily injury to an individual."
This definition could cause a flood of reports from decision-makers who are paranoid about something as simple as a defective air stem on a tire that could possibly cause a blow-out and lead to serious bodily injury.
Furthermore, the issue of acquiring "actual knowledge" could be tough to prove in court.
A senior officer could simply say they were ignorant of the problem, even if the evidence would show the person wasn't performing their job duties. They might lose their job and cost the company money in penalties and fines, but that person won't face time behind bars.