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Tuesday, March 21, 2006
You pay. They don't. How come?
$35 billion. As much money as China will spend on its military this year. As much as Americans will spend on weight loss plans. That's how much money is owed to the U.S. government in fines and penalties from corporations and individuals, according to an investigation by The Associated Press.

And yet the money goes uncollected. Why?

None of the government agencies we contacted wanted to talk publicly about the problem, but they admit it is real. Some agencies suggest they just don't have the people to collect. Some say these offenders who have broken all sorts of regulations for workplace safety, the environment, consumer protection, you name it, often can't pay anyway. So, these regulators suggest, it is good to at least use the threat of fines to extract promises of better behavior.

Still, at the Department of Motor Vehicles in Washington, D.C., I met Oscar Keys, who had just finished paying $270 worth of parking tickets. He wasn't happy when we told him the federal government has let $35 billion of fines go uncollected. As he put it: If the government is collecting money from me, shouldn't it collect money from everyone, including big businesses?
Posted By Tom Foreman, CNN Correspondent: 10:07 AM ET
  38 Comments
This is utterly ridiculous. These firms say that they don't collect this money because these firms "often can't pay anyway". Well, if they can't pay, they shouldn't be in business. The rest of the public doesn't have the luxury of not paying so they shouldn't either. A lot of people that get fined usually don't have the money to pay that fine but it's done anyways or consequences are sufferd. If the person mentioned in the article that payed $270 in parking tickets didn't pay them, he wouldn't be allowed to drive. If a company can't afford to pay their fines, they shouldn't be allowed to conduct business until the outstanding balance is payed off.
Posted By Anonymous Jose, Omaha Nebraska : 10:54 AM ET
Big businesses pay--not to the American public, but to the politicians. Lobbying is expensive, so why should they pay twice? Then the lawmakers won't get all their fancy trips and other quid pro quo. This is no big mystery.
Posted By Anonymous Paige B., Austin, TX : 10:58 AM ET
I'd like to know where does the money go when collected? To the agency? If so, is it possible that a catch-22 situation surfaces? If all the money is collected by an agency and that amount puts them over the top and now they do not qualify for the funds usually received from the government to keep running? I'm not familiar with how the government funds the agencies, but I would bet that something like this is keeping our agencies from fully collecting the fines.
Posted By Anonymous Sherry, Hillsboro, Ohio : 12:20 PM ET
$35 billion is a drop in the bucket really, when you consider the grand total of debt the US governtment is in. Should the US be more concerned about what other country's owe more than it's own people and companies? At least those people and companies are paying into the GNP, domestic taxes (hopefully) and - again hopefully - buying American products that help everyone out. What is the amount owed the US from, for instance, France from WWII and WWI - especially if you incure late fees and interest? Why should we be responsible for our own debt and not hold other nations to the same standard?
And what about the trade deficit we hear about each year - why are we willing to give other countries a break and sell their products cheap while our products don't get the same benefit in foreign countries?
Just a couple thoughts.
Posted By Anonymous Nathan Jerke, Blackfoot Idaho : 12:24 PM ET
So typical - as long as the "Average Joe Citizen" pays, the Government will leave other offenders alone. The Gvernment does not go after Big Business but Big Business gets money give-aways paid by the average citizen. I am sick of it!
Posted By Anonymous Bonnie, Trumbull, CT : 12:33 PM ET
The government should be collecting at least half of this amount. I understand that many departments are short-staffed in being able to carry-out fines, but they still have authority to pursue fines incurred through some type of violation. We all pay taxes -- if we don't then we see the result; a failing country that can't work with it's budget.
Posted By Anonymous Mark, Waynesville, NC : 12:34 PM ET
You should publish the names and contact information for the top offenders. That way the public can either contact them or quit buying their products.
Posted By Anonymous Gaylon Baker, Dickinson, North Dakota : 12:36 PM ET
I owed the Navy Echange $100 that the bill never found my current adress after leaving the Navy. The Goverment wound up collecting by withholding part of my tax return that I owed the Exchange.

I would think the goverment could do things like this to big buisness and collect that money.
Posted By Anonymous John, Chicago IL : 12:39 PM ET
Who cares? Half of it is just bogus government intrusion into our lives. Don't have the people to collect???Please, there are so many bureaucrats that its not even funny - must be too close to their government funded pensions to care.
Posted By Anonymous Dave Seattle Washington : 12:41 PM ET
This country has thousands of collection agencies that collect from businesses and consumers. Let them go after these dead beats on a contingency basis. At least the government will get back some of the money owed less any fee's. Plus we would be supporting an industry and possibly creating jobs.
Posted By Anonymous Joe, Malden MA : 12:41 PM ET
The government does not collect from large corporations or rich individuals because the government is significantly influenced by large corporations and run by rich individuals. That is a simplistic answer but it is also a true answer. The laws and regulations are difficult to enforce against entities with wealth and power because they can hire high priced lawyers to find loopholes, they can lobby lawmakers with large bankrolls, and they can hide behind public apathy. Let's face it - if it's not a high profile transgression like Enron, then the average American won't pay attention to it long enough to affect lawmakers. It is the same cycle of corruption that allows huge government waste on a large scale.

Examples: no bid reconstruction and defense contracts in Iraq (Haliburton); Katrina clean up costs hugely inflated ("Katrina cleanup costs grow and grow: Layers of contractors and subcontractors boost bill to taxpayers" Washington Post 3/19/06)

It is primarily the middle class that gets stuck with the bill in the form of higher taxes, interest rates, and inflation. Yet even as I gripe about this, I am already distracted by the next media trivia story to make headlines about a cat that fell 80 feet from a tree and survived. Did you see that on streaming video? That was really cool! Guess what? I think I might get a tax refund this year - awesome, the government is finally paying me!

Yeah, right.
See what I mean?
Posted By Anonymous Anatole Karpovs, Lake Charles, Louisiana : 1:41 PM ET
Stunning! Last year I was audited, had legitmate deductions denied summarily and then not only paid the fines but interest as well. Maybe I need to incorporate and then outsource my labor...
Posted By Anonymous jon - NY, NY : 1:42 PM ET
It's a lot easier to kick the little guy than it is to kick a big company/corporation, with big lawyers,
who has big lobbyists in Washington.
Just the way it is.......
Posted By Anonymous Peter McKeever, Washington DC : 1:46 PM ET
Why don't they outsource it if they don't have the resources - outsource it to collections firms at a reasonable (not the usual) rate, say, 25%. Outsource it to lawyers, maybe even law students (if they can under the rules) to start seizure and proceedings.

Bottom line: be it Katrina, homeland security, etc. Government cannot solve the problems. We need to get back to ideas like civil defense and get citizens and the private sector involved. I'm not talking about meshing the two to a point of communism or other ideologies, I'm just saying, let's make use of ALL our resources, including us sitting here reading this crap popping blood vessels.
Posted By Anonymous JB, Columbia, MD : 1:48 PM ET
I am a web site programmer, with average skills, and it would take me less than a DAY to set up a secure web site where fines could be recorded, tracked and PAID. ALL ENTITIES (business, governement, not for profits, etc.) fully understand how to extract money from each other. You set up an account. You provide you bank account routing information.

Once again the American people allow their leaders to engage in this continued masquerade of passive aggressive behavior, trying to convince us that it's just too hard or costs too much money to get a job done. I especially hold in fault the YOUTH of this country, who not only will be left holding the empty bag, but who more than anyone should be demanding that the people they elect to serve in office use the technology at hand.

"People" are no longer required to collect money, so that arguement is laughable. If I can set up an account to pay a $5.00 per month bill on-line, don't let these morons ge away with the charade that they don't have the resources to put a system in place to collect $35 billion.

If you cannot program your TIVO, if you cannot download music, if you cannot figure out how to open an account on-line - get the heck out of the way and let people who know how to use technology get the job done. Why not just hire Pay Pal to do this. Better yet, open it up to private enterprise and let the people who manage the program keep 0.01% of the fines owed- $3.5 million.
Posted By Anonymous Kim, Midland Michigan : 1:48 PM ET
The key element here are the lawyers. Big business can and will keep from paying those fines, while their cases are fought appeal after appeal. Why would a Corp. pay a 20 million dollar fine when you can pay a lawyer 250K a year to keep that money and make it work for them, for another 3 or 4 years. The average american does not have the time, money or good lawyers (for that matter) to keep the gov't at bay.
Posted By Anonymous Ed, Newport News, VA : 1:55 PM ET
If I didn't pay my bills hi ho hi ho to debtor's prison I go. It is only fair Get them..
Posted By Anonymous Sylvia, Denver Colorado : 1:55 PM ET
The Federal government was sure to send me a very threatening letter regarding the $28.71 in taxes I owed, regardless if I had the money or not. "We don't have the money" is never valid excuse, ask any person working in the asset recovery department, set up a payment plan... our country needs their $35 Billion.
Posted By Anonymous Pablo, Bloomington Illinios : 1:55 PM ET
Why doesn't the OMB or some other watch dog agency publish a list of the companies, the thing (s) they were fined for doing and the amount of the fine owed? I wonder how many are large campaign contributors?
Posted By Anonymous Marcia Topeka, KS : 2:00 PM ET
The federal government has a major social component to almost every action it takes. Fines are simply a tool to get a company to operate within in the rules. My experience has been that companies fall into 4 types (big,small,good,and bad). The large, good companies fix their processes and pay the fines. For the small, good companies, we work with them and provide guidance and assistance until they are operating properly. Enforcing the fine may do more harm than good - the goal is not to close the company and put 10 people out of work but to have that company operate in a safe manner within the environmental regulations.

As for the large, bad firms, their legal depatments ensure that they are not held responsible for the fines. Sometimes the legal structure of the company is such that there is not an entity to actually hold accountable. For the small, bad firms, those are the ones you keep going after and enforcing the fines is just one tool of many used to keep after them. The goal being to get them to operate within the regulations - the goal is not necessarily collecting the fine.
Posted By Anonymous Cassie, Dallas, PA : 2:04 PM ET
Just another case of the Rich and powerful just getting richer. WHy would this be such a shock anymore? This is the American way it seems and it will continue until the poor and screwed-over in this society get mad enough. Forget the B.S. about changing Iraq, the revolution needs to start at home.
Posted By Anonymous Will, Chicago : 2:04 PM ET
They can't pay any way? I wonder if Mr. Keys had told the DMV, "Sorry, I don't have $270", do you think they'd have let him slide? I doubt it.
If corporations have violated the law and are not paying their fines, then the company needs to be taken into receivership and sold to satisfy the fines. Any monies left over should, of course, go back to the original owner.
That's more generous than the taxman treats most private individuals who fail to pay.
Posted By Anonymous Phil, Kansas City, MO : 2:06 PM ET
Keep the lobbyist out of Washington all of them and forbid any Government employee from making contact with them then we might see a change. Get paid by a Lobbyist they Owen you.
Posted By Anonymous wayne mickletz Gilbertsville,PA. : 2:08 PM ET
I know that if I don't pay my taxes on time, the government sure comes after me to make sure that I do.

I'm tired of the "we just don't have enough people to handle it all" excuse. We can find some money to pay for those people, it's called go collect the back taxes/fines owed the government. With the technology we have today, we are more than capable of finding the offenders. Garnish the companies accounts, levy stiff fines, put them in jail, but collect the funds so that they are held accountable for their actions.

Isn't a sad commentary to realize that $35 billion just isn't enough money for the government to really be concerned about. I don't know about anyone else, but it sure is a lot of money to me!
Posted By Anonymous Karen, Houston, TX : 2:09 PM ET
Interesting story. Now the real questions; 1. What government agencies are involved? 2. What corporations are guilty of not paying? 3. If we are not willing to collect these fines, how can we even begin to discuss raising taxes for any income bracket?!? $35B is not exactly going to wipe out the deficit, but it would help.
Posted By Anonymous Mark, Garland, TX : 2:09 PM ET
Not just fines or penalties, but also taxes! I just got audited for my 2003 state taxes. I ended up owing the state less than $100 because of expenses I had incurred but wasn't able to properly justify 3 years later.

Why did they waste their time and effort coming after me? There are individuals who earn a LOT more than me, and businesses and corporations who owe a lot more state taxes than I do, yet they spent their time to go through two rounds of questions & verification with me?

If they're looking for additional revenue, it seems like their time would have been better spent going after someone who earns more than $35k/year. The return on their effort would probably be higher.

Same with the fines & penalties. If they have to chase people down, why not chase down those who have the most to pay?
Posted By Anonymous M.K., Lansing, MI : 2:10 PM ET
Just Injustice

How about money the government has borrowed from the Social Security Fund and that no one is collecting?

No one collects from the haves yet the common folks and down and out get harassed and even arrested for small things – like not paying a few dollars in taxes - while big money people steal by the millions?

Why can’t we say “I want my taxes to go to collect money owed” or say “I don’t want my taxes to go to anything that hurts those already hurting or to war”?
Posted By Anonymous Marta Weeks, Elk Grove, CA : 2:13 PM ET
The federal gov't will never make a serious effort to collect anything from corporations. When they do some lobbyist steps in and doles out money to some crooked politician who then finds a way for that particular debt to be forgiven or just overlooked. Then the focus shifts to the poor and working poor. They will not be allowed to owe the fed a penny. This group represents the path of least resistance because they are too poor to hire fancy attorneys and the like the stand up to the fed. I'd like to see the day when the fed goes after these corporations with vigor and force them to pay up. But don't hold your breath.
Posted By Anonymous Stan M - Baton Rouge, LA : 2:20 PM ET
That's a very interesting point. If we as regular people do not pay our parking tickets or other fines we owe the government they threaten to throw us in jail, inpound our cars, ect why don't they do the same with businesses. Especially those that break regulations for things like workplace safety.
Posted By Anonymous Dave Chicago, IL : 2:21 PM ET
If you are fined and don't pay, what is the penalty? I think the idea of "good to at least use the threat of fines to extract promises of better behavior" an acceptable solution. There should be a consequence for bad behavior, i.e. jail time for the offenders in lieu of "promises". I know from past experience with raising children that if you don't back up your "rules of the house" with action, the children will continue to step further and further over that line. Why would anyone think it would be any different with big business? Nothing will be done about it anyway so why SHOULD they comply? What a double standard...the law would be all over me if I did not pay my taxes or fines.
Posted By Anonymous Linda Bochenek, Sioux Falls, SD : 2:22 PM ET
My gut reaction is that the primary reason is that ordinary people--citizens--are easy to intimidate into paying fines and penalties. The court system has a pretty high financial barrier to entry, and while a corporation may have the resources to hire a cadre of lawyers, most Americans do not. The Return On Investment to intimidate a citizen into paying fines and fees is probably a lot higher than the ROI for trying to collect on big business. And hey, there's more of us, right?
Posted By Anonymous John, Norfolk, VA : 2:24 PM ET
I guess the big corporations think that by not paying the fines they are saving the consumer money. Because, if the did pay the fines, then they would have to pass on the debt in increased prices!
Posted By Anonymous Ann - Newton, IA : 2:33 PM ET
B.S.Make them pay,While your at it, Collect the world debt....IRS.Never has a problem collecting....
Posted By Anonymous Erin L. Oswego, N.Y. : 2:46 PM ET
Well, It ain't me that owes them; the IRS placed a levy on my bank account to collect a debt that I didn't even know I owed them. If they can do that to a piddly-ass middle income wage earner such as myself, how come they can't do that to these corporate giants? I know why! Because if they did, these guys might not finance the crooked politicians' campaigns, and the crooked politicians won't be around to keep the good ol IRS funded so they can rook the little guy! Our government, hard at work, as usual.
Posted By Anonymous Pam B. St. Louis, MO : 2:55 PM ET
I haven't read the comments totally, so I don't know what all has been said...not enough time. But I'm willing to bet that a lot of the large corporations aren't being collected from is due to the fact that they're big campaign contributors to both parties, and the politicians wouldn't dare bite the hand that feeds them.

Face it; your government isn't really your government. It belongs to 'them'.
Posted By Anonymous Chris, Nashville, TN : 3:02 PM ET
I will be glad to take on the task of collection for 3%.
Posted By Anonymous Frank Jacksonville, Fl : 3:08 PM ET
I agree with M.K., Lansing, MI, I'm being audited for the same year as others I know, wow weird, must be anyone whom makes less then 35k a year and live in the midwest states, and I'm with you, why me and I know I won't be able to take my time with the explaination or with the payment. I mean 35k might seem like alot to some people but in reality it is not especially since gas prices are up for cars and the homes, soon electricity will be up. All household items and clothing is going up but not the tax breaks I need inorder to secure my retirement (which from what our courts are saying any company can basically say well after putting $ into the acct. for 20yrs, we don't need to give it to you now cause we need to pay our executives and oh yeah we are in bankruptcy) and to secure a home. Help the little folks out, that is why this country was founded, for the little people, for people who want equal rights, what happen to that.
Posted By Anonymous Rita, Chicago, IL. : 3:28 PM ET
bottom line is, the government isn't missing a "whopping" $35B - read: they don't care. a poster in the beginning of these responses mentioned that $35B is a drop in the bucket, and he/she's right.

with my last company, i routinely filed suits against other companies that owed us - after everything else failed. i was shocked to learn that after winning a judgment, that it was up to ME to collect on it, there was no enforcement from the judge/courts. if the company was playing hard to get, it was up to me to research other things to use to penalize them - such as liens. still, if i wanted that money i had to collect it.

sounds like the government just isn't concerned enough to collect, and that's crap.
Posted By Anonymous michelle, alpharetta, ga : 4:31 PM ET
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