Ask about "ripping off the company" and most people respond as if it's a "victimless crime."
What difference does it make if your kids color with felt-tip pens from the supply room, or your monthly bills go through the postage machine, or you talk to your mother in Montana on the company's line?
It makes a $30-billion or $40-billion-a-year difference says the American Management Associations, which has just completed a massive study of crime against business and has concluded it's largely an inside job.
Take $5 billion or 10 billion in employee-pilferage, about the same amount in illegal kickbacks, another $4 billion in embezzlements, and a couple of billion is shoplifting, plus a billion or two in check fraud, and credit card fraud, and insurance fraud and securities fraud, and maybe a little arson for profit - and figure a 10-percent-a-year growth rate.
Illegal kickbacks - the proper term is commercial bribery - probably rival employe pilferage as the number one business offense, says the American Management Associations rrport. That doesn't count the well-publicized overseas payoff. Mostly it's under-the-table discounts, the kind of practices that got Emerson's, Ltd., in trouble and which remain common in some highly competitive fields.
"Much of this $30 to 40 billion is passed on directly to consumers in increased prices," says the management associations' report, prepared with money from the Law Enforcement Assistance Administration (L.E.A.A.).
"There are major social costs in lost employment opportunities and lost amenities when businesses close because their losses are too great to be borne," says the study, which estimates that up to one out of every five firms that fails does so because of crimes committed against it.
Crime frequently is blamed by business managers for the problems of downtown Washington, where retailers talk about 5 percent "shrinkage" figures. That means that, for every $20 rung up on the cash register, another $1 walked out the door.
During the Board of Trade's last big anti-shoplifting campaign, which ended Dec. 31, there were 7.917 shoplifting arrests in the greater Washington area.
But the statistics - even the Uniform Crime Reports of the FBI are inadequate - the study says. The L.E.A.A.'s "victimization surveys" estimate the number of burglaries and robberies against businesses, but don't give a clue to employe frauds or illegal kickbacks.
Part of that is the fault of business managers, who report only a small proportion of known offenses to the police. The management associations' study said business managers regard the criminal justice systems as "excesively time consuming and generally non-responsive to their needs" for dealing with crimes.
That's probably a fair conclusion in light of an American Bar Association finding that 91 percent of convicted bank robbers go to jail, but only 17 percent of the convicted embezzlers do. Or there's the example of Indiana's commercial bribery law, which until last summer provided fines ranging from $25 to $100. That's about what it would cost an enterprising beer truck driver to get his brand displayed on the counter of one small town tavern.
When the kickback is as big as the fine, there's not much deterrent to committing the crime. To increase the deterrent - making it more costly to steal - the project suggests setting up a National Economic Crimes Institude in Washington.
The institute would link the business and law enforcement communities and "serve as the major energizer of the national effort against economic crime."
Aimed not only at crimes against business, but crimes by business, the Economic Crimes Institude would help lawmen learn how to cope with today's economic criminal.
There's too much of a cops-and-robbers approach to business crime, complains the management associations study. What could Kojak or Columbo or the police woman or Starsky and Hutch do against a computer criminal who steals by remote control and programs the system to cover his tracks."
One aspect of the defense against business crime suggested is a "war games" approach to computer criminals. Some "Beltway bandit" ought to be hired to put one team of computer experts to work designing crime-proof defenses and another team to try to manipulate the system illegally.
Defenses and deterrents are two of the solutions advocated by the LEAA study. The third is demotivation - raising business managers' consciousness about commercial crime, making them realize what it costs. That's what this column is all about.