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Senator John McCain, Republican of Arizona, has launched a bold new “tough on crime” initiative that would imprison or fine shareholders for corporate crimes committed in their name. Punishment would depend on the severity of the crime and the number of shares owned.

John McCain reclaims “maverick” status with strict new sentencing to put corporate criminals behind bars.

An old prison being remodeled for white-collar criminals.

Mr. McCain outlined his unique two-tiered punishment program, which would punish corporations for legal infractions according to their severity. Mr. McCain explained that there would be two “suites” of punishment, for levels of crime roughly corresponding to misdemeanors and felonies.

In one “suite” — for “misdemeanors” like bilking taxpayers of seven-figure dollar amounts, overcharging consumers, attempting monopolies, and contributing to simple human troubles like asthma and brief bouts of homelessness — punishment would take the form of short- or long-term share confiscation. Dividends of confiscated shares would pay for remedial action, where possible, as well as public-good programs like health care.

“I know a number of people whose companies were players in the Savings and Loan scandal,” Mr. McCain said, “and they’re prepared to face the consequences. Remedies for serious problems are never easy, especially when they hit at the root.”

The second punishment “suite,” for “felonies” — spreading diseases, committing homicide or manslaughter, contributing to national disasters in the U.S. or abroad, large-scale bilking of taxpayers, etc. — would involve direct punishment of the shareholders in question.

Mr. McCain used Union Carbide’s 1984 Bhopal massacre, in which thousands of Indian villagers were killed by lethal gas, as an example of a crime that would be classified as a felony. While retroactive prosecutions based on new laws are usually not permissible, in such extreme cases they would be, as they were in the Nuremberg prosecutions of 1945.

In the Union Carbide example, Mr. McCain noted that each death would cost the company a “negligent homicide” charge, for approximately twenty years of incarceration each. Twenty years multiplied by 2000 equals 40,000 years in prison, with aggravating factors such as a demonstrated lack of remorse or compassion tripling the total.

This penalty would be divided among Union Carbide shareholders, each of whom could expect to spend from a few weeks to several years in prison, depending on the size of investment. A minimum penalty could be set by a judge — so that an investor with even a fraction of a share would be liable for, say, two weeks in jail. This would apply even to those who had invested via mutual funds, without knowing the precise direction of their investments.

Mr. McCain said that while “tough on crime” policy has been shown to be useless with humans, it would work with corporations. “Corporations are just machines, not like teenage kids. They can be forced to act as if they knew right from wrong.”

“Corporate behavior has become a very loud cry for ‘tough love,’” the governor said. “We’ve got to adapt to a changing world, and sometimes that means changing laws.”

“Fines are not punishment, they do not build character,” Mr. McCain said. “What’s a ten-million-dollar fine to a giant corporation? Fines seldom if ever affect the pocketbooks of shareholders or managers, those who make the decisions or power the machine. Hitting pockets and people directly is a different thing.”

Mr. McCain admitted that several major problems remain to be solved. The death penalty, for example, while often merited in corporate crime cases, had no obvious application — “We can’t talk about ‘little deaths’ here,” said Mr. McCain, making an obscure bilingual pun better left unexplained.

Also, the issue of global markets poses some problems, Mr. McCain said. “These penalties will eventually have to be agreed on by a global governing body like the W.T.O., not only here at home in Arizona or the U.S. Otherwise we may create a better market here, but the changes will be irrelevant in the bigger picture. And influencing such a powerful and state-independent body as the W.T.O. is a very involved process.”

The ultimate aim of the program, Mr. McCain said, is to help corporations achieve their long-term goals. “Corporations have spent the last century and a half trying to obtain all the legal rights of people,” Mr. McCain said. “They’re now technically persons, but they’re not really human. We owe it to them — and to our species — to help them finish their quest.”

Mr. McCain went on to explain that corporations still, even today, lack one distinguishing human characteristic: a conscience. “Corporations were invented to keep investors innocent of crimes committed with the help of their money, accidentally or not. But now that corporations have become legally almost human, they have to be taught that their actions have consequences.”

Mr. McCain called corporate efforts to obtain the legal rights of humans “compassionate greed,” and said that it was “not entirely about getting richer.”

“You’d have to be very cynical to think that corporations, when they won protection as ‘persons’ under the ‘Freed Slave’ Amendment, were thinking only of their own wealth,” Mr. McCain said. He was referring to the 14th Amendment, which had been designed to protect the rights of freed slaves, and which was used in 1886 to establish corporations as “natural persons” under the law.

“It’s clear that corporations just admire humans and what we have. We should be good hosts and help them however we can. Right now, that means making them responsible and responsive.”

While most experts scoff at the idea that corporations could actually become human beings, most agree that punishing corporations for the crimes they commit will at the very least have a positive effect on the world. “If each shareholder is personally responsible for corporate crimes, then you’ve got real controls — and without regulation!” said Mr. McCain.

Mr. McCain dismissed concerns that personal liability for corporate crimes might discourage individual investors from taking a risk. “People love to gamble,” he said, “and this will make it all very real.”

For those who do not thrive on such risks, Mr. McCain suggested that the mutual fund industry would easily adopt new decision-making processes, just as it has in the past. “The prime mechanism of regulation will be shareholder judgement. If investment in one company is likely to land you in jail, you’ll invest in another instead. Mutual fund companies will find it an exciting challenge to obtain and keep investor confidence. It will reinvigorate the industry, and in fact the whole concept of investment.”