October 11, 4:30PM, Georg Rilinger at Money, Markets, & Governance: Corporate Conspiracies and Complex Secrets: Structure and Perception of the Insull Scheme in 1930s Chicago

Please join us for our next meeting of the Money, Markets, and Governance Workshop on Tomorrow, 10/11, 4:30-6PM, in Social Science Research Building classroom 401.

Georg Rilinger
PhD student, Sociology, University of Chicago

Corporate Conspiracies and Complex Secrets:
Structure and Perception of the Insull Scheme in 1930s Chicago

Discussant: James Murphy, PhD Candidate, Sociology, University of Chicago

 Abstract: Sociological studies of secrecy generally point to the ‘leakage’ or ‘interception’ of incriminating information to explain why criminal conspiracies are discovered. In cases of corporate conspiracies that conduct long-term and large-scale economic crimes, however, such information has often diffused beyond the bounds of the conspiracy long before the scheme is detected. The Ponzi scheme perpetrated by Samuel Insull’s utility empire in the 1920s-1930s is an example of a case in which several Federal Trade Commission investigations failed to detect criminal activity even though the scheme was too vast to allow for an efficient control of information. I argue that the current literature on organizational secrecy cannot explain such cases, because it neglects the role of conspiracies’ audiences. Since the very definition of a secret depends on those who are excluded from it, we need to take the ‘conditions of discovery’ for particular audiences into consideration to explain why a conspiracy can remain secret. For audiences that confront secrets in corporate settings, I then develop a novel theory of ‘complex secrets’ that have distributional and compositional characteristics. They are not contained in any one piece of information, but are composed of sets whose elements are dispersed over the corporate structure as a whole. Discovery requires retrieving and assembling all pieces into a coherent interpretation. By reconstructing the expansive network of company relations in the Insull system as well as the patterns of engagement in different investigations from archival sources, I apply this theory to the Insull case. I show that the early investigations failed because the auditor’s search behavior was adjusted to an official conception of the Insull system that made the internal relations of the puzzle pieces unlikely. The fog of innocuous information surrounding the individual pieces therefore overwhelmed their ability to recognize these connections.  

Questions about the workshop or accessibility concerns can be addressed to yanivr {at} uchicago {dot} edu

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