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When does company incompetence or fraud cross the line to “criminal”? Current G.M. tragic cases may re-open this Pandora’s Box.

If you are a CEO, it may keep you up at night: Could one, or several, of your many employees be doing something that will seriously embarrass and penalize the company? Could it even rise to a criminal offence with major reputational damage, costly settlements and, in severe cases, jail time?

The G.M. auto safety case may provide the latest test. AP reported today that Senator Kelley Ayotte (R-N.H.), a former prosecutor, opined, “I don’t see this as anything but criminal.”

Proving criminal guilt is generally more challenging than establishing guilt in civil cases. But the stigma of a criminal conviction is so great that companies try to avoid it at all costs. Even a criminal indictment is a heavy blow. Other current examples: Banks involved in the current LIBOR litigation, where nine people have been charged with criminal misconduct; and the Justice Department criminal investigation of foreign banks accused of sheltering funds for Americans evading taxation.

All such cases are, of course, complex and varied. And innocent until proven guilty is still the touchstone. But one contributing standard for guilty verdicts seems apparent: The cover-up of the original sin.

Much is at stake in all such cases, human loss and suffering being the most important. But there’s is also a price paid by society. We are reminded of the Lincoln Savings debacle of the late 1980s, “the largest US banking scandal” of its time — which threw the U.S. financial sector off balance and embroiled five senators — engineered by banker Charles Keating who went to jail for it.

Keating died on March 31st.