suggest that the epitaph for this entire era should
be: "The fish rots from the head down."
latest round of corporate scandals -- Hollinger,
the growing mutual fund mess and the foreign exchange
dealers who ripped off their own companies --
provide an elegant summary of the pattern.
International, a media company owned by Lord Conrad
Black, reported a relatively measly total profit
of $23 million from 1998 to 2002.
the same period, the company paid Black and his
close associates more than $200 million in salary,
management fees and non-compete payments, according
to published reports.
company also featured the usual insider dealing
-- including a $2.5 million investment in Hollinger
board member Richard Perle's company, Trireme.
That would be the same Perle who is still on the
Pentagon's Defense Advisory Board, despite having
had to resign as chairman earlier because of other
business conflicts of interest.
far, every business scandal starting with Enron
has displayed the same features: investors ripped
off, pension-holders ripped off, employees often
left with nothing, and execs walking away with
have become entities set up to avoid taxation.
It's really quite extraordinary.
the corporate income tax is 35 percent, but no
self-respecting corporation would actually pay
that. Many of the country's most profitable corporations
are so good at tax games that the government owes
happens sooner or later when there is rot at the
top -- what economists call "control fraud" --
is that the little fish get into the act, too.
Hey, why shouldn't some of the peons play the
same game at their own level? And that's when
you get things like the foreign exchange traders
and even some of the mutual fund rip-off artists.
The rot does spread downward.
being of the liberal persuasion, I believe that
the way to stop corporate rip-offs and harm caused
to the public by greed is through government regulation
and suing the bastards.
let's suppose for a moment here that we try The
Wall Street Journal's preferred methods for
fixing all this: transparency, accountability
let us apply these methods to the Bush administration,
which proudly bills itself as the CEO administration.
It is certainly an administration of CEOs.
We started with Dick Cheney's secret energy task
force. Then George W. Bush decided that neither
his father's presidential papers nor Ronald Reagan's
could be made public. Then we got the USA Patriot
Act. We couldn't find out who had been "detained"
when, where, why or for how long, with no lawyers
and no family notification. And of course secret
phone taps, wiretaps, sweeps, etc., all on "suspicion."
What does it take to get fired by this administration?
Outing a CIA agent for petty political revenge?
Completely contravening administration policy
with jackass statements about Islam while you're
the head of a sensitive Pentagon department on
you can get fired for standing up for the
environment -- or at least not lying down quickly
enough for those who are busy trashing it. RIP,
Christine Todd Whitman. And for standing up and
saying something populist, like the Internal Revenue
Service should quit going after working poor people
and try nailing a few rich tax cheats, as former
Treasury Secretary Paul O'Neill did.
Have you ever heard this administration admit
it has made a mistake? It won't even take responsibility
for dumb stuff like the "Mission Accomplished"
sign, much less admit it had no idea what it was
doing in Iraq after Saddam Hussein fell. Even
now, administration folks keep trying to wiggle
out of their own … well, I don't know whether
it was lies or misinformation.
was no nuclear weapons program, there were no
weapons of mass destruction, and there were no
ties between Saddam and Osama bin Laden. But there
they come again, with some leaked list of questionable
intelligence trying to prove what isn't true.
country boasts a multitude of people who are real
heroes. The extraordinary book Mountains Beyond
Mountains about Dr. Paul Farmer should not
at the top of the corporate and economic worlds,
ethical standards seem to be rotting out -- greed,
self-righteousness, fatal certitude. And, of course,
beware of those with no humor.
Posted: November 28, 2003