[corp-focus] Businessmen Make Boo-Boos

[Robert Weissman]

Businessmen Make Boo-Boos
By Russell Mokhiber and Robert Weissman

Let us now take a walking tour of Washington, D.C., to see whether the
Enron scandal has loosened corporate America's grip on our nation's
capital. (Okay, the answer is no.)

At the White House yesterday, President Bush announced a 10-point plan
that he said will "improve corporate responsibility and help protect
America's shareholders."

It will not.

In fact, a quick analysis shows that the federal government already has
the authority to implement Bush's proposals. No new laws are needed.
It's merely a question of will power.

Even the toughest of the Bush ideas (#5 -- CEOs or other officers who
clearly abuse their power should lose their right to serve in any
corporate leadership positions) can be executed by the Securities and
Exchange Commission (SEC) today, right now, with no law changes.

But given that the top cop on the securities fraud beat in Washington is
the accounting industry's former top lawyer -- that would be current SEC
chair Harvey Pitt -- we may conclude this: there is no will, and there
is therefore no way this Bush's 10-point proposal will "improve
corporate responsibility."

It's all smoke and mirrors.

Let's remember that when Bush's Treasury Secretary, Paul O'Neill, last
month proposed that corporate executives be held liable for their
negligent wrongdoing, he was quietly sent packing.

Why?

When asked about why O'Neill's proposal was shot down, a senior
administration official told reporters yesterday morning at the White
House: "Businessmen can make boo-boos. When you invest in a company in
which a businessman makes a mistake, a business judgment mistake, no one
wants to have to have anyone be guaranteed for those returns."
(Translation: can't hold the executive responsible for mistakes under
the "business judgment rule.") "And we're trying to be very careful to
steer away from that issue and still leave investors on the hook for the
choices businessmen make about business." (No that is not a typo.
According to the White House transcript, he said "on the hook.")

Let us now proceed across the street, to the Treasury Department annex,
where the Office of Foreign Assets Control (OFAC) has for years been
engaged in a kind of protection racket -- enforcing the law against
large corporations for alleged violations of the Trading with the Enemy
Act, allowing the companies to settle those cases for a few thousand
dollars, and yet never informing the public about those settlements.

Until last week, that is, when as a result of a lawsuit we filed last
year, OFAC began releasing the documents detailing about 100 to 150 such
cases from 1998 to 2000.

But still, the Treasury Department says it won't inform the public, in a
timely manner, about which of our giant corporations are "trading with
the enemy."

Let us now proceed cross town to the U.S. Sentencing Commission, where
it is the tenth anniversary of the sentencing guidelines for corporate
criminals.

These guidelines were drafted in 1991. They created a carrot-and-stick
approach. If a corporation had a strong ethics program, an 800-number
for whistleblowers, a compliance officer with teeth, but despite all of
that, was still convicted of crime, a judge would give that "good"
convicted corporation a lighter sentence.

If a corporation didn't have a strong ethics program and wantonly
violated the law, the judge, under the sentencing guidelines would give
that "bad" corporation a harsher sentence.

The result of the guidelines: there are now 800 corporations with ethics
officers. The officers even have their own trade group -- the Ethics
Officers Association.

But have the corporate crime sentencing guidelines reduced corporate
crime? We doubt it.

The U.S. Sentencing Commission says it wants to know the answer, so it
has announced the creation of a 15-member ad hoc panel to study the
effect the guidelines have had on corporate crime.

But get this: 12 of the 15 members are corporate white collar criminal
defense attorneys or others from the corporate sector. Why no one from
the public interest community? Why no lawyers who sue corporations
alleging wrongdoing? Why no legal scholars critical of corporate
influence over our democracy? (The grip is tight.)

Let us now proceed to Capitol Hill, where Representative Dennis Kucinich
(D-Ohio) is introducing legislation that would create a Federal Bureau
of Audits.

Today, corporations hire their own auditors. If the auditors find
something wrong and try to get it fixed, a corporation can lawfully fire
the auditor and hire another more to its liking.

Kucinich's bill would require that publicly held companies go to the
Federal Bureau of Audits and be assigned a government auditor.

It's one of the few reforms we've seen floated in recent months that has
a chance of preventing future Enrons.

And yet, at the press conference where Kucinich announced his
legislation, there were two reporters. And no co-sponsors.

The Democrats, who like the Republicans, are marinated in corporate cash
and culture, see Kucinich's bill as too hot to handle.

The reason: accounting firms stand to lose tens of millions of dollars
in auditing business to the federal government.

Let us now proceed down Pennsylvania Avenue, to the J. Edgar Hoover
building, where the Federal Bureau of Investigation (FBI) is about to
release it's yearly "Crime in the United States Report."

If history is a guide, the report will document all kinds of street
crimes, but not even mention the wave of corporate crime and violence
sweeping over our country -- this despite the well documented reality
that corporate crime and violence inflicts far more damage on society
than all street crime combined.

Let us now proceed uptown, to the K street corridor, where we find
thousands of corporate lobbyists working diligently late into the night
to ensure that whatever citizen energies were released from the Enron
earthquake are contained within reasonable bounds.

After all, businessmen make boo-boos.


Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime
Reporter. Robert Weissman is editor of the Washington, D.C.-based
Multinational Monitor, http://www.essential.org/monitor. They are
co-authors of Corporate Predators: The Hunt for MegaProfits and the
Attack on  Democracy (Monroe, Maine: Common Courage Press, 1999;
http://www.corporatepredators.org)

(c) Russell Mokhiber and Robert Weissman

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