- AUSTIN, Texas -- I suggest
the epitaph for this entire era should be, "The fish rots from the
head down." The 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.
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- Hollinger International, a media company owned by Lord
Conrad Black, reported a relatively measly total profit of $23 million
from 1998 to 2002. During the same period, the company paid Black and his
close associates over $200 million in salary, management fees and non-compete
payments, according to published reports. The 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 Richard
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.
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- So 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 executives walking away with
millions. Those at the top of large corporations who screw up completely
and create total disasters walk away with millions under golden parachute
arrangements. Just for example, Treasury Secretary John Snow, formerly
head of CSX railroad company, presided over a 53 percent drop in the company's
stock while raising his own pay by 69 percent. He also slashed both health
care and life insurance benefits for CSX retirees.
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- Corporations themselves have become entities set up to
avoid taxation. It's really quite extraordinary. Theoretically, the corporate
income tax is 35 percent, but no self-respecting corporation would actually
pay that. The Bermuda Loophole is just the beginning of the games corporations
play -- and don't think for a minute that the corporate alternative minimum
tax is making them cough up. Many of the country's most profitable corporations
are so good at tax games, the government owes them tax rebates.
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- What 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, if the guys at the top are ripping people
off right and left, 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.
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- Now, being of the liberal persuasion, I believe the ways
to stop corporate rip-offs and harm caused to the public by greed is government
regulation and suing the bastards. But let's suppose for a moment here
that we try The Wall Street Journal's preferred methods for fixing all
this -- transparency, accountability and responsibility. And let us apply
these methods to the Bush administration, which proudly bills itself as
the CEO administration. It is certainly an administration of CEOs. After
the unspeakable Harvey Pitt was forced to resign as head of the Securities
and Exchange Commission, Bush brought in Bill Donaldson as corporate watchdog,
the CEO of a huge Wall Street firm, Donaldson Lufkin & Jenrette, currently
under investigation by the SEC for fraud. Ooops.
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- Transparency: We started with Dick Cheney's secret energy
task force, then Bush decided neither his father's presidential papers
nor Reagan's could be made public, then we got the PATRIOT Act, and everything
went to hell. 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."
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- Accountability: 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,
like Gen. Boykin, while you're the head of a sensitive Pentagon department
on the subject? Obviously, 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 IRS should quit going after working poor people and
try nailing a few rich tax cheats, as former Treasury Secretary Paul O'Neill
did.
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- Responsibility: 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 fell. Even now, administration
folks keep trying to wiggle out of their own ... I don't know whether it
was lies or misinformation -- there 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.
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- This country boasts a multitude of people who are real
heroes: The extraordinary book "Mountains Beyond Mountains" about
Dr. Paul Farmer should not be missed. But 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.
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- - Molly Ivins is the former editor of the liberal monthly
The Texas Observer. She is the bestselling author of several books including
Molly Ivins Can't Say That Can She?
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- (c) 2003 Creators Syndicate
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- http://www.workingforchange.com/article.cfm?ItemID=16027
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