Thursday, July 12, 2007

Of potshots, punishments, and presidents.

Apropos of yesterday's post, the Internet, the shield of anonymity it affords, and the opportunities for clandestine behavior created by that shield*: For all my experience in journalism and the (supposed) bicoastal sophistication new acquaintances usually presume that I have, I must admit to a decided naivete about the way people use and abuse the Web. Comes a story, now, about a CEO in the thriving natural-foods sector who would visit key industry chat rooms and discussion boards where, under a phantom screen name, he flaunted his immense grasp of the industry, establishing himself as something of an oracle of the organic-foods biz—a platform he used in touting his own company while disparaging his chief competitor. That's pretty nasty stuff to begin with (albeit perhaps "typical" in America's all's-fair-in-love-and-business climate). But it would appear that the guy kept surreptitiously bad-mouthing his competitor even after deciding to acquire it, employing the ruse to depress the other company's stock price, thus making his target easier and less costly to gobble up. The Federal Trade Commission is looking into the CEO's actions, and one suspects that the Securities and Exchange Commission just might have something to say about this particular M&A strategy, too. For my part, it blows me away that people in even the highest and most visible positions have the cojones to try these kinds of shenanigans.

I'm sort of playing six-degrees-of-Steve's-pet-peeves here, but inasmuch as we're on the subject of corporate affairs and the like, I noted with interest the other day that China executed a former top bureaucrat who once had run the nation's equivalent of our Food and Drug Administration; the guy accepted bribes and caused unsafe products to find their way to Chinese markets, with sometimes-fatal results. It can be tempting to regard such news stories (together with accounts of the state-authorized draconian punishments found throughout the Middle East) as evidence of how "barbaric" some other cultures remain... And yet I've long thought that many types of so-called white-collar or "institutional" crime are far worse than any instance of homicide and should be punished accordingly. I ask you: Who demonstrably did more damage? Charles (Tate-LaBianca) Manson? Or Enron's Ken Lay? Which of them probably ruined, even ended**, more lives? I would think that punishment should consider the breadth of the harm, not just simple, biblical notions of "an eye for an eye." It has always mystified me that people who do truly horrific things in corporate or governmental settings, affecting the lives of thousands or millions of Americans, are somehow insulated from the more extreme criminal sanctions and need only worry, in most cases, about facing the music in civil court***. As I mused in a post some time back, if it's ever proved that George W. Bush got us involved in Iraq under false pretenses (especially if he did it for personal/venal reasons), then who could possibly be more deserving of the ultimate punishment (whatever we, as a society, deem that to be****) than our illustrious chief executive?

To my mind, all those bright-eyed wannabes now seeking the presidency in 2008 should be made to understand that there are far worse things that can happen to them than simply being voted out of office in 2012.

* What I'm trying to say about the relevance of this to yesterday's post is, I don't think I would've gotten suckered to begin with were it not for the ease with which the 'Net enables people to establish bogus identities and even create bogus web sites.
** In Lay's case, the "murders" would've been indirect: lost or substandard health care, suicide as a result of financial desperation, etc.
*** Lay, of course, was criminally prosecuted. But he's one of the few.
**** I am not a fan of the death penalty. If we're going to have it, however, we need to think more deeply about when to invoke it.


Mary Anne said...

Let's not forget the HP scandal where they spied on their board to find the leak. That was a fun frolic about pretexting to get jouranlists cell phone records that somehow no executive knew about. By the way, that is against the law in California now, but not on the federal level. HP just paid a big fine for it to go away. Let me state that I know some decent corporate execs, but they eat their own too. It is a given the CEOS and board members are on the finance message boards, which are suppose to be for unbiased investors. If you want a fun night of reading, go through some SEC reports on Wall Street investment banks. They can make your toes curl. I am working on a book about the boutique investment banks of San Francisco during the boom boom '90's and it is quite amazing how immoral these people were/are. No one will touch it, because it is about how money is made. I am not the only one who has tried to write a book about these firms that somehow could not find a publisher.

Anonymous said...

You see, there in lies the problem, the President's scam that sent us to war has already been proven.

He admitted to acting on false information his appointees provided. And his office continues to obstruct justice in the Attorney General shakedown about firing some federal attorneys.

And don't get me started on the Libby sentence commuting stunt.

The guy's a crook, a scoundrel. Chaney ain't any better.

Maybe an ol'fashion burning at the stake for the Bush team is in order -- televised, even -- and uploaded to YouTube.

Got any popcorn?

[Disclaimer: Contents above is sarcasm. It is not intended to be a threat on any government official and should not be taken as such.]

Steve Salerno said...

Sad, isn't it, the high-anxiety latter-day climate in which we've lost the right to joke (or even talk) about so many things. By no means am I the first to say this, of course, but pretty soon the terrorists won't have to take America away from us; we'll have willingly surrendered it.

OTOH, Anon, I do happen to believe that everyone deserves his/her day in court. No matter how obvious someone's guilt might be to the rest of us (and never lose sight of the fact that we're getting our sense of that guilt largely from the media and/or people with an ax to grind), a person is entitled to have the evidence weighed and tested in formal courtroom proceedings. One of the things that gives me pause in my own occcasional rush to judgment re Mr. Bush is the fact that for years, so many Dems (including the most beloved of all Dems, Bill Clinton) were of the same mind about Saddam and Iraq: buying into the whole WMD motif as well as Iraq's role in fomenting terrorism. My big question with Bush, basically, is this: Was he merely mistaken about Iraq, and then he simply scrambled to cover his tracks for political reasons? Was he misled by others (because we all know the degree to which he has always counted on the Texas Mafia and the rest of his top advisors)? Or did he know the truth going in? What WERE his real motives? Those are questions I'd like to see answered.

RevRon's Rants said...

Perhaps at his & the *real* president's (Chuckles Cheney's) impeachment proceedings. Not before.

True justice would be to see him tried before a jury consisting of ex-Harken Energy employees. They'd probably follow the Chinese model of justice.

Citizen Deux said...

Sorry Steve, the impact of "white collar" crime is indirect at best. Prosecutioin based upon unintended consequences implies a level of causal capability which simply doesn't exist. By your argument, any individual who took their own life after being rejected by a former lover would be a murder trial.

The realm of crimes in this arena deserves special attention and appropriate punishment. As it was, Ken Lay broke several definable laws, laws which didn't exist several years ago. So had he done what he did then - would he be guilty? Conversely, murder of an individual is largely forbidden in Western society (not so for honor killings in Islam).

Finally, to the anonymous posters who rail against the administration - if a law was broken, bring forth the charges. To date, there are none. Why? Because the actions of our government, regardless how distasteful to some, are within the boundaries of our laws.

The vengeful statements made by many, Ron, should be carefully weighed against what is and is not legal. What seems simple on the surface, rarely is and deserves careful consideration - despite our primitive inclination to condemnation and retribution.

Steve Salerno said...

CD, all I am saying is this: If you are a responsible player in a major corporate environment, and you act with malice aforethought (and dereliction of duty) in such a way that wreaks devastation upon thousands of lives (and I dare say, the cumulative impact of Enron was in the millions of lives), then that is a far more serious crime--to my way of thinking--than a homicide.

In the end, you make my point: If people acting "within the law" are nonetheless causing the sorts of collateral damage that we see around us (Enron, Iraq, etc.), then there is probably something wrong with the laws in this country. I would like to see the whole system reexamined, top to bottom. But that isn't going to happen, so maybe my wife is right in that other post where she says I'm wasting my time, and everyone else's....

RevRon's Rants said...

CD - When there is a concerted - and largely effective - effort to prevent the facts of a potential crime from being examined, a secondary crime is committed. I pay little credence to the vague assertions of administration wrongdoing, but have a difficult time assigning an honorable motive to their many efforts to silence not only testimony in criminal investigations, but simple disagreement with their policies, within their own circle. If someone does things that make me question their honesty, yet responds to questions and criticism with little more than reassertions of their honesty, those reassertions have little credibility, IMHO.

I would suggest that anyone inclined to defend the President's honor should study not only his press releases, but his track record before he was on the radar screen. Look at how he got his many business "opportunities" and how those businesses fared under his "leadership."

One further point - I attended a fairly small state university, not necessarily known as a beacon of higher learning. Had I submitted papers or given oral presentations as incoherent and filled with grammatical errors as those so typically given by President Bush, I would have flunked out during the first semester. Yet we are to believe that he graduated solely upon the merit of his work?

I don't look for or desire a "burning at the stake," but I do believe the American people deserve to be told the truth about the people we elected. Whether that takes a couple of impeachment proceedings is up to those who have to date either refused to answer the pertinent questions or have given answers later proven to be false.

Citizen Deux said...

Ron, I will grant that the President lacks a certain intellectual sophistication, but I am uncertain how much is an act and how much is genuine. The Economist this week poses a similar question.

Nonetheless, is the lawful exercise of rights unethical? If you do not consent to have your home searched, to conceal a crime - is that unethical? You are within your rights, but the "searchers" must prove cause in order to search.

Steve, I would argue against the widespread impact purported by ENRON's collapse. Even the savings and loan scandal, far larger, affected realtively few people in the long run. This is not to minimize the impact of ENRON's illegal actions - but they truly made less impact than would be believed - Harvard Business has done some interesting post mortems on the case.

Wanting to see the whole system reexamined is a worthwhile and noble cause. Just make sure you would like the answer to the questions you want to pose. I am a staunch free marketer. This goes for business and government. I believe that the systems will play out to the best possible course, given an unfettered market.

Steve Salerno said...

CD, I understand the point you're so intent on making, but the logic you propose in that endeavor is troubling. I agree that we don't necessarily know--in an objective sense--what's right and what's wrong, what's good and what's bad, so in most cases we have nothing but man's law to go on. However, I hope you realize that the argument you make--that obeying the letter of the law is "good enough"--could've been (and was) used, among other things, as a defense of slavery, which, of course, was perfectly legal in this country pre-Lincoln. In fact, your approach here is reminiscent of Bill Clinton's (in)famous parsing of the meaning of the word "is," which I think was one of the most subtly destructive events in socio-legal history. The damage it did to the psyche of college students--who are already plenty cynical enough--was incalculable, if my experience at Indiana University (where I was teaching at the time) counts for anything.

I think that sometimes the only way to determine whether someone acted badly is by the end result, regardless of law and/or intent. If you are the president, and you commit the nation to a course that causes massive loss of life--both ours and others'--to no good end (or to an end that proves to be other than as stated), then perhaps you are guilty of some undefined crime, regardless of whether you broke the letter of the law. It is simply your job, as president, to "know better," and to avoid causing such disasters. And really, as a practical matter "ex post facto" justice is invoked all the time in civil matters--Dow Chemical, for example, was driven to bankruptcy based on the claims of women who said they'd been damaged by a totally legal product that--in the end, years later--was vindicated anyway! So clearly, all that mattered in that case was that people had been harmed, and Dow was deemed to be the cause of it. I'm certainly not saying that we should apply the "Dow standard" in any case where people suffer and we THINK we can isolate the cause. If you read my book, you know that I am not at all happy with trial lawyers. I'm simply saying that to interpret such matters in the strict context of "what the laws says, today," is (a) morally dubious and (b) not how we really do things in this country, in any case.

Mary Anne said...

In my experience, most CEOs and corporate board members, think they are doing the "right thing." The question becomes-the "right thing" for whom? A CEO's job is to make money for the company he or she runs. No CEO is EVER going to make everyone happy if the company is to be successful. Most of these CEO's give up their personal lives for the companies they run. We as a society actually reward them for their greed by giving them these bigger and ever bigger salaries. It is always in hindsight that we say "oh how evil they were!" Such as the case with Enron and others. No one was worried about Enron when they were bringing in the big bucks. That is why there is a SEC and various laws to try to keep these activities in check. Notice how CEO's are bringing in bigger and bigger paychecks and there are bigger gaps with the lower level employees? That's when a CEO should have some ethics and say, "hey there is a problem here." Few CEOs do this however, instead they say, "I earned it." Let us not forget outsourcing too. Why pay an American worker, when I can get cheaper from India? This in itself is not such a bad thing, but how it is handled generally is. Instead of telling the American workers their jobs will be gone in X amount of months, the workers are told right before the Indian work force takes over. This is done to keep them working until it is CONVENIENT for the company to let them go. Most CEOs will not take responsiblity for these types of oversights. In my view, these types of actions are where ethics come into question.

Dave said...


You should separate the intent in Iraq from the reality of Iraq. As someone once said "some people just need killing" and Saddam and his bunch of sidekicks were such people. The people of Iraq AND America are much better off without them in the world.

I will never forget, as a military professional with 22 years of service at the time, my shock when I realized that the Administration had no plan for Iraq after the war was won. Unfortunately, only the Dept of Defense is the only agency of the US Government that has really been engaged in the war on terrorism, so the vast resources of our government have never focused on "winning the peace".

Bottom line, we did the right thing, regardless of the pretext, in removing Saddam et al. We did a horrible thing - all of us, not just the administration - by not being prepared for the after effects.

Separately, I agree whole heartedly that the continued obstruction and ignoring of the justice system is sickening. Enough is enough.

Steve Salerno said...

Dave, something about your rationale kind of worries me here, and I'm not entirely sure why. I'm gonna "think on it." But your points are well taken.

Mary Anne, I wouldn't exactly say that "no one" was worried about Enron when the company was doing well. There are always watchdogs and social-justice types who tend to dislike/distrust corporate America, all the more so when it's successful and "bringing in the big bucks." And precisely b/c of the gap between the haves and have-nots. But as with Doug above, I definitely hear what you're saying.

RevRon's Rants said...

CD - Trust me... As one who has followed Bush's career for many years, I can assure you that he was smart in one area: he chose the right family into which to be born. And while I agree to exercising one's rights, it bothers me greatly that the administration has been so quick to diminish the rights of ordinary citizens, while claiming for itself rights specifically denied under the laws passed specifically to protect the country from despotic actions. The administration's claims that they are above those laws simply doesn't wash. If and when legislators decide to fulfill their oaths to the Constitution and their constituents, rather than abandon those oaths in favor of partisan loyalty, there will, indeed, be repercussions for the administration, and it will make the Clinton impeachment look like a Nobel ceremony.

As to the reliance upon the free market to cure our society's ills, I would recommend that you visit Hong Kong, where the free market truly reigns supreme. For every person thriving there, there are 1,000 living in utter destitution. And if the decimation of thousands of employees' & investors' finances can be described as "minimal impact," I think our perspectives need to be reassessed.

And Dave - The old joke that "he just needed killing" is a viable defense in Texas is just that: a joke. We have systems in place to make such a determination, rather than an individual (or administration) having the power. Though the system is sorely unchecked in Texas, at least it is more transparent than the one which ultimately made the decision to invade Iraq. And at least Texas kills them one at a time for a well-documented reason,rather than a village at a time for a lie.