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EDITORIAL: Sleaze: Corporate scandals: Corporate scandals(Charleston Gazette, The (WV) (KRT) Via Thomson Dialog NewsEdge) Dec. 30--Corruption has tainted a sickening number of U.S. corporations in recent years. Last week, Joseph Nacchio, former CEO of Qwest Communications International, was charged with insider trading -- dumping more than $100 million worth of his Qwest stock just before bad news about Qwest's earnings sent share prices tumbling. In another insider case, Global Crossing executives who sold $123 million worth of stock as the telecommunications giant headed toward an $11 billion bankruptcy were forced to pay $325 million to swindled buyers who sued. And homeware queen Martha Stewart went to the federal women's prison at Alderson for lying about using insider knowledge to get rid of ImClone stock ahead of bad news. ImClone's president, Sam Waksal, got seven years in prison for gypping stockholders. Similar suspicions have shadowed President Bush, once a Harken Energy executive, who unloaded his Harken stock just before it sank -- and Senate Majority Leader Bill Frist, R-Tenn., who joined relatives in dumping stock in their family's hospital chain before it tanked. Currently, the mother of all crooked firms, Enron, is in the news. Former Chairman Kenneth Lay -- affectionately dubbed "Kenny Boy" by President Bush -- and CEO Jeffrey Skilling are to stand trial Jan. 17 on charges of fraudulent manipulations that cheated millions of Americans in their power bills and destroyed the pensions of Enron employees. Several other top Enron executives already have agreed to guilty pleas, and one committed suicide. Other recent boardroom sleaze: Jamie Olis of Dynergy, a firm linked to Enron, got a 24-year prison sentence. Arthur Anderson, the accounting firm that helped hide Enron debts, was convicted of obstructing justice, and mostly disintegrated. Citigroup Inc., the financial services giant that aided the Enron fraud, paid $135 million in fines and a $2 billion lawsuit settlement to victims -- and also paid $2.6 billion for its role in the WorldCom collapse, and other settlements. WorldCom chief Bernard Ebbers got 25 years in prison for faking $7.3 billion in imaginary corporate earnings, and was ordered to forfeit his $40 million wealth. Cendant Vice Chairman Kirk Shelton drew 10 years in prison and was ordered to pay $3.3 billion to fleeced stockholders. Adelphia Communications founder John Rigas drew 15 years in prison, and his son got 20 years, for looting their cable TV conglomerate. Tyco International CEO Dennis Kozlowski and chief financial officer Mark Schwartz were convicted of pilfering $600 million from their firm. Merrill Lynch, the investment banking firm, paid a $100 million penalty for misleading investors. Credit Suisse First Boston was fined $100 million for funneling IPO (initial public offering) stock shares to special clients. Xerox listed $3 billion in phony revenue, and paid a $10 million penalty for false reporting. Rite Aid CEO Martin Grass drew eight years in prison for inflating the pharmacy chain's earnings by $1.6 billion -- and five other Rite Aid executives got lesser sentences. Gemstar-TV Guide founder Henry Yuen agreed to a guilty plea in a quarter-billion-dollar fraud, but a federal judge refused on Dec. 19 to accept it, saying the proposed penalty of home confinement was too lenient. Eddie Antar, founder of the Crazy Eddie's discount electronics chain, got six years in prison for stock fraud. Mall developer Alfred Taubman, chairman of Sotheby's auction house, went to prison for fixing art prices. Steve Madden, founder of a shoe firm, went to prison for stock fraud and money laundering. America's white-collar crime wave fills people with disgust. The only cure is intensive prosecution and tough sentences, to make it clear that America expects scrupulous honesty in business and finance. |