Between the Lines: Score one for the little guy
David finally gets a hit in on the corporate Goliaths
By Patrick Callahan, senior writer
Posted on October 5, 2006

In a world increasingly owned and operated by an elite group of corporate giants, the victories of average investors and employees are few and far between. But when they are victorious over the mansion-owning, martini-sipping, sports-car-driving, heartless CEOs who got rich by ruthlessly scamming their own companies — the excitement is equivocal to a late 12th-round knockout punch by a severe underdog.  

The recent convictions of two enormously wealthy and powerful CEOs could be scored as nothing less. On the same day that former WorldCom CEO Bernard Ebbers began a 25-year prison sentence for his role in a fraud that caused 20,000 jobs to be lost and billions of dollars of investors’ money to be squandered, former Enron finance chief Andrew Fastow was sentenced to serve six years of a mandatory 10-year sentence that was only reduced because of his extreme cooperation with government officials.

Ebbers, in his late sixties with an ailing heart condition, will surely spend the rest of his life in jail, while Fastow will find almost his entire estate depleted upon his release. They aren’t the only ones. According to The Washington Post, two top executives at Tyco International were convicted in the past two years of stealing $150 million from the company and spending it on pricey artwork and extravagant parties. Also, Adelphia Communications founder John J. Rigas and his son were both convicted of conspiracy and securities fraud almost two years ago and have since had approximately $750 million worth of assets seized.

Fastow’s image as a ruthless executive has been minimized by his apparently genuine agreement to aid federal authorities in bringing down several big-name banks for assistance in misstating the company’s earnings. However, this compliance isn’t enough to spare him the inside of a cell. Some of the workers, who lost their entire retirement plans because they had invested in their own company, will never be able to live comfortable lives again.    

These convictions have been handed down with their respective severities only because they were federal indictments that come under newly updated legislation that requires harsher punishment for white-collar crimes involving the misrepresentation of large amounts of stockholders’ money. Some critics have said that such harsh sentences aren’t justified when an economic crime is equated to a murder or an armed robbery — but when it comes down to it, what’s the difference between robbing someone with a gun or robbing them blind and jeopardizing the futures of their children by applying tricky accounting tactics? 

Hewlett-Packard Co. has also come under fire for its attempt to find the source of a leak by applying unethical practices in an investigation of employees that included using false aliases to obtain phone records, sending cryptic “tracer” e-mails to track employees correspondences, and waiting outside the homes of those suspected of leaking information. The frightening part is that even HP executives admitted such tactics are frequently used throughout corporate America, a fact that comes with little surprise when one examines the extreme lack of control implemented by Congress over corporations.

Our leaders have made a big step by allowing the Justice Department to go after corporate criminals and put them away for serious amounts of time, a fact that should discourage similar crimes. But until corporate lobbying money is banned from Capitol Hill, slaps on the wrist with the occasional sacrificial lamb will be all our tax dollars ever succeed in prosecuting. The scale of corporate scandals being conducted today is truly unimaginable, but for now — chalk up two victories for the little men in a long-term fight against the interests of big business executives.   

Patrick Callahan is a junior political science major.