corrente

Here's an important article in WaPo by Carrie Johson. She's been covering all the business fraud trials: Enron, HealthSouth, Adelphia, WorldCom, and so on, and she's come to some interesting conclusions. First, the thieves and crooks at the top of the greasy pole had plenty of helpers:

The sheer number of subordinates who face criminal charges for these accounting frauds belies the myth that some of the biggest schemes of the past decade were carried out by a small group of devious executives. Rather, as the employees themselves recount under oath, dozens of people colluded to hide misdeeds from auditors and investors. At Enron Corp., nearly 30 face criminal charges. At HealthSouth Corp., prosecutors have indicted 18 individuals who allegedly misstated their companies' finances using computer software systems, prepared phony documents and made improper entries on corporate accounting ledgers. Without their help, the frauds probably could not have taken place.

Testimony at the various trials has shed light on a particularly vexing problem for corporate governance experts, prosecutors and investor advocates who want to break the back of corporate fraud: Why would highly motivated workers take part in schemes that jeopardized their careers, their marriages, their standing in the community, and call into question their most basic ethics?

[T]heir biographies offer some clues. Many grew up in or near the towns where the company and its founders reigned supreme. Working at the area's most prominent business conferred instant status in towns such as Coudersport, Pa., the former headquarters of the cable TV giant Adelphia Communications Corp. (whose 79-year-old founder was convicted last year of fraud); Birmingham, home to Scrushy's HealthSouth Corp., and the Jackson, Miss., offices of Ebbers's WorldCom.

Red states all... Now, money paragraph #1:

The words and actions of a surprising number of these subordinates suggest that in many of the companies where fraud began to flourish, workers vowed loyalty not to ethical business practices or even to the company, but to the charismatic leaders who came to personify their businesses.

That is, exactly, fuhrerprinzip. (As translated into American-ese by a myriad of business consultants, "leadership" seminar weasels, and the Harvard Business Review.) And money paragraph #2

The details of these late 1990s frauds vary from company to company, but the general theme is remarkably similar. Someone at the top level, worried about lagging revenues or sagging profits, would ask accounting wizards to find creative ways to meet targeted goals. The process of "hitting the numbers," "making the numbers" or "helping the numbers" (the preferred euphemisms for accounting malfeasance, according to testimony thus far) usually would start as a temporary, if troubling, one-shot deal. Tinkering with the books for just one quarter, however, often morphed into a years-long project as gaps between actual revenue and reported sales snowballed beyond the control of top executives and subordinates in the accounting and finance units.

Um, does this "general theme" remind you of anything? Like Republican budgetary practices? Moving the major expenses, like Iraq, off the books? Rosy revenue projections? Shortening projections so major costs don't appear?

And does the requirement for "loyalty" remind you of anything? Like everybody who was wrong on Iraq getting promoted, and everyone who was right getting shitcanned? Like DiIulio and Wean retracting critical statements days after they made them (and after finding a horse's head in their bed?) Like Bush only appearing at Partei rallies with people who've signed a loyalty oath?

Fuhrerprinzip doesn't work for corporations, does it? (Correction: It works for a short time, and it works for the chieftains who loot the system and stash their millions where justice can't reach them. But it doesn't work for anyone else. Especially it doens't work for the people who help them commit the frauds, or the workers who get left holding the bag, with no job and no pension.)

And since we already know Fuhrerprinzip doesn't work for corporations, why has half the country decided to try it again on the national level? Truly, the definition of insanity is doing the same thing twice and expecting a different result.