The Bradenton Herald (Florida)
Do we have enough prisons to handle all the recent corporate crooks spending time for fraud and deceptive practices?
Consider this:
Former Qwest Communications Chief Executive Officer Joseph Nacchio was indicted in 2005 on 42 counts of insider trading. Former Chief Financial Officer Robin Szeliga pleaded guilty to insider trading.
Three Rigas family members connected to Adelphia Communications Corp. have been sentenced to or are serving time for securities fraud. One was sentenced to 20 years in prison and the other 15.
Bernard Ebbers, CEO of WorldCom, was sentenced in July to 25 years in prison in one of the largest corporate fraud cases in U.S. history.
Bill Owens, CFO of HealthSouth Corp., was sentenced to five years in prison for fraud and money laundering. Hannibal “Sonny” Crumpler, another HealthSouth executive, also was convicted of conspiracy and lying to auditors.
Dennis Kozlowski and Mark Swartz of Tyco International Ltd. were convicted of grand larceny, conspiracy, securities fraud and falsifying business records and were sentenced to eight to 25 years in prison.
And the list goes on. Granted not all of the above mentioned corporate executives are in jail yet. Some are awaiting appeals and are cooperating with the government to convict fellow executives.
The Foundation for Taxpayer and Consumer Rights estimates the cost of corporate crime at $1.5 trillion annually. It seems every day there’s another Enron scandal in the making — a corporate collapse estimated to have cost the public billions of dollars.
Maybe the answer to all this corporate greed is going back to the basics. Even as far back as the classroom. Is it too far-fetched to consider requiring ethics courses in school? And I’m talking about starting in elementary school.
Rich Brody, professor of accounting in the College of Business at the University of South Florida and a certified fraud analyst, at first didn’t think much of the idea.
“The ethics that students bring to me is the ethics they were taught at home from relatives,” said the Bradenton resident. Teaching students ethics in elementary and high school might be usurping the role of the family, Brody said. “I’m not sure I would want schools taking on that role.”
But Brody feels completely at ease teaching college students about ethics and how it relates to accounting and auditing practices.
“I used to have people ask me, ‘Why do you need to teach ethics in accounting?’ ” he said. “Boy, do we know the answer to that now.”
The huge ethical and fraudulent lapses in U.S. corporations have been great fodder for Brody’s classroom discussions. He poses potential ethical dilemmas to groups of students and is sometimes surprised by the answers.
“Some students make unethical choices, so we talk about it,” he said. “But I’ve been teaching long enough that nothing shocks me anymore.”
It seems that the line has become blurred between what is legal and what is ethical. Many seem to think that if it’s legal, then there’s not much to worry about.
Sissela Bok, philosopher and author, would disagree. In her book “Lying: Moral Choice in Public and Private Life,” Bok argues that in order to live together in a society we must tell the truth to each other about such basic matters as sources of food or of danger. If lying was acceptable, our society would be in chaos.
I was first introduced to Bok in one of my communications courses required for my master’s degree. Believe it or not, it was the first time in all my 16-plus years in school that I had been introduced to the idea of ethical behavior. I learned my ethical values at home, but it was refreshing to actually study how ethical choices come into play in our daily lives.
For those grappling with a situation in which you might consider lying, Bok proposes an internal test. Look at your lie and hold it up to a test of imagined public scrutiny. Imagine defending it in a court of your peers. Would most of them think the lie a worthy one?
Brody wonders if the accounting profession has learned anything from the myriad of corporate scandals. “I don’t have the answer,” he said. He does know that setting an ethical example starts at the top, and its impact filters down to company employees.
“If you see your CEO acting unethically, you’ll do it,” he said.
In the April issue of the Journal of Small Business Management, research shows that business owners and managers are making more ethical decisions. Based on responses from more than 5,000 managers in all 50 states, more ethical decisions are being made in both large and small firms.
Brody does feel more confident now that his students will think twice about the consequences of their actions when they enter the corporate world.
“Now we have examples of people going to prison for their actions,” Brody said. “We’ve seen the perp walks. That’s the reality.”
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Jennifer Rich is the business editor of The Herald. She can be reached at 745-7087 or at [email protected]
