Sunday, June 10, 2007

Corruption - Corporations

According to CommonDreams.org, "...corporate...corruption on an almost unfathomable scale. They put to shame those petty government bureaucrats who stole a few thousand dollars or even a few million. The numbers bandied about in the Enron, WorldCom and other scandals are in the billions, greater than the GNP of many countries."

When executives steal, they steal millions of dollars instead of the $200 that robbers steal from convenience stores. Also, executives steal from thousands of people (shareholders, employees, pension-fund holders, mutual-fund holders, RRSP/401K holders, etc.). Most people in society own stock directly or indirectly through funds. Unlike retail stores or banks that get robbed, victims of corporate crime rarely know that they are victims. Therefore these executives are likely stealing from you and you don't know it. Hence, there is very little public outrage, as there is when people see robbers steal a purse.

Furthemore, white-collar criminals rarely get jail-time. If you steal from a banking machine, you get can 10-15 years of jail-time. Executives steal tens or hundreds of millions and they rarely get that kind of jail-time. This problem is compounded by the lack of media coverage of corporate corruption and crime. According to Wikipedia :

"Weissman and Mokhiber (1999) catalog the silence and indifference of the major media in the face of the widespread corporate corruption. Only in part is this justifiable. The news media find it difficult to respond to corporate crime both because reporting may compromise the trial by tainting the jury's perceptions, or because of the danger of defamation proceedings. Further, major corporate crime is often complicated and more difficult to explain to the lay public, as against street or property crimes, which may provide graphic visual evidence of harm to victims injured, or of property that has been damaged or vandalized in spectacular fashion. But, more significantly, the news media are owned by large corporations which may also own prisons."

Remember:

North America is just as corrupt as Latin America. The only difference is that the Latin Americans know that their countries are corrupt. Most North Americans are clued-out as to how corrupt their countries are.

Many of the mansions and villas that you see in the Cayman Islands, Barbados, etc., are paid with money stolen from you.

Here's a short sample list of corporate criminals:

Nortel

Conrad Black

Eugene Melnyck (owner of Ottawa Senators hockey team): Making C$122 Million in 2001 and C$66 Million in 2002, CEO of Biovail was the highest paid executive in Canada. More than 98% of his compensation were from sale of stock options. However, there is strong suggestion that he "pumped and dumped" and conducted illegal insider trading. Biovail gave glowing reports and forecasts of revenue and profit. Investors bought shares. Shortly after, Biovail executives sold their stocks (or options). Shortly after, finanical numbers are reported and are much less impressive than expected. Share prices plummet. It was a classic roller-coaster ride where the executives get out at the top of the ride. Both SEC and OSC allege that Melnyk failed to report his insider trading .

Andrew Rankin and Dan Duic: biggest inside traders in Canadian history. However, neither got any punishment.

Enron

Worldcomm

HealthSouth (biggest healthcare company in North America): FBI arrested CEO for fraud.



Adelphia: John Rigas and his son Timothy Rigas, who were convicted in 2004 of participating in a massive corporate-looting and accounting-fraud scandal costing $60 billion to investors.

Krispy Kreme fires 6 executives amidst investigations from the U.S. Attorney’s Office and SEC.


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