It's Worse Than You Think. (Editorial)

Multinational Monitor, July-August 2002 | Go to article overview

It's Worse Than You Think. (Editorial)


HERE IS ONE OF THE MOST REMARKABLE aspects of the still-unfolding financial scandals swirling around WorldCom, Xerox, Global Crossing, Enron, Arthur Andersen, Tyco and a growing number of other companies: The fraud occurred in the most heavily regulated and monitored area of corporate activity.

If an epidemic of corporate malfeasance could occur in the financial arena, how serious is the more general problem of corporate crime?

Consider the checks and balances in place that should have stemmed the wave of corporate wrongdoing which has reportedly angered even USA, Inc. CEO George Bush:

* Disclosure requirements for corporate financial performance are extensive, and by far the most detailed for any element of corporate activity.

* There is a distinct industry -- made up of accounting firms -- whose function is to review the financial numbers, audit corporate books and certify the financial statements.

* There is another distinct industry, separate from the accountants -- this is the Wall Street investment firms -- whose function is to scrutinize the corporate reports, interview corporate executives, analyze market performance and provide investors with independent evaluations of company prospects.

* There is a legal duty for corporate executives to advance the interest of an important and powerful class of people -- shareholders -- and significant numbers of these shareholders are increasingly organized and assertive of their rights (including through pension funds). There is no comparable legal duty for corporate executives to serve consumer or worker interests, say.

* An array of Securities and Exchange Commission regulations establish rules for financial reporting, and are backed by the enforcement power of the agency, as well as the threat of private litigation from shareholders in case of violation.

Other aspects of corporate activity are simply not subject to such robust scrutiny and control.

Given what is now the apparent blatant corporate disregard for the law, even in areas where executives are most closely watched, what should we expect is occurring elsewhere? What's happening with consumer rip-offs, sales of unsafe products, endangerment of workers, pollution of the environment?

Even with inadequate law enforcement, reporting requirements or organized countervailing institutions, we know enough to know that the epidemic of corporate crime, fraud and abuse is at least as severe outside of the financial arena as within.

To take just a few examples from recent months: In May, drug maker Schering-Plough signed a consent decree with the Food and Drug Administration, agreeing to pay a record $500 million in connection with charges that over a three-year period it produced about 125 different prescription and over-the-counter drugs in factories that failed to comply with good manufacturing practice. In April, the Justice Department announced that it collected more than $1. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

It's Worse Than You Think. (Editorial)
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.