Corporate Criminals of 2005

From Adbusters #63, Jan-Feb 2006

L. Dennis Kozlowski
Former CEO of Tyco International.

CHARGES: 22 counts of grand larceny, falsifying business records, securities fraud and conspiracy resulting in the loss of more than $400 million of company funds.
FAMOUS LAST WORDS: Asked the judge to be as “lenient as possible” and to consider “all the positive things I have done in my life.”
SENTENCE: 8–25 years in prison.

CHARGES: Fraud and conspiracy resulting in an $11 billion loss to investors in the largest (to date) accounting scandal in US history.
FAMOUS LAST WORDS: “No one will find me to have knowingly committed fraud.”
SENTENCE: 25 years in prison.

Calisto Tanzi
Founder and former CEO of Parmalat.

CHARGES: Accused of market-rigging, providing false accounting information and misleading Italy’s stock market regulator in a $15 billion scandal that has been described as “Europe’s Enron.”
FAMOUS LAST WORDS: “Eight billion, 11 billion, 14 billion – it’s all the same.”
SENTENCE: Currently remanded to a Milan jail, his trial continues.

The fall of multi-million dollar energy broker Enron was one of the most dramatic corporate implosions in recent memory. And the full story – as chronicled in the film Enron: The Smartest Guys in the Room – should be mandatory viewing for all business administration students. Because it’s not simply a story about numbers, it’s a tale of corrupt individuals exploiting a corrupt system.

Certainly there were specific villains – like the top executives and some unscrupulous traders who are caught on tape laughing about bilking “Grandma Millie” out of her retirement fund and exclaiming “Burn, baby, burn” as forest fires drive California’s deregulated electricity prices through the roof. But the main point of the film is that Enron happened because of “synergistic corruption” that extends beyond any one individual. The company perpetuated its fraud thanks to a convergence of lax and often overly friendly regulators, lawyers who paid no attention to professional ethics, and investors who uncritically signed off on sleight-of-hand accounting so long as the share price was in ascension. And the corporate scandals that came to light after Enron’s collapse showed how rampant such behavior was at other companies. More stringent regulations have theoretically changed all that.

Theoretically.