Corporate Crime for Morons

We can’t all be astronomically wealthy. But we can all enjoy when the rich and powerful are facing financial ruin, public humiliation and, best of all, jail time. So it’s no surprise that the CEOgate story has gotten so big, temporarily eclipsing our neverending battle against terror and our self-righteous indignation over the Pledge of Allegiance.

It probably doesn’t help that both the President and Vice President are closely linked to big business and believe in their entitlement to secrecy so adamantly they refuse to turn over any documents anyone asks to see (like Bush’s SEC investigation files). Even Martha Stewart is being sautéed in insider-trading allegations, and if you can’t trust Martha Stewart, who can you trust? (Does this soufflé recipe really call for four eggs, or is Stewart just trying to help her friends in the poultry industry?)

Now what began with Enron last fall as simply the biggest corporate bankruptcy in U.S. history has spiraled into a steady stream of scandals, scaring the crap out of investors, spooking the already shaky economy and forcing the government to leap into regulatory mode. With elections a mere four months away, you can bet even the timid Democrats will keep the story alive, since it casts such a poor light on our MBA President and his big business-beholden party.

But as sexy as the corporate corruption scandal has become, why should you care about the shady (or straight-up illegal) accounting practices of a bunch of fat cats? Because even if you’re not a shareholder in Enron, WorldCom, Xerox or Martha Stewart Omnimedia—or even if you’re not a shareholder in any corporation—we all have an interest in the health of the economy. A bad American economy, it stands to reason, is bad for Americans.

Maybe even more important, if these CEOs are criminals, they deserve to be treated like criminals. Don’t let all the big business jargon or lawyerly explanations confuse you: Stealing billions from Wall Street investors is no different than stealing 50 bucks from a Main Street convenience store—in fact, it’s probably worse. If thieving corporate officers don’t do serious jail time, that’ll be an even bigger crime.

So, before your eyes begin to glaze over, let’s get right to the most important questions.

What the hell is going on around here?

It turns out corporate America is just as bad as your disgruntled bleeding-heart hippie uncle always said it was. Insider trading, questionable connections between “independent” auditing and high-priced advising, overstated revenues and creative bookkeeping are costing some shareholders their shirts while lining the pockets of the guys in charge of these companies. This has prompted investors to pull out of the stock market and hurt the economy. After all, who wants to hand over their savings to a bunch of suspected criminals? Investment is always accompanied by a certain amount of risk, but you shouldn’t have to take the additional risk that maybe the company you’re investing in is lying to you.

OK, but corporations have always been sketchy, haven’t they? I mean, if you wear Gap khakis and Nike sneakers, drink Starbucks coffee and eat McDonalds hamburgers, it’s like kicking a small business owner and third-world child in the face while pissing on the environment and making a financial contribution to the Devil himself. Big corporations have always been unspeakably evil—why is their bookkeeping such a big deal?

Whoa there, my rabidly consumer-conscious friend. While there may be some truth in what you say, we’re not talking about business practices that are merely morally or ethically questionable. In many cases we’re talking about businessmen purposely misstating their numbers to make their companies—and thus shares in them—appear more valuable than they actually are.