Another Enron article entitled, , by Wendy Zellner, explores Skilling’s (Ex CEO of Enron) involvement in the Enron scandal. The following quote from sums up the content of the article by providing damming testimony against his character:
“He implicitly and explicitly pushed subordinates to break laws as a heavily indebted Enron scrambled to hide years of bad investments to keep its crucial credit rating.” (Zellner, 2002)
In an article entitled ; CEO’s under fire, the lavish lifestyles and irrefutable greed of today’s CEO’s are exposed. The main target is Dennis Kozlowski, the former CEO of Tyco. The author of the article states that Kozlowski will be remembered by Americans as:
“the bald guy with the $6,000 shower curtain. And, say, the $15,000 dog umbrella stand. Ditto for the now infamous $2.1 million birthday bash that Kozlowski, the former CEO of Tyco, threw in Sardinia for his wife's 40th birthday. It featured a giant cake with exploding breasts and an ice sculpture of Michelangelo's "David" dispensing Stoli through an appendage that in more modest times would've been covered by a fig leaf.” (Varchaver, 2002)
This article makes it clear that CEO’s today are living lifestyles normal people couldn’t possibly fathom, and at whose expense? The investors, and their employees. This pressure falls on the accountants to make earnings acceptable so that they don’t lose their jobs, and their bosses can fund their ridiculous lifestyles.
An article in Business Week entitled, , takes an in-depth look at the key individual responsible for the illegal activities that transpired at Enron. Their primary target is Jeff Skilling, and they emphasize that the blame for the scandal belongs on his shoulders.
“Skilling, a former McKinsey & Co consultant and Harvard Business School grad, tried to craft as a new kind of virtual trading giant, operating outside the scrutiny of investors and regulators. 's numerous partnerships were shrouded in secrecy, tucked away off the balance sheet. They were used to shift debt and assets off the books while inflating earnings. The chief financial officer ran and partly owned two partnerships, a clear conflict of interest. leveraged itself without a reality check by any outsider.” (Business Week, 2001)
In a Business Week article entitled, , the Worldcom scandal is discussed and emphasis is placed on the fault of management for causing the illegal activities. They actually point out that the Deloitte & Touche, the accounting firm dealing with Worldcom’s financial figures, quit because they didn’t agree with the moral decisions Worldcom was making with regard to their record keeping.
“The company's accountants, Deloitte & Touche, abruptly quit in 1994, citing ``an inability to rely on management's representation'' of its numbers--first-quarter earnings of $8.8 million that matched analysts' forecasts.” (Timmins, 2002)
A Newsweek article entitled The Mighty Fall, by Keith Naughton, depicts today’s CEO’s as immoral, money starved crooks, that are willing to take any measure necessary to fill their bank accounts with investors’ hard earned money.
“Gone are the days when CEOs were America's new Joe DiMaggios, inspiring and enriching us with their heroic leadership of the booming New Economy. These days, CEOs seem more akin to Allen Iverson. Now they're the bad boys of the 21st century. The insatiable appetite for CEO comeuppance is enough to give even honest bosses a crisis of confidence. No CEO's reputation is intact.” (2002, Naughton)
“Corporate boards are also taking a harder look at something investors have been complaining about for years: CEOs' fat paychecks. CEO pay has grown tenfold since 1990, and pay packages crammed with stock options allowed the big boss's take-home pay to top $200 million in some cases. But Congress is fast tracking legislation to rein in stock options by forcing companies to account for them as an expense on the books, rather than handing them out like free money.” (2002, Naughton)
A Maclean’s article was written on John Rigas, former CEO of Adelphia Communications. The author, whom wishes to remain anonymous, states that Rigas used the company as “his personal piggy bank”. Rigas is portrayed as an immoral, greedy leader, whose main concern was how much money he could embezzle out of his company.
“The company issued more than $1.3 billion in stock and notes for the benefit of the Rigas family. It paid off $241 million of the family members, personal debt. Of that, $174 million was paid after accounting problems were announced in March. The firm paid $26.5 million for timber rights on a Rigas property. It spent $12.8 million of company funds to build a golf course and clubhouse which was controlled by the Rigases. The family had the exclusive use of - paid luxury properties in Colorado, Mexico and New York City.” (Maclean’s 2002)
Here is yet another article that bashes Rigas’s character, and portrays his passion in spending shareholders’ hard-earned money.
“But what was perhaps most unsettling was the unabashed manner in which the Rigases had helped themselves to shareholder dollars. financed the family's $150 million purchase of the Sabres. It paid $12.8 million in 2001 for office furniture and design services provided by Doris Rigas.” (Leonard, 2002)
Research Method
Subjects
The subjects being analyzed in this research are mainly CEO’s and other upper management level employees (both current and former) that operate/d large corporations. The companies/individuals being analyzed will be involved in some sort of criminal investigation (i.e. fraud or other unethical behavior). Furthermore, the subjects’ being analyzed will belong to corporations in North America, and they will be highly publicized companies.
Sources of Information
The main sources of information will come from online peer-reviewed journal and periodical databases. These will include, ABI Fulltext Informational Database, Hoover’s Fulltext Database, and Econlit Database. Other sources will include newspaper articles from the Globe and Mail, Financial Post, Gazette, and the Toronto Star. There will also be supplementary information from class lectures and notes.
Data Analysis
The data will be analyzed based on the reported findings from the published sources and current events in the daily news. A comparison will be drawn between the advantages for the CEO’s and upper management employees in relation to the accountants working alongside them. The motives for fraudulent behavior will be analyzed and the individuals with the most incentive/monetary gain to benefit from the execution of the scandalous acts will be deemed responsible for their actions.
Limitations
The main limitation of this study is that there isn’t an opportunity to obtain face-to-face interviews with the individuals in question. They are either inaccessible due to security reasons, or they are simply unwilling to divulge the personal information that is required for the study. Therefore, a majority of the data will be obtained from journals and periodicals which may possess skewed or speculative information.
Research Design
This study is qualitative and is primarily composed of secondary data in the form of articles from journals and periodicals. Data will be collected through the use of a few cases which may not be representative of the entire population. The data received will be descriptive, yet non-statistical in nature. The findings are meant to be used as a base for initial understanding and to promote further study in the area of ethical practices in corporations.
Budget
The anticipated out-of-pocket expenses for this research report consist of the following:
The approximate total cost anticipated for this research study is $1140.
Ethical Considerations
The people being analyzed in this study are all public figures that have already been accused and some even apprehended for their actions. The information regarding their criminal behaviors is already available to the general public and thus there is no additional invasion of privacy as a result of conducting this research. However, all the individuals in this report will be treated fairly and with respect. No additional/ unpublished information will be divulged throughout the course of this study, which may further incriminate or falsely accuse the individuals in question.
References
; Anonymous; Maclean's, Toronto; Aug 5, 2002; Vol. 115, Iss. 31; pg. 12, 1 pgs
; Business Week, New York; December 17, 2001, Iss. 3762; pg. 154
; Devin Leonard; Fortune, New York; Aug 12, 2002; Vol. 146, Iss. 3; pg. 136, 8 pgs
; Keith Naughton; Newsweek, New York; Aug 5, 2002; Vol. 140, Iss. 6; pg. 24, 2 pgs
; Anita Peltonen; Barron's, Chicopee; Nov 4, 2002; Vol. 82, Iss. 44; pg. 44, 2 pgs
; The Economist, London; Aug 31, 2002; Vol. 364, Iss. 8288; pg. 61
; The Economist, London; May 4, 2002; Vol. 363, Iss. 8271; pg. 11
; Johnnie L Roberts; Newsweek, New York; Mar 11, 2002; Vol. 139, Iss. 10; pg. 22, 7 pgs
; William C. Symonds; Business Week, New York; Sep 30, 2002, Iss. 3801; pg. 40
; Heather Timmons; Business Week, New York; August 5, 2002, Iss. 3794; pg. 14
; CEO’s under fire; Nicholas Varchaver; Fortune, New York; Nov 18, 2002; Vol. 146, Iss. 10; pg. 123
; Wendy Zellner in Dallas, with Christopher Palmeri in Houston, Mike France in New York, Joseph Weber in Chicago, and Dan Carney in Washington; Business Week, New York; February 11, 2002, Iss. 3769; pg. 38
