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ROBERT TRIGAUX"Today's events should send a message to anyone who believes that lying, cheating and stealing are effective means towards personal success." - Linda Thomsen, SEC deputy director of enforcement, at a news conference Jan. 14 announcing that Enron ex-CFO Andrew Fastow had pleaded guilty to participating in a massive conspiracy.
Linda, Linda, Linda. I wish I could believe that you believe what you say. But you're like the little Dutch boy who stuck his finger in the dike trying to stop the flood.
Lying, cheating and stealing increasingly are creeping into the mainstream of corporate America. Just as it has infected parts of our public schools and universities, our sports, our media and entertainment, and our legal world.
Not that this should surprise anyone. Lying, cheating and stealing have always been around. The real question is, why are these vices so entrenched and prospering in the first place?
In business, the barrage of headlines devoted to cheating never seems to end.
At Enron, former chief financial officer Andrew Fastow pleaded guilty last month after an astonishing display of greed: cooking the books of Enron, arranging side deals to personally reap tens of millions of dollars, then hiding his deceptions from company shareholders. Fastow - corporate poster boy of self-enrichment - will serve 10 years in jail without parole and forfeit more than $29-million in assets.
Last week, Fastow's former boss, Enron's ex-CEO Jeffrey Skilling, pleaded not guilty to 35 counts of conspiracy, securities fraud, wire fraud and insider trading.
Martha Stewart is on trial again this week in New York not just because she may have profited from a stock tip by selling shares in ImClone Systems. She also allegedly lied to cover up her actions and to preserve the value of her own publicly traded company, Martha Stewart Living Omnimedia.
Then there is the trial, $6,000 shower curtain and all, of Tyco International executives. And the fines levied against Wall Street firms whose analysts essentially lied about company stocks to prop up their value. And the continuing probe of major mutual fund companies that catered to wealthy clients by letting them trade shares and profit after the markets closed - when basic investors could not. And don't forget all those companies, including a bunch in the Tampa Bay area, that have had to restate their earnings, sometimes going back several years, because their accounting practices proved bogus.
Why do we seem so awash in cheating?
Maybe it's because the country's former financial overseers - the Securities and Exchange Commission and U.S. Justice Department - look more like lapdogs than watchdogs.
Maybe it's because the potential financial rewards at the top are so astronomical, so off the charts, that people's moral compasses are overwhelmed.
Maybe it's because everybody's so anxious to "succeed" - no matter what corners are cut - since today's competition is so intense and job security is so thin.
Maybe it's because the country really has become a "winner take all" society. That's a society in which a handful of top performers walk away with most of the rewards. The idea gained prominence in the 1990s when two economists, Cornell University's Robert Frank and Duke University's Philip Cook, explored "winner take all" markets. Then they wrote the 1995 book, The Winner-Take-All Society: Why the Few at the Top Get So Much More Than the Rest of Us.
Their message? If you can claw to the top at whatever you do - corporate CEO, high school valedictorian, high average Major League Baseball player or Super Bowl half-time entertainer - the rewards vastly exceed those whose performance is just a little less.
That trend, the economists criticized, is why the top 1 percent of the nation's earners have captured more than 40 percent of the country's earnings growth in the past two decades.
The result is a vastly widening gap between the rich and poor in the United States.
It is that startling inequality and sense of unfairness that has America so on edge and so willing to embrace cheating to materially succeed. That is the premise, at least, of a new book called The Cheating Culture: Why More Americans Are Doing Wrong to Get Ahead, by David Callahan.
"Cheating is up. Cheating is everywhere. By cheating, I mean breaking the rules to get ahead academically, professionally or financially," writes Callahan, who got his doctorate in politics from Princeton and is co-founder and research director of the Demos public policy group in New York.
Americans operate their lives using two separate moral compasses, Callahan suggests. One compass directs their behavior, appropriately, when it comes to things such as sex, family, drugs and traditional forms of crime. But another compass - one that excuses cheating - now guides many Americans in their careers, pursuit of money and material success.
The author blames the rise of deregulation fever and antigovernment attitudes, embraced a generation ago by President Ronald Reagan and reaffirmed by today's President Bush, for diminishing the clout and respect of regulators and federal prosecutors who normally would discourage cheating.
"This is a dark book in some ways," Callahan concedes. "An increase in cheating reflects deep anxiety and insecurity in America nowadays, desperation even, as well as arrogance among the rich and cynicism among ordinary people."
Callahan takes broad swipes at cheating as a national symptom.
Doctors take finder's fees to funnel patients into clinical trials. Princeton admissions officers tap into a Yale Web site to see which applicants have been accepted. Chicago Cubs slugger Sammy Sosa gets caught using a corked bat in season play. Job resumes are so inflated that one recent survey found 20 percent listed fraudulent degrees.
A new movie in theaters, The Perfect Score, describes how cynical and overly ambitious high schoolers go on a mission to snare the answers to their upcoming SAT test.
Callahan's on to something: an ingrained and growing national compulsion to succeed at any cost. Alas, his recommendations - raise the minimum wage, more affordable health care, a tougher SEC watchdog - are less penetrating and more formulaic. But they may be part of a solution.
Why explore cheating in a business column? Because it's eating away at what precious little integrity remains in the U.S. economic system.
I was reminded of this last week after listening to a roundtable of Tampa Bay area business executives and academics discuss the impact of the country's rising federal deficit. Some of the participants painted a dark future for many middle- and working-class people who are heavily in debt and vulnerable to rising interest rates fueled by a deepening deficit.
I asked two participating business school deans, Robert Anderson of the University of South Florida College of Business in Tampa and Joe McCann of the University of Tampa Sykes School of Business, if the roundtable's assessment was too negative. I mean, isn't the economy improving?
"I think the comments were just the tip of the iceberg and were right on target," Anderson said. If interest rates rise 3 to 5 percentage points, he said, we will see "more bankruptcies filed than the Depression of the 1920s caused."
McCann added that the shrinking middle class already is struggling against high health care and tuition costs and job insecurity. And the working class is most vulnerable, especially in large companies, he warned.
The dean outlined a bleak workplace built on three separate classes of employees. The lowest-level employee makes up 60 percent of the work force and is viewed as a cost to be driven down as much as possible or outsourced. A second class of professionals, 30 percent of the work force, must constantly justify their work based on their return on investment to the company. The last segment of elite employees, the remaining 10 percent, are "those who have it made," he said, with enough stock options, salaries and benefits to make them immune to economic strife.
"Nice scenario, huh?" McCann posed.
Fair it is not. It's almost enough to make you cheat just to try and get ahead.
- Robert Trigaux can be reached at trigaux@sptimes.com or 727893-8405.