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To: E.J. Neitz Jr who wrote (53401)	6/30/2002 10:58:47 PM
From: stockman_scott	Respond to of 65232

Editorial: Show them to their cells It's about time corporate criminals did some hard time. By The Des Moines Register Editorial Board 06/27/2002 Who needs the tabloids to follow crime news when you have the Wall Street Journal? Check out Wednesday's top story on the Journal's front page: "Accounting Fraud at WorldCom Tops $3.8 Billion." That follows on the heels of news that three former Rite Aid executives were indicted for lying about the pharmacy chain's earnings. Not long ago, the CEO who built Tyco into a conglomerate quit just ahead of being charged with tax evasion. Remember when Enron was the poster child for corporate malfeasance? The Houston energy trader misstated its earnings by a mere $600 million over four years. WorldCom's phonied-up revenues were the equivalent of six Enrons - in five quarters! Business writers Wednesday were calling it one of the biggest accounting frauds in history. The business news in recent months has been a steady dose of reckless disregard for traditional business ethics that once made corporate America the envy of the world. Now American business resembles a bunch of mobsters in the "30s. The wreckage from this growing business scandal includes once proud companies with familiar names like Merrill Lynch and Arthur Andersen. WorldCom, the latest, is a huge, worldwide telecommunications company, second only to AT&T. Now it is likely to head for bankruptcy court. As the business scandal has spread, it has become almost comical. Even Martha Stewart has been dragged into the mud for allegedly using insider information to dump a bunch of stock just before it tanked. Lest all of this be reduced to material for late-night talk-show monologues, this parade of horrors down Wall Street has had a devastating impact on the markets. They predictably went into a nosedive with Wednesday's WorldCom revelations, and investors are not likely to trust publicly held companies with their nest eggs for a long time. Some observers counseled against overreacting. If anything, the post-Enron response has been an underreaction: a few congressional hearings, some talk of institutional reform and much hand-wringing. Now, in the wake of Rite Aid, WorldCom and who knows how many more cases, the SEC fraud squad will be dispatched with orders to put some people behind bars. That, it seems pretty obvious, should have happened a long time ago. dmregister.com

To: E.J. Neitz Jr who wrote (53401)	7/1/2002 2:19:21 PM
From: stockman_scott	Respond to of 65232

Companies too complex to control, says Galbraith By Rupert Cornwell in Cambridge, Massachusetts The Independent 01 July 2002 Modern corporations are now so complex that their operations are beyond any effective control of the shareholders who actually own them, John Kenneth Galbraith says. In an interview with The Independent in which he discusses the crisis of corporate America, the veteran economist and liberal advocate said he had been astonished by the scale of the problem disclosed by the string of company scandals. The modern corporation had fallen under the "virtually absolute control of management and the individuals recruited by management", said Mr Galbraith, who admitted he had failed to foresee the problem. No one could yet predict the consequences. "We are looking at a major flaw in the system which is going to weaken confidence, provoke criticism, and force a search for a remedy. But the nature of that remedy is far from evident," he warned. news.independent.co.uk