Crime And The President's Restatement Of Yearnings
By Arianna Huffington
Tuesday, 9 July, 2002
Every scandal, it seems, produces at least one classic and defining euphemism -- a judiciously chosen
word or phrase diligently employed to sugarcoat the sour reality at hand. In Watergate, it was press
secretary Ron Ziegler's mechanical assertion that all his previous statements were "inoperative." In
Vietnam, it was the military's use of "friendly fire" to soften the dreadful truth of soldiers killed by their own
side.
And now we have corporate America's glittering contribution: "restatement of earnings." It sounds so
innocuous and benign. Possibly even a good thing. Earnings are good after all. And "restating" is just the
boardroom equivalent of asking for a do-over on the playground. It connotes a slip of the tongue, a wrongly
chosen word, a failure to carry the 1 when doing your math homework. What it doesn't sound like is, well,
what it is: out-and-out fraud involving the fleecing of billions of dollars from shareholders and pension funds.
But that's the beauty of our endlessly flexible English language: defrauding investors to the tune of $3.8
billion, as WorldCom did, can be passed off as nothing more than a harmless "earnings restatement." This
same linguistic legerdemain allowed Xerox to lie to shareholders about $6.4 billion dollars in revenue and
present it as "a restatement."
Indeed, a Xerox spokeswoman blithely dismissed the accounting scam, saying: "There's no revenue
that is going away. It's just going from one place [in Xerox's books] to another." But be forewarned: that
level of weasel wordplay is for professionals only. If you don't believe me, just try saying something like that
to the IRS the next time you decide to shift some moolah from the "income" to the "deductions" side of
your tax return.
Of course, the reason these companies can get away with both the euphemisms and the fraudulent
practices they seek to hide is because the government clearly doesn't take corporate crime seriously. How
else can you explain the fact that Xerox, which was hit with a $10 million fine -- the largest financial penalty
ever levied by the SEC -- did not even have to admit any wrongdoing?
The rapacious shareholder swindles perpetrated by WorldCom and Xerox are merely the latest
outbreaks of an epidemic of fraud. Restatement of earnings has become the Ebola virus of corporate
America, with close to 1,000 U.S. corporations restating their earnings since 1997. (Which means, I
suppose, that Xerox could argue that it was merely copying others.) And Wall Street expects a flood of
restatements in the next few weeks as CEOs scramble to come clean before a new rule takes effect in
mid-August forcing them to swear under oath that their company's books are accurate.
And how is the Bush administration responding to this corporate crime wave? Apparently by screening
a lot of classic movies at the White House.
Watching the president unleash his newfound "outrage," coming after months of silence and ho-hum
shrugs, conjures up the image of Louis, Claude Rains' police chief in "Casablanca," announcing that he is
"shocked, shocked!" to find that gambling has been going on in Bogie's joint -- just seconds before picking
up his winnings from the previous night.
After all, phony-baloney accounting tricks at Harken Energy helped Bush collect winnings -- make that
"earnings" -- of $848,560 in 1990 on an insider transaction his father's SEC investigated but ultimately
declined to prosecute. All he needs now is Rains' pencil thin mustache and Brit-doing-a-Frenchman accent.
And given the fact that the SEC is currently investigating accounting tricks at Halliburton under former CEO
Dick Cheney, one can easily picture Rick and Louis -- I mean, Dick and Georgie -- ambling off down the
tarmac at Dulles after dispatching their underlings to "round up the usual suspects" and embarking on what
promises to be the continuation of a beautiful -- i.e. highly profitable -- friendship.
You can tell the president's heart isn't really in his new tough rhetoric. Take his recent call on corporate
executives not to "fudge the numbers." Given the daily revelations of corporate criminality and its
devastating impact -- on jobs, savings, and faith in our economy -- admonishing crooked CEOs not to
"fudge the numbers" is like suggesting that suicide bombers not "spoil the day" of their intended victims.
The President himself revealed the desultory nature of his commitment to cleaning up the corporate
sewer at a fundraiser late last month: "Let me tell you how strongly I feel about this," he said. "I believe if
somebody is running a corporation, if somebody has got responsibilities to shareholders and employees,
they have the responsibility to be above-board at all times, to be frank and honest with all numbers." Wow
-- that is strong. What is he going to come out in favor of next: the butcher keeping his thumb off the scale
when he weighs your rump roast? The supermarket cashier giving you the right amount of change when you
pay for your groceries? Students not cheating on a pop quiz?
And what are we to make of SEC chairman Harvey Pitt's utterly unconvincing attempts to paint himself
as a combination of Dirty Harry and Howard Beale? The same corporate mouthpiece who once authored a
white paper arguing against government efforts to eliminate conflicts of interests among corporate
accountants, and who continued to meet privately with former clients under SEC investigation even after
taking office, now wants to be seen as the "very tough cop on the beat."
Like a wannabe Clint Eastwood, he reacted to the WorldCom revelations with his best tough guy snarl:
"Criminal charges may be too good for the people who brought about this mess." What does he have in
mind instead -- public execution? Can't you just picture "Dirty Harvey" standing above a cowering Bernie
Ebbers, pointing his .44 Magnum at his head and asking: "Do you feel lucky today, punk? Well, do you?"
He even went so far as to quote Beale's famous "I'm mad as hell, and I'm not going to take it anymore"
rant from "Network," during a speech at the tony Economic Club of New York. Hearing Pitt go ballistic over
corporate malfeasance is about as believable as hearing R. Kelly sing the praises of the Mann Act or Al
Gore fume "to hell with the polls" and promise to really "let it rip" next time he runs.
In his essay, "Politics and the English Language," George Orwell wrote: "The great enemy of clear
language is insincerity. Political language . is designed to make lies sound truthful and murder
respectable." And to allow corporate coddlers like Pitt and Bush to repackage themselves as born-again
crusaders for reform. I'm sorry, fellas, but I'm just not buying your "restatement of yearnings."
As the president prepares for a highly touted reading of the riot act to Wall Street this Tuesday, he
should remember that as long as he continues to tolerate a corporate culture in which CEOs can call fraud
"restating," and don't have to admit wrongdoing even when caught picking their shareholders' pockets, his
sudden change of heart is, pardon the euphemism, utterly "inoperative."
Love the title of this one EH?
CC |
