Call That Reform?
combination of the back-from-the-dead passage of the Sarbanes-Oxley
corporate-responsibility bill and the broadcast-ready perp
walks of Adelphia’s John Rigas and WorldCom’s Scott Sullivan
may give the public the sense that corporate reform is a done
deal. But nothing could be further from the truth.
And it’s not just because of the long list of vital reforms
still needed. It’s because the corporate crimes we’ve been
so sickened by are only symptoms of a much larger—and more
insidious—crisis. In a bloodless coup, our government of,
by and for the people has been replaced by the dictatorship
of the corporate dollar.
Watching President Bush smile for the cameras as he signed
Sarbanes-Oxley—a bill he never supported—I couldn’t help but
wonder if the twinkle in his eye was because he knew something
the rest of us didn’t. That for all his get-tough promises—“No
more easy money for corporate criminals, just hard time”—this
bill would actually do very little to change the level of
corporate influence over our government.
It made me think of the time a friend took a family trip on
a cruise ship. Her 10-year-old son kept pestering every crew
member he encountered, begging for a chance to drive the massive
ocean liner. The captain finally invited the family up to
the bridge, whereupon the boy grabbed hold of the wheel and
began vigorously turning it. My friend panicked—until the
captain leaned over and told her not to worry, that the ship
was on autopilot, and that her son’s antic maneuvers would
have no effect.
It’s the same with our leaders. They stand on the bridge making
theatrical gestures they claim will steer us in a new direction
while, down in the control room, the autopilot, programmed
by politicians in the pocket of special interests, continues
to guide the ship of state along its predetermined course.
Take the much-ballyhooed corporate-reform law. Although it’s
being presented as a big win for the public interest, corporate
lobbyists actually succeeded in fighting off a whole slew
of potential reforms: Stock options still don’t have to be
treated as a business expense, offshore tax havens are still
allowed, and there’s been no pension-fund reform. It’s no
accident that despite the high-profile arrests, no executives
from the granddaddy of corporate scandals, the Enron collapse,
have been indicted. The simple though hard-to-believe fact
is that none of their mendacious and mercenary maneuverings
are clearly illegal—and nothing in Sarbanes-Oxley changes
What’s more, industry lobbyists were able to water down many
of the provisions that actually made it into the bill, including
those affecting the ability of accounting firms to offer consulting
services to the companies they audit—a major disease vector
for dishonest bookkeeping. The law doesn’t ban such double
dipping—it only limits it. And even those limits can be overridden
by the new accounting oversight board. A few more “victories”
like this and we’re going to lose the war.
It’s really pretty astounding when you think of it: With all
the public outrage and media focus on corporate wrongdoing,
moneyed interests are still able to outgun or undermine the
public interest—as our political leaders shamelessly continue
dancing to their tune.
How else to explain the brazen hypocrisy exhibited by the
president after last week’s ceremonial signing of the new
bill? Less than eight hours after warning corporate crooks
“you will be exposed,” he furtively issued an interpretation
of the law undercutting a provision designed to make it easier
for employees to—you got it—expose corporate crooks.
When the president’s action was harshly criticized by the
provision’s bipartisan co-sponsors, White House spokesman
Ari Fleischer puffed out his chest and sniffed: “Welcome to
the statutes. That’s why statutes are often complicated, and
that’s why somebody created lawyers.” In other words: “Forget
it, Jake, it’s Chinatown.”
If these guys are this audacious now, I shudder to think what
will be going on a few months down the line, when the media’s
notoriously short attention has moved on to Iraq or Ben and
J-Lo or Ben and J-Lo’s invasion of Iraq. On the other hand,
you can bet that corporate America—with its Energizer Bunny
lobbyists and wide-open checkbooks—will still be working overtime
to ensure the perpetuation of the status quo.
Over the last 10 years, corporations have doled out more than
$1.08 billion in campaign contributions. And this down payment
on preferential public policy has extended across party lines,
with $636 million going to Republicans and $449 million to
Yet Al Gore, in his New York Times j’accuse, still
had the gall to lay the blame for the current threat to “the
future of democratic capitalism” squarely at the feet of Republicans
“bankrolled by a new generation of special interests.” What
What makes the ongoing corporate crime wave not just a business
scandal but a political one is precisely the fact that there
is simply no consistent institutional opposition to the corporate
takeover of our politics—certainly not from the Democratic
Party. It was, after all, Tom Daschle who blocked the stock-option
amendment proposed by John McCain. And all but two Democratic
senators have accepted campaign contributions from WorldCom,
Enron or Arthur Andersen.
No group is able to match the relentless lobbying and contributing
by corporate heavy hitters. And until we have such a countervailing
force—one that will storm the control room on the S.S.
America and shut off the autopilot—we are doomed to live
in a less and less democratic society.