July 15, 2002
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When I was eight years old I saw a news program in which vice-president
Richard Nixon gave Fidel Castro a small reception in Washington D.C.
(President Eisenhower refused to meet with Fidel). I remember telling my
dad "that guy is a crook." My dad was a very conservative republican who
retired with more than thirty years of military service, so he thought I
was referring to Castro. I wasn't. Here we are forty-three years later and
'Tricky Dick' had nothing on George W. Bush.
Up until a few months ago, I had the impression that Resident Bush wasn't much of a businessman, at least not in the past; that he was a bungler. Now we find he was as unscrupulously clever as any of the CEOs, CFOs, and CROOKs currently under investigation. The corporate boards of Enron, WorldCom and several others are accused of misleading investors about accounts and benefiting through sales of shares inflated by the misleading financial information. So what? Young George perfected that sleight of hand more than a decade ago. Mark it up to good ol' American ingenuity, or fatherly advice. In March, The Wall Street Journal reported that Harken Energy paid $2 million for a small energy company, Spectrum 7, a loser with large debts where Bush II was Chief Executive Officer. Harken was also losing money but hid most of the losses in 1989 with profits it reported by selling a subsidiary, Aloha Petroleum, to a group of Harken insiders who borrowed much of the money from Harken for the purchase. The Securities and Exchange Commission (SEC) found that it was a bogus transaction and forced the company to 'restate' its 1989 earnings. But before the ruling, George W. Bush, who served as a Harken board member and on its audit committee, sold two-thirds of his stock for $848,000 and did not inform the SEC for 34 weeks despite laws requiring prompt disclosure of insider sales. An internal SEC memorandum concluded that Bush had broken the law but no charges were filed. When recently asked about the possibility that his sale amounted to the same corporate misbehavior that he himself is now calling criminal, Dubya replied: "Everything I do is fully disclosed, it's been fully vetted." Huh? Senate Majority Leader Tom Daschle (D-SD) recently called on the SEC to disclose Bush's file to answer all the questions about the Resident's corporate trading record with Harken. Daschle, appearing on CBS' Face the Nation, said, "I think the president would do well to ask the SEC to release the file; release it all. We've had different explanations as to what actually occurred and I think the best way to resolve all those issues is just allow the SEC to release the file." Nadda; no way. Bush may have disclosed his illegal activities to the SEC, but heaven forbid the American people would see him for what he is. Then again, heaven may not have much to do with it. According to The Los Angeles Times, Bush's opinion of the recent corporate accounting scandals is an example of another two-faced, empty political gesture since he has for years opposed government oversight of business. "After suddenly altering his [Bush] explanation for why he was eight months late in reporting to the Securities and Exchange Commission his 1990 sale of stock in Harken Energy Corp.--a company on whose board he sat--shortly before it announced large losses [for years he blamed it on the SEC; now he's fingering Harken's lawyers]; after the fanatical ethics wars of the Clinton years, few in Washington have much stomach for a full-scale confrontation--though the Washington Post raised eyebrows by revealing Bush's former personal attorney was the SEC general counsel at the time the commission cleared him of wrongdoing in the stock sale. [The attorney, James Doty, says he recused himself.] The demands of the real war underway against terrorism also will discourage a political firefight over the sale. But even so, the disclosures are still creating awkward moments for Bush as he prepares to call for greater corporate responsibility in a speech Tuesday in New York. Actually, the focus on Bush's behavior 12 years ago may frame the wrong debate. It's likely that the dominant argument in Washington will be over whether it's credible for Bush to demand better corporate behavior while facing these personal questions. The more relevant issue is whether it's credible for Bush to threaten a crackdown now after his administration spent its first 18 months promising business kinder and gentler enforcement of the range of federal laws against corporate misconduct--from the environment to the stock markets to the workplace. In other words, can Bush plausibly shake the iron fist after stroking the Fortune 500 for so long with a velvet glove? It's good for Bush to add his voice to the demand for more ethical corporate behavior. But his words would carry more weight if matched with action. If Bush is sincere about confronting corporate misbehavior, he'd be changing direction not only at the SEC but also at the agencies protecting the environment, the workplace and public lands too. Eric Schaeffer, who resigned in protest as head of civil enforcement at the EPA earlier this year, asks the right question: Does it make sense to rely 'on corporate self-policing' to safeguard the public 'after what we've learned about corporate responsibility from Enron and others'." [LA Times, 7/8/02] I wonder how much faith the American public has in 'government-policing' of corporate behavior. Considering that it is, in large part, corporate influence that elects government leaders, and corporate influence that dictates what laws and regulations are enacted and enforced, and corporate influence that educates and informs the public about corporate behavior and what is acceptable and what is not, how much faith can a coherent citizen place in corporate reform by corporate influence? In his quest to rid the earth of evil-doers, the born-again corporate reformer currently occupying that big white cave in D.C. may give lip service to criminal penalties for execs who certify false financial statements, but what about misleading financial statements that are confusing for jurors but not, in the strictest legal terms, completely false? Will he ban auditors from consulting with accounting clients? Will he advocate limiting stock options by requiring that their cost be deducted from corporate earnings? Will he insist that investment bankers stop advising stock analysts about which junk stocks to push when? In the final analysis, the Bush regime will strive to create an even friendlier environment for those gifted at trickery and financial magic; we'll not hear of systemic reform, not from Dr. Dubya's medicine show. A few years ago, I met and had lunch with an interesting man who has an entirely different approach to corporate reform. His name is Richard Grossman and he is co-founder and co-director of POCLAD, the Program on Corporations, Law and Democracy, which describes its mission as "instigating democratic conversations and actions that contest the authority of corporations to govern." Grossman has also worked as a Peace Corps Volunteer in the Philippines; director of Environmentalists For Full Employment; organizer of the Labor Committee For Safe Energy & Full Employment; co-founder of the Highlander Center's STP (Stop the Poisoning) Schools. He is a prolific writer and has authored books and articles on labor, environment, job blackmail, energy and economics. "It's funny, we did not set out to become experts on the corporation," Grossman says. "We set out to try to discover why it is that the activist work of so many good and able people around the country for so many decades had not brought about the kinds of changes that people had been hoping for. Why is it--after so many years of so many groups fighting toxic chemicals and winning, passing laws, and closing dumps, and doing all kinds of good things--that every day more toxic chemicals are produced than the day before? We saw that power was being concentrated even more in corporate boardrooms. The ideal of democracy was moving further out of reach. And by most objective criteria--the wealth gap, public health, the environment, workers' rights--things were getting worse." In a recent book published by the group, Defying Corporations, Defining Democracy (Apex Press, 2001), Grossman and his colleagues argue that corporate power has grown unchecked. "Following the Civil War and well into the twentieth century, appointed judges gave privilege after privilege to corporations," the book notes. One of the most defining cases early on was the 1886 Supreme Court decision Santa Clara County v. Southern Pacific Railroad Co., which ruled that a corporation was a "person" under the Constitution, sheltered by the Fourteenth Amendment. In one stroke, that judicial decision killed efforts by states and local governments to rein in corporate misbehavior. Grossman says it's time people took back control over corporations. He and his constituency believe we need an amendment to the Constitution that clearly defines what corporations are, tools with no more rights than a coal shovel. "The abolitionists eventually had to take their struggle into the Constitution and write the Thirteenth, Fourteenth, and Fifteenth amendments because the ownership of humans as property and the denial of human rights had been imbedded in the Constitution. The women's suffrage movement also had to go into the Constitution. The same is true with what we're talking about. Eventually, when the culture changes, when there's been enough contesting, revealing, and educating, these issues will either be driven into the Constitution or they won't." When the American people begin seeing the corporate 'smoke and mirrors' for what it is; when the sleight of hand mastered by corporate boards and their accounting firms fails to make fools of the American family; when the Bush mystique falls to the floor like the emperor's long-johns, the dark corners in which hide the true gremlins of human depravity and greed will be lit with the all-revealing light of common sense and the will for common good. It's up to us to turn the lights on; it really is, up to us. · · · · · ·
References Reuters, Tuesday, 2 July, 2002; "Bush Brushes Off Question About His Business Past" The Progressive, March 2002; "Richard Grossman Interview," by Ruth Conniff Program on Corporations, Law and Democracy ReclaimDemocracy.org The Alliance for Democracy Democracy Unlimited of Humboldt County Michael W. Stowell is chairperson of the Board of Directors of the Friends of the Arcata Library in Arcata, CA. He is the producer/editor/videographer of numerous public access television programs; he is a naturalist, a gardener, a bicyclist and a Swans' columnist. Do you wish to share your opinion? We invite your comments. E-mail the Editor. Please include your full name, address and phone number. If we publish your opinion we will only include your name, city, state, and country. Please, feel free to insert a link to this article on your Web site or to disseminate its URL on your favorite lists, quoting the first paragraph or providing a summary. However, please DO NOT steal, scavenge or repost this work on the Web without the expressed written authorization of Swans, which will seek permission from the author. This material is copyrighted, © Michael W. Stowell 2002. All rights reserved. No part of this material may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the publisher. |
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