When The Fat Cats Pay The Piper
With accounting scandals, fraud accusations and corporate collapse dominating business news it's harder than ever to ignore the greed of some top executives.
They enrich themselves while running their companies into the ground then walk away with fortunes. But, as CBS News Correspondent Richard Schlesinger reports, at least some of them may yet pay the piper.
The business world has developed quite an underworld of alleged insider traders and shifty accountants who frequently leave unsuspecting investors holding the bag.
The accounting firm Arthur Andersen was convicted of destroying documents in the Enron Case and they were fined. It will probably go out of business, but nobody's gone to jail yet. And the Enron executives went before congress, but not before a judge.
Executive pay is frequently linked to how good the company's financial figures look. Bonuses, stock options and other benefits go up when the numbers do.
Scott Sullivan, the Chief Financial Officer who was fired from WorldCom this week, is building a huge mansion on the coast of Florida. Gary Winnick the man in charge of Global Crossing when it went belly up built a house, too. In many cases, cooking the books has been a game with high stakes but low risk according to experts like corporate observer Sarah Teslik.
"You can make a bet," said Teslik. "If you win you get to keep a hundred million dollars. If you lose your employer gets fined, wanna make the bet?"
Why haven't more of the executives been led off in handcuffs? New York State Attorney General Elliot Spitzer says just wait.
"There is criminal culpability," said Spitzer. "People have been cooking the books with old fashioned frauds and people should be held responsible. People will be going to jail."
Spitzer is looking for stronger laws to use against corrupt executives. And Neil Getnick, an Attorney specializing in Corporate Fraud, says it's time for congress to step in.
"It is a big mistake to suggest that anti-fraud is anti-business which concentrates in some way as being anti-American," said Getnick. "That's just nonsense."
That's the issue for Congress. The issue for prosecutors is what to do with these men — one time darlings of Wall Street who may have been devils mucking up the details of all those financial reports.