What do Jeff Skilling, Bernie Ebbers, Dennis Kozlowski, John Rigas, Sanjay Kumar, Walter Forbes, Joe Nacchio, Richard Scrushy, Sam Waksal, and Martin Grass all have in common? They were all CEOs of prominent public companies, convicted of big-time corporate fraud and sentenced to lengthy prison terms.
They were all also fabulously wealthy when they committed their crimes. Nevertheless, they risked their careers, families, reputation, wealth, power, everything. And for what? You've got to wonder, what motivates rich, high-powered CEOs to unnecessarily risk it all against all logic and ethical principals?
Perhaps their brain circuitry is somehow hard-wired for exceptional success followed by devastating disaster. Or maybe it's just probability? Maybe x percent of highly successful, super-wealthy CEOs of big companies will turn out to be dysfunctional crooks. Not buying those explanations? Me neither. Let's see if we can figure out ...
What Motivates Rich, Powerful CEOs to Commit Fraud?
- Greed. Corporate America is often characterized as the land of greed; why shouldn't the folks at the top be the greediest of all? Actually, these CEOs risked way more wealth than they stood to gain by their fraudulent actions. I don't think any amount of money or power would have fulfilled the needs that made them commit these acts.
- Arrogance. Sam Waksal of ImClone described himself as arrogant in an interview after his conviction. Perhaps all that power and money makes CEOs feel invincible, untouchable, above the law. And maybe they got caught because, on some level, they knew what they were doing was wrong and wanted to be punished for it. Hmm.
- Evil. Well, evil is sort of a philosophical concept. In this context, perhaps it describes the effect the CEO's actions had on shareholders and employees, but I don't think it actually describes their behavior. I mean, they didn't torture little puppies or murder anybody.
- Stupidity. Maybe they're just plain stupid. No, I don't think so. Most of these people didn't just fall off the turnip truck. Look at Computer Associates, Enron, ImClone, Qwest, Tyco, WorldCom. These CEOs built huge, successful companies. I don't buy that any of them were anything but brilliant businessmen.
- Personality Disorder. Delusional, narcissistic psychopaths, call them what you want, it sounds like a no-brainer to me. I mean, most of these folks maintained their innocence to the end. That implies compartmentalization so they didn't actually feel empathy for those affected by their actions. Denial is a powerful thing. Sure sounds like a behavioral disorder to me. Anyway, there's no denying that each of these men functioned, and functioned exceptionally, until their issues caught up with them.
So, if it's a behavioral disorder, that sort of begs the biggest question of all: Can you somehow identify these people before they actually commit the crime? Any thoughts on that?In any case, here are my Top 10 CEOs in Prison:
- Jeff Skilling, former CEO of Enron
- Serving 24 years for fraud, insider trading, and other crimes related to the collapse of Enron
- Bernie Ebbers, former CEO of WorldCom
- Serving 25 years for accounting fraud that cost investors over $100 billion
- Dennis Kozlowski, former CEO of Tyco Serving 8 to 25 years for stealing $134 million from Tyco
- John Rigas, former CEO of Adelphia Communications Serving 25 years for bank, wire, and securities fraud related to the demise of Adelphia
- Sanjay Kumar, former CEO of Computer Associates Serving 12 years for obstruction of justice and securities fraud
- Walter Forbes, former CEO of Cendant Serving 12 years for fraud
- Richard Scrushy, former CEO of HealthSouth Serving 7 years for bribery and mail fraud
- Joseph Nacchio, former CEO of Qwest Communications
- Serving 6 years for insider trading
- Sam Waksal, former CEO of ImClone Served 7 years for securities fraud (released last year)
- Martin Grass, former CEO of Rite Aid Served 6 years for fraud and obstruction (just released this year)