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January
28, 2002
Sen. Russ
Feingold
Campaign
Finance Reform?
Think Enron
John Chuckman
Liberal?
Media?
January
27, 2002
Mokhiber
and Weissman
Enron's
Drip, Drip, Drip
Tom Turnipseed
MLK
Jr.'s Dream Perverted
January
26, 2002
Norman
Madarsz
Adieu,
Bourdieu
January
25, 2002
National
Lawyers Guild
Know
Your Rights
Alexander
Cockburn
You
Call This Terrorism?
CounterPunch
Wire
Cal
Energy Crisis Hoax:
It Wasn't A Shortage,
It Was a Shakedown
Tariq
Ali
Kashmir,
Klinghoffer,
the Kurds and Chomsky
Nadine
Strossen
Protecting
MLK Jr.'s Legacy:
Justice and Liberty After 9/11
January
24, 2002
Robert
Fisk
Turkey
Targets Chomsky
Dean Baker
Lying
on Top:
Ken Lay One of Many
David
Vest
Idiot
Wind
January
23, 2002
Terry
Waite
Guantanamo
Prisoners:
Justice or Revenge?
Molly
Secours
The
Case of Abu-Ali:
Racism and the Death Penalty
Robert
Jensen
Speak
Out, Get Slimed
January
22, 2002
Brendan
Cooney
Moby-Dick
and the Hunt
for Osama bin Laden
Rick Giombetti
Progressive
Pols for Enron?
Judith
Resnik
Invading
the Courts?
Kevin
Alexander Gray
The
Crisis in Black Leadership
January
21, 2002
Marjorie
Cohn
Will
Walker's Words
Be Used Against Him?
Ahmad
Faruqui
MLK
Jr. and the Palestinians
January
19. 2002
Jordan
Green
Enron
Stole Our Future
January
18, 2002
Tom Turnipseed
The
Enron Model
Walt Brasch
Enron
at the White House
CounterPunch
Wire
Human
Rights Group Says Guantanamo Prisoners Must
Be Treated as POWs
January
17, 2002
Gideon
Levy
Bulldozing
Rafah
Uri Avnery
That
Weapons Shipment
January
16, 2002
John Chuckman
The
Angel and the Pretzel
Lawrence
McGuire
Subverting
the
Geneva Convention
Kathy
Kelly
An
Open Letter to
Richard Perle on Iraq
January
15, 2002
George
Monbiot
Greenpeace,
Lord Melchett
and the Business of Betrayal
Jack McCarthy
Follow
the Pretzel
William
Blum
Atta
and the Times:
Follow the Changing Story
Edward
Said
Emerging
Alternatives
in Palestine
January
14, 2002
David
Vest
Open
Bag. Eat Pretzels.
Patrick
Cockburn
Collapse
of Georgia
Ignored by the World
Mokhiber/Weissman
Enron's
Accountants:
When In Doubt, Shred It
January
13, 2002
C.G. Estabrook
Why
We Kill People
January
12, 2002
Cockburn/St.
Clair
Forbidden
Truths
January
11, 2002
Lee Balllinger/Dave
Marsh
Neil
Young's Duet with Ashcroft
January
10, 2002
Tom Turnipseed
Bush,
Enron, UNOCAL
and the Taliban
St. Clair/Cockburn
Greenpeace
to Greenwash?
Hans von
Sponek
Iraq:
Is There an Alternative
to Military Action?
Jim Lobe
Israeli
Human Rights Group Assails Army
Marina Mayakova
Russia's
Top Military Astrologer Predicts More Attacks from OBL
January
9, 2002
David
Vest
The
Super-Burqa
and the Big Tent
ND Jayaprakash
Winnable
Nuclear War?
Rafiq
Kathwari
Kashmir
Will Make Ground Zero Look Like a Bonfire
January
8, 2002
Prudence
Crowther
Sting
Like a B-52
Nelson
Valdés
Al-Qaeda
at Guantanamo Bay
John Chuckman
Dark
Tales from the
Ministry of Truth
Richard
Corn-Revere
Do
We Fear Freedom?
Joan Hoff
The
Nixon You Haven't Heard
January
7, 2002
Lawrence
McGuire
Confusing
Economic Tales About Argentina
Wael Masri
They
Are Taking
Our Rights Away
Philip
Farruggio
Better
Medicine
A Photographic Journal of Life
in an Afghan Refugee Camp
By Judith Mann
Resources:
100s of Links
About 9/11
CounterPunch:
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Coverage of 9/11 and Its Aftermath
Five
Days That
Shook The World:
Seattle and Beyond
By Alexander
Cockburn
and Jeffrey St. Clair
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CIA's Assassination Plan a History of
Torture in US Prisons
bin Laden and Bush
Business Connections
Aisha Ikramuddin on the Hidden Hype
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Jiang Zemin Tells Bush:
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Cockburn
and Jeffrey St. Clair
The Memphis Blues Again:
Six Decades of Memphis Music Photographs
Photos by Ernest Withers
Text by Daniel Wolff
The New Intifada:
Resisting Israel's Apartheid
Edited by Roane Carey
A Pocket Guide to
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by James Ridgeway
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The
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by Douglas Valentine
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January
28, 2002
Unaccountable
Accounting
The Tyranny of the Bottom Line
By Russell Mokhiber and
Robert Weissman
Ralph Estes' voice is not being heard in Congress.
That probably says more about Congress
than it says about Ralph Estes.
At last count, 11 Congressional committees
were up and running, investigating the collapse of Enron and
the role of the auditors.
A study released last week by the Center
for Responsive Politics found that of the 248 Senators and House
members serving on those 11 committees, 212 have received campaign
contributions from Enron or its accounting firm, Arthur Andersen.
Under any other conditions, Estes might
be a considered a top candidate to aid Congressional investigators.
He used to be an auditor at Arthur Andersen.
He was president of Accountants for the
Public Interest.
He has written a number of pathbreaking
books, including Auditor's Report and Investor Behavior,
Corporate Social Accounting, Accounting and Society,
and most recently, Tyranny of the Bottom Line: Why Corporations
Make Good People Do Bad Things.
He was on a short list to be chair of
the Securities and Exchange Commission (SEC), but Arthur Levitt
had raised $1 million for the Democrats, and Estes had raised
zero for the Democrats, so Arthur Levitt became chair of the
SEC.
But even Arthur Levitt, with all his
institutional credentials, couldn't overcome the accounting
industry's money and get through a mild reform that would have
prohibited accounting firms from raking in millions in consultancy
fees from audited corporate clients.
Levitt got kicked in the teeth by a bi-partisan
group of members of Congress -- many of whom are now posturing
for cameras, using Enron and Arthur Andersen as a whipping boy
for political advantage.
But Levitt's was only a 10 percent solution
to a structural problem that forces good people to do bad things.
If Congress were serious, they would
consider the 100 percent solution being offered by Estes.
Estes says that Congress should prohibit
corporations from hiring auditors.
If a corporation needs an audit, it would
go to a newly created Corporate Accountability Commission, an
independent agency of the U.S. government, which would assign
it an auditor. The company would pay its fee to the Commission,
which would pay the auditor.
The government would hire and fire the
auditors.
Bank examiners, insurance examiners and
other professionals are independent of those they audit or examine.
Why not financial auditors?
"Even State Farm knows not to let
me choose the damage assessor," Estes says.
In addition to hiring the auditors, the
Commission would regulate the industry.
We asked Estes his thoughts on the self-regulation
proposal put forth last week by SEC chairman Harvey Pitt.
"Pitt reminds me of a mafia lawyer
who is appointed Attorney General and is called upon to propose
laws constraining the mafia," Estes says. "You can
count on what comes out being detailed, involving a lot of verbiage
and not harming his friends at all. The applicability of this
analogy is evident when we see the AICPA [the American Institute
of Certified Public Accountants] effectively saying -- yeah
Harvey, right on, we like that one. Pitt was an attorney for
each of the Big Five accounting firms and for the AICPA. What
he is proposing is a modest tightening of the in-house industry
self-regulation."
Many of the top financial executives
of Enron were former Arthur Andersen employees. And this movement
from accounting industry to audited client is rampant within
the industry.
Estes says that if you audit a client,
you shouldn't be able to go to work for them for at least five
years.
"This may sound tough, but I don't
think it's unreasonable for potential recruits to public accounting
to recognize that moving to a client is simply not an available
option," he says. "Auditors should proudly view their
work as professional and important, and be prepared to spend
their entire careers in this work."
Reflecting the dictums that "you
manage what you measure" and "if you don't count it,
it doesn't count," the Commission would also require corporations
to incorporate into their accounting system data on intangibles
and externalities.
For example, when workers were injured,
you wouldn't merely report the cost of the in-house nurse and
the insurance, but you would also report the cost to the worker
of loss of the leg, offset by any benefits you might provide
to the worker.
How would this new accounting system
affect the bottom line? Instead of just one bottom line for
financial investors, there would be many "bottom lines"
-- for employees, customers, financial investors, communities,
and the greater society. (For more on Estes' proposal, see
www.stakeholderalliance.org.)
Estes hit the nail on the head when he
titled his most recent book Tyranny of the Bottom Line: Why
Corporations Make Good People Do Bad Things.
Now we learn that J. Clifford Baxter
was found in a suburb of Houston, shot in the head, an apparent
suicide.
Baxter was an Enron executive who in
May 2001 reportedly challenged the company's financial practices
and resigned.
His colleague, Sherron Watkins, wrote
in a memo to Enron CEO Ken Lay that "Cliff Baxter complained
mightily to [then-CEO Jeff] Skilling and all who would listen
about the inappropriateness of our transactions with LJM"
-- one of the partnerships where Enron parked off-the-books
debts.
In the end, we are all victims of this
tyranny of the bottom line.
To stop the bleeding, the political class
needs to stop genuflecting and start listening to courageous
professionals like Ralph Estes, who have much to teach about
how to fix our system of unaccountable accounting.
Russell Mokhiber
is editor of the Washington, <D.C.-based> Corporate Crime
Reporter. Robert Weissman is editor of the Washington,
D.C.-based Multinational
Monitor. They are co-authors of Corporate
Predators: The Hunt for MegaProfits and the Attack on Democracy
(Monroe, Maine: Common Courage Press, 1999.)
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