Corporate scandals relate to ethics, not deregulation

July 8, 2002
It's the Republicans' fault, say Democratic leaders of recent corporate scandals.

It's the Republicans' fault, say Democratic leaders of recent corporate scandals.

What else would they say?

Predictable political sniping wouldn't be worth attention except that House Democratic Leader Richard Gephardt of Missouri has taken blame-fixing a step too far.

In a press conference after disclosure of WorldCom's accounting mess, according to CNN, Gephardt said deregulation by Republicans created the problems now painfully evident with corporate governance.

"In 1995, when the Republican leadership came in, both Newt Gingrich [the former House speaker from Georgia] and Tom DeLay [current majority whip from Texas] made statements that the main goal of their effort was to deregulate corporate America," Gephardt said. "Well, they did a lot of that in the last years, and now we see some of the results of that."

Can anyone point to a post-1995 deregulation measure that legitimately can be blamed for the rule-stretching and misrepresentation now bringing down WorldCom, Enron Corp., Arthur Andersen, and others?

No. No one can do that because the problem has nothing to do with deregulation.

The problem is a relaxation of ethical standards that occurs when leaders behave as though anything is okay that feels good, makes money, and can be gotten away with.

Can anyone point to leadership of this kind? In the post-1995 period Gephardt mentions? At the highest level of government?

Does anyone remember the argument of a certain former US president that his dalliance with a White House intern technically didn't constitute sexual relations so he technically didn't lie when he denied that relations of this nature ever occurred?

Does anyone remember how it was just beginner's luck that enabled the same former president's wife-then an Arkansas governor's wife, now a New York senator-to make $100,000 trading commodities in an astonishingly brief period because nobody could prove otherwise?

If there's any political blame due for a relaxation of ethical standards that misleads some-not all-corporate leaders into thinking anything's okay that raises profits and can be gotten away with, it doesn't belong to Republicans. Not this time.

(Online June 28, 2002; author's e-mail: [email protected])