Monday, September 25, 2006

Ebbers to die behind bars

A few more like this, and corporate fraud could become extremely rare.

Tomorrow, the man who once swaggered through the halls of his telecommunications company as a cowboy-booted billionaire is scheduled to surrender to authorities and begin a 25-year sentence. Federal prison policies virtually ensure that [former WorldCom CEO Bernard] Ebbers, who has a heart ailment, will spend the rest of his life in prison for his role in an $11 billion accounting fraud.
Some legal experts say it is unjust for a white-collar criminal like Ebbers to receive a tougher sentence than a mob boss. Those experts are focused a little too much on the "white-collar" and not enough on the "criminal."

Part of the reason corporate fraud is so pervasive is that many corporate officers are willing to weigh the risks of a fine and a couple of years in prison against the millions of dollars they might be able to steal from their companies and shareholders. They blind themselves to the suffering their actions can inflict on their employees and investors. Even when caught and convicted, many manage to hold on to their ill-gotten gains. Every such example emboldens and increases the temptations for the next generation of executives.

Ebbers perpetrated a fraud on investors in the amount of $11 billion. That is real money stolen from real people. Anyone with any sense of how much money $11 billion is should sneer at the suggestion that 25 years is too harsh a penalty for his crimes.