|Bored by boardrooms, bedazzled by bedrooms |
July 14, 2002
If a politician is going to have a peccadillo, the latter is better. Boardroom monkey business is convoluted, draped in recondite legalese, craftily made impenetrable by well-paid lawyers.
But the voting public understands bedroom monkey business.
Just ask Bill Clinton. The Whitewater investigation – burrowing into bewilderingly complex land deals – went nowhere until it landed in the bedroom, and the headlines featured Paula Jones, Monica Lewinsky and assignations facilitated by Arkansas state troopers.
Then the public got aroused.
Today, when the subject is boardroom shenanigans, the public is aroused only to the extent that mutual funds and 401(k)s are tanking.
A couple of years ago, theoreticians were gloating that the people's capitalism had finally taken root; half of American households owned stocks directly or indirectly.
Now, the people are getting decapitated. They don't like it. President Bush is finding that out. Democrats are wary of pushing the investigations too far because their skirts are very dirty, too.
But boardroom bamboozlers have a defense: complexity. Contrived complexity is at the heart of almost all white-collar fraud. Corporate cozeners are praying that the public will soon tire of legal polysyllabics, and go looking for activity that can be capsulized in four-letter words.
WorldCom's disguising of routine expenses as capital expenditures seems easy to grasp, but just wait until investigators start probing "material irregularities" in the company's reserve accounts.
Bring back thongs!
Companies puff up sales through channel stuffing, vendor financing, swaps. Alas, these swaps are not as titillating as spousal swaps. Not as good courtroom drama, either. Certainly not as good for TV ratings.
Everybody knows Enron is bad. But how long will the public want to delve into special purpose entities and special purpose vehicles by which the adverse balance sheet statistics were sent packing offshore?
Ah, offshore. Understanding tax prestidigitation on secrecy-shrouded offshore tax havens requires a deep understanding of geography. Quick now: How much do you know about Alderney, Vanuatu, Sark, Niue, Nauru, Mauritius, Dominica, Guernsey, Herm, the Turks & Caicos Islands?
Wouldn't you prefer to read about a romantic tryst on Monaco? Even if it is interrupted by a short trip to a brass plate bank?
A pump 'n' dump sounds enticingly Clintonian until you realize it is a description of a penny stock manipulation.
From an investigation standpoint, George Bush and Dick Cheney have a leg up on Bill Clinton and Monica Lewinsky.
The public will soon get bored of the probe into Halliburton's practice of booking revenue from cost overruns before customers agreed to pay the excess costs. It happened on Dick Cheney's watch. Will the public's eyes glaze over?
Some of us have been writing about George W. Bush's adventures with Harken Energy for more than a decade. There seems to be some public interest now, but how long will it last?
A group of Harken insiders, with money borrowed from Harken, paid a fat price for a Harken subsidiary, Aloha Petroleum, thus relieving Harken of a big loss in 1989. Similar insider ploys are being criticized today, but will the public connect the dots?
Bush dumped his Harken stock before bad news hit, then was eight months late reporting the sale. After looking into it, the Securities and Exchange Commission decided not to go further. The SEC head was then Richard Breeden, who had been a deputy counsel to Bush Sr. when he was vice president. The SEC general counsel was James R. Doty, who had assisted Dubya in the purchase of the Texas Rangers baseball team. Who will care?
A predecessor company of Harken was Arbusto Energy. It was George W. Bush's first business. One of Arbusto's major backers had extensive ties to the Saudi bin Laden family and the Bank of Commerce and Credit International, said to have been the most corrupt bank in financial history. But that's old history – and dull history, by Lewinsky standards.
And how did tiny Harken get the contract to drill for oil in Bahrain?
Bahrain? Is that near Monica? Oops: I mean Monaco.
Don Bauder: (619) 293-1523; email@example.com