As said in every economics class, the reason every business goes into business is to make money. The same can be said in criminal cases involving businesses. In the majority of cases, executives and people highly ranked in the company tend to bend the numbers in the financial/accounting areas of the business or corporation. They do not do this for fun, but rather to make money. Something needs to be done before corporations really get out of hand.
Thankfully, after the Enron Corporation scandal, the government has recently started to crack down on corporations and pay more attention to what they are doing. This is due to the extent of what Enron Corp did for so long. From approximately 1996 to 2001, Enron “cooked the books”. This means that Enron did not properly translate their profits to the government and the Securities Exchange Commission (SEC). The SEC is the governmental control of the stock market and conveys the information to the public. Since Enron did not report the correct numbers and inflated their profit, it encouraged the public to buy and trade more of the Enron commodity and consequently led to employees losing billions of dollars in its 2001 bankruptcy.
To complicate matters, one of the Enron masterminds, Kenneth L. Lay, passed away in July of 2006. Some say it was set up, and some mourned his death. It makes the case of recovering assets from Lay’s estate much more difficult. Now the question is what to do with Lay and the rest of the case. Clearly you cannot punish Lay any further, but what does that mean for the rest of not only the case but his family. Lay passed away in the middle of the night from a heart attack and his family released a statement saying they are, “grieving the sudden loss of their husband and father”.
Enron was only the beginning. There have been subsequent similar cases including Citibank, ChevronTexaco, ESPN, The New York Yankees, and Exxon Mobile. Some of these have “cooked the books” like Enron and some have been caught dealing with terrorist groups or countries which the United States has strict policies with. Cuba was very popular and affected the New York Yankees and ESPN. Orlando Hernandez was not supposed to be in the United States and the Yankees felt the heat for that. But it is quite evident thatthe government has to step in, but how?
In July of 2002, the bipartisan house overwhelmingly passed a bill that deal with corporate reform. In majority, the bill would add criminal penalties and now make the guilty do time behind bars like the rest of the criminals. As said by House Judiciary Committee Chairman James Sensenbrenner, R-Wisconsin during a floor debate, “It [the house bill] goes a long way to protect the life savings of many Americans by making the price of theft too high”.
The bill would not only increase the maximum prison term from five to twenty years for wire and mail fraud, but create a new section entitled “securities fraud”. This would make the statutes more general and less technical stipulation than currently installed. The maximum penalty for this would be an astounding twenty-five years.
Once again, Enron is a leading cause in the creation of corporate change and triggered a new law against shredding documents valuable to a case involving criminal obstruction of justice. In addition, the bill would raise the maximum term to twenty years in this case. Additional provisions include; corporate executives must certify company financial statements, allow the SEC to freeze payments to corporate executives, strengthen the penalties to those who defraud investors, and protect those who turn in the investors that are in violation of the law.
I feel that the people who commit these crimes are just overwhelmingly greedy and cannot control themselves. If they were able to build up the company, they obviously are intelligent minds and more than likely already have a significant amount of money. Something needs to be done, especially when so many people are affected. Millions of people lost so much money and too many lost their life savings just because the people at the top of Enron were greedy.
It seems as though the government is taking small steps in the right direction. However, I feel that more needs to be done especially becausesome of these companies are funding and supplying potential terrorists. That is just outrageous and shows the extent of what people will do to make money. This is difficult to control and monitor but more steps need to be made. Hopefully the politicians and others of the future will recognize this ever-growing problem and solve it for the companies to come.