Teddy Roosevelt rolls over and over in his grave

By Lee Russ

Monday, October 30, 2006 at 11:45 AM

The business/corporate community in this country is extremely well organized and obviously well heeled.  It guards its interests, at the expense of the rest of us, night and day, 24 hours a day, 365.25 days a year.  So if you thought the Sarbanes-Oxley law, or the incredible corruption revealed in the stories of Enron, Global Crossing, and more than a dozen other gigantic corporate rip-offs, had permanently changed the regulatory landscape, guess again.

Yesterday's NY Times reports that:

...two influential industry groups with close ties to administration officials are hoping to swing the regulatory pendulum in the opposite direction. The groups are drafting proposals to provide broad new protections to corporations and accounting firms from criminal cases brought by federal and state prosecutors as well as a stronger shield against civil lawsuits from investors.

Although the details are still being worked out, the groups' proposals aim to limit the liability of accounting firms for the work they do on behalf of clients, to force prosecutors to target individual wrongdoers rather than entire companies, and to scale back shareholder lawsuits.

The groups hope to reduce what they see as some burdens imposed by the Sarbanes-Oxley Act, landmark post-Enron legislation adopted in 2002. The law, which placed significant new auditing and governance requirements on companies, gave broad discretion for interpretation to the Securities and Exchange Commission. The groups are also interested in rolling back rules and policies that have been on the books for decades.

Wow.  Not bad, huh?  You won't be able to sue the accounting firms that supposedly verify the corporate-issued information, shareholders won't often be able to sue period, and liability of the corporation itself will be replaced by liability of the individual corporate officers that you can prove acted illegally.

That should get rid of just about all incentive for the corporations and their joined-at-the-hip auditors to conduct business within the confines of the law, don't you think?

Sue or prosecute only the individual officers?  That's a joke.  First, they're expendable, so getting them won't hurt the corporation at all.  In fact, most have nice, hefty liability insurance coverages, and one way or another would be well taken care of by the grateful corporation on behalf of which they conducted their shenanigans.

Second, the corporation's senior executives remain able to put incredible pressure on underlings to act illegally, as well as to cover their own tracks, leaving the poor slobs in the middle to lower echelons to pay the price.

Third, this really bestows an incredibly privileged status on corporations.  Any other form of business will remain subject to personal liability because the persons are the business.

You haven't even heard the worst part yet (emphasis added):

To alleviate concerns that the new Congress may not adopt the proposals -- regardless of which party holds power in the legislative branch next year -- many are being tailored so that they could be adopted through rulemaking by the S.E.C. and enforcement policy changes at the Justice Department.

The proposals will begin to be laid out in public shortly after Election Day, members of the groups said in recent interviews.

Isn't that dandy?  Bypass the historical legal controls, bypass the legislature to do it, and hope against hope that the issues are so "complicated" and so "boring" that the majority of the public yawns twice, stretches toward the remote control, and goes back to sleep to the background noise of some "reality" television show.

This is ass-backwards, folks.  Corporations have historically been treated as subject to the will of the governments that grant them their existence and limit the responsibility of the stockholders for business losses to the amount of their investment in the company.

Our founding fathers knew better than to give corporations an unfettered hand.  Teddy Roosevelt certainly knew better than that.  God knows FDR knew better than that.  Eisenhower certainly never would have supported this idiocy.

But our current crop of corporate shills, parading under the banner of common sense and some strange assertion of "moral values" is more than willing to shield corporations from responsibility for the actions of its employees, an odd policy given that the corporation only exists in the form of its employees.

If Teddy Roosevelt came back he'd whack the hell out of this whole overdressed underprincipled crowd of charlatans.  With a big--very, very big--stick.

So look forward to Nov. 8, the day after the election, when gas prices prepare to climb skyward once again and the Chamber of Commerce pulls another huge slab of bacon out of its very greasy hat.