WorldClass Criminal

Can charity buy lenience?

Bernard Ebbers was sentenced to 25 years in prison today. What makes this criminal different is that he was the CEO of WorldCom, the company that had a spectacular collapse. In essence, he stole billions of dollars from investors, and also hurt a large number of employees. Usually, white-collar criminals like this get off with a slap on the wrist and a fine. Perhaps when the money runs out, so does the goodwill of the criminal justice system. We will see if this sentence sticks, or if it is overturned some time in the future, when the story is somewhat forgotten, and the “point” has been made.

Perhaps this leniency will be based on Ebbers' charitable donations:

"Defense lawyer Reid Weingarten had asked for leniency, mentioning Ebbers' heart condition and his charitable works, cited repeatedly in 169 letters sent to the judge. He described Ebbers as "a modest man" and an angel to many desperate charitable causes."

What is interesting here is that almost all mega-business titans are big charitable givers. Is this a way to buy public goodwill? An absolution of guilt? A way to buy oneself a ticket to heaven? A favorable footnote in history?

Let’s look at a quote from Andrew Carnegie, the classic rags to riches industrialist, who may be one of the greatest philanthropists of all time:

"the millionaire will be but a trustee for the poor; intrusted for a season with a great part of the increased wealth of the community, but administering it for the community far better than it could or would have done for itself"

Is the big corporation like a socialist government, where the dictator at the top is in charge of the administration of wealth, for the benefit of all society? Is Castro simply the CEO of Cuba?

While Carnegie seemed to be sincere in his interest in helping the poor, and his charity is not in question, he created a mold for modern day oligarchs: become rich, and then give back to the community.

Benevolent contributions and endowments today carry a certain amount of skepticism in the case of some huge corporate titans: how genuine are those who have followed in Carnegie’s footsteps? Are some of these contributions just marketing expenditures? An inexpensive insurance policy to protect against bad publicity?

There are situations now where captains of industry engage in practices that could be seen as anti-social, or even criminal. Does throwing a few dollars to charity make any modus operandi acceptable? Is it really moral for powerful individuals or corporations to:

• Form monopolies and trusts?
• Put competitors out of business under questionable circumstances?
• Prevent competitors from even getting started?
• Go through convoluted processes to pay some employees as little as possible?
• Sell the future of a corporation to make a quick dollar right now for the executives?
• Import cheap labor into the US without any concern about the effect on quality of life issues such as the environment, housing, traffic, pollution, natural resources and overpopulation?
• Export the entire business out of the country via outsourcing, leaving only a select few here at the top in the US to reap the profits?
• Export key industries completely out of the US that could have an effect on national security?

The process by which extraordinary profits are created can have a bad effect on a nation or a society, and to give a little back after the fact does not change the circumstances.

Bernard Ebbers is now going to pay the price. Of course the crime of which he is convicted is not those listed above, it is simply the crime of failing, and once there is a failure of this magnitude, the fraud that created that failure could not be ignored.

What remains to be seen is if his charity will buy him an early exit from the criminal justice system.