Here’s an interesting tidbit from BusinessWeek:
President George W.
Bush has bestowed on his intelligence czar, John Negroponte, broad
authority, in the name of national security, to excuse publicly traded
companies from their usual accounting and securities-disclosure
obligations. Notice of the development came in a brief entry in the
Federal Register, dated May 5, 2006, that was opaque to the untrained
eye.Unbeknownst to almost all of Washington and the financial world, Bush
and every other President since Jimmy Carter have had the authority to
exempt companies working on certain top-secret defense projects from
portions of the 1934 Securities Exchange Act. Administration officials
told BusinessWeek
that they believe this is the first time a President has ever delegated
the authority to someone outside the Oval Office. It couldn’t be
immediately determined whether any company has received a waiver under
this provision.
Honestly if I’d read this a week ago I probably wouldn’t have paid attention, but since I just finished reading “Conspiracy of Fools“, which is a detailed look at the Enron/Andersen debacle, I have to say I find this development disturbing. You see I used to assume that for the most part if you were a c-level executive at a Fortune 50 company you’d at least be smart and pretty good with management and financial basics. I also assumed that their auditors would catch on to any really serious malfeasance. This book cured me of those delusions.
I also always assumed that every company had its crooks, and that every company does whatever it can to jack up its financials, but I never imagined that the crooks, especially the stupid ones, could climb so high and not be caught.
So we only have to look back five years to see a spectacular example of how bad companies can behave, and how lax the oversight can be in the higher reaches of corporate America, and yet now we have the administration potentially providing a cloak of secrecy to these guys? Why give an exemption? Why not just get some auditors with top-secret clearance? And why delegate the authority to your chief spy?
Who am I kidding asking these questions?
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