Fat cat sleaze escapes our outrage
A sleazy bit of self-dealing is being revealed, yet America doesn't seem to care.
NEW YORK (CNNMoney.com) -- We are in the midst of a slimy, sleazy, putrid scandal of corporate self-dealing and cronyism. It points up just how elitist and corrupt the power-suited set of the corporate boardroom can be. And it is widespread. Over 100 companies -- major corporations -- have been implicated so far.
And yet ... where's the outrage? C'mon. Even a dead man was getting a piece of the pie.
Yet most of this scandal is blowing by public opinion with nary a stir. With Enron, WorldCom and Tyco there were howls of outrage and screams of protest. Nightly news features and front page photos of beady-eyed, panicked corporate executives.
But here? While those deep in the financial game -- institutions, pension funds, mutual funds -- are taken aback, the Man on the Street doesn't care.
There are two reasons why: America is stupid and there are no pictures.
Okay, the first reason is phrased a little harshly. The scandal, in this case, is more complicated than your run-of-the-mill misuse of company funds and lie about the numbers routine. It involves ... jeez, I tried to go as far I could without using the phrase ... stock options.
The moment you say the word "options" to somebody off Wall Street, their eyes glaze over. Heck, my eyes glaze over. And then throw the description "back-dated" onto it. Yikes. It takes thinking. And it takes thinking about time and relativity ... like one of those really complicated time travel "Star Trek" episodes. It makes my head hurt.
But when you cut to the guts of it, it is outrageous. Companies were essentially giving top executives a lottery ticket and letting them fill in the date they wanted it good for ... after the drawing had been made.
"The stock is at $40 today? Then we'll say we gave you, Mr. CEO, the right to buy the stock at $20. And we'll say we gave you that right last Tuesday."
That is the "Back-Dated Stock Options Scandal." It just doesn't have the simplicity of "CEO took shareholders' money." The scandal does have the same effect, though.
"It's just not rising to the level of public interest of Enron where people lost their pension funds and witnessed massive corporate implosions," John Bielema, securities litigation defense partner at Atlanta-based Powell Goldstein LLP, said in a recent CNNMoney.com report. "The issue is technical related to stock prices, performance based compensation and tax deductions, which may be esoteric for the average person."
And then there is the second problem ... no pictures. Or sound bites.
With Enron, we had employees cast out onto the street with their boxes, staring around vacantly, wondering aloud what they were going to do without their jobs or life savings.
With WorldCom, we had a high-profile, cowboy-booted CEO trying to stay high and mighty to the bitter end.
And with Tyco, we had CEO Dennis Kozlowski's company-funded bacchanal in Sardinia.
It's hard to take a picture of a back-dated stock option. And so we don't get the TV coverage and front page blasts this corporate scandal deserves, even though it involves more companies (Cablevision (Charts),Apple (Charts), Broadcom (Charts), Brocade (Charts), Monster (Charts), and Sharper Image (Charts), just to name a few) and points out that many of our so-called Captains of Industry are self-dealing crooks.
But since America doesn't get mad unless it is simple and on TV, why should they care?
Allen Wastler is Managing Editor of CNNMoney.com and appears on CNN's "In the Money." He can be emailed at email@example.com