Get Ready: It's going To Be A Trying Year
By Geoffrey Colvin

(FORTUNE Magazine) – First came the season of germination, when this lush new crop of business scandals sprang with startling brightness from the richly manured soil of the market mania.

Then followed the season of maturation, also called Perp Walk Time, when prosecutors patiently cultivated and nourished their cases, making them bigger and stronger day by day.

And now, as inevitably as autumn follows the summer, we've entered the season of fruition, the harvest, the big payoff, when juries render their verdicts and we learn how many bushels of executives will be sent to the big federal silo up the river.

It's all a natural cycle, but if you're in business, this latest turn is probably bad news. No matter how clean and scandal-free you and your company may be, this season is going to make life more miserable for you, and the effects may last a surprisingly long time.

A bunch of high-profile trials are about to hit us in a sudden rush. The revelations won't be pretty, and the cumulative impact will be powerful. Consider:

Jury selection for Martha Stewart's trial is happening now. Even if she walks, as some expect, we'll hear plenty of dirt dished by an important witness, her broker's assistant, who is cooperating with prosecutors. The media coverage will be huge.

Soon after that, the Dennis Kozlowski trial will wrap up. Regardless of the verdict, the video images of his infamous toga party in Sardinia, introduced as evidence, have already begun to define an era and reshape the public's image of business. If he's convicted and sentenced to prison, he'll be led off in handcuffs--another high-intensity image.

Scott Sullivan goes on trial a couple of weeks later, in early February. WorldCom's former CFO is accused of orchestrating the largest financial fraud in history, amounting to some $11 billion. Most of the evidence will be technical and eye-glazing, but the size of the numbers will make the trial compelling.

The Rigases of Adelphia--John, the founder, and his two sons--go on trial Feb. 9, accused of looting the company of $2.5 billion, a huge amount that makes Kozlowski look like a small-town smash-and-grab artist. The company's former director of accounting and former vice president of finance have pleaded guilty and are cooperating with prosecutors.

Lea Fastow's trial, scheduled for the next day, may not happen if she makes a plea deal. The wife of former Enron CFO Andrew Fastow was charged mostly with tax violations involving her role in some of his Milo Minderbinder financial schemes. A plea deal could actually spark more courtroom fireworks rather than less. Her plea would clear the way for her husband to make his own deal with prosecutors, presumably including a promise to give evidence. So we could hear Fastow at the trials of former CEOs Ken Lay and Jeff Skilling. They haven't been charged yet, but if Fastow ends up singing, who knows? Absent a plea, Fastow faces trial in April.

There's more. Richard Scrushy, HealthSouth's former CEO, goes on trial in August. He's charged with directing a $2.7 billion fraud, 85 counts in all. It's not often that every one of a company's former CFOs--five in all--pleads guilty to federal charges. At least one of them wore a wire in meetings with Scrushy, so look forward to yummy tapes at the trial.

Seven former Enron executives go on trial as a group in October, facing more than 220 counts. And Enron's former finance vice president and former treasurer will also go on trial later this year, at a date to be determined.

Those are just the criminal trials. The civil cases are too numerous to count.

As trial season gets rolling, here's why you should care. It's no coincidence that the man who originated the modern, metaphorical meaning of "stereotype" was a journalist, Walter Lippmann. He understood that journalists (and through them, the public) deal with the world's complexity by placing people and events in one of a few mental envelopes. Once a stereotype takes hold, it lasts until a new one displaces it, which doesn't happen easily or often.

The businessperson stereotype may well be redefined by the trials of this year. And while business media (such as this magazine) point out the distinctions among businesspeople, general-interest media don't. A year from now the average American may see "businessperson" as simply a synonym for "slimeball."

After the season of fruition comes winter, and it could be awfully long and cold.