Asymmetrical Information

Accountability is rare, indeed. While the idea of getting the bad guys, no matter the method, is a 'feel goodism,' the more one takes those Lilliputian ropes and ties down us Gullivers, the more government binds us to a life of discontent.

It is permissible to point out the 'I gotchas,' however.

The disclosure laws are intended to prevent legal actions by individuals resulting in illegal actions by corporations. Corporations can violate the law without any individual being legally responsible. When that happens, the corporation (if caught) is punished financially. That punishment hits the stockholders and employees, but not necessarily the individual who benefited from and caused the corporation's illegal activities, who may have already moved on.

In the case of governer Spitzer's aide and the state police, if a crime was committed, it was done by an individual. That individual can be held accountable. If he committed the crime at the request of another, that is a crime as well, and the other can be prosecuted. There is no need for disclosure statements.

One major difference between Spitzer and the corporate executives is the types of accounting shenanigans Spitzer investigated are NOT the kind of things we would expect a board member or even the CEO to know about. We would expect Spitzer to know what his staff was doing to combat his major political opponent. (Accounting rules are very technical and few CEOs or board members -- despite the mandates of Sarbox -- can understand the reporting issues involved. The HAVE to rely on experts. Spying on your political opponent? That's NOT the kind of authority that's typically delegated nor does it take an expert to know whether it's wrong.) Maybe it's just my bias, but I'll believe a CEO's complaint she didn't know the amounts in account 303-4492-01 were not eligible for amortization before I'll believe Spitzer did not know his team was spying on his political opponent.

Whether or not a CEO should be charged with knowledge of material accounting items, few would argue that he should be allowed to plead ignorance of the actions of his senior management team. This, in effect, is what Spitzer is claiming. I can believe that his staff shielded him from detailed actual knowledge of their activities, but I can't believe that as AG he would have accepted such an excuse from the CEOs of the companies he prosecuted.

Njorl:

"The disclosure laws are intended to prevent legal actions by individuals resulting in illegal actions by governments. Governments can violate the law without any individual being legally responsible. When that happens, the government (if caught) is punished financially. That punishment hits the taxpayers and employees, but not necessarily the individual who benefited from and caused the government's illegal activities, who may have already moved on.

In the case of Enron, if a crime was committed, it was done by an individual. That individual can be held accountable. If he committed the crime at the request of another, that is a crime as well, and the other can be prosecuted. There is no need for disclosure statements."

"When that happens, the government (if caught) is punished financially. That punishment hits the taxpayers and employees, but not necessarily the individual who benefited from and caused the government's illegal activities, who may have already moved on."

Sounds like a perfect description of the current administration. Perhaps Gonzales will pursue charges.

(Sorry to those of you who just spewed coffee all over your keyboard.)

Person,
Your ridiculous attempt to turn the tables is complete nonsense. In the past, it has been possible for corporations to violate the law to the benefit of specific individuals within the corporation who were not violating the law. Your substitutions are not accurate.

"Nah, too draconian."

Jane, you bring the funny.

Better idea: make publicly admitting incompetence grounds for impeachment. Although if we got rid of all the managerially incompetent politicians, who'd be left?

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