Topic: Business & Commercial
In Praise of the Olis Sentence
Ambrose Bierce, in his wonderful Devil’s Dictionary, defines a corporation as “An ingenious device for obtaining individual profit without individual responsibility.” How true. The measures recently put in force by the SEC have attempted to add a measure of personal responsibility to the definition, and the critics are screaming, “Injustice!” Thus, when a vice-president for the company Dynegy received a mandatory prison sentence of 24 years for helping his employers pull off a scheme that defrauded investors by artificially inflating profits, his punishment was widely decried as a “tragedy,” and an example of pendulum swinging run amuck. Columnist James Glassman wrote that the sentence handed down on James Olis was “a brutal punishment for a relatively minor crime.” Describing the scheme that Olis admittedly helped execute, Glassman fingered Citybank and Arthur Anderson as Dynegy accessories, but minimized the contribution of Olis because “he reaped no personal gain.”
Really? What about his salary? What about the favor of his superiors? What about keeping his job?
The perception of right, wrong and responsibility displayed by Glassman and others in evaluating Olis’ plight is frankly appalling. “The sentence,” Glassman wrote, “was out of all proportion. By comparison, the median term for murder is 13 years; for drug trafficking, four years; sexual abuse, three years.” But corporate fraud robs thousands of individuals of their savings, and undermines public faith in the economy, causing a chain reaction that affects the national financial health as a whole. Would anyone argue that the Enron scandal caused less harm than a single murder? Or that WorldCom’s implosion was less harmful than a single instance of sexual abuse?
Commentators like Glassman are transfixed on the impersonal entities Anderson, Citybank, Dynegy as the “wrongdoers,” an attitude that makes as much sense as saying that it the true culprit in vehicular homicide is the car. Corporations are big, powerful, and assume a large role in the welfare of the nation. Managing such a beast is a great responsibility, and every individual involved must approach his or her duties with ethical resolve commensurate to its importance. As long as James Olis and his like see their jobs as going along with schemes, frauds and deceptions, confident that they can deflect their own culpability by showing that they didn’t make a bundle of swag in the process, corporate misconduct will flourish.
All managers have responsibility for ensuring that the large engine of commerce barreling down the financial highway under the direction of their superiors does so without callously leaving squashed innocents in its wake. It is unethical to handle that responsibility ineptly, indiscreetly, or disloyally. It is cowardly and despicable, as well as unethical, to knowingly abdicate that responsibility for the illicit profit of others. The sentencing of James Olis is appropriate to the enterprise he participated in and the widespread harm it caused. More important yet is the message it sends to all those who would hide behind Ambrose Bierce’s definition. If you lead or manage a corporation, you are responsible for the harm it causes when you do your job negligently, fraudulently, dishonestly, or unethically.
There are no unethical corporations, just unethical people that run them.