Witch hunts

23 Nov 2009

It seems that when it comes to high-profile criminal prosecutions, we get fixated on an individual that becomes the poster-boy (or girl) for the outrage of the day, and lose sight of the criminal forest that we found that tree in.

There was Kenneth Lay and accounting fraud, Martha Stewart and insider trading, Eliot Spitzer and misuse of government funds (although he was never convicted of anything) and most recently Bernard Madoff and securities fraud. But these folks are not the only individuals or even high-profile individuals that have engaged in these activities. It just seems like after we get one, we lose the patience and the stomach to do what’s right and prosecute these folks.

And then there was Dennis Kozlowski, the poster-boy for corporate greed and excess, with his $31 million Manhattan apartment and $6,000 shower curtains. Kozlowski has been serving his 8-25 years after being convicted in 2005 on charges related to his extravagant expenses and compensation, but now he’s back (but still in prison). In an interview with Fortune, Kozlowski makes the argument that he did nothing worse than what tens, maybe hundreds of executives have done in the past few years on Wall Street, and that he doesn’t deserve to be in prison.

Now I don’t happen to agree that Kozlowski should’ve gotten nothing more than a stern talking to, but he has a point about the other white-collar criminals that are still on the outside. There’s no doubt that there are a couple-dozen gentlemen that were and are still involved in our financial markets that did far more to harm investors and our nation than Dennis Kozlowski. But aside from Bernie Madoff and Allen Stanford, I’m not convinced that a single one of them will even have charges filed against them. And Kozlowski has a right to be upset about that. We should all be upset about that.

It looks like the tide may be turning in some places though. South Carolina Governor Mark Sanford is facing ethics charges for his misuse of government funds.