In 2002, America's corporate barons were on the lam, fleeing the wrath of a public that was outraged by the raw ugliness of CEO greed, which had suddenly erupted out of Enron, WorldCom, Tyco and so many others.
You might recall that George W., feeling the political heat, loudly denounced the greed back then. To show his seriousness, Bush installed a new sheriff at the SEC, the agency in charge of protecting shareholders and the larger public from these out-of-control corporate chieftains. But two and a half years later, the CEOs are no longer running away -- instead, they're running the SEC.
Signaling that the flag of reform has now been officially struck from the agency and replaced by the flags of the corporations it is charged with overseeing, the SEC recently capitulated on one of its key reforms. You and I would consider this a very mild -- even meek -- reform. It would've required that the boards of directors that supposedly serve as a check on CEO actions not be entirely chosen by CEOs. Instead, in board elections, large shareholders would be allowed to put forth their own independent nominees for a couple of board seats.
"Good grief," shouted the CEOs in unison, "the Bolsheviks are coming!" Democracy, you see, is an idea that is abhorrent to corporate barons. Consequently, they mounted a massive lobbying campaign with Bush and Congress to get the SEC to stop this communistic encroachment on their totalitarian rule. Sure enough, this month, the SEC officials meekly ruled that this proposed reform had become "stale" with the passage of time, so they dropped it.
What we have here is a victory of corporate political money over the people's continuing outrage at CEO greed. Last year, Bush, flush with campaign cash from CEOs, joined their lobbying effort against shareholder democracy. And John Kerry, also immersed in CEO money, simply refused to raise the hot issue of corporate corruption -- so reform became a political orphan. Now it's been killed.
Publication date: 2/24/05