Crooks and countries

With Kenneth Lay and Jeffrey Skilling 8212; Enron bosses who rewrote the rules of corporate fraud 8212; convicted, great many commentators will argue how Enron was and is symptomatic of American capitalism. We agree 8212; Enron shows what8217;s good about American capitalism. Capitalism8217;s most fervent advocate won8217;t argue that this economic system is any less vulnerable to fraud than any of its alternatives. There will, sadly, always be scandals. The point is how a system handles it. The American political and legal system reacted to Enron by passing a raft of laws on corporate behaviour, by taking a relook at particular aspects like the relationship between accounting firms and their corporate clients, by increasing the punishment for white collar crimes and by swiftly conducting trials leading to prosecutions.

As a result, Enron is a lasting lesson and not a debilitating demon. Corporate chiefs bent on being a little bent are appreciably more scared 8212; Kenneth Lay was a friend of George Bush, now he faces prison time. It could easily not have been like this. The case could have dragged on. Legislators could have endlessly postponed amending laws. Powerful business people alleged to have committed fraud could have exploited systemic weaknesses. Ordinary citizens would have got no sense that betraying institutional and shareholder trust is something that costs corporate fat cats.

We have seen this happen 8212; here. India is a case study of a system incapable of quick, intelligent, fair responses to business scandals. The crooked rich always seem to get away, aided, wittingly or otherwise, by those very politicians who are always talking of the poor. The efforts of parliamentary joint committees aid global warming, not due process. There8217;s no serious effort to send out signals that white collar financial fraud will be seriously dealt with. And all this happens in a country that boasts of innumerable critiques of 8216;American-style capitalism8217;. Ask Kenneth Lay 8212; he would have loved to be a corporate crook in India.