Business's Enduring Image: Venality!
I recently saw The Informant, starring Matt Damon as Mark Whitacre, the Archer Daniels Midland whistleblower who exposed his company’s blatant conspiracy to fix the price of lysine, an additive given to feedlot cattle and other livestock. I remember reading the book of the same name by New York Times reporter Kurt Eichenwald, and how amazed I was at the details of this conspiracy. Whitacre and other ADM executives met with their peers at competing companies in hotel rooms across the world where they fixed lysine prices and apportioned the market shares each of the companies would get.
If that wasn’t enough, Whitacre, who had been diagnosed as bipolar, was stealing money from ADM — $9 million, in fact, stashed in a secret Swiss bank account. His loopy behavior is caught so well in the movie that it provokes peals of laughter from the audience.
I have long been interested in writing a book on the portrayal of business in novels, plays, films and television. It has always struck me as ironic that in the country most celebrated for its business acumen, this esteem does not show up in literature or the dramatic arts. On the contrary, business people have been generally derided or despised in popular media, long before the current scandals delivered a host of new examples of perfidy in the executive suites.
So The Informant joins the library of artworks and popular culture wherein the villain you love to hate is the businessman or business woman (see sidebar). It’s quite a legacy.
The events of the last two years will no doubt inspire new works that illuminate the seamy side of capitalism. Writers will have a rich lode of material to work with: Bernie Madoff, Bernard Ebbers, Richard Scrushy, AIG, Fannie Mae, Freddy Mac, Countrywide, Merrill Lynch, General Motors, Chrysler, Siemens.
Siemens strikes me as an especially good candidate. With 420,000 employees, the German company is the 13th largest private employer in the world. It has gone through a gut-wrenching shakeup that saw two CEOs ousted because of a bribery scandal.
When I first started to write about social responsibility in business forty years ago, bribery was a prominent issue. American companies argued that they were disadvantaged in global markets because competitors engaged in bribery. In 1978 Congress prohibited U.S. companies from paying bribes, ostensibly putting the issue to rest. Not so.
In 2005, prosecutors in Germany and the Securities and Exchange Commission began uncovering a well-organized, massive, and routine system of bribery deployed by Siemens. The different units in the company maintained kitties to dole out these bribes all over the world. The telecommunications unit had an annual bribery budget of $40 to $50 million. The bribes were usually 5 to 6 percent of a contract’s value but in especially corrupt countries it could go as high as 40 percent. The budget for Greece alone was $10 to $15 million a year.
All told, Siemens spent $1.4 billion on bribes from 2001 to 2007. Five million went to the son of the Bangladeshi prime minister to win a mobile phone contract. In Argentina, Siemens put up $40 million in bribes to secure a contract to produce national identity cards. In Israel, $20 million went to government officials for a contract to build power plants. And so on.
Siemens did not deny the charges. In fact, it cooperated with the prosecutors. In the end, it paid $1.6 billion in penalties, the largest fine ever levied on a corporation for bribery, and $1 billion to for internal investigations and reforms. How could it add up to so much? Siemen’s law firm assigned 300 people to the case — lawyers, forensic analysts and staff members. The lawyers and an outside auditor racked up 1.5 million billable hours.
Lucky Siemens has deep pockets. With $123 billion in revenues in 2008, it was the 30th largest company in the world.
And what a good movie it would make…
There Will Be Blood, Michael Clayton, The Constant Gardener, Wall Street, Glengarry Glen Ross, Erin Brockovich, The Insider, All My Sons, Pretty Woman, The Hucksters, Mad Men, Black Gold, Babbitt, Sister Carrie, The Bonfire of the Vanities, Gain, Underworld, The Axe, American Pastoral, Moral Hazard, The Man in the Gray Flannel Suit, Microserfs, The Spiked Heel, A Civil Action, Citizen Kane, Silkwood, Boiler Room, The Hudsucker Proxy, Robocop, The Financier, The Octopus, Something Happened, The Jungle, Modern Times, The Power and the Glory, Sabrina, Rollover, Putney Swope, Rising Sun, Jurassic Park, Bodies Electric, Ragtime, JR, Cash McCall, Red Harvest, Other People’s Money, The Tin Men, My Cousin Vinny, Trading Places.