GOP eyes seizing mansions, yachts of corrupt executives

Washington Times ^ | 7/27/02 | Dave Boyer

[kattracks]

House Republican leaders, heading home to face voters anxious over retirement security, announced yesterday they will introduce legislation to seize the mansions and yachts of corrupt corporate executives.

"We need to do more to strip corrupt corporate kingpins of their ill-gotten gains," said House Majority Whip Tom DeLay, Texas Republican. "We're taking the mansion. We're draining the accounts. And we're coming after the yacht."

[Consort]

Sounds like a heads up to the fat cats perps to liquidate those assets. By the time Congress reconvenes, all those assets will be gone.

[CyberAnt]

It's funny you should say that, because his statement is really just another of the liberal's "projection" technique in action. What his statement says is they ARE "pitiful, repentant politicians in full flight". I do believe that describes them very well.

[bybybill]

the lawyers will get the first and second and third bites before anybody gets a thing.

[Lancey Howard]

"We need to do more to strip corrupt corporate kingpins of their ill-gotten gains," said House Majority Whip Tom DeLay, Texas Republican. "We're taking the mansion. We're draining the accounts. And we're coming after the yacht."

And they should. This is what they did to the S&L crooks a decade ago. I remember specifically the case of the CenTrust chief who got stripped of his loot this way.

But if I was Mr. DeLay, I would be talking equally strongly about jail time. Some of these guys need to go to real jail.

[j271]

No doubt these crooks deserve to do hard time.

However, isn't it a little dangerous to expand the scope of asset forfeiture solely to score some political points?

From 1913-1915, taxpayers only paid 1% tax on income up to $363,000 (inflation adjusted to 2002 dollars, sources for tax rates and for CPI data ) while the "super-rich" paid 7% tax on income over $9,000,000 (2002 dollars).

Unfortunately, before too long everyone was in the same boat as the "super-rich" and in fact much worse off, as our present day tax rates clearly indicate.

Once we start sliding down that slippery slope, we don't seem to be able to get back up where we began, and sometimes by the time we're done we've impacted groups of people that we never would have envisioned.

[Timesink]

David Obey received $8,000 from Worldcom. (Warning, page is 500K long.)

A rat is a rat is a RAT.

[Kerberos]

"I thought (obviously incorrectly) that it was implied that a "criminal" is one already convicted, not merely indicted. "

In strict usage that would be true, however in common usage I find it to used to define those who are merely accused.

If I misread you intent in the statement I offer my apology.

[Kerberos]

"But the SEC is nothing but a bunch of underpaid lawyers and accountants."

But keep in mind that the IRS was just a bunch of geeky accounts also until one of them figured out that the tax laws could be used to go after Capone.

[DB]

I agree with both of you. No forfeiture without previously being convicted of the crime. No exceptions.

[truth_seeker]

"We need to do more to strip corrupt corporate kingpins of their ill-gotten gains," said House Majority Whip Tom DeLay, Texas Republican. "We're taking the mansion. We're draining the accounts. And we're coming after the yacht."

Quick indictments, no bail, orange jump suits. Maybe even a GITMO for these white collar terrorists?

Seriously, things got this way, because the perps figured the worse case would leave them set up for life, even if it meant fighting lawsuits for years. When they ponder the worst case in the future, the consequences need to convince them to serve the shareholders, employees, customers with old time integrity.

I was for years a senior staff guy, in a major public corp. My take is that the CPA firms haven't done their traditional jobs, and the Boaards are now made up by too many figureheads of diversity, who know little about business.

Between the corrupt CPA firms, and the inept boards, the dirty managements knew it was easy to run these scams.

Advice: Read the footnotes to financial statements in annual reports. Watch for "SPEs" and "QSPEs" which are shorthand for off-balance sheet debt financings. Read executive compensation plans.

So far a few big companies have been found out, but many smaller instances will continue to occur. The (so-called) audit profession was allowed to self-regulate; via AICPA, FASB, etc.

They basically set down guidelines for when and how the scams could pass their muster. Now we reap the fruit of it all, which will mean more government involvement.

Sad to say, self-regulation didn't work, or maybe I am off base?

[Looking for Diogenes]

Current law allows the Securities and Exchange Commission to collect civil fines and other penalties for corporate malfeasance and distribute that money to aggrieved investors. Total collections in 2001 exceeded $500 million, and Rep. Richard H. Baker, Louisiana Republican, said that total "will likely go up rather dramatically."

The SEC budget for 2001 was $422,800,000. It too, will likely go up dramatically (supposedly by $100 million).

SEC Budget History

[sakic]

I am absolutely amazed by the number of people on this board that are more than willing to flush their Constitutional rights down the toilet if they, in the most remote way, believe it will solve the immediate problem in front of them.

Don't be amazed. They're the same people who feel it's win at any cost. They're indistinguishable from the people on the left who behave the same way. They all stand for nothing.

[fporretto]

This proposition might put an end to the entire concept of limited liability.

That's not necessarily an argument against it, considering how the corporate shield can be (and has been) used to conceal and shelter commercial wrongdoing. However, before you give your support to such an idea, remember this: limited liability is the basis of all corporation law in the United States. To undo it at a stroke would throw American enterprise into such a convulsion that a continent-wide Richter 10.0 earthquake might not do as much damage. It's the exact opposite of a conservative measure.

Remember also how much the Left would love a new group of high-profile free-enterprise sacrifices to crucify, the better to spearhead their charge against economic freedom. If leftists can persuade people generally to tear down the capitalist edifice because there's something in it for them, we're all doomed.

Freedom, Wealth, and Peace,
Francis W. Porretto
Visit the Palace Of Reason: http://palaceofreason.com

[grania]

I have no problem with criminal charges against corporate executives who commit fraud, and then seizing assets, but I have a big problem with giving the government authority to seize property "just in case" or because someone "might" be guilty.

I agree with you. Try these executives, determine if they're guilty of anything, and mete out appropriate punishments according to the law.

I also see the potential for this new crackdown to be applied unequally, with more charges being levied on those out of political power. A lot of this money was earnend legally...are they going to go after people for looking too rich? I'm also uncomfortable when residences are involved...these people have families and lives that will be affected.

New laws or restrictions always make me uncomfortable, because someday, somehow, they might be applied against me, by some unintended application.

[cgbg]

Don't they understand that if they seize all the mansions of corrupt public company executives they will burst the real estate bubble and cause the economy to crash? ;-)

[decimon]

This proposition might put an end to the entire concept of limited liability.

This probably goes beyond that. How do we know how much of someone's assets derive from their corporate involvement?

[evad]

Try these executives, determine if they're guilty of anything, and mete out appropriate punishments according to the law.

Can anyone tell me what actual EXISTING LAWS any of these CEOs have broken? If we try them, what will we charge them with?

I know what they have done is wrong, immoral, whatever BUT..what laws did they break?

For example, we know what a POS Ken Lay is but to date (correct me if I'm wrong) there are no "legal" charges against him. The guys from Adephia that they led off in cuffs...apparently they actually have evidence of them raiding and siphoning off the company assets so I assume they have a legal charge for that.

But again, the rest of the POS's, what do they get CHARGED with?

Legal begals out there...anyone, anyone...Bueller?

[Iwo Jima]

Fraud, embezzlement, theft. False statements, false pretences. Racketeering. RICO. Bribery.

Not all will fit in all cases, but I think that fraud is present in each case.

[Miss Marple]

Also, Lay hasn't been charged yet, but there is an on-going criminal investigation. There was an article posted earlier this morning that said the FBI had met with California Senate investigators (the California legislature Senate, NOT Boxer and Feinstein) to review their Enron evidence.

Large cases like Enron require tons of investigation and the mountain of documents to wade through is enormous. To prosecute successfully, one must move deliberately and thoroughly, which means it's not going to happen overnight.