The GOP World: Where Corporate Fraud Is a Virtue

September 21, 2011 at 2:43 PM

It was reported Wednesday, Sept. 21,  that all of the Republican presidential candidates want to reverse the banking system safeguards that were recently passed to protect consumers and prevent another financial crisis. That is, they want to go back to the days when banks could engage in reckless behavior and take advantage of consumers.

One candidate even wants to repeal the Sarbanes-Oxley law (nicknamed SOX) passed in 2002 after the Enron debacle. You remember Enron. These were the guys who fabricated billions of dollars of assets and profit.  Enron eventually went bankrupt. .

I worked for many years on a financial management team of a multi-national US corporation putting in place SOX safeguards around the world.  SOX is a fairly simple law that says, in a nutshell, that a public company should not lie to its shareholders.  Further, it requires corporate senior management to assure its shareholders that the company has implemented safeguards to ensure that senior management is not lying to its shareholders.  In addition to protecting shareholders, SOX safeguards make the company better inasmuch as they provide management more confidence in information they use to make business decisions.

What does it tell you when a Republican candidate for president wants to go back to the days when it is OK for corporations to lie to their shareholders?   It should not be a surprise that they are OK with letting banks return to the same risky business practices that brought us the 2008 financial crisis and the recent recession.

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