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Home > Blog > An Eye for An Eye
Out of Our Minds
Wednesday, July 13, 2005 2:16 PM
An Eye for An Eye
Kevin Salwen on Ethics

What's fraud worth? That's the question I keep coming back to in the case of Bernie Ebbers, the former WorldCom CEO, who was sentenced today to a staggering 25 years in prison. For a 63-year-old man, that's essentially life without parole (he can get out in 22 years with good behavior).

I find myself oddly torn on this one. Ebbers committed remarkable fraud on our financial system, bilked investors of billions, ruined lives of workers and investors and other crimes. Seeing him cry after the sentencing was a moment of near-joy for me -- his acts were despicable.

But I keep finding myself yanked back to this question: A life sentence for this? No drugs. No murder. No child prostitution. Ebbers' crime was financial fraud -- he hurt others through acts of deception. I know that he changed (and ruined) people's lives; I know we need our criminal justice system to be a deterrent to future crimes. But am I wrong to feel that this may be over the top? What's your view?


15 comments

Arden - 7/18/2005 10:58:26 AM
Ebbers is serving as a role model--for someone aspiring entrepreneurs never want to grow up to be.
Arden - 7/18/2005 10:56:25 AM
Ebbers is a role model--for someone aspiring entrepreneurs never want to grow up to be.
Mark Sicignano - 7/16/2005 8:52:51 PM
Rahul says:

'Yes, he deserves time, but use 20 years of his sentance to teach, educate, do something productive. He poses no more physical harm to society.'

You want somebody like this to teach and educate? Why?! So he can hand down his craft of mismanagement and ripping people off to future generations?

Oh I think he should certainly work and put back into society, but let's leave the teaching jobs to those who are good role models and who have demonstrated good morals and ethics in creating successful businesses.
Jeffrey - 7/14/2005 5:11:25 PM
By framing this as a life sentence you immediately distort the issue. The sentence was 25 years. It may indeed by the rest of his life, but that's not what the sentencing terms is.
Che G. - 7/14/2005 3:54:43 PM
Well, yes, the crime and the effect it had on so many people's lives warrants this substantial sentence. Consider this particular person's actions and the impact these actions had on others. Being concerned over who else got what sentence for some other class of transgression seems irrelevant.

We're in a reducing atmosphere in American business where ever more economic power is concentrated in progressively fewer boards of directors. I think we need to remind these leaders of their substantial responsibilities.
Che G. - 7/14/2005 3:54:05 PM
Well, yes, the crime and the effect it had on so many people's lives warrants this substantial sentence. Consider this particular person's actions and the impact these actions had on others. Being concerned over who else got what sentence for some other class of transgression seems irrelevant.

We're in a reducing atmosphere in American business where ever more economic power is concentrated in progressively fewer boards of directors. I think we need to remind these leaders of their substantial responsibilities.
Rahul Banta - 7/14/2005 1:46:53 PM
At first I thought he should have the book thrown at him, he lost billions of dollars for people. Then, I realized:

1. People who put their life savings in one stock get what's coming to them.

2. The teenager in Europe who unleased two of the most destructive computer viruses in history and cost billions of dollars in damage worldwide got less than a year in prison.

3. Having Ebber walled off from society for 25 years does not really do society that much good. Yes, he deserves time, but use 20 years of his sentance to teach, educate, do something productive. He poses no more physical harm to society.
Tara Jericho - 7/14/2005 11:55:37 AM
As my mom was personally affected by Ebber's financial deception, it is very difficult for me to feel any sort of pity for him or any upper managment at WC.

She worked for WC for more than a decade - starting off with British Telecom, which became MCI, which then became WorldComm. My mom (and dad) are no spring chickens and for ten years she had saved up a pretty sizeable chuck of change for her and my dad to retire on.

After the fall out, needless to say, she lost it all and was then laid off. She struggled for two years to find another job and is back trying to rebuild her savings for retirement - with time not being on her side.

As far as him being made an 'example,' to me that implies that he doesn't deserve what he got. Having to watch my parents struggle to rebuild thier retirement fund ... in my opinion, he didn't get enough. He should have to pay every single person from mailroom clerks to VPs who lost their savings because of his greedy selfishness.
Troy Worman - 7/14/2005 12:20:42 AM
Ebbers is being made an example. Is this punishment equitable? I don't know.

There are a lot of men doing 25 years for crimes that impacted far fewer people.
Grant Henninger - 7/13/2005 7:32:09 PM
I hate the way our system of justice is set up. It truly is set up to punish people. If somebody does harm to society, as Ebbers did, wouldn't it be more useful and fitting to have them repay society in some way, instead of being locked in a cell for the rest of their life? Now, I don't know how you do that, but asking the question and trying to find an answer is something we as a society must do sometime soon before we incarcerate another million or two people.
TPB, Esq. - 7/13/2005 6:50:36 PM
Punishment, now that the sentencing guidelines aren't controlling, is often tied to social costs, particularly with white collar crimes. Ebbers did a boatload of harm to society, and the notion behind this is to make clear to others who can do similar amounts of harm that there are real penalties for such fraud. Fraud, particularly tax fraud, is the most prevalent crime in America, and, at least when I last checked, the costliest.
anita - 7/13/2005 6:43:20 PM
My question is whether he actually orchestrated the fraud or was hammering on his people to 'make the numbers' and was oblivious to how they were actually manipulating the numbers.

I never really interviewed Ebbers, but I once tried to ask him a brief financial question or two at the end an analyst meeting. He brushed my question off, which I saw as arrogance at the time. Later I decided it might really be more ignorance than arrogance.

Like Pat, I would have felt harsher toward him had his actions led to a big pay day for himself.

At the end of the day, we simply have to find a better way for public companies to operate outside of the quarterly 'make your numbers' pressure.

martin - 7/13/2005 5:51:21 PM
Ok Kevin, I'm somewhat shocked as well. But what would you suggest? If Ebbers gets something lighter, are we giving a green light to corruption at this level? Granted, murder, child prostitution and all acts of civil violence are hidious. But when a crime bankrupts thousands, destroys a town and forces an entire industry employing hundreds of thousands of people to change their reporting practices (falsely trying to keep up with Worldcom) is that not as damaging?

For me, 'yes' to a life sentence. I don't think you're wrong in asking this question. But keep in mind, he is not being sent to the chair, nor is he on route to Attica circa 1971.
pat - 7/13/2005 4:57:44 PM
I think it's over the top, especially considering that Ebbers sold very little stock. A better sentence would have forfeiting all of his money and spending 25 years, 8 hours a day, on community service. Our prisons are over-crowded and a huge cost to taxpayers; they should be used almost exclusively to keep dangerous people off the street -- such as that pedophile who was released on bail and now stands accused of murdering a family in Idaho and kidnapping two kids.
Janet Auty-Carlisle - 7/13/2005 3:50:54 PM
Kevin,
Interesting perspective.
Perhaps his sentence is higher than that of those who murder, molest or maim because that is what people place value on most...financial interests. My guess is that the victims of any crime would feel that no sentence is enough so it's up to society to place the value of the crime to the value of the punishment.....This really opens a can of worms for the justice system. Living la vida fearless. Janet Auty-Carlisle www.tobeyourbest.net

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