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CLASS-ACTION TERROR HUNTERS
ATTACK CORPORATE TERRORISTS:
IS THIS GOOD OR BAD?

 

GROUND ZERO PLUS 1061 DAYS, New York, NY, August 6, 2004--Corporate Terror Hunting seems to be the hallmark of 21st Century business battles. It seems that the biggest corporate news striking the headlines is which company did the worst, most egregious acts against the public and its stockholders.

If corporations are like Humpty Dumpty, they are falling from the wall and their former inviolable shells are cracking right and left.

One of the big Corporate Terror Hunters is the law firm of Scott & Scott in Colchester, Conn., that specializes in class-action securities litigation. In addition to Halliburton, four top executives of the Halliburton Company have been named in the suit for "cooking the books" at the expense of stockholders.

The suit was filed the day the Securities and Exchange Commission settled a civil suit against Halliburton for using questionable accounting practices that boosted the company's stock value of $7.5 million.

But the new civil action by Scott & Scott is only part of the cracks in Halliburton's corporate shell. In a quarterly filing this Tuesday, Haliburton disclosed it is under investigation by the Justice Department over possible over billing on government services work done in the Balkans from 1996 through 2000. Also, it was disclosed that Halliburton is under investigation by the Justice Department and the SEC over a project in Nigeria it participated in where possible illegal payments may have violated the Foreign Corrupt Practices Act.

Halliburton is a giant egg on the corporate wall. And, it gets headlines in part because its former CEO was Dick Cheney during the times it is accused of major violations. Mr. Cheney is the Vice President of the United States.

Regardless of the reasons for the headlines, the fact remains that giant corporations are not exempt from attacks when there is evidence of wrongs against the public, investors and stockholders.

In response to the lawsuit by Scott & Scott, Haliburton spokespeople claim that such Terror Hunting litigation is an excuse to "abuse" corporations. Halliburton officials said: "They abuse the broad immunity from defamation actions enjoyed by litigants and get their publicity at the same time."

In a related story by James Surowiecki in the August 9 issueof the New Yorker, he relates a story about corporations hoarding cash. Currently, corporations have socked away a half a trillion dollars.

He compares the rich bellies of corporate cash to the meager ones of the average American. The national savings rate, he reports, is just two percent and there is more than two trillion dollars in consumer debt.

Microsoft leads the world in corporate savings. It sits on sixty billion dollars. And rather than let its cash sit idle, Microsoft announced recently it will pay a special thirty-two-billion-dollar dividend at the end of the year.

But, Survowiecki reports, not all companies look at their pile of cash that way. Like any source of power, they let it grow under their control, keeping it out of the economic mainstream where it could be put to work to spur the economy.

The pile of cash is like lottery winnings to some companies--there is so much of it that it is often spent unwisely in acquisitions that look good at the moment but then tend to fall apart because the rush to "buy" blinds the CEO who is on a buying spree. He notes that most economists argue that "if CEO's spend unwisely it's because they are more interested in empire-building than value-building."

The losers in excessive cash hoarding are of course the stockholders and the public. Dividends that should be paid aren't, and money that should flow into the economy to fuel the engines of commerce sit in secure one-percent yield returns where CEO's can watch the money pile grow.

Corporate Terror Hunting today is not about destroying the power of capitalism, as some would like to argue. It's about reestablishing the faith between the leaders of companies and the public.

In the broader vision of things, the attacks on Halliburton are signals to other companies that even though the Vice President of the Untied States might have once been the head guy of the company, that the Justice Department, the SEC, and the average Joe and Jane, has the right to redress.

That's a big deal.

Corporations used to have an incredible ability to "terrorize" the public by putting up their "corporate shields" and daring anyone to challenge them. They had both political as well as unlimited economic powers to quash the attacks on their alleged "integrity," and to act as though they were Titans, above the law, above the fundamental moral and ethical guidelines to which most people subscribe.

The average Joe or Jane would cower justthinking about trying to refute a corporation, for its power loomed as fierce as Beast that would breathe fire and eat your children if you dared to take it on. Corporations used the Corporate Terror Tactics--Fear, Intimidation and Complacency to their favor.

But times change.

In Halliburton's case, four employees launched the class action suit. Many more will join.

The Joe and Jane who once shied from seeking justice from the "giant company" because of the oppression the company presented in terms of legions of lawyers and tons of money to drag out and wear down the single individual, have sought support and won. The EEOC recently supported a group of women who charged sexual bias against Morgan Stanley and won.

The playing field is becoming more and more level as individuals learn they can fight back and win.

When it is all said and done, when the bodies are counted, there will be a fresh new order for the corporations. They will, after suffering many wounds to their former sense of impenetrability, find their vulnerability to be just as human as those who do not hide behind the corporate shield. Martha Stewart found that out, even though her "corporate shield" was her image. She was dethroned, as the blind CEO's will be dethroned to the Corporate Terror Hunters who fix them in their sights.

But it will end well. Corporations will be forced to install Corporate Vigilance Departments, at first defensively, and then they will evolve into offense strategic tools. When a Corporation of Vigilance does business with the public, that trust that is the foundation of all rich economies, will soar again.

The engines of commerce will hum.

But for now expect more bloodshed as corporations continue trying to cling to old ways and old habits where they fearlessly believe they do not have to attend to the Principles of Vigilance.

When they are wounded enough, they will cry out for help. The Beast will fall and be reborn a Sentinel.

In the interim, if you are a victim of Corporate Terrorism, fight back. There is no time like now to assert your rights. Become a Sentinel of Vigilance.

 

 

Go To August 3--Parallels Between Corporate & Olympic Terrorism

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