The VigilanceVoice

July 22, 2002—Ground Zero Plus 313

Pyramid Of Corporate Vigilance
Cliff McKenzie
Editor, New York City Combat Correspondent News

       GROUND ZERO, New York City, July 22--For far too many years corporate executives have clung to the Newtonian Principle that "sewage flows downhill."  Finally, in the heat of corporate scandal, one executive is making it flow up.  And by the time it gets to him, it better be clean!
       Before we examine the Vigilance of this courageous CEO, let's examine how the stereotyped "old guard CEO's" handled their positions of power.
         Sitting in insulated bunkers, replete with the finest wood and plushest carpets, and protected by batteries of lawyers and layers of senior and junior executives, the current vision of a Chief Executive Officer is he plays "king of the stock pile."
       He or she lavishly waved the magic wand of "Visions To The Future," seducing Wall Street with heaps of projections about all the cash money his or her great visions were going to produce.   Then the pit-bull of reality locked its jaws on his testicles and shook its thick neck with rabid agitation.

       One by one, the bricks protecting the "kings of capitalism" began to shudder and shake, crumbling and exposing the fact the monarch was sitting in a glass house without any clothes, and revealing that his manhood was far less in length and girth than what he had boasted to his stockholders.   
       The siege on the "castles of capitalism" began when Enron's sham accounting was unveiled, and its CEO denied any knowledge of the book cooking that cost billions of dollars to those who had joined the Enron Holy Crusade in hopes heaps of riches would befall them as they raped and plundered the land, only to find that the king and his court was stuffing their pockets with the loot and booty, and that instead of conquering new economically fertile soil, they were buying their own old dead bones and selling them to their troops and the unsuspecting public as "fresh meat--yet to be processed."
       WorldCom followed suit as the forces surrounding its castle stormed the walls.  The CEO of Tyco International was charged with tax evasion--the barbarians had penetrated the "castle keep."   Then the former CEO of ImClone Systems was arrested for insider trading, hauling into the blood bath the queen of American domestic purity, Princess Martha Stewart, soiling her reputation and taking her out of the average American's kitchen and living room and elevating her to vulture status.
      Only as a result of such severe public pressure has Congress stepped in to appear as the "White Knight," wielding the Sword of Inquisition as though it members might hold some stock of purity, or have some right of judgment after the fact for crimes they allowed to be committed under their watch.     They rail on television news shows and in Congressional sub committees about how "awful" and "un-American" such nefarious, greedy tactics were, promising to "get to the bottom" of the quagmire they allowed to pool and ferment into the economic sewage that is being flushed uphill, not downhill.
      I find it sad the American people continue to be Complacent about not only the Terrorism without--the bin Ladens--as well as the Terrorism within--the relinquishing of Vigilance to the few--the major accounting firms, the politicians, and the CEO's who rape the land of their investments.
      In the mid 80's I was the acting president of a new franchise concept called, Accountants Network of America.   Our goal was to franchise the small, independent Certified Public Accountants (CPAs) across America who were being Terrorized and oppressed by the major accounting firms--then, called the Big Eight.  
      The Big Eight accounting firms included Arthur Anderson, Arthur Young, Coopers & Lybrand, Deloitte Haskins & Sells, Ernst & Winney, KPMG, Price Waterhouse, and Touche Ross.  The collective power was like Goliath versus David.  The Big Eight helped keep the "small" small by growing bigger.

       Beginning in the late 80's, the firms merged into the Big Five, consolidating their resources and power, leaving only Arthur Andersen, Deloitte & Touche, Ernst & Young, Price Waterhouse Coopers, and KPMG. 
      And then there were four as Arthur Anderson's relationships with Enron crumbled its castle, scattering its 85,000 employees worldwide to the wind and its $9.3 billion in global revenue to competitors..
      America relies on "honesty" and "integrity" in numbers.   Without them, the average investor-- Mr. and Mrs. John Smith, or Mr. Smith, or Ms. Smith--bets on fabricated numbers.   At risk is their children's education, college funds, their quality of life, their life savings.   The fraud of accounting is a most vicious Terrorist, for it eats away the foundation of economic security, driving those who trusted the long arm of the auditors to be crushed, and a vast portion of their equity to be erased by carrion who feed themselves first and the public last--if there's anything left.

       The goal of the franchise I was helping launch was to organizing the small CPAs into a massive force to counter the intrusion of the Big Eight Accounting forces, whom I deemed the "Monsters of the Economy."   I presented them as voracious beasts, gobbling up the prime fruit while leaving the rinds for the other CPAs, blocking them from promoting and advertising, from banding together.
       Everyone knew in the accounting industry that any major company could "buy" a favorable audit.   The higher the price, the less the auditors looked at the books, or, turned their heads to those practices that would be considered immoral, unfair, unjust, or simply, illegal.
       A few years earlier, as the Senior Vice President of Marketing for Century 21 International Real Estate, I was part of a successful privately held team that banded together under one umbrella 7,500 independent real estate brokers threatened by large regional operations.   In eight years we grew from a zero market share to over 11% of all U. S. residential real estate transactions, accounting for more than $50 billion in gross product sales and boasting a sales force of more than 100,000.
       I hoped we could do the same with accounting.
       Unfortunately, the Big Eight didn't fancy the small getting large.   At every corner we were thwarted, and, lack of capital was crippling for such an undertaking.  So I have some idea of the Terrorism of the Big Five, or anything "Big" for that matter, ruled by one CEO.   Franchising balanced tyrannical rule, because it was the composition of a multitude of CEO's, each owning his or her own kingdom, reporting as a tribal chief to the main chief, but always carrying the Big Stick of a CEO.

        That's why I was impressed today to see that the CEO of John Hancock Financial Services, David F. D'Alessandro, is requiring every financial officer and the heads of all business units to certify their own numbers before submitting them to him for final sign off.
       He's making the capos responsible to the don.  
       If he's going to jail, the cell will be crowded with all those who fed him the numbers.   Their signature on their numbers makes them a co-conspirator if there's any hanky panky.
       Vigilance is a pyramid.   It starts not from the top down, but the bottom up.
       America's thrust to install a Homeland Security Department is the wrong approach.   It means more power under fewer roofs.
       D'Alessandro has the right idea.
       He's putting Vigilance on the doorsteps of his fellow chiefs.    He's making them blood brothers in a battle for credibility, brought upon the financial world by those who were more concerned with the top of the pyramid than the bottom.    What the latter received in salary and perks was more important than their stockholders, the public, the economy, the children of our nation.
       By forcing his captains to sign off on numbers, he forces them to make sure that their lieutenants and sergeants and privates have given them the right numbers.   Called "forced distribution," this process demands everyone think like a CEO, and be as responsible to the bottom line as he is.
       Vigilance is not about an edict from the government.   It is about the people rising up to act with Vigilance.
       When people take the Pledge of Vigilance, and urge others to do the same, they are doing what D'Alessandro is demanding of his people-- protecting the children from Terrorism.
       Whether it is economic Terrorism or physical Terrorism, the children suffer the impacts of Fear, Intimidation and Complacency if it is not countered with Vigilance.
        Vigilance requires Courage, Conviction and Right Action--and the CEO of John Hancock Financial Services has exhibited it.

       While many of his fellow CEO's are bailing out because they can't stand the pressure, D'Alessandro is sticking to his guns.   He knows the equity of America is based on faith, and to establish faith, one must earn it.
      He's earning it.
      He is a Sentinel of Vigilance.


Go To July 21--One Out Of Many

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