Current weather

  • Scattered clouds
  • 54°
    Scattered clouds

Getting away with something

Posted: Friday, January 18, 2002

NEW YORK (AP) -- The accounting practices that brought down Enron Corp. and also cast doubt on the credibility and future of auditor Arthur Andersen have come as a great shock to the energy trader's employees and shareholders and plenty of other people who have watched Enron unravel.

Lately, much of the shock has come in response to news that Andersen executives ordered Enron documents shredded after the papers were requested by the Securities and Exchange Commission. Yet in one regard, that shock itself is surprising -- while the behavior of those involved is understandably being seen as lacking in ethics to an extreme, it probably has its roots in an integral part of human nature:

Getting away with something.

When it comes to the accountants and lawyers who work for the companies we invest in, Americans expect integrity and accountability. These are the people who are supposed to keep executives honest, who are supposed to ensure that the financial figures we base our investments on are accurate and truthful.

But as Enron's story reveals, executives can sometimes have a different objective, one that involves hiding debt and inflating profits, and they can sometimes look to the professionals to help achieve that. And sometimes those professionals collude with the company managers.

They're trying to get away with something.

While that idea unnerves many people, others are likely to nod knowingly -- finagling, juggling, shading and creative interpretations are a part of doing business, and hiding and obfuscation can be too.

Almost all of us have done something less than above boards at some point in our lives. Even those of us who don't run a business.

We try to get away with something.

As you complete your income tax return, do you gently inflate the value of the clothing and furniture you donated to a charity? Or take a couple of receipts from dinner with friends and designate them as ''business entertainment''?

Nobody's going to get hurt, you might think.

Only the government, and consequently, a lot of other people like yourself.

As you filled out your customs declaration after your trip abroad, did you massage the numbers a little or lose a receipt or two to bring the total of what you spent below the threshold where you'd have to pay duty?

Everybody does it, you might think.

It's all a matter of degree. At some point, someone crosses a line and ethics are disregarded and maybe rules and laws are broken. Peccadilloes turn into crimes. And, sometimes more crimes are committed when someone tries to cover up the wrongdoing.

Without knowing what went inside the heads of Enron and Andersen executives, it's probably safe to assume that questionable practices at the two firms got their start in getting away with something.

A well-respected federal judge, Learned Hand, acknowledged that getting away with something -- or at least trying to -- is part of life in a famous quote from a 1934 decision (cited on Web sites such as www.paynoincometax.com):

A ''transaction, otherwise within an exception of the tax law, does not lose its immunity because it is actuated by a desire to avoid, or, if one choose, to evade, taxation. Anyone may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes.''

Of course, Hand was not advocating breaking the law. He was speaking about working within the law to achieve one's goals.

End adv for Sunday, Jan. 20



CONTACT US

  • 150 Trading Bay Rd, Kenai, AK 99611
  • Switchboard: 907-283-7551
  • Circulation and Delivery: 907-283-3584
  • Newsroom Fax: 907-283-3299
  • Business Fax: 907-283-3299
  • Accounts Receivable: 907-335-1257
  • View the Staff Directory
  • or Send feedback

ADVERTISING

SUBSCRIBER SERVICES

SOCIAL NETWORKING

MORRIS ALASKA NEWS