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Monday 16 December 2013

10 MOST CORRUPT BUSINESS LEADERS OF THE LAST DECADE


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10 Most Corrupt Business Leaders of the Last Decade
By Gerri,
Business Pundit, 16 December 2013.

The U.S. has an embarrassment of riches when it comes to corrupt leaders whose dirty laundry has been aired throughout the past decade. From insider trading to shady dealings while in political office to fraud and other unlawful practices while heading a company, you have to hand it to these guys - they’re nothing if not bold in their corruption. In fact, it would almost be funny if they weren’t contributing the economic ruin of the entire nation and upsetting the global financial system.

Here is a sampling of the blatantly and shockingly corrupt executives dining out on salaries and bonuses that could support entire small nations. And no surprise here, many of them operate in the blurred lines between business and politics.

1. Jamie Dimon

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The head of JPMorgan is among those elite businessmen who has managed to remain largely unscathed in the shameful and scandalous financial crisis. Dimon is lauded for his business acumen, but it is worth keeping in mind that he and his ilk are responsible for the disastrous effects the economic crisis has had on the country, and that his corporate savvy doesn’t come with clean hands. Reporter Matt Taibbi wrote of Dimon, “he is no better than a mafia don running a criminal organization or a corrupt dictator.” The crimes for which JPMorgan could be held accountable include “mortgage abuses during the crisis years…a Libor manipulation investigation, violations of the Foreign Corrupt Practices Act, manipulation of a corporate bond index, an obstruction of justice investigation, and even potentially some involvement with the Madoff ponzi scheme,” according to Slate. And yet Dimon is still the darling of Wall Street, praised left and right for his smart moves prior to the financial meltdown of other banks and his ability to keep his bank’s business running smoothly. Alternet, which included Dimon in their roundup of America’s most corrupt capitalists noted that he brazenly negotiated a bailout package for JP Morgan with the New York Fed while serving on the board of the New York Fed. You can’t make this stuff up.

2. Henry Paulson

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Former Treasury Secretary and former CEO of Goldman Sachs, Henry Paulson, is among an elite group of fat cats who have become incredibly wealthy through shady and outright corrupt business and political practices. Alternet reports that while serving as Treasury Secretary, “Paulson personally approved a direct US$10 billion capital injection into his former firm.” In that same article, they note that Paulson “held a secret meeting in Moscow with Goldman’s board of directors, where they discussed economic prognostications, market conditions and Treasury rescue plans.” Paulson also reportedly tipped off his old company about the impending failure of Fannie Mae and Freddie Mac nearly two months before it happened. It boggles the mind that such blatant corruption is practiced so brazenly in the halls of power, but then again - it explains a lot about the country’s current economic situation.

3. Robert Rubin

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While Dimon and Paulson are no angels when it comes to their financial dealings and their companies’ hands in the financial crisis, few people can be linked more closely to that economically harrowing event than Robert Rubin. As Treasury Secretary under President Bill Clinton, Rubin “helped usher in one of the greatest deregulatory eras in U.S. history…and made it possible for economically essential banks to gamble taxpayer dollars on volatile stock markets,” according to Listverse, which included Rubin on a roundup of the Top 10 Evil Businessmen. That paved the way for the establishment of massive banking institutions like Citigroup, which, wouldn’t you know, Rubin went to work for after leaving the Treasury post. Citigroup would later receive US$45 billion through the government’s Troubled Asset Relief Program.

4. Bernie Madoff

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Who could forget Bernie Madoff? He’s the mastermind behind a massive Ponzi scheme in which he stole more than US$17 billion dollars from investors. A highly regarded investment manager and head of Bernard L. Madoff Investment Securities, Madoff for years pulled the proverbial wool over his clients’ eyes, fleecing them out of millions upon millions of dollars. According to Forbes, Madoff reported almost unheard of returns on his investments, which would eventually lead to his undoing. He was sentenced to 150 years in prison, and now at 75, it seems more than likely he will be there for the rest of his life. TIME called the former NASDAQ chairman’s elaborate scheme “perhaps history’s biggest financial swindle.”

5. L. Dennis Kozlowski

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Unlike his fellows in corruption on this list, the one-time CEO of Tyco International has been doing time in a medium security correctional facility since 2005 for taking unsolicited bonuses, for giving himself loans taken from the company and using stolen money to purchase extravagant personal items. Among the most notorious purchases were a US$6,000 shower curtain and US$15,000 umbrella stand. Kozlowski will be released on parole in January 2014, and was forced to pay millions in fines to Tyco. The company’s former chief financial officer Mark Swartz also did time for stealing from the company, but was paroled in October 2013.

6. Kenneth Lay

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Although he passed away in 2006, Kenneth Lay’s name will be synonymous with corporate greed and corruption for years to come. The former CEO of Enron not only helped found it as a natural gas company in 1985 but helped grow it to a US$68 billion corporation. But as TIME put it, “much of that money was based on shady accounting practices and losses not recorded in its financial statements.” The company ultimately filed for bankruptcy, costing employees their jobs and savings and investors billions of dollars. Lay, along with Jeffrey Skilling, another Enron executive, was convicted of fraud and conspiracy, but died before he was sentenced.

7. Jeffrey Skilling

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It wouldn’t be right to include Kenneth Lay on a list of corrupt business leaders without giving Skilling a special mention as well. Though he was originally sentenced to 24 years in prison, Skilling’s sentence was reduced to 10 years in July 13, six of which he has already served. Skilling “was convicted in 2006 on 19 counts, including 12 counts of securities fraud and one count of insider trading.” Skilling had several high-level positions at Enron properties and became president and CEO in 1997.

8. Bernard Ebbers

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As the founder and CEO of WorldCom, a telecommunications giant, Bernard Ebbers was sitting pretty - until he brought down his own company thanks to his own corrupt practices and was sentenced to 25 years in prison. Ebbers was convicted of committing accounting fraud to the tune of US$11 billion, lying to his investors to keep the struggling company afloat. Ebbers made TIME’s list of crooked CEOS, where it was noted that WorldCom went deeply into debt after the company made a series of acquisitions that made it financially insolvent. TIME also stated that the Securities Exchange Commission investigated US$400 million that WorldCom had loaned Ebbers.

9. Raj Rajaratnam

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The founder of the Galleon Group, a hedge fund management firm, was brought down on insider trading charges and is currently serving a prison sentence in the same facility where Bernie Madoff is doing time. A district judge sentenced Rajaratnam to 11 years in prison in 2011, a sentence the Wall Street Journal reported was “the longest-ever term imposed in an insider-trading case.” That’s probably because he was at the centre of one of largest insider trading cases in history. Rajaratnam, who is originally from Sri Lanka, went to great lengths to hide his activities, including lying under oath when questioned by the Securities and Exchange Commission and using offshore accounts to pay contacts for insider tips.

10. Joe Nacchio

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Ah, insider trading. It’ll get you every time, at least as long as the government continues its campaign of cracking down on this pervasive tendency among Wall Street execs and CEOs. Nacchio was once the CEO of Qwest Telecommunications, and was a controversial figure long before he was ever convicted of insider trading, selling off millions of stocks during the telecom bust. According to the Wall Street Journal, he was not well-loved by Qwest employees, “some of whose retirement accounts were drained during his tenure and when Qwest’s stock took a dive.” Nacchio spent nearly five years in prison and maintains his innocence to this day. He was released from prison this year.

[Source: Business Pundit. Edited.]


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