Enron is the beginning of what appears to be a huge, costly battle into "White Collar Crime", and is now one of the largest in the history of the U.S. Before it is all said and done, the fallout from the long list of companies with so-called "accounting improprieties," is likely to have the biggest recorded impact to the U.S. economy since the crash of the stock market in 1929. Of late, the news has echoed the names of companies such as WorldCom, Global Crossing, Adelphia Communications, and the Rite Aid drug store chain, naming a few. Of these recent companies to hit the lime light, WorldCom reported a $3.8 billion accounting scam which has been taking place over the past five financial quarters. The company recently filed for bankruptcy, by cutting 17,000 jobs and sending their stock to just pennies a share; a far cry from the $64 a share just two years ago. All of these companies are caught up in what is beginning to look more like the status quo of "Cooking the Books" and inflating corporate profits, to drive up stock value. The questions must be asked: "Why is this occurring?", "Who is benefiting?".
In almost every case of today's corporate accounting fraud the only benefactors have been those at the top, the corporate upper management. These are the presidents, board of directors, CEO, CFO, and others with tight ties to the value of the corporation's stock value. In today's economy these officers are paid prolific salaries, but the big bucks are made through other compensation methods are tied to company performance. Most corporate officers have their compensation packages tied to stock prices, which are the measure of the company's performance, and are paid with company stock. While employees and investors are losing their jobs and life's savings, the leaders of these companies are not. While this practice might be considered economically efficient, in fact, this practice of compensation has a neutral effect on the economy.
