The Whistleblower #35
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The Whistleblower

The Whistleblower #35 - Sep 25, 2002

Don't like the news about renegade corporations? Change it. Governor Davis can do just that, by signing SB 783 (Escutia), a bill that would protect whistleblowers and hold high-ranking company officials liable for covering up accounting fraud. Recent events underscore the pressing need for Governor Davis to sign this vital corporate accountability measure:

El Paso Corp. pipeline needed Whistleblower hotline. It took two years for a federal administrative law judge to determine that the El Paso Corporation illegally manipulated access to a key natural gas pipeline, contributing to the astronomical electricity rates during California's "crisis." The decision, which was announced Monday, means that California's electricity consumers may eventually receive refunds -- relief that has been long delayed. Had SB 783's whistleblower protections been in place two years ago, ethical El Paso employees would have felt safe in refusing to break the law and blowing the whistle on the company's misdeeds, knowing that they would have been sheltered from intimidation and retaliation by their crooked bosses. SB 783 expands existing law that forbids retaliation against whistleblowers, protects employees who refuse to break the law for their employers and creates a Whistleblower Hotline in the office of the Attorney General, giving employees safe, confidential access to law enforcement. Put that in your pipeline and smoke it.

You may already be approved for a zero-interest, zero-payment loan from the Bank of Tyco! ...If you are a high-ranking Tyco executive, that is. Former CEO Dennis Kozlowski and others received loans from the company that were later forgiven, amounting to free cash for the executives. Who knew? Lots of people, according to minutes of a board meeting detailed in a Monday report in the New York Times. And, apparently, some of the executives were pressuring others not to say anything about the crooked giveaways. Raiding the corporate accounts is not done stealthily in the dead of night; there are those in the periphery who know, but as the infamous scandals of late demonstrate, these individuals don't come forward until after the damage is done, so long as there is no SB 783 requiring them to spill the beans.

Adelphia: so many shareholders, but only five pairs of souvenir handcuffs. That's about all that Adelphia shareholders can hope to gain from Monday's indictment of former CEO John Rigas along with his two sons, all of whom were arrested in July for bank fraud. A nickel won't buy you much these days, but it will buy you share of Adelphia stock -- a bad deal for anyone who bought in at $40. The Rigases and two other former execs were indicted, but they aren't the only scoundrels in this story; it takes a whole gang of suits to pull off a heist this big, and any of the executives, directors, and upper managers who aided and abetted the corsairs of cable should be held accountable. SB 783 would punish not only the corporate thieves, but their accomplices as well. High-ranking officials who know about, but fail to report or stop, financial fraud will be subject to large fines if Governor Davis signs SB 783, California's early warning system against financial fraud and other corporate crimes.

Governor Davis has only five days to sign SB 783. He can be reached at (916) 445-2841.

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