The Age Of Sleaze Comes Home
This seems to be the age of sleaze. From the no-bid contracts to the likes of Halliburton and other profiteers; from the lies coming daily from Washington about WMDs, terrorist threats, firing of US Attorneys and the World Bank, to name just a few; from corporate greed like the firing of senior (more expensive) staff at Circuit City, which backfired on the bottom line; from the lies that daily emanate from Israel to support a life of terror for peoples from whom that state has stolen their lands; from the cover-up that depleted uranium has wrought on the health of the children of Iraq.
Maybe it is just the information bandwidth we now have. If you go back nearly two hundred years communications were still very primitive. It wasn't until the magnificent steamship The Great Eastern finally laid the first reliable transatlantic cable in 1866 that news across The Atlantic took less than two weeks to arrive.
The practicality of the time change from two weeks' wait -- to hearing Samuel Morse's code in a detector in Newfoundland almost instantaneously -- would have saved a lot of lives in, for instance, the War of 1812. Its most bloody event occurred in January 1815, when a British expeditionary force landed and attacked the U.S. troops of General Andrew Jackson in New Orleans. The 7500 British, hardened troops from the Peninsular War (about the only time Spain and Britain were allies -- up against Napoleon Bonaparte), were led by General Sir Edward Packenham and attacked with no battle plan. Two thousand men were cut down, including Packenham and another general, while Jackson lost eight men in total.
The sad thing about it was that peace had been negotiated with the Treaty of Ghent, signed two weeks earlier, on Christmas Eve 1814.
Some of us have watched the sleaze in our own industry. The under-the-table payments to executive spouses; the transfers of technology before the chop; the employment of a designer who can bring in mental work that has been perfected in other premises; the emptying of a building's assets before the VCs can get there to attach a padlock; the misuse of H-1B visas; the conversion of overseas undergraduates and researchers from university status to employee status; the appointment of the "right" people to the compensation committee. But the latest schemes have been particularly outrageous.
The average return on stock options in our industry is about 20%; so when you see returns in excess of 100%, and over 200% in some cases, and nearly 300% in one particular example, regulators are bound to get a little suspicious. And rightly so.
The Financial Times has reported that more than 160 companies have owned up to backdating options to suit the market occasion costing quite a large number of executives their jobs (but not their bank balances). The Steve Jobs/Apple example, where a complete board meeting was invented, is no longer under review by the SEC (because the company cooperated so well…) and Jobs was very upbeat at last week's annual shareholders' meeting.
But at another Silicon Valley company, in our space, one executive has been so non-cooperative with the SEC that he was warned that if he went to work he would be arrested. He resigned for the usual "health reasons" and is, I daresay, not in the Continental USA any longer.
My advice is: move to Dubai. You can create your own island and screw the environmental consequences. And one of your neighbors is going to be Halliburton -- maybe Dick Cheney himself -- all of you avoiding any extradition treaty with the US…