Integrity Ebbs by InchesMay 13th, 2009 — tonymayo Email This Article
I was very pleased to be invited to a meeting with former MCI Worldcom internal auditor, Cynthia Cooper, sponsored by Accelerent. She is the employee who discovered and “blew the whistle” on the $11 billion financial fraud that, along with Enron, changed corporate governance in America. Unfortunately, similar frauds continue to be perpetrated. Her story, also told in Extraordinary Circumstances, illustrates an important principle of business integrity.
Business crimes are seldom committed by evil people searching for opportunities to lie, cheat, or steal. Most misdeeds, from pilfering pens and personal copies to billion dollar stock frauds, are carried-out by regular people who have rationalized small steps over the line. At MCI Worldcom, accountants reclassified some reserves into revenue because the CFO said, essentially, “Sales are obviously understated. We don’t have time to find the mistakes before we meet with investors, so let’s just make this ‘adjusting entry’ and sort it out later.” Later, of course, other “adjustments” were made, the numbers got huge, the consequences dire, and the people involved knew they had gone so far from the truth that they were criminally culpable. So they kept making even bigger fraudulent entries.
You do not wake up one morning a bad person. It happens by a thousand tiny surrenders of self-respect to self-interest.
A crucial step on this road to perdition is, as with “brainwashing” of POWs, the shift in self-image from “I’m basically a good person” to “I’m a criminal.” Once the perpetrator begins to see herself not as an honest person who slipped but as a criminal who has done serious wrong, it becomes natural to do more and greater wrongs.
I very much appreciate Cynthia Cooper for telling this story and carrying an important message to business people. I particularly admire her commitment to explaining for young people that big problems are not caused by cartoon villains, but by otherwise good, ordinary people who took a wrong turn. Problems only compound when we let small errors justify greater crimes instead of turning back early and taking responsibility for petit failures.
It is often true that what determines character is not what you do wrong, but what you do about it.
A similar storyline occurred at HealthSouth. “How does a fraud start?” the former CFO told students. “With thoughts like, ‘This is just temporary…We can’t disappoint Wall Street…Everybody does it.’ We saw that a lot of people were doing the same types of things we were doing. So, you start believing this is just business. “
See also, The Fraud Triangle, on this blog.