In the corporate world, more and more large companies are being exposed for corruption and fraud. Investors are nervous. In a recent VOA-TV interview, Randall Eliason explains this issue and the recent revelations. Mr. Eliason is an adjunct professor of law at several universities and was assistant U.S. attorney in Washington D.C. for more than ten years. His specialty is “white collar” crime -- fraud and other non-violent crimes committed by business executives. David Borgida is the host of “NewsLine” and spoke with Mr. Eliason.
Joining us now to discuss WorldCom and this rash of corporate corruption, Professor Randall Eliason, of the American University Law School. Thanks so much, Professor, for joining us. Let's get right to it.
I guess your average investor, many Americans, are wondering why we are seeing so much of this now. Is there something in the corporate boardrooms that is cultivating this sense of maybe excessive corruption that people are sensing?
Well, David, there has been corporate crime as long as there have been corporations, so a lot of this I think is really nothing new. There have always been people who are willing to commit fraud or engage in other kinds of misconduct in connection with their corporation if they think they can make a buck and get away with it.
I think what we are seeing here is a couple of recent cases of this happening on such a massive scale, with these huge companies and affecting so many people all at one time, that it has directed a lot of public attention and the attention of Congress and the media to this issue and to the problems of corporate crime in particular. But I don't think that it signals that there has been some kind of sea change in corporate ethics or in the nature of corporate criminal conduct.
That's reassuring. Where do we go from here, though, Professor, in terms of the legal situation? The Securities and Exchange Commission is apparently about to look into all of this, and the Justice Department. Where do we stand on the legal front now?
It's all going to come down to a question of resources. There are going to be a number of investigations, and they're going on, in various Federal agencies, the SEC and the Justice Department probably being the main ones. And the real issue down the road is going to be, I think, whether they are given the resources and the time needed to really fully explore, investigate and prosecute this type of crime.
The SEC and the Department of Justice, as all institutions, they have limited resources. They are constantly having to set priorities, to assign resources, one place or another. And every time you take resources, prosecution or investigative resources, and focus on the war on drugs or health care fraud or some other priority, you are taking resources away that could be used to focus on this type of crime. And those priorities shift from time to time as new administrations come into power or new scandals erupt that seem to demand attention.
So the real issue, long term, is going to be whether these agencies are given the resources and the time to really probe these types of cases and really go after them vigorously. Because these investigations are extremely time- and cost-intensive. Seeing, for example, the Enron investigation, I think that has been going on now for eight or nine months, and no one from Enron has yet been charged. And I don't think that is surprising, given the nature of the case. There are tens or hundreds of thousands of documents to go through, witnesses tend to be reluctant and hostile -- these are very difficult cases to investigate and prosecute.
And so the question about how adequately you would be able to address them in the future is going to come down to whether these agencies are given the resources and directed by Congress that they have a mandate to make this really a top priority.
Professor Randall Eliason, thanks so much for joining us, from the American University School of Law. We appreciate your time and insight today. Thanks so much.