In the business world, it appears the 5-to-10-year outlook is not just a measure of growth but what the company CEO might be facing in prison time. The recent admission by Volkswagen executives that at least a half-million of their diesel-powered models have been rigged to pass vehicle emissions tests is a jaw-dropping confession — but not exactly an isolated example of corporate skulduggery given recent headlines.
Around the same time VW and Audi owners found out they got hoodwinked, Turing Pharmaceuticals announced an overnight 5,000 percent price hike (from $13.50 to $750) for the drug Daraprim, which is used to fight a potentially deadly parasite in those with compromised immune systems, often people suffering with HIV or cancer. Turing CEO Martin Shkreli, a 32-year-old hedge fund manager, smugly defended the action as necessary to finance drug research, but that's tough pill to swallow, given that Daraprim has been on the market since 1953.
That choice may not be illegal, but surely it's ethically suspect given how some patients in dire circumstances may no longer be able to afford the drug. Even if the money were used for research, it still seems morally questionable, forcing sick people to underwrite Mr. Shkreli's profits rather than paying for the research and drug production that has actually benefited them. Under pressure, Mr. Shkreli announced yesterday that he would lower the price, but he didn't say how much.
Meanwhile, the former owner of Peanut Corporation of America was sentenced to 28 years in prison by a U.S. District Court judge in Georgia on Monday for knowingly allowing salmonella-tainted food to be sold to retail customers. That reprehensible decision by 61-year-old Stewart Parnell eventually led to the deaths of nine people as well as one of the nation's largest food recalls.
Just a bad day for an isolated group of business executives? Maybe, but given other recent scandals — from the federal corruption investigation into whether United Airlines traded perks for influence with the Port Authority of New York and New Jersey, which caused CEO Jeff Smisek and two others to resign, to the fake profits at Toshiba, a $1.2 billion "overstatement" that forced CEO Hisao Tanaka to step down — it's been a rough summer for some of the world's most influential companies.
Small wonder that Sen. Bernie Sanders has been rising in the polls among Democratic presidential contenders given such outlandish behavior. He's not some Johnny-come-lately on the subject of corporate greed, Wall Street political influence and income inequality.
Corporate misdeeds are not a new invention, of course, and there have been worse abuses both in scope and criminality over the last decade (the subprime mortgage crisis that helped plunge the nation into the biggest recession since the Great Depression and the blatant ripoffs engineered by Enron CEO Jeff Skilling and investment adviser Bernie Madoff come to mind), but this is also coming at a time when a majority in Congress seems to be clamoring for less government regulation and oversight of the economy, not more.
Even now, one would likely find more votes in the U.S. House of Representatives to repeal Sarbanes-Oxley anti-fraud restrictions than to beef up Securities and Exchange Commission oversight of cybersecurity, despite the lessons of recent history. Whatever is causing CEOs to run wild these days, it's not going to be cured by more mandatory ethics courses in business school, it's going to require that executives' feet be held to the fire by the appropriate regulatory agencies.
How fitting that it was the much-maligned U.S. Environmental Protection Agency that squeezed a confession out of Volkswagen last week for the company's seven years of software manipulation by threatening to withhold approval of 2015 and 2016 model year vehicles. This is the same federal agency that Republicans in Congress (and many of those running for president) rail against on a daily basis — often because of its efforts to address climate change.
Thankfully, most businesses aren't run like Volkswagen or Peanut Corp., but consumers deserve some measure of protection against those that do. Just as the most law-abiding neighborhoods still require police, the business community requires their equivalent — reputable, fair-minded but alert regulators looking out for the broader public good. And here's another thought: Those captains of industry who are justifiably outraged by the greedy and irresponsible characters in their midst ought to speak out against those who would gouge the sick or otherwise run their businesses without human values or even a drop of compassion for the suffering.