Report Measures Human Costs of Accounting Scandals
The "No More Enrons" Coalition was formed to push for aggressive implementation of accounting reforms. At a recent press conference, the Coalition presented a report of the human costs of accounting scandals. "The Cost of Corporate Recklessness" attempts to quantify the human cost in several ways.
- Lost jobs. Mike Lux, Coalition member and president of American Family Voices, estimates that over 1 million workers have lost their jobs as a result of accounting scandals.
- Stock market losses. Altogether, the Coalition calculates a cost in excess of $200 billion, which it sees as a "corporate abuse tax." The report provides a breakdown of lost jobs and shareholder value for 11 companies and 2 accounting firms said to be "enmeshed in scandal." The companies and firms are: Enron, Global Crossing, Adelphia, Xerox, Tyco, WorldCom, Arthur Andersen, KPMG, ImClone, Merrill Lynch, Merck, Halliburton, and Qwest Communications.
- Vanished retirement savings. Noting the beating that retirement accounts have taken as the stock market has continued to tumble with each new corporate scandal, the report pegs total 401(K) losses at $176 billion in 2001. Hans Riemer of the Campaign for America's Future, a member of the Coalition, says this amount is "more than enough to shatter the dreams of millions for a safe, secure, dignified retirement."
- Unfair tax burdens. The report also cites differences between book and tax income that translate into $13 billion in uncollected taxes for just 11 companies. This is based on a schedule of "corporate tax disparities" at Boeing, Colgate Palmolive, Enron, Ford, General Electric, General Motors, IBM, Kmart, Microsoft, Navistar and WorldCom.
Members of the "No More Enrons" Coalition include the Campaign for America's Future, American Family Voices, The Daily Enron, Progressive Majority, USAction, and MainStreetUSA. For more information, visit www.NoMoreEnrons.com" or download the complete report.