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Eeuw, This Won't Help Our Standing in the League Tables

posted by Buce

It wasn’t all that long ago when every corporate failure was followed, sure as the sun rises over Flatbush, by a lawsuit against the accountants.

Clinton securities “reform” and a hard-hearted Supreme Court put a stop to that, and not such a bad thing, either: not every bad guess should lead to the penalty box.

But some should. And nostalgia buffs will feel a ripple of remembrance when they read about John Haukland, 57, (former?) KPMG partner “sentenced to 30 days … for negligent accounting in one of this country’s worst bankruptcies…” (link) “This country” is "Norway” where Haukland was auditor of something called Finance Credit, which went bankrupt to the tune of $242 million in 2003.

I know what you are thinking: insert “fraud in  Norway ?” joke here. Evidently the Norwegians are not amused. Commentators discussed the case, among others, in a Norwegian “Country report” produced by Transparency International, the ratings agency that regularly ranks Norway as one of the least corrupt countries in the world (link). The report said: 

Cases like these have been characterized in the Norwegian media as symptoms of a business community that has lost its virtue This is a new phenomenon in Norway and the public debate has been as lively as it has been mixed. Most have welcomed the new focus on corruption, the media revelations and the enhanced debate about ethics and corporate responsibility. But shallow and rosy declarations about zero tolerance, and a lack of public recognition of corruption in everyday practice do not make for a convincing anti-corruption strategy or promote genuine corporate progress. While companies recognise the need to strengthen protective measures and internal controls, they have yet to acquire the knowledge and tools to implement effective anti-corruption policies.

Haukland has the opportunity to appeal. But he has apparently already given up something more pricey than 30 days’ freedom: his license to practice his profession.

There is a wonderful tag end to the story.  We are told that

The court said a mitigating circumstance in sentencing Haukland was that ''[the principals of the company] both verbally and in other ways had skills that few other criminals possess.''

 Man, I would love to know how that one sounds in Norwegian. There’s an old saw that criminals are stupid. Wrong: stupid criminals are stupid. The real danger to society are the guys that learn to work in the white space around the letter of the law while getting other poor sods to pick up their doggy doo. I used to dine out with a psychiatrist. I would tell him some of my bankruptcy war stories (he was more reticent). “I think you know more psychopaths than I do,” my friend said, “but you know the successes. I only see the failures.”

Oh, and PS : KPMG was acquitted.


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