Wall Street on Trial

The politics of business have become the business of politics. Across the world the lesson is clear: just as too much governmental interference leads to dysfunctional economies, left to its own devices the market is incapable of adequate self-regulation.
The corporate malfeasance crisis in the United States has transformed global perceptions about the efficacy of regulatory structures in combating corrupt practices in private and public sectors. The design of effective corporate governance structures depends not just on internal factors but also on the inter-relationship between various actors that constitute wider governance: politicians, lobbyists, corporations and regulators.
A Corrupted State: Wall Street on Trial breaks new ground by deconstructing the systemic flaws inherent in the model itself. It reveals that the 'rotten apple' theory, positing the problems in corporate America as merely the result of deviancy by an individual or a single firm, is an intellectual deceit not supported by the facts.Die Geschäftspolitik ist zum Geschäft der Politik geworden. Die Konsequenzen sind weltweit deutlich spürbar: Ebenso wie ein Zuviel an staatlichen Eingriffen zu Fehlfunktionen in den Volkswirtschaften führt, ist ein Markt, der sich selbst überlassen bleibt, nicht in der Lage, sich selbst angemessen zu regulieren. Das rechtswidrige Verhalten von Unternehmen in den USA hat dazu geführt, dass sich im internationalen Umfeld die Wahrnehmung über den Nutzeffekt regulatorischer Strukturen bei der Bekämpfung korrupter Praktiken im privaten wie öffentlichen Sektor verändert hat. Der Entwurf wirksamer Corporate Governance Strukturen hängt nicht allein von internen Faktoren ab, sondern auch vom Zusammenspiel verschiedener Akteure, die den weiter gefassten Rahmen der Unternehmensleitung und Unternehmenskontrolle bilden, nämlich Politiker, Lobbyisten, Unternehmensvertreter und Kontrollinstanzen.
"Wall Street on Trial" - Dieses Buch wagt sich auf unbekanntes Terrain vor, indem es die systemischen Mängel des Modells genau analysiert und aufschlüsselt. Hier enthüllt es, dass die Theorie vom "Faulen Apfel", die die Probleme in Amerikas Unternehmenswelt einfach als Ergebnis von abweichendem Verhalten eines einzelnen Unternehmens darstellt ein intellektueller Trugschluss ist, der nicht durch die gewonnenen Fakten belegt wird.

Foreword vii

Acknowledgements xi

Introduction: the corruption cycle 1

1 Assessing guilt: the Wall Street shakedown 37

2 Power failure: the fall of Enron 71

3 An appalling vista: the rogue of Rhode Island 115

4 Lynching Merrill 141

5 Enforcing the enforcers: the politics of business 175

6 Corporate politics: the buying of power 219

7 From Chicago to Washington via New York and Baghdad 247

Index 285

"…there is much useful information in this book, it is probably of greater interest to the specialist academic…" (Professional Investor, October 2003) Dr Justin O'Brien is Senior Fellow at the Institute of Governance, Public Policy and Social Research, Queen's University, Belfast. A specialist in corporate governance and political corruption, he is the author of The Modern Prince, the acclaimed biography of Charles Haughey. Before transferring to academia, Dr O'Brien was an investigative current affairs journalist with the BBC, RTE and UTV, where his last position was Editor, Current Affairs. Married with two children, he lives in Belfast.
The crisis in the capital markets is not merely the result of venal personalities - although there are many in this story - but a system that allows for full expression of those characteristics. Looking beyond the undoubted greed exhibited by corrupted actors, Wall Street on Trial critically examines the structural imbalances within the contemporary American regulatory framework, the reasons for the failure of federal oversight, and the long-term political implications of the erosion of confidence in the probity of the system. The politics of business have become the business of politics. Across the world the lesson is clear: just as too much governmental interference leads to dysfunctional economies, left to its own devices the market is incapable of adequate self-regulation.

The corporate malfeasance crisis in the United States has transformed global perceptions about the efficacy of regulatory structures in combating corrupt practices in private and public sectors. The design of effective corporate governance structures depends not just on internal factors but also on the inter-relationship between various actors that constitute wider governance: politicians, lobbyists, corporations and regulators.

Wall Street on Trial: A Corrupted State breaks new ground by deconstructing the systemic flaws inherent in the model itself. It reveals that the 'rotten apple' theory, positing the problems in corporate America as merely the result of deviancy by an individual or a single firm, is an intellectual deceit not supported by the facts.