Inspector Generals and Auditors

What do Enron, Healthsouth, Adelphia and Tyco have in common? All were found guilty of fraudulent activities. And, each were misled by CEOs and even CFOs. The names Kenneth Lay and Richard Skilling of Enron (accounting and tax fraud), Richard Scrushy of HealthSouth (accounting fraud), John and Tim Rigas of Adelphia (fraud, corruption and theft) and Dennis Kozlowski and Mark Switz of Tyco (massive theft) will not be remembered in a good light. The Enron scandal even brought down one of the largest accounting firms, Arthur Andersen.

Because of their activities, the SEC passed a rule stating that the Board of Directors’ Audit Committee must be given greater authority and independence. In short, the Audit Committee must be independent of the Executive Committee and cannot include the President or Treasurer. It also must:

– Not include anyone employed by the organization or the audit firm
– Have at least one “ financial expert ” who is familiar with the audit process
– Avoid conflicts of interest.

In the federal government, the Inspector General’s office imbedded in each of the departments of the Executive branch serves like an auditor. The equivalent Board oversight is the Congress of the United States, not the president. It is a very important role that keeps America running like a democracy and not an autocracy. When this oversight is compromised, America’s democracy is diminished.

I raise this now as the president of the United States seems to be at war with the Inspector Generals in the Executive branch. Friday night, the president sent a letter that he was firing Michael Atkinson who did his job and reported to Congress the veracity of a whistleblower complaint. To Atkinson’s credit, he publicly defended his role and encouraged whistleblowers to still come forward.

This week, the Glenn Fine, the appointed IG overseeing the $2.2 trillion coronavirus stimulus fund, was removed and will be replaced by a Trump appointee. Fine was well regarded in this role coming out of the Department of Defense. Something seems fishy here.

If that were not enough, the president was critical of a US Department of Health and Human Services IG report led by Christi Grimm. The report was critical of the hospital preparedness for the coronavirus, which is not a surprise, since hospitals and governors are begging for help.

What does all of this mean? Why is the president at war with the Inspector General’s office? Is he hiding something? Are they saying things that run counter to his own storytelling which is well-known to be less than truthful? If this were a publicly traded company, these actions would raise a red flag with the Audit Committee. They should do the same with Congressional oversight.

In short, the US is not a kingdom. It is not an autocracy. The president has never reported to anyone before his swearing in, except for his father. He is highly accustomed to not being questioned. In fact, he does not like being questioned, which is apparent on a daily basis. Yet, he must answer to Congress. I urge Congress to do their job. They must represent Americans, not a political party.

13 thoughts on “Inspector Generals and Auditors

  1. Note to Readers: If you want to read more on these financial scandals, you can find good summaries with a google search. When the Enron mess was heating up Lay advised employees not to divest of company stock in the 401(k) plan, so employees lost jobs and net worth.

    Scrushy asked senior managers to stand up at an employee meeting and then said they are to blame for their woes. That was before his fraud became apparent.

    As for Tyco and Adelphia, lavish personal spending and nepotism abound. The stories will boggle the mind.

    It should be noted it is clear the president is in favor of nepotism. And, neither person was vetted and one had his security clearance denial overturned by the president. This has always been a concern to me.

  2. I have tried to avoid using this parallel because of the other baggage the name carries, but Trump’s behaviour does resemble Hitler’s in the latter’s relationship with his generals and general staff. If something went wrong it was always the fault of the General Staff and his generals, unless they tried and tested cronies.

    • Roger, it is also akin to a toddler “not me” or “I didn’t do it.” Accountability. Responsibility. These words don’t apply to Trump. I try to avoid using Hitler comparisons, even if they could be used. Keith

      • The fact he still garners support is the most worrying feature of his time upon the stage. That people so loathe the opposite of what he appears to stand for (I don’t believe he stands for anything other than ‘Trump’) and thus blind themselves is very disturbing.

      • Roger, to not be able to see the obvious, is a trick even the Wizard of Oz could not pull off on people. His corrupt, deceitful, denigrating and egocentric behavior are plain as day. Keith

  3. These comparisons are certainly apt, and I’ve long said that he is replacing all the qualified people in government with “yes-men”, those who will gladly lie, cheat and steal on his behalf. The purge that started immediately after the Senate handed him carte blanche by refusing to convict him of the crimes he committed, is frightening, for as you say, all oversight is being swept out the door. Congress seems too busy with other things to take it seriously … perhaps it’s time for We the People to rise up en masse … but of course we cannot do that with the orders to stay home. So, a massive letter/phone campaign, and letters to the editors? I sometimes wonder if it helps, but it seems to be the only venue left open to us. Like you, I have tried to avoid the Trump/Hitler comparison … BUT … it’s too obvious now to ignore. Good post, Keith!

  4. Hello Keith. First let me thank you for directing my attention to your post. I have not had much time for reading posts lately.

    When my spouse worked for tRump at Mar-a-Largo no one was allowed to question, correct, or otherwise disagree with tRump. If he said it was raining even when it was clearly not raining, it damn well was raining. If he made a loony pronouncement then that held until he forgot it or said something completely opposite. He is a failed businessman simply because he has acted the same way all his life as he acts now as president. He lacks emotional control, is a bigot, badly uninformed and uneducated, arrogant, convinced of his own superiority in all things, sure that he deserved far more worship and praise than he was getting. He is famous for holding grudges and sure that anyone who doesn’t agree with him is an enemy. He is and always been a carnival salesman, selling a brand that was his name, convinced reality was whatever he wanted it to be. His entire life including childhood no one but his parents were allowed to tell him no and he clearly desperately sought his fathers approval. Staff, teachers, others that most kids were to respect or obey was not true for tRump, he was instead allowed to be in charge and he never grew out of the young kid brat stage. He got sent to a military school because he punched one of his teachers that tried to correct him. In the military school he never did the work, was horrible at everything, tried to kill another student by pushing him out a window, and got away with everything because his father was paying a very large sum of money to the school. So why would he accept any oversight or allow anyone to prevent his theft, grifting, or rewarding those who he thinks will give him money now when he has unlimited power and authority with a captive audience? Hugs

    • Scottie, none of what you wrote is a surprise. He is acting today like he has always acted – boorish, egomaniacal, untruthful, etc. I find myself more perturbed by the sycophants who do CYA for Trump. They have sullied any reputation they may have had beforehand. Many know better, but still cover the king’s hind end. Keith

      • Hello Keith. Very true. I can not imagine ruining my name and career for the short term gain of being a tRump toadie. Unless they think the gain won’t be short term. That is what bothers me, do these people think either trump will last longer than we think or that tRumps way of governing will now be a fixture in politics? Hugs

      • Scottie, my guess is long term thinking does not enter in. The ones who think, decline his offer to work for him. Jeff Sessions is a good example – he damaged his reputation working for Trump and gets vilified by Trump for actually doing the right thing and recusing himself. Keith

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