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Resisting Corporate Corruption, 3rd Edition by Stephen V. Arbogast

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Essay 7‘And the Young Shall be Thrown Under the Bus’ – Lessons in Resisting Unethical Conduct from Enron Through the Financial Crisis

One lesson from this book’s cases is this: when it comes to corporate corruption newer employees are especially vulnerable. Should the corruption later become the subject of investigation, younger employees are also the most likely to be sacrificed.

Corporate corruption is certainly not limited to newer employees. In fact, it is almost always originated by executives higher in the chain of authority. However, younger employees are disadvantaged in terms of their place in the power structure—and they can more easily be pressured to follow instructions and threatened with consequences if they resist. Usually they lack the financial resources to contemplate job loss or the costs of litigation. Finally, they typically lack a support network within the company and the experience to consider how to resist corruption from inside the firm.

These points were driven home to me by the story of Helen Sharkey, a 28 year-old Dynegy CPA who ended up pleading guilty to a felony. The conviction stemmed from her involvement in a tax/accounting scheme dreamed up by her bosses. Ten years later, at Sherron Watkins’ invitation, I heard her recount the tale at a meeting of the Houston CPA society. Helen’s bosses, CFO Robert Doty and Assistant Controller Mike Mott, conceived the scheme advised by Citibank and Arthur Andersen. Helen was sent to New York to close the deal. ...

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