CBS dares to criticize business ethics of other companies

CBS dares to criticize business ethics of other companies
Network assaulted industry but didnt give them any chance to respond.

by  Megan Alvarez
July 18, 2005

     CBS jumped on the ethics bandwagon with a three-minute diatribe against business that never mentioned the networks own ethical lapses. The July 17, 2005 CBS Evening News took a one-sided approach that painted a sordid climate where lines can easily blur between business hardball and corporate crime, as anchor Mika Brzezinski put it.

     Reporter Anthony Mason criticized Microsoft for its work in China, but then provided no response from a Microsoft representative or anyone else representing the vast majority of the business community that acts legally. The program also criticized businesses for complaining about the billion-dollar burden placed on them by new regulations.

     The story centered on business ethics since the Enron and World Com scandals. Featured in the story was the outgoing Dean of the Yale School of Management, Jeffrey Garten. Garten, who has worked for four different presidents, was not the business supporter that CBS pretended him to be.

     Garten is both an advocate for bigger government and a critic of companies that act in their own best interests. In a Sept. 6, 2004 article in Business Week, Garten called for a major increase in U.S. foreign aid and for the creation of a cabinet-level position for third world development. In that same magazine on Nov. 15, 2004, he urged the president to appoint a moderate to the Supreme Court and build bridges to centrist leaders from both parties. These centrists, according to Garten, included Sens. Hillary Clinton (D-NY) and Barack Obama (D-Ill.).

     During the story, Mason pointed out that Microsoft was working for the Chinese government by helping it purge the internet of words like democracy or human rights. He left out any response from Microsoft and failed to point out that Microsofts actions would be in line with constructive engagement of China.

     This policy, which has been adopted by numerous administrations, entails engaging in business with China, while setting aside the issue of human rights in hopes that engagement will eventually lead to inroads in human rights. Nor did he mention that in a free market place if Microsoft, one of the most successful businesses in the world, would have turned down the offer, another company would have taken it.

     Mason emphasized sweeping ethics reforms aimed at the business community, but didnt even identify the reforms he was referring to. These reforms are known as the Sarbanes-Oxley Act, which was passed into law in the summer of 2001. He mentioned that the business community was opposed to these reforms, saying, You hear the business community now screaming, that's too much, to which Garten replied, I think the people who are screaming are badly mistaken. He then failed to bring on a guest to point out why the business community was unhappy with the reforms.

     According to Ira Solomon and Mark E. Peecher, accountancy professors at the College of Business, University of Illinois at Urbana-Champaign, Sarbanes-Oxley has cost companies roughly 13 million hours of staff time and between $10 billion and $13 billion.

     James Sheehan of the Competitive Enterprise Institute wrote of Sarbanes-Oxley in a December 19, 2002, op-ed that appeared in The Washington Times, Sarbanes-Oxley criminalizes even minor accounting mistakes, and holds the chief executive officer liable if a restatement of accounting results becomes necessary. Thus, a CEO could be prosecuted for a forecasting error committed by an employee.

     Sheehan also noted the Sarbanes-Oxley prohibits employers from making loans to their employees, a practice that is common in Europe. For this reason, Sheehan said, Porsche, the German automaker, has already canceled plans to list on the New York Stock Exchange. Some companies have also removed themselves from the stock market to avoid possible Sarbanes-Oxley problems.

     None of that was mentioned in Masons report.

     Mason concluded his story with this: Jeffrey Garten, who will remain a professor at Yale, says American business still has something to learn. One thing is certain, they didnt learn it watching CBS.