No Safety at the Top For Corporate Leaders
By Carrie Johnson and Ben White
Washington Post Staff Writers
Friday, July 9, 2004

Yesterday's triple score by federal prosecutors -- the unsealed indictment of former Enron Corp. chief executive Kenneth L. Lay, the conviction of Adelphia Communications Corp. chief executive John J. Rigas for corporate looting, and the denial of a new trial for Martha Stewart -- marks the opening years of the 21st century as a period of unprecedented peril for once-highflying corporate leaders.

Compared with previous cycles of boom and bust, more high-profile chief executives have been indicted and convicted of more serious charges than ever before. Prosecutors are going after executives at the highest levels, seeking redress for the millions of middle-income families, many of whom were new to the stock market, whose mutual funds and retirement savings accounts were hurt when prices collapsed amid charges of wrongdoing and puffery.

"This was the greatest period of malfeasance since the 1930s, and the only reason we didn't have indictments in the '30s was we didn't have the laws yet," said Charles Geisst, a business historian at Manhattan College. "This is obviously the greatest round, there was more money lost than ever before," Geisst added. "And prosecutors can't get away with going only for the mid-level guys, they have to go to the top."

Consider the prosecutorial scorecard in the 949 days since Enron filed for bankruptcy protection in December 2001.

Convicted: chief executives at Adelphia, ImClone Systems Inc., Martha Stewart Living Inc. and Rite Aid Corp.

Indicted: chief executives at Enron, WorldCom Inc., HealthSouth Corp., Tyco International Ltd. and Westar Energy Inc.

Forced from office: Dick Grasso at the New York Stock Exchange, Jean-Marie Messier at Vivendi Universal SA, Joseph P. Nacchio at Qwest Communications International Inc., Gary Winnick at Global Crossing Ltd. and Charles Conaway at Kmart Corp.

The image of Lay being led away in handcuffs yesterday followed similarly humiliating "perp walks" by Tyco's L. Dennis Kozlowski, Adelphia's Rigas, ImClone's Samuel Waksal and others. The message, legal experts say, has gotten through: No chief executive is safe.