October 24, 2015
Corporate Scandals; Sex, Theft, and Cricket.
German car manufacturers Volkswagen have been splashed across the front pages this week, and not because of another multi million advertising campaign. No, this defied the “all publicity is good publicity” rhetoric, as share prices tumbled and Martin Winterkorn was forced to very publicly resign: the wheels well and truly fell off the wagon. The controversy revolves around car emissions; the automaker’s diesel cars were programmed to circumvent emissions tests by, well, lying.
Once allowed out on the roads, these vehicles would staggeringly release up to 40x more pollutants than the promised amount; surely more than a slight technical oversight? Not according to the US chief Michael Horn, whose laughable testimony to a Congressional committee included golden one liners such as “this was not a corporate decision”, and claimed “this was a couple of software engineers who put it in for whatever reason”; I have a feeling ‘whatever reason’ was indeed a very ‘corporate decision.’
The investigation will rumble on, and as more cars are recalled customers will rue the day they ever fell for that last sleek ad. But what better excuse to launch an investigation into the best, worst, and downright distasteful corporate scandals? So settle down, put your lawyer on speed dial, and let The Badger guide you through a world of outrageous extravagance: of shameless deceit and shameful sex parties, and everything that lies uncomfortably in between.
The year is 1494. The Medici bank is in turmoil. Gross misappropriation of funds, fueling the family’s lavish lifestyle, has seismic consequences for the Italian economy. Compliantly managed for too long, the financial juggernaut is crumbling; one of the first corporations brought to its knees by greed and rampant avarice.
Leap forward five hundred years or so and surprisingly little has changed. 2008 was a particularly explosive year for corporate controversy, with numerous high profile incidents hitting the headlines worldwide; it’s perhaps worth noting how globalisation has immeasurably multiplied the fallout radius of financial foul play.
Bernard Madoff and Allen Stanford came to symbolise the age of multi-billion fraud with their elaborate Ponzi schemes involving robbing investors, banks, charities and even Steven Spielberg of their hopelessly misplaced money. Ponzi schemes are much like a monetary poker face, a Russian roulette for the conned: the schemer promises unusually high returns for investments, juggling different sources of capital in volatile hedge funds until the house of cards inevitably collapses in a cloud of missing funds and court cases. A confidence play like no other – think The Real Hustle on a grander scale – this relies on investor naivety cut with a dash of respectability; the reason these two cases worked so efficiently with such longevity was predominantly due to the shining reputation of both men.
Whilst Madoff was busy accumulating a tasty estimated $65 billion, Stanford set his sights on world cricket, soon to be seen as the game’s saviour; a kindly, generous benefactor to inspire the next generation. This culminated in Stanford hosting his very own winner- takes-all match between the West Indies and England, a cool $1,000,000 prize for every player on the victorious team. With typical Bond villain panache he presented a suitcase filled with banknotes before the game, marking a truly surreal chapter in the sport’s history. The West Indies triumphantly picked up their cheques before Stanford’s illusion fell to pieces; and don’t forget to spare a thought for the unfortunate players who reinvested their winnings into Stanford’s company, a decision so tragically ill fated it does feel like the conclusion to a Peep Show episode.
2008 was also the year of Volkswagen’s sentencing, as Klaus Volkert and Klaus Joachim-Gebauer were punished for a fantastic array of wrongdoing. The former was convicted of inciting fraud, after paying himself illegitimate bonuses of around $4,000,000, whilst the latter was thrown a suspended sentence for arranging exuberantly indulgent ‘company trips’ which were alleged to include prostitutes and shopping sprees: take note Thomas Cook, that’s what you call all inclusive. While employee ‘morale’ may have been high, the legality certainly wasn’t, and VW’s reputation was rather tarnished, although, naturally, this didn’t change much within the company. It continues to treat regulations like curfews: heard, and duly ignored.
Invisible money and dangerous emissions are one thing but our food, what we eat, now that’s sacred. By all means, rip off other companies and steal from each other, but whatever you do, keep the food industry safe and honest. Yes, animals are treated badly, but we can choose organic right? Free range only? At least we know exactly what we’re eating – right?
The horse meat scandal gripped Europe as people came to terms with what was really in the budget “beef” burger. Turns out, it wasn’t exclusively beef. While I’m sure many secretly debated the actual content of cheap meat, it’s always one thing to suspect and another to be told outright; and of all the things they could have snuck in, it had to be horse. Oh the humanity! As a vegetarian I sat quietly though the scandal with a suppressed smirk, although I do dread to think what’s in my 60p tin of “vegetarian ravioli”. Even Ikea’s famous meatballs fell to the exposé, which was subsequently blamed on “food criminal gangs”, or as I like to call them, supermarkets. The EU’s strict food regulations were woefully undermined and horse puns were liked, shared and retweeted as everyone tried to laugh off the most unsavoury of scandals.
So what have we learnt? Don’t trust anything you drive, invest in or eat? Sounds about right. The main problem with corporations is they can bury problematic truths beneath layers of red tape and defensive press releases, acting all surprised when we eventually find out, using the cheating partner’s clichéd excuse of “it only happened once, it won’t happen again!” Sure . Pack your bags Volkswagen, I’ll see you in court.
Image: Tax Credits