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Storm Clouds


This week’s column over at eWeek doesn’t have a lot to do with Hurricane Katrina. But it does have a lot to do with faith in government.
It’s about Larry Ellison’s attempt to get out of a shareholder lawsuit by having his corporation, Oracle, pay $100 million to charity. How can he do this while investment banker Frank Quattrone, accused of obstruction of justice, waits to see if he’s really going to jail?
Because Ellison’s being sued by Oracle shareholders. It’s a private action. Not an official government investigation. And, more annoying, it follows on the heels of a similar settlement that eBay executives made earlier this year. EBay’s executives were sued by their shareholders over the acceptance of shares in first-day offerings of tech stocks during the bubble. Goldman Sachs, eBay’s bank, like many other banks, including Quattrone’s Credit Suisse First Boston, made the shares available to wealthy clients. Yet, eBay’s Meg Whitman and Pierre Omidyar made charitable donations and “returned” money to their company. Quattrone is facing criminal charges brought against him by the U.S. Attorney’s office in New York.
What’s going on here? Nothing good, that’s for sure. It’s a good example — as if after Katrina we needed one – of how the law, or public policy, or government procedure, unequally enforced leads to cynicism and contempt for government. I used to think this was a California mind-set, particularly when it came to dealing with the state government agencies, but I think it’s spreading. Fast.
Thinking commentators like David Brooks – who, weirdly, makes his points better on TV than he does in his New York Times column – is saying that we are about to enter in to a large full-scale debate on the role and nature of government. Katrina is kicking it off, says Brooks. But other missteps – and he cited corporate scandals, the mishandling of the war in Iraq as well as the federal government’s reaction to the hurricane – are also factors. What’s even more interesting: Brooks doesn’t sound like he thinks the conservative insistence on small government is going to triumph.
Yup. ’bout time, too.

Share  Posted by Chris Nolan at 10:25 AM | Permalink

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