Here’s the formula Olympus execs relied on: Hide huge losses for years with bookkeeping tricks + fire new foreign CEO who figures it out + be contrite when caught but stay in charge. They’ve been arrested! Who’da’thunk?http://www.nytimes.com/2012/02/17/business/global/7-arrested-in-olympus-accounting-cover-up.html
Author Archives: Dr. O
No There There–Again!
So, respected Japanese money management/investment firm can’t find most the $2.6 billion it’s handling for various pension funds. Japanese regulators think maybe the rules aren’t strong enough. Can’t wait to see how U.S. deregulation zealots react to such heresy, once they come up for air after torpedoing any sensible financial regulation here. http://www.nytimes.com/2012/02/25/business/global/japan-orders-aij-investment-advisors-to-suspend-operations.html
Cashing Out on the Turnpike
As this story notes, cashing in accumulated vacation and sick leave at retirement is common in public agencies. So, given the inertial nature of organizations, and the employees’ sense of entitlement to such benefits where they exist, agencies that end “cash-out” policies will likely experience plague-level sick leaves that put the CDC on high alert. Ohio Turnpike’s director thinks pay policies are too generous at toll road | cleveland.com.
Institutionalized Family Court
An organization whose actions are largely governed by its members’ perceptions of what ought to be done, notwithstanding what laws, rules, stakeholders or even markets require, is suffering from a grave condition–institutionalization. Now New York’s Family Court won’t die from it, but Kodak might, Olympus will be in the ICU for a while, and IBM almost succumbed to the condition in the 1990s. In varying degrees at varying times this affliction takes hold of the FBI, and the FAA; and most urban public school systems are just emerging from prolonged institutionalization comas. http://www.nytimes.com/2011/11/18/nyregion/at-new-york-family-courts-rule-for-public-access-isnt-heeded.html
Brighton Beach Bamboozling
More Medicare fraud allegations, with a Russian flavor. The scams citizens use to extract services from Russia’s soviet-style bureaucracies are apparently good training for those few immigrants who decide to specialize in U.S. white collar crime. http://www.nytimes.com/2012/03/01/nyregion/dozens-said-to-be-arrested-in-health-care-fraud-scheme.html
Big Harm, No Foul
“Nobody admits to anything” settlements accompanied by hundreds of millions in corporate payouts to “non-victims” have long stuck in my craw. Now judges are choking. About time. http://www.nytimes.com/2012/02/25/business/neither-admit-nor-deny-settlements-draw-judges-scrutiny.html
Fish or fowl? ‘In-between’ organizations
Living large at a quasi-public/quasi-private insurer of workers comp in Missouri. Such corporate style high-life draws outrage no matter how slim the government connection, witness Fannie Mae and Freddie Mac executive compensation. However, these executive salaries, perks, sports boxes and conferences at posh resorts are routine at private firms that issue insurance and finance mortages. STLToday.com: Missouri audit blasts state-sponsored insurer.
Pension Armageddon Near
Warning signs of an impending critical plague of bankruptcies and near-bankruptcies that will infect political jurisdications countrywide. http://www.nytimes.com/2012/02/28/nyregion/to-pay-new-york-pension-fund-cities-borrow-from-it-first.html
NY Promises Reforms After IT Audit
Government usually can’t outbid the private sector for top-notch IT talent. So, beyond a substantial cadre of talented altruists–the IT shop gets run by the second team. New York State’s second team allegedly wined, dined, wheeled and dealed with select vendors, which is a no-no in government though not uncommon in business. Government Technology, February 28, 2012. New York Officials Promise Reforms After Scathing IT Audit.
Doctor shatters Medicare patient records
Something to be said for statistical analysis to root out potential fraud, though in this case the absolute body count would have sufficed. See Los Angeles Times: Doctor charged in nation’s largest healthcare fraud scam.