Is greed good?

Enron, Allfirst: Financial scandals recall freewheeling, irresponsible mores of the 1980s business world.

February 15, 2002

"GREED IS all right. ... You can be greedy and still feel good about yourself."

Such was the sage advice imparted by wealthy arbitrageur Ivan Boesky to the graduating class of the University of California, Berkeley, in 1986. Of course that was before Mr. Boesky added convicted felon to his resume and was sentenced to three years in the slammer for securities fraud.

But his philosophy lives on, and not necessarily just in the hearts of Berkeley grads.

We've seen it most recently in the stunning revelations about the personal fortunes amassed by Enron executives as the corporation they represented crumbled beneath them, taking the financial security of thousands of Americans with it. And we've seen it in the business practices of accounting giant Arthur Andersen, which aided and abetted Enron's sleazy maneuvers for a cut of its fake profits.

What Americans are coming to realize through the Enron debacle is that there's a fine line between capitalism and greed, and when captains of industry step over that line, chaos follows. Ivan Boesky certainly didn't invent greed; he wasn't even the first to elevate it to an art form. But he and his ilk may have been the first to develop it into an acceptable, even admirable, business practice.

And it's not just the high rollers who bought into the creed of "more is more."

Take the case of John Rusnak, the Baltimore currency trader for Allfirst Financial Inc. suspected of hiding $750 million in losses from the company.

At first, the guy seemed less a potential crook than a kind of bumbling banker, a "brogue trader," as he's waggishly been called because Allfirst's parent company is Allied Irish Banks.

Then came the revelation that the $85,000-a-year trader was pulling in annual bonuses of $200,000, based on profits realized on his currency trades.

Is it possible that Mr. Rusnak wasn't just trying to protect his five-figure salary, but his six-figure bonuses as well?

And if so, does it matter, or are we just haggling over the price of his alleged perfidy?

Somehow, it does matter. If he took risks he should not have in order to assure himself of that bonus, it matters.

If he hid or doctored his bad trades to protect his own six figures, it matters. If he put his own personal gain above the financial health of his company, it matters. Because that is stepping over the line, putting greed above commerce, foul play above fair.

As we are learning, even when such conduct is legal, it is not right.

It can destroy more than a single company -- it can destroy people's trust in their institutions.

The Enron scandal is writing a compelling new chapter in the history of American business, and it won't be just a legal brief or a business how-to; more than anything, it will be a morality tale.

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