Editor’s note: David Moats, an author and journalist who lives in Salisbury, is a regular columnist for VTDigger. He is editorial page editor emeritus of the Rutland Herald, where he won the 2001 Pulitzer Prize for a series of editorials on Vermont’s civil union law.
[G]reed is bad. Maybe that will be the mantra of a new era.
Instances of corruption, malfeasance, fraud and self-dealing seem to have reached a critical mass, and maybe the mantra handed down from the movie “Wall Street” during the Reagan era will finally be erased. Events are teaching us, finally, that greed is not good after all.
During the “greed is good” era, a whole constellation of attitudes circled around a central idea: that the genius of the individual must be released from the fetters of government in order to succeed. Business men and women, styling themselves as entrepreneurs, became champions of enterprise, inventors, pioneers. Their regulators were mere bureaucrats. The default attitude among both Republicans and Democrats was that the creative power of the American economy must remain minimally burdened by taxes or regulations.
Outlaws still raided the borderlands of business propriety — they were the irresponsible few who behaved badly, the bad apples. The S&L scandal during the 1980s and 1990s ended with the failure of about a third of the nation’s savings and loan institutions and the imprisonment of hundreds of bankers. The Enron scandal and similar fiascoes during the administration of George W. Bush set new standards for outrageous fraud and ostentatious greed.
But these were seen as anomalies. Something is different now. A rapidly growing catalog of scandals is running in parallel with the widening wealth gap separating the top 1% from everyone else. And Vermont has not been spared.
The scandal involving Jay Peak and other projects in the Northeast Kingdom has been the worst financial scandal in Vermont history, and details continue to emerge. Lately, the state Department of Financial Regulation released more than 400,000 documents related to the scandal, and there are twice that number still to be released.
In the Jay Peak case, the federal Securities and Exchange Commission charged Ariel Quiros and Bill Stenger with misusing $200 million of investors’ money that was supposed to go to projects in the Northeast Kingdom. Quiros was alleged to have diverted $50 million to his personal use, which included the purchase of a $2 million luxury condo.
The money came from foreign investors participating in the federal EB-5 program, allowing them to obtain U.S. visas in exchange for investments of at least $500,000. People’s United Bank is now the target of a lawsuit by investors who say the bank knowingly abetted the fraudulent misuse of their money. The bank denies the charge, but the failure of the Shumlin administration to act on information about Quiros and Stenger’s financial misdeeds remains a major blot on the legacy of former Gov. Peter Shumlin.
That’s just one scandal in one small state, but it is emblematic. How could it happen? People have a great capacity to rationalize and make excuses, and yet despite Stenger’s previously sterling reputation, the massive scope of the scandal made excuses hard to find.
The continuing skein of scandals is showing us that the esteem commonly derived from great wealth is often not deserved. The Sackler family name is attached to numerous prestigious cultural institutions, including the Metropolitan Museum of Art and the Guggenheim Museum in New York. Now the Sacklers are the targets of lawsuits charging them with fraudulently hiding the dangers of the painkiller their company manufactured, OxyContin, leading to the opioid epidemic that, so far, has claimed more than 200,000 lives over two decades.
The Sacklers settled a lawsuit in Oklahoma last month for $270 million rather than face a trial that could have revealed the way they promoted the distribution of OxyContin. The book “Dopesick” by Beth Macy chronicles in heartbreaking detail the way that opioids were pushed on people by unscrupulous marketers and ignorant or venal doctors to create an epidemic of addiction in rural southwestern Virginia. Few areas have been spared, including Vermont, where battling the opioid epidemic has become a public policy priority.
Meanwhile, the Guggenheim has decided to dissociate itself from the Sacklers, as have three galleries in London. The Metropolitan Museum is reviewing its policies. The idea is catching on that the source of donated money matters.
But could well-meaning upper-crust philanthropists really have set about to cause a community-destroying epidemic? There is a precedent. The tobacco industry has caused even more deaths than OxyContin, and its record of deceit is well-documented. Tobacco industry personnel no doubt have a handy store of rationalizations for the deaths they cause. After all, smoking is a choice — except it is in the nature of addiction to fatally destroy the individual’s power to choose.
The endemic corruption evident during this new Gilded Age goes beyond the exploitation of our vices. In recent years Wells Fargo bank has transformed itself into a criminal enterprise, setting up millions of phony accounts without customers’ knowledge and then charging them fees, among other scams. Sen. Elizabeth Warren wrote in The Washington Post earlier this month that the executives overseeing corrupt practices have for too long escaped accountability
“It has been about 10 years since the financial crisis cost millions of people their homes, their jobs and their savings, and not one big-bank CEO has gone to prison, or even been prosecuted,” she wrote. “Tens of thousands of Americans have died after overdosing on commonly prescribed opioids, but not a single major pharmaceutical executive has gone to prison for their role in this tragedy. Corporate America needs a wake-up call.”
The bad apples are piling up. And one of the worst still threatens us.
The campaign of deceit, denial and confusion mounted by Exxon Mobil to slow action on climate change has been under way for 30 years, and the effects are everywhere around us. Author and activist Bill McKibben told an audience at Middlebury College earlier this month that the fossil fuel industry’s climate denial campaign has been “the most consequential lie in human history.”
It is consequential because the planet is experiencing a physical transformation unlike anything in human history, and no one knows what lies ahead for human civilization — all for the sake of monetary gain. In fact, the industry borrowed its tactics for sowing confusion from the tobacco industry. It appears the tide of corruption in corporate America has become as relentless as the rising tides of our warming planet.
One can view the corruption of our business leaders in any number of ways. There is the quasi-Marxist view that the ruling class will always serve its own self-interest first. Or one can chalk it up to the venality or weakness inherent in the human character.
And yet the eagerness of people to look away from the bleak reality of human corruption — to not be disillusioned by the bad behavior of people we had once admired — is constant. We may know people who work for these industries, and we know them as good people. We may have had a pleasant conversation with Bill Stenger of Jay Peak, who, after all, brought many improvements to his ski area. Outwardly, these corporate malefactors may not seem corrupt at all.
And yet human venality is often shielded by the willful blindness of those who don’t want to see the full consequences of bad behavior. For centuries Americans of both North and South were able to excuse, rationalize or look away from the hideous reality of slavery. This history ought to alert us to our capacity to look away from the lies and corruption of drug companies, oil companies or banks. There are criminals, and there are enablers, and it’s easy to fall into that second category. The greed is good era depended on a willingness to buy into the bad apple theory. Now it is occurring to more and more people that the whole orchard is an overgrown, diseased mess, badly in need of pruning.
On the climate issue, McKibben described how efforts to turn the tide have moved from education to confrontation. The recent climate awareness march from Middlebury to Montpelier was an educational and morale-building effort. The divestment movement, which Middlebury College has signed on to and which is starting to cause serious damage to the fossil fuel industry, is a campaign of confrontation.
Greed is bad, in its many manifestations, and people are catching on.
Clarification: Bill Stenger reached a settlement with the Securities and Exchange Commission on charges that included 52 counts of securities fraud and with misusing $200 million in immigrant investor funds through the EB-5 visa program.
