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Update August 29, 2005
Or to put it another way, if it walks like a crook, talks like a crook... I reported on this website, years ago, of the misdeeds of Dean Buntrock, and his cronies and their crooked and incompetent mismanagement of Waste Management, Inc. It's nice the be proven right so clearly! Dean Buntrock and his cronies have signed a consent decree, basically agreeing to pay the fines and penalties to settle the SEC case against, without admitting their guilt; which to those of us who worked for them, has been obvious for many years!
The SEC charged Buntrock, Rooney, Hau, Getz, and two other former top officers of Waste Management with perpetrating a massive financial fraud lasting more than five years. The Commission alleged that, beginning in 1992 and continuing into 1997, defendants engaged in a systematic scheme to falsify and misrepresent Waste Management's financial results with profits being overstated by $1.7 billion. The fraud resulted in a restatement in February 1998, which at the time was the largest restatement in history. In other words, this was the ENRON type cooking-the-books", long before ENRON!
The trial has been years in the making and it has finally reached its conclusion. On August 29, 2005, Dean L. Buntrock, Phillip B. Rooney, James E. Koenig, Thomas C. Hau, Herbert A. Getz, and Bruce D. Tobecksen agreed to make payments of over $30 million in total, comprised of $16.4 million in disgorgement, $10.4 million prejudgment interest, and $4 million in civil penalties. The disgorgement includes approximately $6.3 million in earnings-based performance bonuses from all settling defendants, $5.9 million in Buntrock and Hau's retirement benefits based upon the earnings-based bonuses, $3.5 million in losses avoided by Buntrock and Rooney from selling stock during the fraud, and $700,000 in tax benefits realized by Buntrock from gifting stock that was inflated by the fraud. The breakdown of the monetary relief is as follows:
The Judgments also permanently bar Buntrock, Rooney, Hau, and Getz from acting as an officer or director of a public company. Better late than never...
Additionally, Getz agreed to settle a related Rule 102(e) administrative proceeding to be instituted by the Commission by consenting to the entry of an order suspending him from appearing or practicing before the Commission as an attorney for five years.
The Commission's litigation is continuing as to James E. Koenig Waste Management's former chief financial officer and executive vice president. The other senior officer named in the complaint, Bruce D. Tobecksen, settled in September 2004. [Release No. LR-18913] (September 30, 2004).
For those of us who suffered under Buntrock and his cronies, this is at least some justice. They're still rich from their misdeeds, but it is now a matter of public record that they were charged with the crimes, and rather than let it go to its inevitable complete, settled to pay back $30 million. They can say what they want, but it is obvious to me that if you are innocent, you don't agree to pay $30 million in fines and costs!
Hopefully, the public will learn from this lesson: The overpaid heads of many companies are in power and riches not because of hard work and genius, but often because of corruption, greed, bullying and criminal activities.
There some thing wrong with a society that would tolerate paying a CEO tens of millions of dollars. That's too much compensation for a head of a company, too much incentive to lie, cheat and steal to continue receiving that money year after year. As Lord Acton said almost 200 years ago, "Power tends to corrupt and absolute power corrupts absolutely".
You think by now we'd realize that, and demand transparency in public corporations finances and limits on the power and compensation for officials of publicly traded companies!!
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