DATE: July 2009 - Credibility Crisis Revisited: Madoff, Blagojevich, and Raju
Well, the dust seems to have settled over our three prominent individuals who recently came to suspect amidst their own unique
controversies. Shammed Illinois Governor Rod Blagojevich was ousted from his position on January 29, 2009 by the Illinois State
Senate in a unanimous vote. First elected in 2002, Blagojevich’s two terms were riddled with personal controversies stemming from
rocky relationships with Illinois officials including but not limited to the state Attorney General, Comptroller and Secretary of State. No prior controversy could hold a candle to that which would occur in December, 2008 when Blagojevich was arrested on a federal charge subsequently convicted in January of impeachment charges and was removed from office. In addition, he is one of the few governors in history to be barred from public office for life regardless of position sought.
Since the impeachment, Blagojevich has continued to proclaim his innocence in every public venue imaginable, including Larry King
Live and David Letterman, insisting his removal was politically motivated. In the mean time, Blagojevich has attempted to pursue other avenues of employment ranging from an NBC reality deal to a six figure book contract. Regardless of future endeavors, Blagojevich will undoubtedly fade into history as the shameless governor willing to sell democracy to the highest paying bidder.
In January, 2009 Raju resigned following an admission of a $1.5 billion account fraud following an attempted merger of his founding
company Satyam and a family company Maytas. The fraud which was initially conceived as a method of covering a poor quarterly
performance morphed into a multi-account scheme involving friends and relatives. Raju was promptly arrested for a slew of charges ranging from breach of trust to falsifying business records. Raju was remanded to the Chanchalguda jail in Hyderabad where he will remain pending the outcome of the charges. However, on July 20, 2009, additional accusations surfaced alleging Raju redirected funds from Maytas, through 14 companies and ultimately arriving at Satyam. This discovery prompted the Chief Magistrate to push back a July 22, 2009 hearing to August 5. If convicted on all charges, Raju could spend the rest of his life behind bars.
The sun set on Bernard Madoff on June 29, 2009 when Judge Denny Chin sentenced the disgraced Wall Street Pioneer to 150 year in
federal prison. On that day, 71 year old Madoff swapped FINRA CRD number 316687 for Federal Inmate Number 61727-054 and took up new residence at the Butner Federal Correctional Complex in North Carolina for the remainder of his days. As the practice of parole was eliminated in the federal prison system, Madoff will never be a free man again. In addition, Madoff’s attorney issued a statement indicating an appeal will not be pursued…to the pleasure of his thousands of victims. But while Madoff is locked securely behind bars, the wrath of his historic Ponzi Scheme may never settle as he has left many people penniless, unable to afford housing, food and healthcare. The only benefit to the tragedy may be that Madoff was held accountable for his actions and he paid the highest price.
As the dust settles, it has become evident that fraud and abuse of power can’t be entirely eliminated, regardless of how much
regulation or government involvement takes place. It is even more important in challenging economic times to protect your own
organization from individuals who are dishonest about their past or qualifications.
To review your background investigations policy or to see how you can further protect yourself and your company, contact a CI