"We've never said it's going to be quick. We've never said it's going to be easy. War is tough and it's going to be a tough fight. But it's a worthy fight." -- General Richard Myers, chairman of the Joint Chiefs of Staff, on ABC's Good Morning America Lock 'em up, and throw away the key. That just about sums up public attitudes toward corporate lawbreakers these days. Seem overblown? Well, a little-noted change in federal sentencing guidelines that went into effect on Jan. 25 means that future corporate crooks could face a life behind bars.
The stiffened guidelines, mandated by the Sarbanes-Oxley Act, are causing a stir among white-collar defense lawyers. To be sure, few of their clients are likely to get such a sentence. And the change comes too late for the current crop of malefactors -- unless prosecutors can prove post-Jan. 25 wrongdoing. But at the very least, the new guidelines give ammo to prosecutors in seeking plea deals. "This is not government posturing," warns David Gourevitch, a partner at Stueve Helder Siegel in New York.
According to San Francisco law firm Pillsbury Winthrop, which studied the new guidelines, defendants can get life sentences if crimes involve some combination of the following: over 250 victims, a loss of at least $400 million, involvement of a public company, or a threat to a financial institution's solvency. Officers and directors get the stiffest treatment. Kind of a golden parachute -- the sort that doesn't open. Where's Saddam's wealth? U.S. officials estimate he has $7 billion to $10 billion from oil and cigarette smuggling squirreled away -- a healthy chunk for eventual Iraqi reconstruction. But even if Treasury Dept. sleuths can find what they've dubbed "kleptocrat assets," they face having to win court battles in dozens of countries to get banks to turn over Saddam's accounts. After all, a Swiss court is still pondering what to do with part of Philippine dictator Ferdinand Marcos' loot 17 years after he was deposed.
So Treasury officials are drafting plans to get Saddam's money into the hands of a new Iraqi government. They envisage a possible tribunal like the one in The Hague that heard claims against Iran in the '80s. Or they may use an existing institution, like the Swiss-based Bank for International Settlements. The goal, says a senior Treasury official: "We want to telescope that 17 years to 17 weeks."
Why would countries such as France or Russia let a tribunal override their banks? Because Saddam's billions belong to the Iraqi people, this official says. Besides, "it will be very interesting to see if anyone would come forward and say, 'That's my money,' when it's tied to Saddam's illegal smuggling and skimming." Bob Dylan and John Lennon once helped mobilize opposition to the Vietnam War with songs such as Masters of War and Imagine. Now, a new generation of protest singers is emerging against the war in Iraq -- and using technology their forefathers never had: the Internet.
Musicians, including the Beastie Boys, John Mellencamp, Billy Bragg, and Yusuf Islam (formerly Cat Stevens) have recorded antiwar songs and released them only on their Web sites. And fans are flocking to them. More than 250,000 people have downloaded the Beastie Boys' In a World Gone Mad..., which urges listeners to "fight the nonviolent fight," since it was posted on beastieboys.com on Mar. 11.
The Net is helping protest music debut ever faster. British rocker Billy Bragg released The Price of Oil on billybragg.com at the end of last year and has had 30,000 downloads since then. He figures if he had waited until his next CD, which he anticipates releasing late next year, the song would have lost its relevance. Says Bragg: "This song has a brief shelf life." Let's hope so. The cliche is that CEOs prefer golf. Lately, though, they're taking up cycling. Inspired by Lance Armstrong -- and, often, by knees that can no longer jog -- many execs can be seen riding expensive custom bikes. "The world is changing," says former BMG Entertainment CEO Strauss Zelnick, 45, who now manages investment shop Zelnick Media and often logs 80 miles a week in New York's Central Park. "People are aging better and living longer." Other CEOs are avid riders, too: James Kennedy of Cox Enterprises, Harold Varmus of Memorial Sloan-Kettering, Brian Roberts of Comcast, and Thomas Weisel of Thomas Weisel Partners in San Francisco.
Some are even putting company dollars into competitive racing. Zelnick has a minority stake in the Pro Cycling Tour, the most prestigious U.S. circuit. Frank Schroeder, CEO of Schroeder Iron, who logs up to 300 miles a week, figures that having his company name on racers' jerseys across his Southern California market can bring greater visibility to his structural steel fabricator. Take that, golf! How about 100 shares of Catherine Zeta-Jones stock? At $11 a pop, the actress is still considered cheap, despite her Oscar win. Value investors might want Nicole Kidman, also currently trading at $11 -- but up nearly $3 since February. "If ever there was a long-term hold, it would be Nicole," says Justin Urquhart Stewart, a director at London brokerage Seven Investment Management.
It's all happening on Celebdaq, Britain's online trading game from the BBC. Anyone around the world can play, and so far, about 200,000 people do -- trading some 300 mostly British actors, models, athletes, and politicians. And there may soon be a U.S. version: Several production companies have approached the BBC about it.
Users register at the home page (bbc.co.uk/celebdaq) at no charge, and set up an account with $16,000 in virtual cash to buy and sell celebrity stocks. No real money changes hands, except for a $160 cash prize paid to the player with the biggest percentage gain each week. It could be a defining moment for Silicon Valley: One of the region's highest-profile execs is shedding a symbol of dot-com excess. In late February, Christos Cotsakos, the former CEO of E*Trade Group, put his Atherton (Calif.) house on the block for $28 million.
Even by CEO standards, Cotsakos' spread is a knockout. The basement has an actual wood-paneled English pub shipped from London. There's a Japanese tea house, a koi pond, and a bocce-ball court out back. The formal powder room (yes, there's an informal powder room, too) has 24-karat gold leaf and its own chandelier. The 75-foot pool has mosaics and more gold leaf.
Real estate agent Mark Kaprielian says the reaction is "positive" among potential buyers. He won't give Cotsakos' reason for selling, but insists it is "not financial at all." Cotsakos left E*Trade in January after his $80 million pay package irked investors (he gave back $21 million). Cotsakos didn't return calls seeking comment.