March 10, 2004

Different Strokes for Different Executives

By Thomas Lifson

Senior executives of a certain large organization faced a problem. They owed the public a periodic report of their results, and the numbers just weren't good enough, jeopardizing future access to money. So, they decided to fudge: change some assumptions, apply a different standard, and make the trend line jump up.

 

Enron? No, the Minnesota Department of Education.

 

The Minneapolis Star—Tribune reports that as a result of the manipulated numbers,

 

The percentage of students labeled "proficient" or better is really 3 percent to 6 percent lower, meaning that dozens more Minnesota schools probably would have been deemed underperforming under the federal No Child Left Behind law.

 

Can you spell 'fraud,' children?  

 

It gets worse. The educrats, caught red—handed, are not facing up to their culpability. They are calling the scandal "an error in judgment," despite the fact that the 'error' was brought to the attention of the state's director of testing months before the figures were released, and he went ahead with the release of the fraudulent numbers, despite having the correct figures, based on consistent standards, in his possession.

 

In the corporate world, this sort of deceptive massaging of the books would get an executive indicted, and if the evidence were sufficient, sent up the river for some serious reflection. In the case of Minnesota's educarats, Reg Allen, the man who knowingly released the disingenuous report, was allowed to quietly resign two weeks ago, four months after his boss, Education Commissioner Cheri Pierson Yecke was informed of the 'mistake.' The Education Department's recently—appointed 'Commissioner for Accountability,' however, tells the taxpayers that the resignation was not even over the test scores.

 

Oh. So the Commissisoner for Accountability is telling us that there was no accountability for the phony figures?

 

Yecke, who claims that she immediately took steps to correct the 'error' upon learning of it last November, is contradicted by Allen's statement to a reporter, that Yecke 'signed off' on efforts to devise an explanation for the process used to generate the favorable scores. Allen then, wisely decided to shut up: "I just don't think there's anything useful to be gained by getting into how things were decided."

 

Jeff Skilling, formerly president of Enron, would no doubt agree.

 

Commissioner Yecke is hardly more forthcoming than Allen:

All Yecke would say Monday was that an unnamed staff member had made "an error in judgment. The safeguards we put in place were not followed." Later, when specifically asked about Allen, Yecke spokesman Bill Walsh said the commissioner has no interest in blaming anyone.

Well, we certainly wouldn't want to blame anyone for deceiving taxpayers about what the public gets for its massive investment in schools. Unlike private sector managers, government bureaucrats apparently can lie with impunity. When caught, we give them a few months to settle their affairs, and quietly let them resign. No sense in making a fuss, after all. There's always more money the taxpayers can be required to fork over.

 

Martha Stewart is soon to serve jail time for lying to federal authorities, while not even under oath. Enron executives are beginning to face the judicial music. But apparently, government bureaucrats live on a different, more exalted, and wholly unaccountable plane of existence.

 

It is long past time to begin changing the structure of our legal system, applying the same levels of accountability to civil servants that corporate executives, and even individual citizens face. If citizens can be sent to jail for lying to authorities, shouldn't authorities face the same penalties for lying to citizens?

 

If not, we challenge our law makers to explain why not.