Scared Straight
By Lesley Alderman, Start Here Magazine
www.startheremagazine.com
Most students don't get credit for going to prison.
And most don't get extra credit for attending evening lectures given by prisoners. But if you're a student in Richard Davis's Legal Environment class at Susquehanna University, you do. That's because Davis, 56, a CPA and former tax lawyer in the IRS's Office of Chief Counsel, believes that prisoners have a lot to teach business and accounting students about the law.
About 10 years ago, when the missteps of white-collar, soon-to-be criminals were starting to make front-page news, Davis decided his students could benefit from hearing how smart executives ended up on the wrong side of the law. He invited white-collar criminals from the nearby penitentiary to talk to his students about how they went from professionals earning six figures to inmates working for 12 cents an hour. "I can regurgitate a chapter on corporate ethics and social responsibility," says Davis. "But it's not as powerful as a white-collar criminal coming into my class in a prison uniform to tell his story and say, ‘Hey, I was in your position not that many years ago. Look what happened to me, it could happen to you.'"
Or could it? It's easy to think that people who end up in jail have criminal minds and plot their deeds the way Tony Soprano plans his next hit. But Davis's students learn firsthand that it's not that simple.
Most of the men (the nearby prison is men-only) who speak about their lapses for bank fraud, securities violations, embezzlement and other crimes say they didn't set out to be cheaters. The same can be said for the scores of CEOs and
CFOs of public companies who have run afoul of accepted legal standards in the course of their corporate business. To them, humiliating front-page coverage and long, expensive trials are just the warm-up for the ultimate punishment—jail.
On a sunny day last fall, Davis drove 26 of his business majors to Pennsylvania's Lewisburg federal prison camp, a low-security facility 15 miles from campus,to listen to white-collar criminals tell their stories. (The criminals also go to Davis's class to talk, but a cautious warden had forbidden prisoners from leaving the grounds that semester.) The students filed into a stark, putty green auditorium, with a soda machine humming in the back, and sat on stiff metal chairs. Three inmates, dressed in prison khakis, filed into the room, guards trailing behind them. They began to speak: One had owned a small business, another had owned a securities consulting firm, and the other had been a stockbroker. All had been earning six-figure incomes. Sometimes reluctantly, sometimes defensively, they explained how oversights, small lies and false steps had suddenly caught up with them. As a result of greed or stupidity, their careers had been destroyed, their fortunes all but wiped out, their families humiliated, and, in most cases, their marriages finished. "These were smart, articulate men," says Davis.
The students, who may have assumed that only outright deviants could end up in prison, were sobered. "It's scary that one error in judgment can result in years of imprisonment and a completely ruined career," says Diane Lagowski, 19, an accounting and psychology double major. For Megan Sites, 20, listening to the men made her realize that "these sorts of crimes can happen to anyone. It's like, ‘Oh, what's a little forgery here and there' and before you know it, you've falsely accounted for millions of dollars. Or, ‘I can sell this one piece of software to this person illegally and no one will know.'"
"I think that these men became so engulfed in the corporate culture that surrounded them that they lost sight of their own independent ethical standards," Thomas Sutcliffe, 22, observes.
Alfred Porro would agree. One of the first criminals to speak to Davis's class, Porro spent five years in prison for mail fraud. His tale, he believes, is emblematic. Porro was a wealthy, well-known lawyer. He had his own law practice with his wife, Joan. He'd been a full professor at Baltimore School of Law and, at one point, had teamed up with New York Giants' linebacker Lawrence Taylor to open a series of sports bars and restaurants. "My wife and I had millions: We had a 14-room home in New Jersey with a swimming pool and a tennis court, a summer house in upstate New York and another on the Jersey shore. The works, you name it. And it never seemed like enough. Now it's all lost."
During his ascent, Porro admits that he took liberties and became prey to the temptations around him. During his trial, prosecutors found that he had evaded taxes and even skimmed money from children's trust funds. In the early 1990s, he and Taylor were raising money for a golf center by mail. Porro had not disclosed that he had an interest in the center and was nailed in 1997 with mail fraud. "I tell students now that success is the greatest danger they are going to have in their career," Porro says.
"The newspapers called me the Teflon attorney," he remarks. Porro explains that the drive that helped him become a powerful attorney eventually led to his downfall. "You start believing that no one could get you down." You also start wanting more and more. "If you look at white-collar criminals, they all come to a point of crossing the line into a danger category. It's a gradual process. Your thinking becomes clouded. Your morality becomes relative. You start saying to yourself, ‘Everybody does it,' ‘No one will get hurt,' and ‘I deserve it,'" he attests.
Porro is out of jail now, and he and Joan (who was also sent to prison) continue to speak to students about ethics. He urges students to look at their own behavior. "I ask them, ‘Do you cheat on exams?' because studies show that a high degree of students do. I say, ‘How many of you download music? Share music?' I tell them, ‘Well, you have violated the law.'" Students, he believes, need to be in touch with their moral conscience and to examine their motives. "One of the biggest goals is making money. That was me, and it ended up tragically," he admits.
While it seems Pollyanna-ish, almost quaint, to talk to students about right and wrong, experts in business ethics say it's essential. Jim Brackens, a CPA who runs his own accounting firm in Richmond, Virginia, served on the AICPA's professional ethics executive committee for three years. Brackens says it's dangerous to enter the work world with a "just me" attitude. He defines ethical behavior as "thinking about what is good not just for the company, but for the client, the customer, the society as a whole." And he cautions students that if they find themselves in a culture "that doesn't respect rules or tries to intimidate you, then don't cave—go elsewhere."
Davis is all too aware of the pressures his students will face in a fast-paced, bottom-line-oriented business climate. "As my students head out into the world, they will find the pressure to make a splash in the short term. When those pressures become intense, the temptations to cut corners, to, say, accelerate income from one quarter to the next, become intense too." Davis wants his students to be able to stand up for what is right. "My students are facing a more prosecutorial environment. The government doesn't want to have another Arthur Andersen go down. Prosecutors realize it's better to go after the individual and not the firm itself. You can't hide behind the cloak of your company," he advises.
It's doubtful that Davis's students—who have seen powerful men reduced to mopping floors in prison-issued shoes—would ever need to hide. "I am planning on going into the field of accounting in some way or another," says Danielle McCann, 20, who made the trip to Lewisburg last fall. "I [know that I] have to concentrate and be very focused on any task I'm completing, making sure I'm following all of the correct procedures." Thomas Sutcliffe adds, "I think I will be more likely to avoid succumbing to corporate group-think mentality and instead try to evaluate my decisions as independently as possible." The straight path may, in the end, be the most rewarding path to follow.