By and large, corporations have done good things for America. They have provided jobs – oftentimes very good jobs – for millions of people. They provide a viable presence within their communities. But corporations have also been touched by scandals. It seems like scandals have exploded over recent years, with corporate executives becoming more greedy and corrupt. But the reality is corporate scandal has been around as long as corporations.

Financial scandals tend to follow periods of financial booms. When the economy is going well, everybody, not just corporate leaders, ignore precautions and try to ride on the coattails of the good time. When the downturn eventually (and inevitably) comes, corporate leaders do what they can to save themselves, and when they use inscrutable methods, scandal is sure to follow.

Early American Scandals

The railroad barons were responsible for the rise of corporate power in the United States. They were also responsible for corporate scandal. To get the land needed to expand the railroads, the railroad barons focused on wielding their clout in the political arena. Their money paid for political seats, and in turn for those seats, the politicians made sure that the railroad barons’ requests were given special consideration.

Today’s Scandals

With the economic boom of the 1980s and 1990s and the shift from manufacturing to financial and computer businesses, the corporate scandals of the 21st century were able to happen within some shroud of secrecy. Money itself was more liquid. Employees were offered mutual funds, stocks, and other assets over which they had no control, as opposed to the days when bonuses were offered in cash and placed in savings accounts.

The Enron scandal may be the most famous of the recent corporate scandals. Using its political connections to become the top player in the power business, Enron officials manipulated the California power system and boosted their profits, while hiding debts due to improperly kept bookkeeping methods. Arthur Andersen, the accounting firm used by Enron, found itself embroiled in scandal after it shredded documents to protect Enron. Haliburton is under scrutiny due to its connections with Vice President Cheney and subsequent contracts to rebuild Iraq, but the corporation also improperly booked millions of dollars worth of construction cost overruns.