White collar crime: moral, economic indicator?
Boston — White-collar crime is a signal. It's a signal of widespread attitudes, observers say, toward economic conditions and leadership in government and at the office.
So with almost every economic move it makes, the Reagan White House will be waging war against a crime that leaves only vague traces as it threads its way through American business.
It's a confidence game of sorts: As confidence grows in the economy and in leaders, fewer people cheat on taxes, on medicare, and on expense accounts.
This is why -- with President Reagan's longstanding priorities both on returning work incentives through cutting taxes and on battling down "government waste and fraud" until the federal budget balances -- some observers are optimistic for an upswing in confidence. Hence a downswing in white-collar crime.
"Until you address the fundamental environment of the economy . . .," says Malcom S. Forbes of Forbes business magazine, "all else is for naught."
White-collar, or economic, crime is not usually dramatic. It's an impersonal crime of numbers, ranging from calling a personal car a business expense on tax forms to full-fledged con games and government corruption. As Massachusetts Attorney General Francis X. Bellotti recently put it, "the war against business crime is largely an accountant's war."
"So far," he added, "we are losing that war."
Weighing the problem is notoriously difficult, but Mr. Bellotti told an army of economic crime sleuths at a Massachusetts Society of Certified Public Accountants conference earlier this month that it accounts for between $50 billion and $100 billion a year nationally in losses.
Most of those fighting the battles, including Dana Caro, deputy assistant director of criminal investigation with the Federal Bureau of Investigation (FBI), think economic crime has been growing worse.
The computer has magnified the problem, increasing a thief's leverage. The average bank fraud case involving a computer, FBI figures show, nets more than $ 500,000.
But when suspicious patterns emerge in a company's financial books, it can indicate more than dollars lost. It reflects a mood, some think; it is a symptom of a system -- at some level -- gone awry.
To Mr. Forbes, the answer begins with tax reform, "restoring that essential link between hard work and reward." In this regard he supports the Kemp-Roth plan that President Reagan has espoused for tax cuts to spur productivity.
In a broader way, Leonard Smith sees crime in the office tied to some kind of social malaise. It rises when people are "disgruntled with things." Mr. Smith directs a study project on crimes against business for the American Management Association.
Smith notes a link between the number of pilfering employees, who report themselves in anonymous surveys, and attitudes toward the employer -- that is to say, job satisfaction.Those who cheat often feel they aren't getting fair treatment.
But white-collar, is most dangerous at the top. "Crime in the suites," as super-management corruption is dubbed, can send ripples throughout an organization and cost billions of dollars.
Herbert Edelhertz, director of the National Center for White Collar Crime in Seattle, points out that when the leadership of a firm is visibly evading taxes or driving a company Mercedez Benz on social occasions, the employee often adopts an "everybody's doing it" attitude toward cheating.
The problem is worst when it hurts the most -- under rough economic conditions. It also appears to be tried to productivity, according to Smith's studies. Crime against business and productivity sit on a teeter totter, in a sense, with the balance set by job satisfaction.