AMERICA LOOKS MORE LIKE ENRON ALL THE TIME
by Mark Scheinbaum
American Reporter Correspondent
Boca Raton, Fla.
BOCA RATON, Fla.. -- The Federal Bureau of Investigation's decision not to count 3,000 Americans who were murdered on Sept. 11 as crime statistics in its annual Uniform Crime Reports is just the latest example of what I'll call "off-line madness."
Even though the seven people killed in the 1993 World Trade Center bombing, and the more than 160 murder victims in the bombing of the A;fred Murrah Federal Bldg. in Oklahoma City were averaged into past municipal crime statistics, the FBI is excluding those who died in the Sept. 11 attacks on America from its totals in this year's report.
"They figured it just makes the averages crazy," a criminal justice professor told National Public Radio in an interview.
"Maybe that's why they should in fact be counted, because it makes the numbers look scary," was the gist of the reporter's response.
The problem is not well-meaning bureaucrats. They just want to present relatively level reference points for the supposed 2 percent rise in major crimes in the last year. The problem is the societal cop-out which haunts Wall Street and Main Street.
Good news is always "in-line" or "on-line," or a "budget item," and negative news is always a "non-budget" or "off-line" item.
Andersen Accounting's shenanigans and alleged ghost energy trades for Enron by their brokers, only got double and triple-booked when they made a profit. Otherwise, they were "off-line" items.
During the Savings & Loan crisis of the 1980s, Reps. Fernand St. Germaine and Henry Gonzalez cobbled together a $500-billion-dollar bailout plan that never put a dent in the federal budget or deficit. Why? Because it was an "off-line" item. Shouting the fiscal alarm, almost alone, was former Sen. Bill Bradley (D-NJ), who called for an "international banking fire drill" to once and for all get a handle on bank accounting.
This was the period when FDIC and FSLIC insurance up to $100,000 also had a habit of going "off-line." Little guys got crushed. But the fifth largest U.S. bank, Continental Illinois of Chicago, was deemed "too big to fail." Congress actually took this bank "off-line" from normal regulatory channels to protect the huge Teamsters Union pension trust and other accounts at the bank which were well over $100,000. In a bizarre twist of the rules of equity, there was a time when the failed bank was actually the safest place in America for depositors, because it came with unlimited insurance coverage. Hey, it was all "off-line."
I remember when Citicorp shuddered and the world blinked as Brazil and other countries deferred, demurred, defrayed and denied payments on billions of dollars in debt. Not to worry; appointed (not elected) U.S. Senator and Wall Street mogul Nicholas Brady came up with tens of billions of dollars in new "Brady Bonds." How could the budget sustain such a hit? Bingo! An off-line item! It wasn't even factored into the budget.
Could you imagine telling your spouse that you are out of debt because you have no more credit cards and the car has been paid off? "What about the $85,000 we still owe on the house, honey?" comes the reaction. "Mortgage? Mortgage! We ain't got no stinkin' mortgage - that's an off-line item."
Is Social Security running out of money? Hell no, not if you control Congress. When there's a big 'cross-the-board annual surplus it is a separate budget item in a "lock box," untouchable, "off-line." If your party is not in power, or if you're honest about the national debt, the balance in the Social Security, Railroad, and Highway Trust Funds is just commingled with all of the other money to make the numbers look better, or worse, depending upon how soon the next election will be held. Budget, schmudge-it. It all sounds good to the folks at home.
Having finally financed three kids through college, I can still remember all the campus visits and college searches. Like most parents, we wanted to know crime figures for campus murders, rapes, robberies, etc. Some campuses I heard about anecdotally, yet convincingly, I believed to be high crime areas, but they came up as pristine in all sorts of national crime reports.
It was only through work I've done on some state university campuses that I figured out that horrifying crime figures that would frighten tuition-paying students and parents and away were simply taken "off-line."
For example, by the state's having chartered totally autonomous campus "police forces," just like a municipality, all kinds of crimes magically disappeared.
At the sprawling University of Florida campus in Gainesville, Fla., drug busts, carjackings, rapes, assaults and the like occurring in the many private apartments and off-campus dorms around the main campus were categorized as city of Gainesville crimes and not included in the University of Florida numbers.
What about elementary schools? A kid wields a knife in the mall and is arrested by the cops. The same kid does it in the school lunchroom and the "school board police" have him suspended for a month - an off-line crime item. A Scout leader caught diddling little boys goes to jail. A priest caught doing the same thing gets sent to the bishop and a graduate seminary. Call it ecclesiastical off-line accounting.
The crisis of confidence sweeping through America fixates on names such as Martha Stewart and Kenneth Lay; on gigantic companies such as Global Crossing, Tyco, ImClone, Adelphia, Kmart, Enron, and Arthur Andersen. But the cancer goes much deeper into the fiber of America, and shakes the world's trust in the American system of innovation and enterprise.
Why should a kid worry about plagiarism on a term paper, or cheating on an exam? Why should a bartender honestly report taxable income to IRS? Why should residents believe violent crime numbers?
My lingering "off-line" question is this: If it's the official statistically position of the FBI that 3,000 Americans were not murdered in Arlington, Va., central Pennsylvania, and Lower Manhattan last Sept. 11th, where are they? Mark Scheinbaum, former UPI newsman is chief investment strategist for Kaplan & Co. Securities, members Boston Stock Exchange, NASD, SIPC and based in Boca Raton, Fla.