A CFO who confessed to fraud wants business students to learn from his mistakes. An interview with Aaron Beam, former CFO, HealthSouth Corp.
Edward Teach, CFO Magazine
June 1, 2009
My dog is 20lbs. If she sees a bear in her yard, she barks (through the window) at that 500 lb bear with unbelievable ferocity. Last month she got out when the bear was in the compost and about 50 feet from the bear she just froze, realizing the bear looked very different when in her "grasp." To those who are reading this with disgust and indignation, I would offer this wisdom: Unless you have been in the situation where you have to choose between keeping your job and stepping across the line where you and your family are personally at risk, you are barking through the window. Like a couple of the others who have posted here I have been in the situation described, and I paid a high price for doing the right thing (I refused to falsify state documents and then blew the whistle up the chain of command). Reconciling oneself to do the ethical thing is rarely a snap decision and is extremely difficult. Professors can't teach to this. B-School (and undergrad) students need to hear directly from the success and failure stories of people faced with this choice. There will always be bears in the yard, but by drilling what to do when they arrive then they will be handled appropriately.
Posted by Jeff Lefkowitz | July 15, 2009 11:30 am
I believe the best example we could make of Mr. Beam is not to parade him through the country's Business Schools but rather present him from a jail cell where he belongs. He violated the most important principle and responsibility of a financial leader. He lied! He lied to himself, his investors and the public. Think of the thousand of people who lost billions in investments based upon the lies of Mr. Beam and other unethical, unprofessional financial leaders who, for whatever reason, 'Cooked the books'. People like Mr. Beam disgust me; they have no values they have no character and they have no shame. Putting myself through college mowing lawns, dealing with the public and learning the value of a hard earned dollar created a certain value system that I have followed to this day. Maybe now Mr. Beam will learn the value system that the majority of us possess through the sweat of his brow, pains in his back and calluses on his hands. Mr. Beam did nothing more than steal from society and damage my profession. Shame on CFO Magazine for giving this individual three pages, I would not give him three seconds.
Posted by Jeffrey Scholl | June 25, 2009 07:02 pm
It is disgusting that greed and Public company abuse existed here. If these Southern gents just grew the business honestly.... They were pioneers with MRI clinics which now should not have this bad stigma associated to them. I checked there credit around inception. I thought they were at the right place at the right time. A shame they were misdirected there. Problem is, as much ethics are trained to you at business school, books are cooked far too often and people don't speak up for fear of job loss.
Posted by David Segal | June 18, 2009 04:46 pm
While I do have a humanitarian heartstring that is tugged upon by Mr. Beam's plight, it is overwhelmed by disgust. There are plenty of other non-suit wearing individuals who have been responsible for hurting far fewer individual less egregiously sitting in maximum security penitentiaries than Mr. Beam. They will not get out and get to go on multi-thousand dollar speaking tours about how "they should have said no." Mr. Beam and his compatriots looted millions upon millions of dollars, lived a very pleasant life style (I don't have a $3M home to sell for restitution nor for any other purpose), and looked down on the mere mortals. While Mr. Scrushy may have been the world's worst bully, Mr. Beam always had it within his ability to tell him to put his orders "where the sun don't shine" and walk away from the job. Only after a year did Mr. Beam's conscience get to him. What happened? The golden parachute wouldn't open if he left for ethical reasons? If he would have been willing to risk a small portion of his comfortable life style, he could have quit when he was given the order to break the law. Maybe he has some feeling for the young man who holds up a gas station because the demon of his addiction is telling him to break the law. I hope that Mr. Beam's lectures will help those in business schools to stay on the "straight and narrow." My bet is, however, that those who will be most affected will be those who would have quit. Those who will allow themselves to be ordered to commit illegalities or willingly do so will let it wash over them and affect them in only the most minimal of ways. Perhaps Mr. Beam can help society even more by hiring someone who is released from a prison who served time for a drug-related crime. Maybe then he'll truly see how the other side lives...those who don't have the option of having people feeling sorry for them when the assert that "I should have said no."
Posted by Leroy Kolacinski | June 18, 2009 01:14 pm
Dear Sir (Aaron Beam): Thank you for sharing your experiences as they hit home. I graduated from a university in Boston, in 2003, where there was a lot of cheating happening in the business school. Whether it was blatant cheating or plagiarism, it was rampant. I immediately brought it to the attention of the faculty. First, I informed the professors. When they told me there was little they could do or outright ignored me, I brought it to the attention of the associate dean and dean. They, too, ignored me. I didn't stop there. I continued up the chain of authority and the bottom-line is the university wanted to have no part of it. I stood up for what I believed was right and did the right thing. The administration and certain professors failed to uphold academic integrity in the face of adversity. Eventually the story was released to the Boston Globe before any action was taken (i.e., before the university addressed it). Even the ethics class that I took had students cheating on their exams right in front of the professor. Again, nothing I could do except tell the professor I was not happy with his inaction and later tell the students that I did't approve of their methods. You can sense how popular I was at this university. My point is: We all have our own convictions. We all have a conscionable duty to uphold (academic) integrity in the face of adversity. Either you have an inane sense of responsibility or you do not. Those that chose to cheat or commit fraud will eventually get caught. This quote, by Edgar J. Mohn, resonates my firm belief regarding cheating. "A lie has speed, but truth has endurance." I agree to disagree with you regarding teaching college students ethics. I don't believe ethics should just be limited to universities or colleges. That is, in my opinion, this society must include ethics in its curriculum at the earliest inception of education (i.e., elementary school) and it must be a required course thereafter. Otherwise, you can lead a horse to water, but you can't make it drink. Teaching ethics at a university level, only, is too late. I believe those that are convicted of fraud (i.e., white collar crime), now more than ever, should share their stories with students, at all levels, to raise awareness about the legal and personal ramifications of their actions.
Posted by Stone Laraway | June 09, 2009 11:14 am
The reality is...if your organization asks you to "cook the books" they are already in trouble and if you say no, you know you are going to be fired. At this point you have to choose between no income and no reference or an uncertain future, wondering when you will be found out...when will you pay the price? Now or Later? This is a suckers choice. You don't have to choose one or the other. You have other options. Go to the authorities, start taping your conversations. It IS about your (and your families) survival. Don't let trash take you down with them.
Posted by Sarah Marks | June 09, 2009 10:33 am
It is good to finally see an individual who did wrong take responsibility for poor decisions that harmed others. The ethical conduct in business has gotten so bad that nothing comes as a shock and honesity and integrity seems to have little value. We see it in government, business, educational institutions and look what it has done to our world financial system. The unabated greed has driven folks to do just about anything without concern for who their actions have impacted. Many of these folks had built good reputations over years but have been willing to pitch it all out in minutes for a few dollars. When I published my book, Successful Career Management, a professor at a major university commented that he was pleased that I talked about the need for honesty and integrity in business. He saw is as a trait missing in many of his students today. After witnessing the behavior of those who many of the students admire, I clearly understand why there are concerns with the students we are now sending to the market place. Students hear what you say but they watch your foot prints and we know what they are seeing daily. This unabated greed and corruptions must stop.
Posted by R Donald | June 08, 2009 10:50 am
You ALWAYS have the option of saying "NO" when asked to cook the books. The question is; are you willing to pay the price? Do you really have the conviction of your beliefs? Or, do you have any Judao-Christian beliefs at all? If you do, and they do not control your actions, you need to reassess whether you really believe what you think you believe. I have been a CFO, and I have been asked to falsify financial statements and lie to a large (publicly traded company)customer, and I have said NO, and I have been fired. It boils down to your priorities and what is most important to you in this life. Your pocketbook or your name? (Pr 22:1)
Posted by Douglas Shearer | June 04, 2009 11:36 am© CFO Publishing Corporation 2009. All rights reserved.