Monday, April 11, 2005
It looks like a fraud investigation is being conducted by the US Attorneys Office in Milwaukee and the focus is on what a former employee of S.C. Johnson may have done. The investigation is about an "alleged multimillion-dollar mail- and wire-fraud scheme involving rigged trucking contracts by a longtime executive of consumer-products company S.C. Johnson & Son Inc." The bottom line is whether this corporate exec was receiving compensation above and beyond what was permitted by the corporation. (see more in the Wall Street Journal here)
To the consumer the bottom line may be whether products such as "Pledge" went up in price because someone in the company might have been getting some kickbacks.
Several things to consider here:
1. Should the government be investigating an alleged internal fraud within a company? The company started an internal investigation and some may argue that it should be left to this civil arena. Let the market drive the price.
2. But does the government need to protect the consumer when a company may have failed to be cognizant of internal fraud occurring within? Is that much at least owed to the market and to shareholders?
3. The company in this case was ranked #7 on the Fortune best places to work. (see announcement) How will this affect that ranking, and should it? The company also emphasizes social responsibility. (see here) Does this say that no matter how hard a company tries, they may not be able to control all the employees?