Microsoft settles Iowa class action suit

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deferred prosecution

Microsoft is likely now run by the Fed's AG office. Lets get our clews from yesterday's WSJ.

According to the WSJ, page 1, KPMG's top executives literally had to deal with brain cancer before they set up computer kiosks so people could chat about wrong doing without fear of reprisal and the healing could begin. They did this because it was unlikely the company would exist after prosecution by the feds for a tax related impropriety - even if they won in court, without such an action.

Some background: KPMG hired many of the folks from Arthur Andersen, my old firm, after the Enron paper shredding. The wrong minded thinking continued unabated. Arthur Andersen later was vindicated but the firm no longer exists anyway. The same thing happened with the Gates family law and lobby firm, Preston Gates and Ellis after Abramoff, its key man, was jailed. Neither Arthur Andersen nor Preston Gates and Ellis were deemed by the US federal government worthy enough for deferred prosecution, which when executed properly can save an organization.

Lets assume that a similar deferred prosecution situation now faces Microsoft as it does KPMG. KPMG was called a "rogue operation" by its critics, and Microsoft a "criminal organization". But with only 4 of what use to be 8 big accounting firms left, the nation couldn't really let KPMG fail. Neither can it let Microsoft fail.

The feds first had KMPG cut off its former wrong-doing executives. After these were removed from the firm, they were then made to cut off payment of legal fees to those executives (I think that got a lot of press). Then the chairman and deputy chairman were forced off the board nominating committee.

I expect similar things to happen at Microsoft. Its almost a never ending story. But the US government has lots of experience now and the US population is supportive.

Jobs is a great man. Are you really worried about the backdating? This was a Microsoft innovation. Microsoft's accounting firm Dellote & Tooshe? first help implement it at Microsoft, then introduced the technique (as is usually done with questionably legal actions, to those in our industry who would be labeled "chumps" or "not acting in shareholder's interest" otherwise. The poor in spirit will always be with us. In that mater the work never ends. But our IT industry is getting cleaner every day. Lets see that and be happy for it.

Frank L. Mighetto CCP

Posted by: mighetto   Posted on: 02/16/07 You are currently: a Guest | Members login | Terms of Use

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