Corporate Wrongdoing and Reader Ennui
If you had to pick a theme for the week, corporate malfeasance would be a good candidate.
The goings-on at Wal-Mart and News Corp have been providing plenty of fodder for business media. Wal-Mart is in the hotseat because of a New York Times expose alleging the systemic use of bribery by its Mexican subsidiary and a possible cover-up by folks at HQ. News Corp got another round of questioning about hacking accusations at some of its major media outlets.
Oddly enough, our readers didn’t seem particularly excited about either.
In the case of News Corp it could very well be reader burn-out. This story has been unfolding in slow motion for a while. Some would argue it is primarily interesting just to folks in the media business, although I suspect that may change when and if we see some punishment handed out.
In the case of Wal-Mart, the disinterest may be that bribery in Mexico is unremarkable. Holman W. Jenkins Jr. at WSJ suggested it was because it is an accepted part of the culture. Indeed, my colleague Herb Greenberg wrote an interesting column about whether or not bribes should be considered an accepted part of doing business abroad.
Another factor could be that, for investors, such scandals do not control ultimate money decisions.
“You have to look at each company specifically and look at the ongoing business, the value-added, the moat they built…there’s always potholes,” said Mario Gabelli, chairman and CEO of GAMECO Investors, during a conversation about the Wal-mart and News Corp troubles on CNBC's “Squawk Box.”
There’s another, more troubling consideration. Perhaps corruption just isn’t disturbing news anymore. We’ve had a parade of Wall Street settlements and cases playing across Web sites and front pages lately. Just this week a former Morgan Stanley exec pleaded guilty to conspiracy in regard to bribery in China, and the SEC started poking around possible Hollywood bribes in China. Nor is it just confined to overseas. This week the New York Times published a story about a $56 million fraud scheme by a local construction outfit.
Let’s take a positive view. Maybe it’s not that there is so much corruption that it's become commonplace. Maybe it's that more corruption is detected, reported, and prosecuted. And perhaps when the coverage turns to punishment, readers will take more note.