News
Enron is now enshrined in our vernacular as a byword for corporate arrogance and corruption. By concealing $1 billion in debt, the company went bankrupt, its pension program vanished, and more than 20,000 people were left unemployed.
Additional corporate scandals followed as Halliburton, Rite Aid, and WorldCom were hit with allegations of irregularities and fraud.
What is the public interest responsibility of business in a free market economy? This question lies at the heart of the new Center for Professional Integrity and Accountability, founded in 2004 with a significant contribution from Phil and Suzanne Bogue. The couple made their leadership gift as part of Portland State’s Building Our Future campaign, which seeks to raise $100 million for research, students and faculty, programs, and capital projects throughout campus.
Phil Bogue retired in 1981 as a managing partner of Arthur Andersen in Portland. The audit house collapsed as a result of its Houston office’s involvement in the Enron scandal.
“The formation of a center such as this one is important because of the continuing turmoil in the corporate world over the past several years,” says Bogue. “The center will be a place to study what happened, and what may reduce the severity of this problem in future years.”
The Enron debacle can be seen as one possible consequence of our economic system, suggests Prof. Jesse Dillard (left), Retzlaff Chair in Accounting at Portland State’s School of Business Administration and the center’s director.
“Free market capitalism requires growth and accumulation of wealth,” says Dillard. “In its pure form it’s based on self-interest—the only responsibility of business is to maximize profits. It’s a system that’s effective and efficient in producing things, but when it’s dominant over everything else, humanity can lose its way.”
Was Enron simply a case of a few bad apples? Yes and no, Dillard says. “This kind of thing is cyclical. Every eight to 12 years we have a major scandal. Ten years ago we had the savings and loans, before that it was junk bonds.” In his view, Enron embodied both the good and the bad of the norms of market capitalism, its top leadership acting without reference to any other set of values.
Dillard, who is founding editor of the journal, Accounting and the Public Interest, wants the center to ask fundamental questions about the role of business in a democratic society. “Is the primary purpose of business simply to create wealth for shareholders? Or do all members of society have a moral responsibility to act in the public interest?”
The Center’s research, education, and outreach activities will be aimed at expanding the discussion beyond the business professions, because all members of society are stakeholders. “We want to make people aware of the ethical issues,” Dillard says. “We can’t tell them what the answers are, but we need to talk about where business fits in our society. It’s hard to imagine alternatives—Marxism didn’t work and the only other model anyone in the West has tried yet is free market capitalism. Some of the European countries are on potentially interesting paths.”
Dillard sees himself facilitating an ongoing academic and community discussion. “What excites me most is the intellectual energy and curiosity coming together here. My job,” Dillard says, “is to provide faculty, students and community members with the resources they need to fully explore public interest and sustainability issues. Phil and Sue Bogue’s early support has been key in this respect.”
Why is Portland State the right place for the Center for Professional Integrity and Accountability? “Because relevance guides the work of the School of Business Administration and the University,” Dillard notes. “We want to do things that matter to life in this world every day. There’s a passion here at PSU and in Portland for asking tough questions, a receptiveness to new ideas, a willingness to take on wide-open subjects.
“If we can’t do it here, where can we?"