From: Clifton Azok (3/27/96) To: frontline@PBS.ORG Dear FRONTLINE,
Regarding the story about Phar-Mor and Mickey Monus; it was factually excellent, and only became another attack on capitalism when the host and criminal interviewees began giving their social commentary. For example, para-phrasing the host's conclusion that charatacteristics of a good businessman are also characteristics of good criminals; that was an outrage! You could make that generalization about any successful person or profession, but obviously, the host wanted only to discredit successful business people.
As far as implying through the host's interview that all business operates to some degree like phar-mor was another outrage.
Has Frontline ever featured a government scandal or government fraud? For example, the national debt would be an example of a fraud on the american citizen, which you carefully stay away from. Or, the social security trust fund; which is another example of operational fraud of the American people. Does the social security trust fund operate under legal faduciary guidelines? Does the fact that there really is not a trust fund, but rather a general ledger line on the federal budget; conflict with collecting american's wages to invest for them in a trust fund? We could go and on about government fraud from politicans and bureaucrats, but I am sure we'll never see a government hack job featured on Frontline. We know what kind of cloth you are cut from, "public tv!"
The attempt of the Phar-Mor executives who went along with Monus' fraud to portray themselves as victims was unconvincing at best, nauseating at worst. Pat Finn on his knees in a church pew? Come on, give me a break! He seems awfully confused about what it means to see the world in black and white, as he claims to. Is he familiar with the concept of the word "resignation?" But perhaps that would have interfered with his black and white game of golf and the black and white mortgage on his house.
None of the executives who were party to the fraud were innocents, and they certainly weren't victims. The real victims are the people whose pensions were invested in Phar-Mor. Maybe instead of teaching "aggressive accounting" (whatever that means), schools should start teaching "ethical accounting. I know what that means, and I'd bet that Pat Finn does too.
Your program this week illustrated another sad story of corporate mismanagement and naked greed.
Having worked for a young insurance company that operated in much the same way tells me that the accounting practices at Phar- Mor are not uncommon among fast growing businesses and should be subject to higher a level of accounting scrutiny both by their outside auditors and potential investors. Unfortunately, the ones feeling the aftereffects of the "Mickey-Finn" accounting cocktail are the swindled shareholders and layed off employees.
After seeing your revealing story on Mickey Monus's tremendous corporate fraud, I too had a revelation. Perhaps the investors in Phar-Mor should have borrowed a lesson from the health and insurance industries by proactively getting the opinions of multiple auditors. It is foolhardy to use only the yardstick of inventory flow through a retail chain as the measurement of success. An in- vestment as large as Phar-Mor requires extreme scrutiny in the first few years -- until it, and its leaders can be proven trustworthy. Before I must undergo extensive and potentially expensive medical procedures, my insurer expects more than one look by a single physician. Coopers and Lybrand cannot be completely faulted for their mishandling of the audits. They were unsupported by other investigations, even at the federal level. I am left wondering now whether our federal legislature is going to take some action to stiffen penalties or to increase the reach of the Securities and Exchange Commission.
South Windsor, CT
I want to complement you on your excellant reporting with regard to Mickey Monus and Pharmor. It says something about our society, pay someone enough money and you can take an otherwise honest person and turn him into a common crook. From the CFO on down, they all knew what was going on and yet no one was willing to give up their lucrative paycheck to be honest.
Your show opened my eyes to the graft and greed of the discount retail business.
West Palm Beach, FL
Your piece, "How to Steal Five Hundred Million" was truly excellent. It left me, a former Youngstown area resident, with an accurate feeling of sadness. The last camera shot of the piece, which showed the decaying skyline of Youngstown, summed up the staggering economic depression of the Northeast Ohio area. The Phar-Mor scandal was just one more nail in the coffin for the Youngstown region.
I think your story will go far in educating the rest of the nation about how far the economy has fallen and how desperate some communities have become. It is my belief that if Youngstown had not been so frantic for corporate monies and jobs for area residents, the scam would have been discovered much more quickly.
As America's economy worsens, and more cities are reduced to the decay of Youngstown, it seems possible that even more communities will fall for corporate fraud. Thank you for bringing this issue to light.