LUCKY SEVERSON: You may remember Barry Minkow from the "rip-roaring 1980s," said to be the youngest entrepreneur, at 19, ever to take a company public. His carpet-cleaning company, called ZZZ Best, was once valued at $300 million. But Minkow was scamming investors and creditors, and he spent seven and a half years in prison.BARRY MINKOW: I always wondered if that next call was the call to say "We know you are a crook, Barry, you are caught." So the first good night's sleep I got was prison.
SEVERSON: So you were feeling guilty during this?
Pastor MINKOW: Yeah, I knew who I was at night when nobody was looking.
SEVERSON: And now he is Pastor Barry Minkow of the Community Bible Church in San Diego, preaching the gospel of personal responsibility. And he conducts what he calls "fraudits" -- a sort of "scared straight" program for corporate managers -- dressed in his orange prison garb.Pastor MINKOW: I go in and I say "I got wiped out. The government verifies I didn't keep no money. I did seven and a half, and this is how I was dressed. My roommate was in for murder. Don't do crime, and by the way now, if you steal money, you are going to do 18 years."
SEVERSON: The corporate scandals of the 80s were bad enough, but now they just keep on coming. Losses have grown from millions to billions, derailed the stock market, and wiped out the retirement savings of thousands of Americans.
Professor LAURA NASH (Business Ethicist, Harvard Business School): Some of the behaviors that we heard about were clearly cases of theft, clearly cases of abusing people's trust, and it's pretty degrading activities when you think about it.SEVERSON: And Laura Nash has thought about it a great deal. She's a business ethicist at Harvard Business School, and she says it's extremely important to punish white-collar crime.
Prof. NASH: If we see bloodshed, we are obviously quicker to punish harsher in terms of our punishment. And white-collar crime appears to be a bloodless crime, so I think it's almost instinctive to look the other way. But when we do that we create a system that leaves many, many people out; it is basically an act of injustice.
SEVERSON: Pete Peterson, a former commerce secretary and head of the Blackstone Group, a prominent investment firm, has always been an outspoken advocate of strong corporate ethics.
PETE PETERSON (Chairman, Blackstone Group): We now have a situation where 80 percent of Americans either believe that all executives or most executives are practicing illicit, unattractive, undesirable behavior.SEVERSON: Peterson is now a co-chairing a task force of business leaders and investors searching for solutions to what went wrong and how to fix it.
Mr. PETERSON: Some wonder whether something has happened to the ethic of this country, which is, if it's not illegal, it's OK. Some wonder if it's part of the entitlement ethic: "Wall Street is making a lot of money, why don't I make a lot of money?" It's about what's right and what is wrong.
SEVERSON: Of course, most companies are not corrupt, not skewing the bottom line. And there are companies who believe they can do well by doing good, by actually serving customers, nurturing employees, and building communities.
Case in point: a privately held company called The Container Store, always ranked near the top of FORTUNE magazine's 100 best companies to work for. Over the past 24 years, the company has posted average annual sales increases of at least 20 percent, pays its employees above average, has extremely low turnover, and approaches customers with the notion that helping them is a moral imperative.
The company offers all employees a paid week off each year to work on community projects like planting trees, building houses, and rebuilding communities. For Karen Thurston, an e-commerce manager, serving communities changed her life.
JEFF SWARTZ: It's not that you first do well, you take care of yourself, and then you do good. You must do well and do good simultaneously, that's the challenge.
SEVERSON: Jeff Swartz says it's not good enough for a company to make a good product -- they have to be a good company.
SEVERSON: Most everyone we spoke with agrees that the new, tougher corporate accountability laws passed by Congress will help. They also agree that corporate leaders like Jeff Swartz will need to lead the way and that customers and shareholders alike should demand more ethical responsibility, even when the times are good.
