Benjamin J. Stein is a serious actor who has played in madefor-tv movies and other theatricals. He is also the leading writer and analyst of corporate financial crimes in the country. Wall Street doesn’t like him; he is too insistent that owners of pensions, shareholders and other small investors, such as holders of savings accounts, have rights of ownership and should not be deceived or swindled.
He comes from a conservative background which believes that financiers shalt not cheat. Herbert Stein, his father, is a well-known conservative economist with the American Enterprise Institute, a conservative research entity in Washington, D.C. Since he graduated from Yale Law School over twenty years ago, Ben Stein has been shouldering a lonely vigil. Dozens of articles in the ultra-conservative, Barron’s Financial Weekly, and several books have chronicled in meticulous detail the complex ways that big time corporate crooks, largely using other people’s money and funny money manuevers, bilk the public in a big way and largely get away with it.
Most financial writers on business are either co-opted, lazy or intimidated by the expected curbs on their careers if they dig too deeply or even if they report court documents and other primary sources that otherwise would not see the public light.
Stein has had occasion to notice the inhibitions that approach journalistic truth-reporters. After several articles in Barron’s exposing the junk-bond disasters that ended on the backs of small depositors, shareholders and ultimately the U.S. taxpayers, Stein found that other outlets for his writings, formerly open to him, were now closed.
The Wall St. Journal, where he once worked, did not want to print either his articles or his letters to the editor. The editors were partisans of Michael Milken, the junk bond king, both before and after his indictment, guilty plea and incarceration. The Journal’s editorial writers have never found a corporate crime that they can’t blame the government for causing, including the Savings and Loan debacle, among many other episodes of illegal greed and power during the Eighties.
Stein views it quite differently, of course. He blames the Securities and Exchange Commission (SEC) for massive dereliction of enforcement duty, along with a roster of other institutions that citizens are told to rely on to keep business schemes honest and protect their savings.
These include all the so-called fiduciaries — boards of directors of banks and insurance companies, their outside accounting and law firms, pension fund trustees, state and federal regulatory agencies and their legislative oversight committees.
In his most recent book, “A License to Steal: The Untold Story of Michael Milken and the Conspiracy to Bilk the Nation” (Simon & Schuster, N.Y.), Stein shows how Milken and his cohorts created a network of federally insured savings & loans to which he could sell vastly overvalued Drexel junk bonds at a cost of billions of dollars to depositors and taxpayers. Similar use was made of “friendly” insurance companies. Insider trading, conflicts of interests and rigged markets for these bonds were part of the Milken’s booming bubble until it burst in the late Eighties, writes Stein. He estimates that Milken is still a billionaire.
But such massive manipulations can happen again, he said, because, apart from a modest curb on where S & Ls can invest their savers money, there have been no basic reforms to stop a repeat performance by other would-be schemers.
Moreover, many of the main culprits in the Milken network have not been prosecuted. They are enjoying their ill-gotten wealth in their Californian mansions.
The new Clinton Administration was supposed to change the business-as-usual-attitude in Washington. Yet neither the Attorney General, Janet Reno, nor the White House, have shown thus far any stirrings over the corporate crime wave and its escape from the arm of the law.
The Clintonites may wish to read page 182 of Stein’s book where he describes the millions of Americans, savers, investors, pensioners, bondholders, employees and taxpayers who paid the price of the Milken years. Maybe that will help motivate them to order their prosecutors into action.