Ugly capitalist of the year. (And his board enablers.)

Sandra Hatfield and David H. Brooks, co-defendants in a U.S. government trial in which Brooks is accused of fraud, insider trading, and improper business funding of personal extravagances. Those would include the $100,000 jewel-encrusted belt buckle sported above by Brooks, and recently waved by prosecutors in front of a Long Island jury. (U.S. government evidence photo.)

Tough to beat among the contenders for this coveted distinction is David H. Brooks, 55. While CEO of DHB Industries until 2006, Brooks helped push what had been one of America's leading suppliers of body-armor for U.S. troops in Iraq and Afghanistan into bankruptcy. (The armor, like that of other body-armor suppliers, was faulted by critics with being insufficiently protective.) 

But Brooks, who had a checkered past even before his current courtoom ordeal, was able first to bilk Uncle Sam out of more than $6 million in improper billings for, among other things, plastic surgery for Brooks' wife, a burial plot for his mother, pornographic videos for his son, and prostitutes for employees and board members. 

On the latter point, spot any connection between these paragraphs in the NYT account today:

[Brooks'] lawyers also defended the hiring of prostitutes for employees and board members, arguing in court papers that it represented a legitimate business expense 'if Mr. Brooks thought such services could motivate his employees and make them more productive.'

His lawyers pointed to a board resolution that stipulated that Mr. Brooks was entitled to 10 percent of the company’s profits.

It is, of course, common practice among thriving enterprises to have used call girls to extract industry-leading productivity from their workers. For those few dynamic companies forsaking that device - Apple, Hewlett-Packard, McDonald's Corp., Wal-Mart Stores - one can only despair at the even more burgeoning profits forfeited by the investors in those firms.

And, nah, couldn't be a connection between board members who were, uh, serviced by sex-trade workers and the decision by those same directors at CEO Brooks was deserving of a staggering 10% of company profits. A blandishment of that trifling nature wouldn't cloud their judgment a bit...

Alas, there's much more, and worse, here.

  

Comments

[Wascally Wabbit]

You have been busy David. Much to read here.
The one item that jumps off the page is the David H. Brooks item where his defence lawyers justified the "prostitutes" etc. as "legitimate" business expenses.
Hm! Is prostitution legal in the US then? Is being a "John" legal?
It's certainly not acceptable - witness the fall of a New York Attorney General and Tiger Woods from grace!
As to what is acceptable for corporations to do to win business - I remember living in the Middle East during a period when the US's largest companies were disciplined by the US government for paying baksheesh (bribes) to officials and partners (like for example, members of the Saudi family) to obtain business within the Kingdom.
Didn't take long for government to be persuaded that this was "the way of doing things there" and should therefore not be held to North American standards.
So - have those standards been replaced by those of the rest of the world?

[dolive]

Hi WW: I would think that learning a company in which you have stock has been providing prostitution services to anyone (employees, suppliers, whoever) is about the strongest "sell" signal one could hope for.
As I recall, Gulf Oil (now defunct) and Lockheed (now Lockheed Martin) were the most prominent heads above the parapet in the 1970s offshore bribery scandals that culminated that decade with U.S. anti-bribery laws, still the strongest in the world. GE was recently fined heavily by the SEC for alleged bribes in Iraq.
Long after that point, Germany, most conspicuously, was still embracing offshore bribery as a tax-deductible corporate expense. Reforms there have been recent and tepid.
This is a delicate topic. As I discovered visiting Kazakhstan in the 1990s, you can't get past the airport terminal without bribing the immigration officials. You can't do business in Indonesia or India without paying off bureaucrats. It's been well-said recently that we just don't appreciate in North America - with our intolerance of the inefficiencies of bribery and the amorality of it - that most of the rest of the world does still operate that way.
What's delicate is that "when in Rome do as the Romans do" doesn't cut it if what you're doing would be unaccceptable at home, in London or Hamburg or Toronto. It diminishes you personally. If employing child labor remains commonplace in a given country, do you do business there, under those conditions?
But then again, bureaucrats - or I should widen that to government employees of all description, from border guards to municipal police - are so poorly paid that only with the income from bribes are they able to approach a decent living income. We see this close to home, where restaurant servers count on tips for roughly two-thirds of their income. And they're only making ends meet with that total income.
I think the general rule, or the one I'd be comfortable with, is don't do anything abroad, in Pennsylvania or Kiev, that you wouldn't be comfortable doing and having publicized at home. But I confess that's a simplistic approach by which our globetrotting companies, whom we wish well for the purposes of our domestic prosperity, often disqualify themselves from offshore markets like China that we need them to crack.
It is a quandary that organizations like Transparency International are helping us with. But it won't be a "settled issue" for some time, I fear.