Ring Around Arkansas? White Collar?

Arkansas Attorney General Mike Beebe said a recent rash of white-collar crimes and securities violations hasn’t given the state a black eye. They’re simply a reflection of an overall problem in American business, he said.

Although Arkansas’ examples aren’t as dramatic as the Enron and WorldCom debacles in neighboring states, they still affect confidence in business practices.

“The local problems are evidence that the epidemic goes all the way down to the local level,” Beebe said. “That’s where they often don’t make the national press, but they’re no less harmful to consumers and investors. If the public can’t trust accountants or [stock] analysts, the professionals we rely on to provide sophisticated services, then the untrained public loses confidence in the system and it starts to snowball. We end up with a bear market and economic downturn.

“Bad actors poison the well for the 95 percent of business people who do everything right.”

Beebe said America’s current economic doldrums are also related to cyclical economic issues, but the effects of real and imagined corruption in business are unmistakable.

The Arkansas Constitution gives elected prosecuting attorneys original jurisdiction in criminal matters. But the AG’s office can levy civil penalties and has some additional weapons to defend the public from deceptive trade practices and activities, Beebe said. He said the problem is most local prosecutors are overrun with rapes, murders and other violent crimes and don’t have the staff or expertise to delve into sophisticated white-collar crimes.

“Many lawyers aren’t sophisticated enough to understand this specialized field,” Beebe said. “Trying to ferret out white-collar crime and all of its nuances creates a lot of problems. That’s why we rely primarily on the Securities and Exchange Commission at the federal level and various other watchdog groups to protect the public.”

But waiting for prosecution from the federal level can require patience. When asked if bad operators could fly under the federal radar by keeping scams to a few hundred thousand dollars, Beebe had this to say:

“Unfortunately, that’s probably true.”

When improprieties aren’t Enronesque in scale, Beebe said, a vocal and helpful business community can do wonders for law enforcement.

“A lot of self-policing from the business community would help,” Beebe said.

To read the cover story related to this issue, click here.