Andersen & Waste Management—a match made in Heaven One of my contentions is that never once—never—have I unfairly attacked a CEO, or a corporation. Every bad actor you read about in the daily newspapers' business section, or in The Wall Street Journal or Fortune or wherever—every one of them, to a man, has been savaged by yours truly. Never, I maintain, has a good guy been besmirched by a headline-hungry journalist. Case in point: Waste Management. Back in 1985—17 years ago—I invited a Time stringer to lunch. At Chicago's Downtown Court Club, if memory serves correct. Before we ordered, she said, "I'd give anything if someone would do something about those crooks at Waste Management." My response: "If I had a staff (I've been a one-person operation most of my 19 years at this stand) I'd think I had a leak." I confided that Waste Management, then headquartered in a Chicago suburb, was a candidate for my 10 worst list—its 1984 annual report, that is. Research was done surreptitiously (as you might well imagine) by a famous daily business newspaper's news editor. At the end of this treatise, I'll run all the words that appeared that fall in Chief Executive, my second year of picking the world's 10 best and 10 worst. But back to the present: You no doubt have read that the Securities and Exchange Commission has brought suit against Arthur Andersen, charging the beleaguered accounting firm with conspiring with Waste (how appropriate a version of its corporate name) to—well, "cook the books." The business editor of a Dallas newspaper—formerly a tennis-playing colleague in Chicago—called 18 years ago with a warning: "Sid, buddy, you're playing with bad guys here. We're looking at broken kneecaps if they just want to teach you a lesson. You're talking bombs in your dumpster, kid." I lunched, a few days later, in that very Chicago suburb where Waste hung its corporate hat. When I left the restaurant (no doubt paranoid; surely Waste couldn't tap my luncheon conversations), a Waste Management garbage truck, cab only, tailgated me for 10 or 15 miles. Right on my rear bumper, even as I switched lanes back and forth while high-tailing back to downtown Chicago. Some of my friends said I should view that as a warning shot fired over the bow. Regardless, Waste made the list of 10 worst, and now today it is alleged it conspired (1992-1997) with its auditors, Arthur Andersen, to falsify statements—overprice old garbage trucks, among other charges. Keeping my record intact: Never once in all these years have I unfairly attacked a good guy. Those who make my list of 10 worst reports are uniformly headed by bad folks, in my belief. Lest I have to rush into print with a public apology. And that wouldn't be good enough...to apologize after besmirching an honest corporate chieftain's name and reputation. *   *   * Here's what I wrote about Waste and its 1984 report, appearing in the September 1985 issue of Chief Executive: "Who better than 'a garbage company' to attempt to make a silk purse out of a corporate sow's ear? Waste Management's 1984 report is a design-high, perfect-bound book as befits a darling of Wall St. The high-gloss cover of this colorful tome is a statesmanlike close-up of the Olympic torch. No prosaic garbage cans or dirty dumpsters for this outfit. "Even though charts read the reverse way, the message is clear: Everything, if you'll pardon the expression, is coming up roses for Waste Management. "True, net income as a percentage of revenue—10.8%—was off from the prior year's 11.6% and the year-earlier 11%. And net as a percentage of average stockholders' equity, 17.2%, fell far short of the 1982 number of 22%, if up slightly from 1983's 16.8%. Further, long-term debt as a percentage of total capital nearly doubled—to 35.6% from 17.9% (20% in 1982). "The problem with this company is that its annual report fails to adequately reflect the turmoil surrounding its operations, both on state and national levels. Although the report is stately, the reality by contrast is trouble with the states of Alabama and Ohio as well as the U.S. Environmental Protection Agency regarding, among other things, storage of toxic chemicals suspected of causing cancer, liver damage and other problems in humans. "Further back in the notes management devoted two paragraphs to lawsuits (three consolidated into one) alleging 'failure to disclose adequately and provide for the consequences of alleged environmental violations and investigations and closings, suspensions and permit denials of certain of the company's hazardous waste disposal operations..' The company dismissed 'these proceedings' as 'not material' to its business or financial condition. "Somewhat harder to dismiss, it would seem, are numerous complaints filed earlier this year by federal environmental officials seeking $6.8 million in civil penalties for alleged extensive illegal dumping of PCBs (polychlorinated biphenyls) and for the alleged sale of six million gallons of heating oil contaminated with toxic chemicals. "The EPA, alleging 'a history of serious violations' by Waste Management at its Ohio disposal facility, said the company, by violating federal waste-disposal laws between 1980 and 1983, saved as much as $20 million. "No mention of this technically post-1984 (by three weeks) government action—not even a throwaway 'Subsequent Inconsequential Matters' mention buried among the agate type. "Pass the noseclips." (It should be noted that the company was bought in 1998 by a Houston-based firm that took the Waste Management name following the merger.) *   *   * Addendum: Microsoft describes as "a clerical error" a billion-dollar misstatement on its cash flow statement. Paraphrasing the late Sen. Everett M. Dirksen, "A billion dollars here and a billion there—and before you know it, we're talkin' real money!"

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