Where I Stand — Mike O’Callaghan: Stealing our retirement

Friday, July 5, 2002 | 8:42 a.m.

THE SILENCE IS DEAFENING. We no longer hear the political rhetoric of Bush backers wanting to put a portion of our Social Security deductions into stock market investments. White House cheerleaders for this move also must be suffering from laryngitis.

Before they find their voices again, some deeper thinking must be done. A little time should be spent with millions of Americans who have watched their 401(k) funds reduce in size during recent months. That's the program Congress created so large corporations could be relieved of long-term pension responsibilities and allowed workers to dabble in the stock market. Not a bad idea for those who made large amounts of money and then retired before the bottom fell out. But the employees who pushed their payroll contributions into the raging upward stock market explosion, and are still working and contributing, probably don't feel as lucky.

I know the responses to these remarks are preceded with "in the long term the stock market always bounces back." That's right, if you live long enough and keep pouring money into the stock market, you will eventually make a profit. If you are near retirement and your 401(k) or public employees retirement program is rattling around in the basement, then you may not have a cheerful outlook.

I threw the public employee retirement programs into the mix because of their recent losses. Even the most conservative retirement funds are facing some new major problems that none of them expected to see. Honest investment people find it hard to believe but their clients are being ripped-off by financial thieves. Some of our nation's largest and richest corporations have been run by greedy people who don't give a damn about the men and women who work for a living and have put their hard-earned dollars into their corporations. Just as bad have been the accounting experts who have given the thieves cover so they can retire with great wealth.

Today we don't know exactly how devastating the corporate games have been to our individual savings and the financial structure of our entire economy. We do know that about the time we think things have hit rock bottom, we learn about some new financial scam. The New York Times this week gave its readers a peek at some of the known problems:

Adelphia Communications -- Under criminal and civil investigation on suspicion of hiding $3 billion in loans to its chief executives and overstating the number of customers it had. Filed for bankruptcy on Tuesday.

Computer Associates -- Under criminal and civil investigation on suspicion of inflating sales and profits by booking revenue on contracts many years before it was paid.

Dynegy -- Under civil investigation on suspicion of inflating its cash flow and avoiding taxes with a sham trade of natural gas; has acknowledged making sham electricity trades.

Enron -- Under criminal and civil investigation; has admitted hiding losses and loans with partnerships that were supposedly independent but were actually guaranteed by the company. Filed for bankruptcy in December 2001.

Global Crossing -- Under criminal and civil investigation on suspicion of inflating sales and profits by making sham transactions with other telecom companies.

Qwest -- Under civil investigation on suspicion of overstating sales and profits by making sham transactions with other telecom companies.

Rite Aid -- Four former top executives have been indicted on criminal charges in what regulators called a securities and accounting fraud that led to a $1.6 billion restatement of earnings.

Tyco International -- Under criminal and civil investigation on suspicion of hiding payments and loans to its top executives, including its former chief executive, L. Dennis Kozlowski; shares have plunged 75 percent this year as investors question whether it inflated its earning and cash flow.

WorldCom -- Under criminal and civil investigation; has admitted hiding expenses by wrongly classifying short-term costs as long-term.

Xerox -- Paid $10 million fine to S.E.C. in April, the largest in an enforcement case, and has reclassified $6.4 billion in revenue in restated financial results for the last five years. The case is still under investigation.

So what's next? I don't know, but at this time the thought of putting Social Security contributions into the hands of corporate America doesn't sound very appealing.