The Adelphia Communications scandal
Introduction The Adelphia Communications scandal occurred in March, 2002 when three of the original founding family members which included the father John Rigas, and two of his sons Michael and Timothy, along with two other company executives were arrested for improperly taking assets from the nation’s sixth-largest cable television company. The scam involved one of the biggest financial frauds faced by a publically held company. In the end stakeholders were forced to absorb massive losses as their shares in stocks fell sharply. The Rigas family hid billions of dollars in debts by falsifying its financial records, and blatantly lying to their investors about it. They recklessly spent millions of dollars of company funds that rightfully belonged to the company and its shareholders. They not only looted Adelphia by using its company jets and other assets for personal use but they refused to record any of their self-indulgent expenditures on public records. In short the company got into financial trouble as a result of poor corporate governance and improper accounting practices. (Markon & Frank, 2002).
We will discuss a couple of key ethical problems such as how Adelphia executives fixed the books in order to deceive the public and stockholders, and how they used the company as their own person “ATM” machine in order to support their extravagant lifestyles. We will go on to discuss and focus on what is meant by the duties and rights of deontological ethics and how Kant’s Categorical Imperatives might be applied to both those issues. Finally, we’ll take a look at what a deontological framework of business ethics looks like and how applying it to the two problems mentioned above might have made a difference for both the Rigases and Adelphia.
Two key ethical problems The first key ethical problem raised in the Adelphia Communications scandal that we shall discuss is the fact that the Rigas family engaged in a mass cover up which included one of the family
We will discuss a couple of key ethical problems such as how Adelphia executives fixed the books in order to deceive the public and stockholders, and how they used the company as their own person “ATM” machine in order to support their extravagant lifestyles. We will go on to discuss and focus on what is meant by the duties and rights of deontological ethics and how Kant’s Categorical Imperatives might be applied to both those issues. Finally, we’ll take a look at what a deontological framework of business ethics looks like and how applying it to the two problems mentioned above might have made a difference for both the Rigases and Adelphia.
Two key ethical problems The first key ethical problem raised in the Adelphia Communications scandal that we shall discuss is the fact that the Rigas family engaged in a mass cover up which included one of the family
References: Barlaup, K., Hanne, I. D., & Stuart, I. (2009). Restoring trust in auditing: Ethical discernment and the Adelphia scandal. Managerial auditing journal, 24(2), 183-203. Retrieved from http://dx.doi.org/10.1108/02686900910924572 Johnson, R. (2008). "Kant 's moral philosophy", The Stanford encyclopedia of philosophy (summer 2012 edition), Edward n. zalta (ed.), Retrieved from http://plato.stanford.edu/archives/sum2012/entries/kant-moral. Markon, J., & Frank, R. (2002, July 25). ). Leading the news: Five Adelphia officials arrested on fraud charges --- three in the Rigas family, two other executives held, accused of massive looting. Wall street journal. r. Retrieved from http://search.proquest.com/docview/398878022?accountid=14375 Pecorino, P. (2002, November 12). The categorical imperative... Retrieved from http://www.qcc.cuny.edu/socialsciences/ppecorino/intro_text/Chapter 8 Ethics/Categorical_Impera