Penn Square Bank collapse different than current business scandals

Journal Record, The (Oklahoma City), Jul 11, 2002 by Ray Carter

"That's a big hammer to place over people, but it may be that it's really necessary now," he said.

Hargis compared today's corporate scandals to the wildfires burning in the West. Because much of the West was allowed to "grow wild," years of dead underbrush built up and now "you have this tremendous fuel for these destructive fires."

"We had a little of that here (in the business world)," he said. "This rocked along for a long time without anybody doing much about it, with analysts analyzing stocks for which they were compensated if they went up and accounting firms that were doing both audits as well as making money on other aspects of the (client) firm."

After years of ignoring those conflicts, "all of this little stuff built up and has created a real firestorm" in the business community, Hargis said, but he believes that "firestorm" will wipe out the excess of recent years and leave a healthier system intact.

Some officials noted that business scandals are often seen as an indictment of an entire system, when they are usually just the result of a handful of bad actors.

"It all gets down to the management," Thompson said. "There were a lot of banks back in that time when Penn Square failed that were doing just fine; they were running good banks. It's all the philosophy and the lifestyle of the management."