By Editorial

We remain solidly convinced the free enterprise system in this country is the best in the world. But we are disgusted, as you undoubtedly are, with the parade of recent corporate misdeeds that have bankrupted companies and left thousands out of work.

The fall of corporate giants such as Enron and Worldcom, with their fudged accounting practices and questionable ethics of their multimillionaire leaders, left many little-guy shareholders paying for their transgressions while company CEOs pled the Fifth and stood silent about their specific roles.

Even the trusted lifestyles empress Martha Stewart, and lo and behold, President Bush, were not beyond question, suspected of using insider information and selling stock just before it went belly-up.

Clearly, many of our corporate leaders are not looking in the mirror as they profit in the name of greed - forget their company or anyone who gets in their way.

These ethical violations ultimately threaten our free enterprise system. We certainly do not want our corporate way of life to become so overregulated that only the lawyers are left standing.

Bush did react, albeit late, with a Wall St. speech last week calling for $100 million more for the Securities and Exchange Commission. This helps. But tougher penalties and enforcement clearly are needed as deterrents for ethics violators. CEOS who have destroyed retirees’ pensions are not serving any jail time at all. Congress did vote to toughen penalties to include jail time, but we’re not holding our breath for the moment we see Kenneth Lay in an orange jumpsuit.

Meanwhile, we take comfort in the fact that there are many successful companies using sound, ethical business practices that are staying away from front-page headlines.

Adobe Systems, for instance, shows a company can be extremely profitable by simply creating products that people want. The company, co-founded by Los Altos residents Chuck Geschke and John Warnock, has its core values listed on its Web site. Number one is: Conduct business on the highest ethical basis.

“Life is too short to be ashamed of anything we do,” reads the company literature. “Truth, honesty and integrity in all of our dealings with other people allow us to always be proud of our association with Adobe.”

If only all companies had the same philosophy. Because even doubling or tripling the workforce of the SEC will not root out all corporate evil.

“Ultimately, the ethics of American business depend on the conscience of America’s business leaders,” Bush said last week.

So leaders, start looking in the mirror.