CNBC screencapLegendary short seller Jim Chanos gave an extensive interview to Salon.com about how to spot fraud and corruption in business.
It’s an incredible coincidence that the story was published today, since the news broke that former Enron CEO Jeff Skilling, a man Chanos helped put behind bars, could be getting out of jail early.
Enron is held up as the paragon of 1990s corporate greed. There, not everything was as it seemed despite excellent press all over the business world and a great reputation.
The point is that companies can build amazing brands without being amazing businesses, and as Chanos points out, part of that brand can be doing charity work.
One of the more interesting observations in the world of fraud is that some of the most egregious frauds were some of the most philanthropic companies in their communities. In some ways, if you look at Bill Black’s theory of the corporation as both a weapon and shield (we teach a lot of Bill Black’s things in my class), you can begin to see that that would be one way in which the bad guys in corporate suites would basically use the corporation as a shield. They’d say, well, look at all the wonderful things we do in the community, how many people we employ. We give to hospitals, we give to the Little League team, and so on. Not all these things would be immediately obvious to the casual observer.
So forget the frosting people, look at the cake.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.