Corporate Kleptocracy

Ever heard of a kleptomaniac? It's someone who can't help but steal. She's in a store. She sees a pack of gum she wants. She has $120 in her pocket, but instead of paying for the gum, she slips it up her sleeve and makes her way out of the store. She just can't help but steal.

Corporate kleptocracy takes this to the extreme. We're not talking a $2 pack of gum anymore. Instead, billions of dollars of investor capital. Only it's not some rogue customer. It's the bosses...the people in charge.

Another question: every hear of democracy or aristocracy or oligarchy? They've all got that -cracy or -archy ending. Same with kleptocracy. The kleptos are in charge. They're running the joint.

So a corporate kleptocracy is a situation where the top executives at a company are more interested in getting money to themselves than in operating the business effectively or properly managing shareholder capital. They basically use the company as a personal piggy bank.

The most famous historical example of this was Enron. This energy trading company was pushed into bankruptcy in the early 2000s by a cabal of kleptos at the head. Eventually, a bunch of them went to jail, but not before destroying the company, along with tens of billions of shareholder equity (and most of the workers' retirement plans along with it).