Taking Personal Responsibility: Worldcom

By Rabbi Jay Kelman

The conviction of former Worldcom Inc. chairman Bernard Ebbers on multiple counts of fraud and the like raises the question of executive responsibility for actions of others in the company. Mr. Ebbers’ defence was that he did not understand the accounting irregularities conducted by his Chief Financial Officer. From a Jewish perspective what is most interesting is the fact that the case revolved around the believability of his claim of ignorance of the goings on in the company which he headed. There was never a claim that he himself perpetrated fraud, rather that he ‘pushed’ his staff to achieve better results leading them to doctor the books.

While the Torah is meant to serve as a moral guide, the Torah court system is one that deals primarily in legal issues and from a legal perspective one can only be held accountable for crimes that one actually perpetrates. Thus Jewish law prescribes (in theory) a death penalty for the hit man who kills, while the organized crime leaders who send him, would escape such a fate. The CEO who directs fraud to be committed by others escapes legal liability whereas the underling who carries out such orders must bear the full brunt of the law.

While secular law seeks to punish the ringleaders of criminal activity, Jewish law turns its initial attention to the perpetrators of the illicit activity itself. The moral failings of the ‘bosses’ are to be dealt with by G-d at the appropriate time; one can be liable in the heavenly court but absolved in the earthly court. No such luck awaits the low level employee following the bosses’ orders; the Torah demands that one take personal responsibility for ones action, and pinning the blame on another is a moral failing with legal implications. As the Talmud phrases it when the Master (G-d) tells you something and the servant (man) tells you something to whom shall you listen? It is therefore the CFO of Worldcom Inc. as the actual perpetrator of criminal activity who should receive the greater ultimate punishment.

Nevertheless Jewish law recognizes the legal right of a secular government to establish law and order as they see fit. If that means greater jail time for overseers of crime, so be it. Furthermore while the Jewish legal system itself does not allow for vicarious punishment, Jewish courts do have extra judicial powers that may be used, provided there is a strong likelihood of correcting a social wrong. Thus if evidence existed that jailing criminal ringleaders would actually serve as a deterrent to others, Jewish law would recommend looking beyond the legal issues in order to focus on the social one of reducing crime by all means possible.

This article originally appeared in the March 5, 2005 Money Matters column of the Canadian Jewish News.

Rabbi Jay Kelman is a founding director of Torah in Motion, an educational institute dedicated to inspire Jews to engage with the challenges and opportunities of the modern world through the prism of Jewish law, values and traditions. Rabbi Jay teaches ethics and Rabbinics at the Community Hebrew Academy of Toronto. Rabbi Kelman served for nine years as Rabbi at Beth Jacob V’Anshei Drildz and was a practicing accountant, earning both his Chartered Accountancy (Canada) and CPA (USA) designations; working in the International tax Department of a large international firm.