The Adelphia Scandal
The Adelphia Scandal In 1952, John Rigas purchased his own cable company. By the late 1990's, he had turned it into the sixth largest cable company in the United States with 5.6 million customers. The business was always run as a family style business which led to fraudulent acts among family members and upper level executives. The family has been accused of stealing $3.1 billion from Adelphia and is now facing criminal charges. Adelphia was forced to file chapter 11 bankruptcy and as of April 24, 2004, the new board of directors made the decision to break up the company and sell it. The Adelphia scandal is morally wrong because the Rigas family coerced and exploited employees, harmed all stakeholders as well as stockholders, and had a negative impact on the cable industry as a whole. The word exploit means "to use unfairly for one's own advantage" (Mish 267). The Rigas family exploited and coerced employees by stealing $3.1 billion from the Adelphia Corporation for their own personal use. An example of the Rigas family exploiting an employee is when John Rigas asked an accountant to take out a $20,000 loan in the accountant's name. John Rigas never paid him back. The accountant only made $40,000 at the time. Kant argues, "persons should be treated as ends and never purely as means to the ends of others" (Chapter One 22). I personally think John Rigas taking the money from the accountant is a means to the end of others. In this case, others would be the accountant. Rigas was clearly using the accountant to his advantage. He had no other purpose than to get the money for himself. Therefore, the accountant is being used purely for the advantage of John Rigas. Not only did the Rigas family exploit their employees, but they also damaged the reputation of their employees. The Rigas family destroyed all of the employee's credibility when they decided they would steal money from the Adelphia Corporation. The way they did this was when these employees
Cited: "Chapter One: Ethical Theory and Business Practice." Ethical Theory and Business. Ed. Tom Beauchamp and Norman Bowie. Prentice Hall: Upper Saddle River, 2004. 1-44 Freeman, R. Edward. "A Stakeholder Theory of the Modern Corporation." Ethical Theory and Business. Ed. Tom Beauchamp and Norman Bowie. Prentice Hall: Upper Saddle River, 2004. 55-64. Friedman, Milton. "The Social Responsibility of Business Is to Increase Its Profits." Ethical Theory and Business. Ed. Tom Beauchamp and Norman Bowie. Prentice Hall: Upper Saddle River, 2004. 50-55. Mish, Frederick. "Exploit." The Merriam-Webster Dictionary. 1997 ed.