White Collar Thieves

By pocketing cash, jiggering books, stealing merchandise, and a score of other similar practices, employees this year will steal more than $1 billion--more than twice the amount stolen by all the nation's professional thieves. This is the estimate of Norman Jaspan in The Thief in the White Collar (Lippincott; $4.95), an analysis of corporate stealing. Jaspan, 43, who is president of his own management consulting firm, speaks from experience. His clients include 35% of all major retail outlets in the U.S., plus many airlines and manufacturing firms. In the past ten years, while working to improve operating efficiency, Jaspan's firm has uncovered $400 million in thefts.

Jaspan's basic thesis is that white collar crime is largely caused by corporate neglect of employees' needs and morale and by poor management in general. The growing decentralization of U.S. business, he argues, has left too many top executives concerned only with profit-and-loss figures to the detriment of employee relations. Jaspan acknowledges that many thefts are hard to eliminate because of employees' money difficulties or personality problems (e.g., the unattractive sales clerk who stole for a trip to Bermuda to find romance). But he also points to the need for management to pay higher wages in some cases, make sure that an employee gets recognition of some sort for faithful service. Jaspan cites the case of an employee in a Southern hardware store who was making $150 per week after more than 40 years of service, and had been promised a partnership. When his employer suffered a heart attack and sold the business, the new owner demoted him. The employee promptly set to work stealing because "my old boss left me nothing." Confronted with the theft of $91,000, the employee claimed that "every penny I took rightfully belongs to me." When he reached $100,000--the share of the profits he felt was due him--he said he planned to stop stealing.

Management's Contribution. Management often unwittingly abets white collar crime by tolerating business practices that create the impression that "everybody is doing it." Kickbacks, for example, an accepted business practice, this year will amount to over $5 billion, says Jaspan. This failure by management to police its own house, he argues, has helped change the white collar workers' attitude toward stealing from the boss, especially when the boss is not above thieving. Jaspan cites the case of a young clerk who, after several sleepless nights, finally approached his boss, a credit manager, to blurt out a confession of petty stealing. The clerk was told to forget all about it. "You see," explained the manager, "this department just can't afford a scandal. I've been embezzling for years myself. We're in this thing together." The clerk was later caught--and told the story to the judge.

What starts as petty thievery often grows into multimillion-dollar larceny. The practice of supermarket employees' failing to ring up the purchase of food by relatives is so common that it is known as "brother-in-lawing." But the total cost to supermarkets last year was $100 million. Because of the complexity of modern business methods, Jaspan says, more than 50% of all white collar crimes involve more than one employee. He tells of a rug-department supervisor in a large department store who organized the 16 installers working under him into a gang, set up his own rug business with the store's merchandise and bilked the business of more than $1,000,000 in five years.

The Solution. As to the answer for white collar crime, Jaspan suggests that companies take the basic precaution of bonding their employees so that they can collect on losses. Less than 10% of the nation's commercial retail businesses bond employees. But what Jaspan really wants is for management to try to prevent crime by developing adequate control systems, setting fair standards of performance, and maintaining better employee relations. The best preventive, notes Jaspan, is high employee morale.

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