The Hightower Lowdown

THE STUPIDITY OF FEDERAL DRUG POLICY

Let's hear it for Ed Rosenthal!

He's a marijuana grower -- but before you can say "drug dealer," let me say that he grows his marijuana to be sold for medical purposes, supplying patients under doctor supervision and who need the medicine to treat severe and chronic pain, cancer-induced nausea, and other ailments.

Providing medical marijuana for these patients, many of whom are terminally ill and have no other medicine to ease their agonies, is not only humane and medically sound, but it's also perfectly legal -- in 1996, the people of California voted to OK this use of the cannabis plant.

In 2001, however, George W. chose John "Mad Dog" Ashcroft to be the U.S. attorney general, and this superpious, right-wing extremist has zero respect for the will of the people. Asserting his personal bias over states' rights and democratic choice, the authoritarian Ashcroft is on a prosecutorial crusade against California and the eight other states that have passed medical-marijuana laws.

Saying that his views and the federal law pre-empt state law, Ashcroft's agents have been going after people like Rosenthal with a vengeance. In a perverse, Orwellian twist of justice, the feds convicted Rosenthal by refusing to allow him to tell jurors that he was operating within state law. Jurors later angrily said they would've acquitted him had they known this.

Now the good news: Instead of 100 years in prison and a $4.5 million fine, as the absurd federal law allows, the judge only assessed a thousand-dollar fine and one day in prison for Ed. Rosenthal will now appeal the silly conviction itself, and his case has become a rallying point for all of us who think this federal law is an anti-American assault on our basic liberties. Yet Ashcroft is as arrogant and autocratic as ever -- as one of his agents said of Ed and us supporters of common sense: "We are not listening to them."

And that's exactly what's wrong with national drug policy.

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WHATEVER HAPPENED TO CORPORATE REFORM?

Hoo boy, we're really teaching those high-flying, finagling CEOs a lesson in corporate ethics, aren't we?

The latest to have to take their medicine are six former top execs at Xerox Corp. They were recently found by the SEC to have cooked the company books and illegally inflated profits by $1.4 billion over four years. These actions fraudulently misled investors and allowed the executives themselves to pocket millions in personal pay that they were not due.

But -- pow! -- the SEC regulators have now socked the slippery-fingered six with $22 million in penalties! That'll teach 'em ... right? Well, not exactly. It seems that, under the sweetheart bylaws of the corporation, $19 million of this legal assessment will be picked up not by the executives, but by Xerox and its insurance companies -- plus, Xerox will pay the legal fees for the six.

So it's you shareholders of Xerox and you ratepayers of the insurers who'll pick up the bulk of the tab for these dirty-dealing executives -- and ultimately we taxpayers will be hit for it, since Xerox can deduct a chunk of this payout from its corporate income tax, claiming it as a cost of doing business.

So, what are the lessons here for other CEOs ... and for our children? Crime pays! Paul Allaire, for example, was the Xerox CEO who presided over this shameful rip-off, and he has to pay a million-dollar fine out of his own pocket. That sounds like a serious bit of punishment ... until you do the math. The SEC found that he had put $5.7 million worth of fraudulent gain in that pocket during the four-year scam. So his haul is a nice net of $4.7 million. That's good work if you can get it!

The lawyer for Allaire and another Xerox executive said that the two chieftans had settled so they could "put this issue behind them and get on with their lives."

In the world of corporate crime, instead of being sentenced to a hard jail bed, you get a golden pillow. So much for reforming corporate ethics.