Financial Corruption, Misconduct and More: Delving Into For- and NonProfits

By Megan Wanner

While for-profit businesses are typically scrutinized when it comes to financial affairs, the problems going on with a for-profit may have to do with misconduct within the organization.

Take for example the investigation into the adult homes in New York City. These privately and state-run homes are supposed to be a place where the adults receive the care they need, but closer scrutiny by reporters at the New York Times revealed otherwise. Rather than receiving the attention their mental states required, the adults were neglected and left to their own devices, many of them fatal.

The reporters followed paper trails of Social Security, state, court and coroner’s records, psychiatric and medical files that led to the startling statistics. Their article “Broken Homes: A Final Destination” revealed “At 26 of the largest and most troubled homes in the city, which collectively shelter some 5,000 mentally ill people, The Times documented 946 deaths from 1995 through 2001. Of those, 326 were of people under 60, including 126 in their 20’s, 30’s and 40’s.”

For-profits can be overlooked and their actions highly unreported, causing them to rarely come under scrutiny by the government who assume everything is going well. In the case of the New York City adult homes, the Times reports “Officials at the State Department of Health, which regulates the homes, acknowledge that they have never enforced a 1994 law that requires the homes to report all deaths to the state. Asked for records of any investigations into deaths at the homes, the department produced files on only 3 of the nearly 1,000 deaths.”

Delving into the misconduct of for-profits can lead to investigations into the misconduct of the entities charged with regulating them. When the deputy health commissioner, Robert R. Hinckley, was presented with the findings from the investigation, he said he would have the State Department of Health look at ‘“ways to better investigate those deaths that are reported to us”’ in addition to having the state “issue a regulation alerting the homes that it would strictly enforce the 1994 law on reporting deaths.” However, seven weeks after saying this, the department had failed to do anything of the sort, giving reason to why the misconduct of the homes was going undetected.