GE Pays $50 Million Settlement For No Reason?
Something I always find funny is how both hospitals and companies get charged with something, agree to pay a fine or a settlement, then officially state that they didn’t do it.
In this case, General Electric was charged by the SEC for improper accounting practices that made their company look more successful to investors than it actually was. The SEC accused them of doing it four times between 2002 and 2003, but indicated, in their own way, that it might have been a practice that went on for much longer, as GE kept reporting successes that weren’t predicted for almost 11 years.
So, the two sides must have debated things, and GE gets to pay a $50 million civil penalty, which we might as well just call a fine, for what we’re supposed to believe is not an admission of guilt. To their credit, they’re also not saying they didn’t do it. They’re just staying silent on it all, and there’s this money sitting out there that they’re going to pay to be allowed to move on.
My question is how they’re allowed to kind of get away with not having to fess up to doing something wrong? I always ask the same thing when hospitals pay big fines, but at least I understand that one. If hospitals challenge a federal audit and lose, they have to pay triple damages, plus lawyer fees, and some of what hospitals have been fined for have come to some pretty high dollars.
One hospital in Rochester some years ago was fined $6 million for a minor lab issue that, unfortunately, went on for a couple of years unnoticed by anyone. If they’d fought, they’d have probably lost, and it would have cost them more than $18 million. No one wants to take chances like that. And, though the hospital didn’t admit to guilt, since the claim was intentional fraud and the hospital really didn’t know the process was going on, they were allowed to deny doing anything wrong, based on the claim of fraud, when everyone in health care knew they’d done something wrong, just not intentionally fraudulent.
So, do you feel GE is getting off the hook easily or not? I mean, $50 million is a pretty high dollar amount, but based on the amount of money they probably made over those 11 years, that figure is probably a drop in the bucket, kind of like that “drop in the bucket” $1.67 billion Abbott Laboratories got hit with just over a month ago. What’s your thought on this?