It's always interesting to me how easily corruption occurs. I always assume that accounting double checks things and so on, but I've seen so many business where someone just creates an account and money goes out and ... nobody notices for years.
I've even created automated invoices for some companies and realized that some data was missing for months. And yet they got paid significant amounts. I realized that the invoices could have been for just about anything and they would have gotten paid ...
When Robert McNamara took over Ford, accounting was so messed up, they would weigh their invoices and if the amount wasn't too far off from the expected dollars/pound ratio, they would pay it.
One guy was caught doing that to the tune of $100 million to Facebook and Google. If he had stopped at $1 million or something he probably would have got away with it. I suspect others have.
I was reading this whole thread flabbergasted and wondering "where the hell are people working that this happened" when it hit me:
I did work in a place where a manager was invoicing monthly "external design work" to the company to the tune of 5x his own salary, because the company's designer was "overwhelmed".
In the end he was just paying the hired designer a little extra to drag her feet and paying a Fiverr freelancer to do some cheap mockups with Figma. And obviously cashin' in the rest.
I only found out about several months after I left. It was interesting for me to have all this revealed because this guy was actively working to undermine all other engineering teams, with gossip and by blocking work. I didn't interact much with him or at all, but he was part of why I left.
The fun part: he was only fired a few months after the BOARD ITSELF fired the CTO, CPO and CEO all in the same day.
The company was 90 employees when I joined, 900 when I left, zero in 2024, and now was sold for scrap to a micro-sized competitor.
I wish I was a writer because the stories I have of that place would be an amazing book.
How was he caught? Involving the internal designer seems like a huge mistake. Keeping the scam quiet without collaborators or actively rocking the boat could have probably persisted for a long time.
The CFO had raised it as a problem but nobody ever bothered to check.
When a new CTO started, he actually checked it out on his first week and discovered the company emitting invoices belonged to the PM.
The CTO also demanded talking with the designer from Fiverr and in the end the amount of money actually paid to him was negligible.
I never really understood the involvement of the internal designer but she was also fired on the spot together with the PM and the company's highest paid engineer (but I don't think this one is involved).
I can say that the people we hired from HubSpot were 100% frat-house-boys so I 100% believe it.
But back to the company I worked, there were very stupid shit going on:
Around #MeToo, there was a group meeting with all men in the company because of fears of sexual harassment issues. Nobody close to me had any idea about the root cause, and there were some very strangely sexist comments in the meeting. Some people (including one later fired for non-sexual harassment) made it a personal soapbox and went into rants. The CEO completely mishandled it.
Also there was once an anonymous blog about the practices of the company that was totally blown out of proportion by management, and all employees had to attend a meeting to talk about it. Once again the CEO mishandled it, first by paying any attention and second for being incredibly awkward and super-defensive.
This was the main reason the CEO was ousted.
After I left the company there was a string of CEOs that acqui-hired all the competitors and basically drained the company's coffers. And of course the over-hiring, getting to 900 people on a pyramid scheme.
I forgot to tell the main product the company made: SEO blogspam. Yep.
Last year it collapsed because of our mutual friend, ChatGPT.
> Ford Motor Company was hemorrhaging millions of dollars every month. It was impossible to give an exact number because there was no accounting system. “Can you believe it?” Henry II later remembered. “In one department they figured their costs by weighing the pile of invoices on a scale”
Or perhaps the dimension was length, rather than weight?
> the corresponding receipt, then pinned them together and sent out a check, usually a few months late. To figure out how much money the company owed, they stacked up all the bills, measured them with a ruler, and through a formula of unknown provenance turned feet into dollars.
That's how he got to DOD in the first place, by being the stereotypical "businessman who will clean up government." DOGE was not the first time politicans have talked about this kind of thing; it comes along every 20-30 years.
The Fog of War is definitely worth a watch. It was a fairly harrowing experience when I saw it. Actually, it is probably one of the hardest films I have watched. He clearly details the war crimes he presided over, and is open about the fact that he would have been tried as a war criminal had they lost.
He also pioneered the use of seat belts while at Ford. Which does make the morality-math a little more unusual.
To be clear, while McNamara was an advocate for seat belts, he wasn’t particularly instrumental in their development or adoption. In 1955 he introduced a paid option for Ford vehicles that included seat belts. But the option wasn’t popular with consumers, only 2% of new Fords the following year had it installed.
Saab was the first to include them as standard equipment in 1958, with Volvo introducing the modern 3-point seatbelts as standard equipment the following year. They remained unpopular in the US until after Ralph Nader’s 1965 book Unsafe At Any Speed which became a bestseller and prompted congress to pass the National Traffic & Motor Safety Act in 1966, and ultimately were made compulsory by states (presumably under a lot of lobbying pressure from insurers) starting in 1970.
Lee Iococca from Chrysler wrote his seatbelt campaign can be countered by an anecdote of a person safely ejected into the grass and car falling off a cliff. I swear some brands are thriving on warm feelings.
The larger the usual bills, the larger the rounding-error-level amounts. I've had some fun time with a vendor recently where they just forgot to bill a few $k for months, but remembered when asked for quota increase.
The invoice route happens all the time and is seldom caught. Recently the former city manager of La Cañada-Flintridge CA was charged with fraud. The scheme was he would send invoices to car insurance companies with city letterhead to cover damage to city property. Only he pocketed the money.
A couple years ago someone was also sending invoices to FB, Google, etc. Scammed them out of $100m.
I've even created automated invoices for some companies and realized that some data was missing for months. And yet they got paid significant amounts. I realized that the invoices could have been for just about anything and they would have gotten paid ...