Posted tagged ‘ethics’

Should Gifts Be A Problem?

September 7, 2017

Senator Bob Menendez is on trial in Federal Court charged with graft and corruption, or words to that effect. Menendez accepted eye popping amount of gifts and favors from one of his out of Sate supporters but Melendez is resolute in claiming he has not brought disrepute to the office of US Senator.

Vacations, watches, and air plane fares apparently do not mean there is a quid pro quo, according to Menendez’ defense team. These perks are just what any two friends share. Hmmm.

In an eerily similar case, former Virginia Governor Bob McDonald took his conviction to the Supreme Court and won on appeal. The Supreme Court ruled, in essence, there had to be proof of “if you give me this, I’ll do that for you” in order to justify a corruption conviction. What was the Court thinking?

The Supreme Court could find no smoking gun, that is any evidence that McDonald offered favors in return for gifts. And, although the Court was well aware of the sophisticated methods that campaign donations miraculously appear when special interests favored legislation is approved, the Court in essence was saying, no explicit demand or promise, then no corruption took place under existing law.

There in lies one of the problem… existing law.

Since political campaigns cost so much and candidates need to raise huge amounts of money in order to be viable, and there are few meaningful limits on donations, it is simply unrealistic to think that contributors won’t get at least the politician’s ear when they wish.

Further, unless a Congress member is willing to hear from a business interest, it is possible that legislation being contemplated might adversely hurt jobs in that State and send them to another.  There seems to be many opportunities for a donation to be considered in policy and law development. Hmmm.

So, once again are gifts a problem?

Coffee cups, donuts, baseball caps, and pens are long time honored “remembrances” which are generally accepted as corruption free gifts. These gifts are of minimal value and demand little in return. Rolex watches, vacations in Paris, and multiple free trips to the Dominican Republic are not just over the line in acceptability, these emoluments represent an open invitation to corrupting behavior.

Even if Senator Menendez felt no need to reciprocate, his ethical radar should have warned him to avoid such appearances and not put himself in the position of possible temptation to invite even more “gifts”.  “Friends” would not put their “friends” is such a compromising spot.

A few years ago, a Louisiana Representative was arrested for graft. Investigators found stacks of $20 bills wrapped and stacked in his freezer. No one had much trouble recognizing that this man was taking advantage of his office for personal gain. What is so different this time?

Cold cash, I guess, is different than a cold “Rolex”,


Loss Of Ethics?

June 19, 2017

Ethical behavior seems at times a much sort after characteristic. Most everyone prefers to think of themselves as “ethical”. All to often, however, individuals confuse ethical with legal (I’m for law and order) and continue to act on the belief that what they are doing is both correct and legal, not considering that while not illegal, their actions may be highly unethical. Hmmm.

In the 1980’s General Motors along with the other major American car manufacturers designed and made automobiles which performed poorly, lacked durability, and were often unsafe, yet were highly marketed, promising the buyer years of great performance. Independent automobile evaluations (side by side comparisons) told a different story and slowly but surely, consumers weighed in favor of competition from Europe and Japan.

In the period 2000 to 2008, financial institutions told clients (such as pension funds) to buy certain securities, especially mortgage backed securities knowing full well that the securities’ credit rating was false. Compounding this terrible behavior, these financial firms used depositors money to purchase credit default swaps betting that the securities they had just sold would subsequently fail.

Now we are looking at a Congress that is determined to reduce healthcare coverage for those who are most vulnerable, yet claiming their plan offers “great” healthcare. This same Congress is proposing to undertake tax reform which will translate into a huge tax cut for the wealthy. Hmmm.

In each of these situations, those involved acted lawfully and as requested by their superiors. In each of these situations, their actions’ consequences were hurtful to others. Their behavior was unethical.

One hears everyday from company X, Y, or Z, or from Chief Executive A, B, or C, that the basis for complaints (even law suits or indictments) were “unfounded”, that their product or service met (or exceeded) applicable standards or regulations, that their product or service when used according to manufacturer’s recommendations, were completely safe, and when confronted with overwhelming evidence that consumer complaints were genuine, these executives and companies claimed “no law” was broken.

One is left with the impression that all types of conduct are “ok” unless specifically denied by law or regulation. Where has the importance of ethical behavior gone? Where has the importance of ones word gone? How can our schools and universities “educate” so many, so highly, yet produce graduates so absent of ethical skills?

The Columbia University Cannon, which requires students to relive history from the perspective of past great minds, at least exposes students to critical thinking. But how many other colleges or universities can say the same?

Other institutions such as churches, law enforcement, and public office holders once provided visible examples of a well lived life. Americans could look to their pastor, their policeman (the policeman is my friend), or their Mayor, Governor, or Congressman for a model of what was right or wrong. No so today.

Church leaders argue over whether certain naturally occurring life styles are acceptable while preaching love they neighbor (but maybe only this type of neighbor). Policemen have morphed into a junior version of soldiering and in the process too many have lost the perspective of the public they serve. (Shoot first, ask questions later). And probably the most devastating has been the self serving, money talks nature of politics. Rare, instead of expected, is the public official who chooses that profession to “serve”.

So, one is left with the question, have our institutions failed us and lead to the apparent loss of ethical behavior, or has a broader, more pervasive cause infected every corner of American life, including our institutions?

What type of pervasive cause could move America to deny global warming or take any responsibility to find a remedy? What would cause Americans to accept healthcare where 25 to 50 million fellow Americans will be unable to access basic healthcare? And, what would make educated and well off Americans push so hard for tax cuts which shift more of the tax burden to those less able to carry it?

America’s Best And Brightest Without a Moral Compass

June 29, 2016

The old adage “Those who can do, do. Those who can’t do, teach” traceable back to George Bernard Shaw and more recently, Woody Allen, of course is full of exception. The adage mostly justifies why the salary of teachers is so low relative to the importance of their work. These words might be better applied to the current crop of elected officials who populate Congress.

For the past 30 or 40 years, there has been a self congratulatory chorus by American Universities. American MBAs have long been considered the best prepared business people in the world. Lawyers and engineers have been likewise considered exceptional.  Doctors and Accountants also clammer to be recognized at the top of the list.

But every so often, however, events unfold and we are left with the shocking question, how could that person (or persons) done such and such? One is struck with the idea that this generation has risen without a hint of ethics or a moral compass. How is that possible?

David Brooks, NYT columnist, points to a lack of reliance on historical bastions for ethics and morality, namely churches and reinforced by family. Others emphasize the higher education process has become too narrow in its mission and has forgotten about the well educated person. Who knows?

Another place to check out these hypotheses is elected officials in Congress.  Here are men and women who speak elegantly of religion, moral values, and America’s exceptionalism.  What type of example do they set?

Elected members of Congress lay somewheres between teachers and lawyers/engineers/business degreed people in terms of what type of renumeration they can demand. Receiving almost $200,000 a year is a lot more money than a teacher but a lot less than what successful professionals can receive. But Congress members can never be considered dumb.  They have found ways to do better.

Congress member enrichment schemes are clever and numerous. These schemes involve the Congress doing something for someone and then the someone sending money somehow and some way back to the Congress member.

One famous example involves defense spending where the newest, most sophisticate, and not surprisingly most expensive planes or ships are constructed of parts made in all 50 States. There is no reasonable chance of this occurring naturally but it s sure way for all Congress members and their supporters to gain lucrative business and in turn buy services from third parties who can innocently reward the Congress person’s campaign, Congress person’s law firm (or business) or as a reward, even hire Congress member’s family members.

In an unbelievable Supreme Court case announced yesterday, former Virginia Governor Bob McDonnell’s jail sentence for fraud was reverse. No one questioned the facts that the Governor has received over $150,000 in “gifts” from a business man who was seeking the Governors help in arranging certain meetings and events. The Supreme Court ruled existing law did not preclude this type of behavior! Where is their sense of ethics (why should a Governor get this access to “gifts” and no one else, or why should this business man get help his competitors did not receive) or morality (where is the boundary between friendship and buying favors?  Where has ethics and moral compass gone?

Congress members and State Governors have realized that as Government spends trillions, there is a wonderful chance for each member or elected official to divert a little into their own pockets if they forget about ethics and morality.

It appears that in this regard, these elected officials are truly exceptional and wonderful products of their institutes of higher learning.


Rule of Law

August 27, 2014

There are two cases grabbing news headlines that make one wonder. How could a sitting Governor accept extravagant gifts from a private citizen and how could a another sitting Governor threaten another elected official resign or he would veto funding?

The answer in both cases is “because they could”.

Former Virginia Governor Bob McDonnell is on trial for having accepted sizable financial gifts from a businessman who stood to gain with appropriate State support. McDonnell claims he never helped the businessman. Hmmm. What about accepting the gifts?

In Texas, Governor Rick Perry has been charged by a grand jury with what amounts to an abuse of power. Perry vetoed funding for the Travis County’s DA’s corruption task force after claiming that DA Rosemary Lehmberg was unfit to serve following a DIA conviction. Hmmm. Seems strange the Governor of the State would interfere in a county matter.

In the Virginia case there is no doubt that the Governor and his wife received substantial gifts from the businessman. The only defense, former Governor McDonnell has raised, is that he did not do any favors for the businessman and most of the gifts were to his wife, not the Governor. Well that certainly makes a difference.

“Abuse of power” seems a very subjective claim. While there is no question that Governor Perry threatened the elected DA, and that the DA was of the opposite party, and that the DA corruption task forces was established to investigate wrong doing within State Government (where Perry lives and is now Republican controlled), whether this is an abuse of power is at question. Hmmm.

From either an ethical or common sense perspective, a sitting Governor who accepts substantial gifts is out of bounds. For a sitting Governor to get trapped in a political war with the opposing party over a job elected by Country residents and whose charter is to investigate corruption in State Government, is dumb if not unethical.

Both McDonnell and Perry stand fair to good chances of being acquitted. Despite what appear to be improper actions, both men may have been operating within the “rules of law”.  Hmmm.

Coming Of Age

March 25, 2014

Pennsylvania is wrestling with a no-brainer ethical dilemma. Should the State amend its ethics rules to make it clear that cash contributions given directly to an elected official are unacceptable? It is hard to believe this should not already be the case. But it is not.

About three years ago, the State Attorney General’s office opened a “sting” investigation probing the ethics of elected and appointed officials. The sting allegedly nabbed at least 4 State Representatives who accepted cash in return for a promise to vote a certain way. Slam dunk you would think. Not quite.

The current Attorney General shut down the sting operation and refused to charge anyone. Attorney General Kane said the investigation was flawed and sloppily undertaken. The consequences are that four Representatives have been found guilty in the press but will face no further criminal charges. Most are running unopposed so they will continue their political careers.

The State legislature is now considering a complete ban on cash gifts. Hmmm. No one is asking why this was not already the case, or how will politicians go about collecting this type of tribute in the future? But closing this ethical loophole is a necessary first step.

State Representatives “getting around” and talking to constituents has been a necessary part of politics since cows roamed our streets. How else can a Representative know what their district needs or what legislation would be good for the State? Getting around, however, does often involve a Representative being lobbied. Here someone with money gets a larger say in what should happen than the average citizen.

In the past, face to face was necessary because Harrisburg was too far from Philadelphia for information to travel quick enough. Letters, faxes, and even newspapers were too slow, and telephone calls consumed too much time. Today the internet has provided a game changer. It is possible through social media for a Representative to solicit in real time their constituent’s opinions as well as to post their own thinking as a means to gather feedback.

Getting around can be limited to office hours or “town meetings” where the sunshine flows. A Representative who wants to be ethical can easily obtain all the necessary information and feedback he/she needs without sitting in a dark restaurant booth and slipping a cash stuffed envelop into their purse or pocket.

The worrisome part of the investigation findings is that while these were ethical violations, they were not illegal unless it could be shown the cash was accepted in return for a vote. This is much easier to allege than to prove.

And, what’s more worrisome is most politicians conflate ethics and legality. If its not illegal, its not unethical. Hmmm.  Where have our schools failed us?

The Price Of Elected Office?

January 22, 2014

Federal officials have charged former Virginia Governor Bob McDonnell with violations of State ethics laws.  Until rumors of the Federal investigation surfaced last year , McDonnell had been considered a potential GOP candidate for President or Vice President.  The former Governor has denied any illegal activity.  Here in lies the rub.

The ethics violations center on financial consideration given to the Governor and the “quid pro quo” return of favors to McDonnell’s generous supporter.  The Governor admits there were loans (all repaid) and gifts but nothing was given in return, McDonnell says.  Of course, the Governor wishes he hadn’t accepted the favors but he adamantly claims he broke no laws.  Hmmm.

From news reports, it seems that the price of being elected Governor was higher than McDonnell’s personal financial means could meet.  He had allegedly maxed out his credit card and was looking at some significant expenses like his inauguration ball, what his wife could wear to special events, and his daughter’s wedding.  Private sector executives often face the same type of expenses but normally are compensated sufficiently to afford those expenses.  Public sector officials are not.

So what are the messages here?

1.  We must overlook whether McDonnell violated any laws.  It is almost beside the point.  McDonnell  admits receiving two $50,000 loans, a $15,000 loan, and several dresses for his wife.  Who, other than someone in position to do favors, could find a person to be so generous?

One of the most elementary ethic standards is that a public servant should refuse to a accept something not available to anyone else.  McDonnell, like most other public officials who are exposed, immediately switch attention to whether some is illegal rather than where it was ethical.

2. As if we need another example but this points out the slippery slope all public officials are on.  The wealthier the official, the more careful and sophisticated they can be in applying their position to personal wealth accumulation.  Having only rich people as elected officials, however, brings its own set of problems.

3. McDonnell has been exposed.  What makes one think that the other 49 Governors or the 535 Congress members do not also have similar ethical problems?

The 7/24 news media sees this as a gift from heaven.  The Governor Christie brouhaha has peaked and what is there to talk about?   Yet, none have tied the dots together to reveal a underlying national problem.


The Hand Off

March 14, 2013

Pennsylvania can’t be the only place.  Bribing a public official is against the law.  But, the classic “hand off” is alive and well.

A couple of years ago, the Commonwealth’s citizens were instructed on how the Port Authority greased elected officials’ palms.   The process begins with Port Authority senior officials were appointed by high level State officials (usually the Governor).  These Port Authority jobs were high paying and with loose oversight.  The Port Authority then proposed large scope projects which were approved.  In order to be careful, the Port Authority hired big time law firms (just certain ones) to protect the interest of the toll paying public.  And to complete the “hand off”, these law firms made generous donations to the high level elected officials’ campaign funds.  Hmmm.

More recently, the public learned a Pennsylvania Supreme Court Justice employed his spouse (a talented lawyer).  The spouse referred several individuals to certain law firms who practices before the Supreme Court.  As is the Pennsylvania customer, the law firms rewarded the spouse for the referrals.  The “hand off” reward was not $800, but over $800,000.  Hmmm.

This week the Pennsylvania Attorney General’s office has focused upon 8 members of the Pennsylvania Turnpike Authority.  Like the Port Authority, these hold appointed, well paid positions.  The “hand off” goes like this.  When an influential elected official needed a boost for their campaign fund treasury, they would call the Turnpike Authority head.  The head in turn would contact one of the appointed officials.  These officials would contact all their key vendors with the message “pay official X now and play later”.  Hmmm.

When the workings of our Federal Government get frustrating, we are usually reminded that States do things more efficiently.  Hmmm.  If that is true (and I doubt it), it looks to me like “the hand off” is the hidden tax.