Ethics Newsline®

How much do you think the Asian and international financial crisis will damage the American economy–a lot, some, or not at all?

by Rushworth Kidder

The day Ken Starr testified before the House Judiciary Committee last week, I was conducting an ethics seminar. The participants–fifteen executives from a Fortune 500 global manufacturer in the Midwest–got talking about whether our moral barometer was rising or falling. Sure enough, when they came to listing evidence that ethical standards are in decline, up came President Clinton’s name.

As it regularly does. In the last few months, I’ve had similar discussions with college faculty, foundation executives, military officers, health professionals, and others across a spectrum of occupations and interests. You can’t talk about ethics these days without the president showing up.

That’s not new. He’s been out there a long time, looming up behind the nation’s moral discourse. But what struck me last week was that the terms of address have shifted. Last spring he was a polarizing force, slamming like a lightning bolt into the center of any conversation about values and fusing its participants into stark, crystalline opposition to one another. By summer’s end he was a sad spectacle, settling like smog over the national conscience and evoking the shake of the head, the sigh of resignation. By Election Day he was a kind of mathematical certainty, factored into the political algebra with a cool precision of wins and losses.

Now comes another phase, as we try to figure out what to do with him. Despite congressional histrionics, nobody wants impeachment–not Democrats who need his high approval ratings, not Republicans who dread facing an incumbent Al Gore in the 2000 elections, not citizens who wish the hearings would evaporate. But nobody wants nothing to happen to him, either. Notable throughout last Thursday’s hearings was the lack of any defense of his actions.

I asked this group whether the events in the nation’s capital were having any impact on corporate culture. Yes, they said, they sensed an effect, but they couldn’t put their finger on it. One executive, who from her accent was a born-and-bred Midwesterner, said she knew of executives who had affairs–but not with subordinates, on company time and in company property, and in high-risk ways. She was sure that, if found out, the offenders would be sharply disciplined. What if they lied to cover it up? That, she felt, would be instantly terminal.

One of her colleagues from Europe took a different view. What was the big deal? he asked. The president goofed. But so do lots of people. Does that render them incompetent in the workplace? He hastened to say he wasn’t excusing Clinton’s actions, which he found appalling. But didn’t we risk being hypocritical in our condemnation of perjury? We all adjust the truth to the situation, he said, especially in a corporate setting where tact is a prized quality. Again, he wasn’t praising deception. He saw it as just trying to be realistic.

She wasn’t persuaded, though she saw his point. What troubled her particularly, she said, was what to tell her daughter. “I just think it’s very confusing,” she concluded. He agreed.

In that simple conclusion, she framed the problem. These days, we’re all groping for ways to make sense of this issue. Gone are last spring’s polarities, last summer’s resignation, last Election Day’s certainties. Instead, we’re floundering. We think clearly about ethics, it seems, until Clinton’s name comes up. That’s when a pall of bafflement settles over the conversation.

Again, nothing new. That bafflement is the hidden cost of unethical activity in high places. It’s not that such activity telegraphs bad messages. Instead, it taps out random dots and dashes that carry no message at all. It leaves thoughtful people befuddled. It’s not that it demagnetizes their moral compass. It just takes them out of range of the North Pole.

And that’s the unkindest thing of all. Good leaders set standards and help people think clearly. They make our mental and moral lives easier. Poor leaders blur the outlines of thought. They leave us puzzled, uncertain, confused.

Yet as the business community moves into the uncharted inlets of the 21st century, clear thought is exactly what’s needed. Will the Clinton episode change corporate culture? Will sexual promiscuity in the workplace now be dismissed as inconsequential? Or will we pry even deeper to expose it? Will perjury no longer count? Or will we land even more heavily on deceivers? Will we learn to compartmentalize values and competence, applauding the latter no matter what the former looks like? Or will we learn never to trust a top management that seeks success at the expense of ethics?

I suspect, once this episode is over, that the moral barometer will be found to have risen. I think the nation’s organizations, sobered by this spectacle, will tighten their standards and demand a greater sense of values on the part of their leaders. And I think clarity will once again reign. Meanwhile, don’t be surprised if it’s still confusing.

Comments and questions? Email Rushworth Kidder: rkidder@globalethics.org.

Smoking, a wit once observed, is the leading cause of statistics.

It’s also among the leading causes of litigation, a fact that has pushed amassive settlement between states and tobacco companies to the top of theheadlines in this week’s Business Ethics Newsline, your weekly summary of thenews in ethics.

Our top stories this week deal with the settlement, which includes a$206 billion payout to cover states’ health care costs as well as agreementsrelating to advertising and the dissolution of trade councils.

We cover some other tobacco stories as well, including a trial in which ascientist claimed that tobacco company research was conducted in Europe sothat it would not be available as evidence in the United States when tobaccosuits came to trial.

The week’s news in ethics was also dominated by the resignation of someone whocalls ethics his business–Sam Dash, who served as ethics counsel toIndependent Counsel Kenneth Starr. We report on Dash’s protest that appearingbefore the Judiciary Committee violated the ethical standards imposed on theoffice of independent counsel.

From Washington comes a report on a Supreme Court case that may hold importantramifications for U.S. business: The High Court determined that unionmembers can sue for discrimination even if their union contracts call for thematter to be settled by arbitration.

A story from London highlights one of the problems inherent in changingbusiness practices. In this case, the U.K. has decided to end all animaltesting of cosmetics, but critics wonder if the testing will simply moveelsewhere.

An unusual story from Los Angeles: Five Safeway workers are suing the storechain, contending that a policy requiring them to smile and make eye contactcauses female workers to suffer sexual harassment by customers.

From Washington comes a report about a class-action suit forming against theU.S. Department of Agriculture; black farmers claim that the USDA has shown apattern of discrimination against them and has driven many to bankruptcy.

CBS has settled a massive pollution case, and we have a report and linksrelating to that story.

And from London comes an item about the government’s effort to end agediscrimination with a voluntary code.

London correspondent E.B. Mills files three analyses this week: the story of adoctor who assisted a sick passenger while on a flight and now wants theairline to pay a bill for his services; a decision to return a culturalartifact that has sent shudders through the museum industry; and speculationthat union electricians in London are working at low voltage in order toprolong a lucrative project.

And we conclude our wrap of the week’s news in ethics with our Ethics in theNews feature–this week: a link to a story from the Washington Post aboutsurveillance of employees.

BEIJING
Scientists concluding the world’s largest study of tobacco deathshave warned that smoking will contribute to the deaths of three millionChinese men each year by the middle of the next century. “The truth is a thirdof all the young men in China will eventually be killed by smoking,” RichardPeto, professor of medical statistics at Oxford University and coauthor ofthe study, told Reuters.

CHICAGO
Researchers have found an alarming 28 percent jump in cigarette smokingamong U.S. college students over the past four years, scientists reported inlast week’s issue of the Journal of the American Medical Association.Researchers attribute much of the rise to the “tremendous increase in tobaccoindustry advertising and promotion directed toward children,” according toNancy Rigotti, one of the report’s authors and director of tobacco researchand treatment at Massachusetts General Hospital.

Special to Newsline from London Correspondent E.B. Mills

A British doctor who saved an American Airline passenger’s life has lost hislegal bid to collect a fee for his services. A district court in London sidedwith the airline, on technical grounds.

Dr. John Stevens responded to the cabin crew’s request for a doctor during aflight from California to London. He diagnosed a life-threatening blood clotin a 58-year-old woman passenger, Audrey Stevens (no relation), and advisedthe pilot to land in Chicago, where the woman received treatment. She hassince recovered fully, and believes Dr. Stevens saved her life.

Dr. Stevens submitted a bill for 540 pounds ($900) for four hours of work.American Airlines sent him a bottle of what the doctor called “cheapchampagne” and a $50 gift voucher.

Dr. Stevens said he was asked by the airline to perform a professionalservice. He said, “If you call out a plumber in an emergency, you wouldexpect to receive a bill.” Furthermore, Dr. Stevens said, he was not coveredby malpractice insurance and could have been ruined if the woman had died andher family had chosen to sue.

The airline said it has a policy of not paying doctors, and that it’s a matterbetween the doctor and the patient.

Special to Newsline from London Correspondent E.B. Mills

Are unionized electricians deliberately working at low voltage on a LondonUnderground project, so as not to derail their gravy train? The plannedextension of the Jubilee Line is meant to carry the expected tens of thousandsof visitors from central London to the Millennium Dome, which is scheduled tobe completed in October 1999.

But the work on the extension is 18 months behind schedule and way over its $5 billion budget. Many of the union electricians working on theline are making $1,700 weekly, and London Underground management isopenly questioning whether the union is deliberately dragging out the work tokeep their paychecks coming.

There have been several incidents of sabotage, as well, slowing progress evenfurther. Union leaders accuse management of waging a campaign of “dirtytricks propaganda” against the workers, in order to shift the blame for thedelays on the line.

LOS ANGELES
CBS Corp. agreed last week to a $9.5 million settlement withfederal and state environmental agencies over alleged chemical dumping off theSouthern California shore, ending the company’s involvement in a $250 millionpollution case believed to be the largest suit involving damages to naturalresources ever filed, the Associated Press reported.

CBS was acquired by the industrial firm Westinghouse in 1995, and Westinghouseassumed the CBS name. Westinghouse had been charged with dumping toxins froma transformer plant into the waters off Palos Verdes Peninsula, now anEnvironmental Protection Agency (EPA) Superfund site. The company denied thecharge.

The EPA and other environmental groups will use the settlement to continuecleanup efforts at the Palos Verdes site.

NEW YORK
State attorneys general last week unanimously agreed to sign on to a proposed$206 billion deal with Big Tobacco promising payments and industry reform inexchange for dropping all state lawsuits seeking recovery of funds spenttreating tobacco-related illnesses.

The settlement also proposes:

• A ban on the use of cartoon characters, outdoor advertising, and paid celebrity advertisements

• A ban on the distribution and sale of apparel and merchandise displaying tobacco brands’ logos

• The funding of a $1.5 billion antismoking campaign

• the dissolution of industry trade groups

Washington attorney general Christine Gregoire, who led the settlement talks,insisted that the deal, which offers fewer restrictions and less funds fromBig Tobacco than the failed $368.5 billion deal quashed by Congress earlierthis year, still has plenty of bite.

But critics, including American Lung Association chief executive JohnGarrison, say that the settlement is too weak and too hurried.

The tobacco companies are expected to sign the agreement this week.

LONDON
The U.K. will no longer test cosmetic products on animals, the HomeOffice announced last week, ending a year-long legislative process designed toeliminate nonvital animal testing in the U.K.

Earlier this year, U.K. ministers and many industry leaders agreed to stop usinganimals–primarily mice, guinea pigs, rats, and rabbits–in the testing offinished cosmetic products. Last week, several holdout companies agreed tovoluntarily turn in their licenses to test cosmetics on animals, and no morelicenses will be issued

Promoters of the ban applauded the U.K.’s move, but warned that the UnitedStates, Japan, and the European Union have no such restrictions, and animaltesting may simply move from the U.K. to other countries.

WASHINGTON
Up to 4,500 black farmers may join a class-action lawsuit filedlast month against the U.S. Agriculture Department (USDA), according tolawyers who charge the USDA denied loans and financial assistance to blackfarmers over the past 15 years.

About a thousand farmers have joined the suit so far.

Lawyers for the plaintiffs contend that the USDA’s discrimination has forcedblack farmers off their land for decades and has led to a bankruptcy ratethree times higher than that of white farmers, Reuters reported.

Agriculture secretary Dan Glickman has acknowledged his department’s pastdiscriminatory practices and inefficiency in handling discrimination claimsand has called for an out-of-court settlement before the case goes to trialin February.

WASHINGTON
Sam Dash, ethics advisor to Independent Counsel Kenneth Star,resigned Friday to protest Starr’s decision to appear before the HouseJudiciary Committee.

In a letter to Starr obtained by the Associated Press, Dash wrote, “You haveviolated your obligations under the independent counsel statute and haveunlawfully intruded on the power of impeachment.”

Starr said he respected Dash’s decision and noted that “reasonable minds candiffer.”

Dash has a long history of involvement in legal ethics, dating back to the1970s, when he helped write American Bar Association ethics codes for criminaldefense attorneys and prosecutors. Dash was also chief counsel to the SenateWatergate Committee.

Dash himself recently came under criticism for the $400 per hour fee he billedthe government for his role as ethics adviser to Starr, CNN reported.

LONDON
U.K. government and employers have joined forces to combat agediscrimination, proposing a voluntary code of practice for employers.

“Companies can’t afford to waste talent,” Employment Minister Andrew Smithtold the BBC. “There’s an enormous waste of talent here. With more than a thirdof the workforce cut off from the labor market, it’s not only a denial ofopportunity to them, it’s an enormous cost to the economy.”

Smith noted that mandatory age discrimination legislation in other nations hasproved difficult to enforce.

WASHINGTON
The United States Supreme Court ruled last week that unionmembers can sue employers for discrimination even if their union contractsrequire that such complaints be handled through arbitration.

The Court voted unanimously to revive the case of Caesar Wright, a SouthCarolinian dockworker who sued several shipping companies for discrimination.His case had been thrown out by a lower court, which ruled that Wright’s unioncontract obligated him to use union arbitration rather than federal court.

Writing for the court, Justice Antonin Scalia contended that the union’scontract was too vague to be binding and that Wright’s “right to a federaljudicial forum is of sufficient importance to be protected against a less-than-explicit waiver,” the Associated Press reported.

LOS ANGELES
Five female employees of Safeway, Inc. grocery stores last weekfiled federal and state discrimination complaints against the company,claiming that Safeway’s mandatory service-with-a-smile policy encourages malecustomers to sexually harass them.

Attorneys for the women accuse Safeway of fostering a “hostile workenvironment” by “forcing employees to smile at, make eye contact with, andotherwise engage in overtly solicitous interactions with customers under thethreat of disciplinary action.”

A Safeway spokeswoman told the Reuters news agency that the company does nottolerate sexual harassment in any form but promised to investigate thecharges.

WASHINGTON
The Washington Post discusses the increasing use oftechnology to keep tabs on employees, and the effects such surveillance canhave on employee morale and productivity.

Inexpensive technology allows employers a number of options to keep track ofemployees, from reading their email to tracking their whereabouts withelectronic pass keys to monitoring how often they surf the Web. But, warnsPost writer Robert O’Harrow Jr., the “burgeoning practice of watching workerscould backfire,” undermining morale and employee enthusiasm.

“At some point,” advises privacy consultant Robert Gellman, “surveillancebecomes counterproductive.”

“Nearly 18 percent of women surveyed, or 17.7 million American women, have been raped or been a victim of attempted rape during their lifetimes, according to the first collaborative study on violence jointly funded by the Department of Health and Human Services and the Department of Justice.

“Published [last Tuesday] in a Justice Department Research-in-Brief, findings from the national survey, conducted by the Center for Policy Research in Denver, Colorado and sponsored by the National Institute of Justice and the Centers of Disease Control and Prevention, provide a better understanding of the lifetime rate, nature, and consequences of violence against women and men.

“According to the survey, 54 percent of those raped reported they were under the age of 17 when first raped. The survey also reported that more than half of American women have been physically assaulted some time during their life. Physical assault was defined as behaviors ranging from slapping and hitting to using a gun. . . .

“This survey was unique in several ways: The questions regarding violence were posed in the context of “personal safety” as opposed to a “crime”; respondents could call interviewers back when not in the presence of someone who had abused them; women were interviewed by women; and victims were provided with information and referrals for services. The survey’s designers believe that these precautions increased the quality of the information collected.”

“A man’s true greatness lies in the consciousness of an honest purpose in life, founded on a just estimate of himself and everything else, on frequent self-examinations, and a steady obedience to the rule which he knows to be right, without troubling himself about what others may think or say, or whether they do or do not that which he thinks and says and does.”

–Marcus Aurelius Antonius (121-180)