Ethics Newsline®

Question: “Has Bill Clinton’s behavior in the Monica Lewinsky and impeachment matters made you feel that…”

“Laws are always unstable unless they are founded on the manners of a nation; and manners are the only durable and resisting power in a people.”

–Alexis de Tocqueville (French political writer and statesman, 1805-1859)

From the press conference by Sen. George Mitchell:

USOC Special Bid Oversight Commission Final Report and Recommendations Press Conference

March 1, 1999
Hotel Intercontinental, 11 East 48th Street, NYC

“SEN. GEORGE MITCHELL: Good morning, ladies and gentlemen. I will make a brief statement then we will be pleased to take your questions. It is my hope that each member of the commission will participate in the question-and-answer period. Copies of the full report will be available to you outside of this room at the conclusion of this press conference. . . .

“The troubling events in Salt Lake City and other host cities are attributable to the fact that ethical governance has not kept pace with the rapid expansion of the Olympic Movement. The Olympic Games have become big business for sponsors, host cities, athletes, and the organizations that make up the Olympic Movement.

“The intense competition to host the Olympic Games coupled with the multibillion-dollar enterprise that results from winning that competition, have exposed the weaknesses in the Movement’s governing structures and operational controls.

“Despite the fact that everyone recognizes the Olympics to be a huge commercial enterprise, the International Olympic Committee and its constituent organizations lack the accountability and the openness needed to keep up with the role of the Olympic Games that are played by those games in the world today. The commercial success of the Olympic Games creates both the opportunity to better the games and the potential for abuse.

“We found responsibility at the local, national, and international levels of the Olympic Movement for the improper conduct. Therefore, in order to restore the integrity of the games, especially with the public, we believe there must be reform at every level.

“It was wrong for Salt Lake City officials to give money to International Olympic Committee members and their families to win votes. But what happened in Salt Lake City was not unique. . . .”

LONDON
Many dissatisfied U.K. workers are trading in their high-paying jobs back home for volunteer positions in third-world countries, according to a new survey by a U.K. company besieged by applications for overseas work.

The charity Voluntary Service Overseas (VSO), which places workers in two-year positions in third-world countries at local pay rates, reported a tremendous upswing in applications — 19,000 over the past six months, the BBC reported.

VSO spokesman Dan Rees told the BBC that the surge is largely due to workers feeling unappreciated, overstressed, and unchallenged by conventional jobs in the United Kingdom.

VSO volunteer Tim Pitt, who resigned from a well-salaried engineering position for road-building duties in Afghanistan, told the BBC that giving up the company car and comfortable lifestyle was a necessary decision.

“The money is not the important thing anymore,” 32-year-old Pitt explained to the BBC. “In Afghanistan I am going to be building something important, which will be valued.”

When does a tip become a bribe?

Does acquittal absolve one from responsibility?

Can litigation resolve every important disagreement?

Abstract questions, these — even metaphysical. But relevant. To ethics officers who oversee both compliance-based and values-driven programs — and who must constantly balance regulatory constraints against visionary aspirations — such issues are central. They speak to a fundamental question in our field: How does ethics relate to law?

Oddly enough, this past week’s news is studded with examples:

• The Olympics scandal. In a stern report, an independent commission of the United States Olympic Committee (USOC) headed by former Senator George J. Mitchell found that the Salt Lake City organizers had succumbed to a "culture of improper gift giving" in bribing members of the International Olympic Committee (IOC). "What they did was wrong," Mitchell said bluntly in releasing the report. He also explained that being wrong is not the same as being illegal — a determination his commission was not empowered to make. The commission did, however, argue for a movement from the moral to the legal arena. One of its most potent recommendations was that the IOC be declared a "public international organization," making it not only subject to international codes of conduct but to the U.S. Foreign Corrupt Practices Act, which exacts legal penalties for bribing foreign officials.
• The Espy backlash. The Supreme Court, meanwhile, seems to be moving in the opposite direction. It heard a case growing out of an independent counsel’s unsuccessful effort to convict former U.S. secretary of agriculture Mike Espy on bribery charges. The high court was asked to find that a California fruit and nut grower, in providing Espy with $5,900 worth of tennis tickets, luggage, meals, and gifts, had given a bribe rather than a gratuity. According to one report, Justice Stephan G. Breyer appeared skeptical of shifting such cases from the realm of ethics into the regime of law. Ethics regulations, the New York Times quoted him as saying, were preferable to "bringing the blunderbuss of federal law into the prosecutor’s arsenal, where they can prosecute trivial things."
• The Marine pilot acquittal. Meanwhile, a military jury at Camp Lejeune, North Carolina, found Capt. Richard J. Ashby innocent of involuntary homicide and manslaughter when his plane severed a gondola cable at an Italian ski resort last year, causing 20 deaths. Despite finding that he was flying much lower and much faster than the rules permitted, the military seemed content to characterize the incident as a training accident rather than a crime — leaving open the question of whether anyone was morally, if not legally, responsible. Speaking for a nation appalled by the verdict, Italian prime minister Massimo D’Alema told President Clinton during a joint press conference in Washington that he would not be satisfied until "whoever is responsible for what happened is found guilty and punished."
• Prime-time Monica. And in a tale with more staying power than the proverbial Dogpatch ham, Monica Lewinsky is at last speaking out about her affair with President Clinton. Despite the President’s acquittal last month by the Senate, the public still clamors for details: Lewinsky’s new book, Monica’s Story, is topping the best-seller charts, while her March 3 ABC-TV interview with Barbara Walters set audience records. Her comments help sharpen a picture of presidential conduct that most Americans regard as unethical and repugnant — despite the fact that it was not found to be illegal.

Small wonder, then, that corporate ethics officers struggle with the values-compliance dialectic. The world, too, is struggling with it. The tired formulation of the relativists — "If it ain’t illegal, it must be ethical" — gets deservedly short shrift these days, as people sense that ethics involves far more than avoiding criminality. The debates that most matter, after all, can’t be resolved within a legalistic, guilty/not guilty framework. From Salt Lake City to the Supreme Court, from 1600 Pennsylvania Avenue to Mount Cermis, Italy, it became clearer last week that to call something legal doesn’t necessarily mean it’s ethical.

All the more reason, then, for serious ethics programs to continue moving from the compliance ethics of "Thou shalt not" to the values ethics of "Let’s do right." Compliance, quite simply, isn’t enough.

(c)1999 by Rushworth M. Kidder

For anyone doing business in the United States, this week’s lead stories matter. The Supreme Court last week took up two cases — one centering on punitive damages in discrimination lawsuits, the other on bribery — that may have a profound impact on the conduct of U.S. business. And while those decisions may not be forthcoming for a few months, the debate is focusing businesses’ attention on the fine line between legality and ethics.

Next on our particular docket this week in Business Ethics Newsline is a story that used to seem amusing but has now turned serious: The so-called “banana wars” — tariff and import disputes that originally involved bananas — are escalating to a major trade issue between the United States and the European Union.

And we follow up with a report on a major sex discrimination suit that is changing the way Wall Street handles such cases.

Mexico is not only a neighbor but an important economic partner, and we have a report on how that nation is attempting to clear up some of its long-standing labor troubles.

From the U.K. comes a report from the "say it ain’t so" category: allegations from one of the world’s most prestigious research journals that claims much scientific research is faked.

The Fighting Irish are combating sweatshops: We have a report on how the University of Notre Dame is commissioning independent inspections of apparel-makers that produce its licensed goods.

Swissair says it is going against its own lawyers’ advice and granting immediate compensation to families of victims of a recent crash; we have that story and links to sources.

Also, we have an interesting report about the new media: A Columbia University journalism professor’s study says Web-based publications often rush to judgment.

And we conclude our wrap with two stories about the Olympics scandal and its aftermath. In the research section of Business Ethics Newsline, we also link you directly to the USOC Special Bid Oversight Commission Final Report and Recommendations document and the press conference transcript.

Our regular Ethics in the News feature capsulizes and links you to several important stories this week, about sexual harassment, e-mail, and children of working mothers.

And we wrap up this segment of our report with our regular Ethics in the Workplace feature and a report from Canada by correspondent Errol Mendes.

Have a productive, ethical week.

–Carl Hausman

WASHINGTON
Cases involving gifts to government officials and punitive damages for discrimination lawsuits went before the U.S. Supreme Court last week. The docket included:

• The appeal of Carole Kolstad, whose lawyers asked the Supreme Court to lower the standard required for juries to assess punitive damages against companies convicted of sexual or racial discrimination.

• The U.S. government’s appeal against Sun-Diamond Growers of California, in which an independent counsel seeks to reinstate bribery charges against the firm.

The Court is expected to decide both cases by July.

WASHINGTON
The banana war between the United States and the European Union escalated last week, heightening trade tensions, prompting retaliatory promises from both sides, and adding U.S. beef and airplanes to the international dispute over protectionist trade policies.

The Clinton administration last week began requiring importers of European goods to post bonds to cover the promised imposition of crippling, 100-percent tariffs on $520 million worth of European products — tariffs imposed in retaliation for alleged EU discrimination against American banana growers.

The EU, which insists it ended banana-import discrimination in January, condemned the threatened tariffs, which have yet to be approved by the World Trade Organization (WTO). The WTO has asked for more time to decide whether the U.S. tariffs are justified, the Washington Post reported.

A second wave of tariffs on $250 million worth of EU-produced goods has been threatened by the United States if the EU fails to further open its markets to U.S. beef imports.

Also last week, the U.S. House of Representatives voted to ban Europe’s Concorde airplane from flying over U.S. soil, a tit-for-tat protest against an EU plan to cut down on air pollution by banning older U.S. planes from European airways, according to the Associated Press.

NEW YORK
More than 900 women filed discrimination complaints against Merrill Lynch and Co. last week, meeting the deadline to join in the company’s 1998 settlement of a class-action lawsuit alleging unfair treatment of its female brokers.

A court-supervised mediator will handle the women’s claims that male brokers were given more accounts and better training than female brokers, the Associated Press reported.

Industry observers say the settlement marks a turning point in the way Wall Street is handling charges of discrimination, shifting from mandatory in-house arbitration to the courts.

The National Association of Securities Dealers and PaineWebber also recently abandoned mandatory arbitration, according to the Reuters news agency.

Merrill Lynch spokesman Bill Halldin told the Associated Press that the shift away from mandatory arbitration was “an important step” that would help eliminate the “perception of unfairness” tied to corporate arbitration.

Merrill Lynch has denied any wrongdoing in settling the class-action lawsuit.

MEXICO CITY
The Mexican government last week announced a renewed effort to solve the nation’s labor problems, including human rights abuses, gender discrimination in the workplace, and the possible renewal of a “guest worker” program permitting Mexicans to work seasonal jobs in the United States.

Mexican labor secretary Jose Antonio Gonzalez said that his country would do “all that is possible” to address concerns raised by U.S. labor secretary Alexis Herman, who recently visited Mexico to discuss Mexican-U.S. labor issues.

Gonzalez also pledged to investigate the deaths of as many as 192 young women who worked in Mexico’s “maquiladora” industry, a collection of assembly-for-export companies accused of severe human rights abuses, the Associated Press reported.

LONDON
The world’s scientific community must work harder to crack down on fraudulent research, reported the British scientific journal Nature, one the most respected forums for publication of scientific research.

Nature reported last week that recent studies show a disturbing rise in scientists’ use of fraudulent data in published articles. Two recent surveys from the United States and Norway indicated that between six percent and 22 percent of researchers were aware of “serious breaches of research ethical guidelines” by fellow scientists, according to the BBC.

“The scientific community should be worried about fraud because it corrupts science and leads to public mistrust,” Sir John Maddox, the former editor of Nature, told the BBC.

Maddox said the rise in fraudulent research could be curbed by instituting global ethics codes for researchers, creating independent investigation agencies, and relaxing the link between scientists’ university tenure and the push for research publication.

SOUTH BEND, Indiana
The University of Notre Dame last week announced that it would continue its campaign against sweatshops by paying for independent inspections of manufacturing firms licensed to produce merchandise bearing its trademark.

Government and industry leaders praised Notre Dame’s decision as an important step in leading the way for other universities in the campaign against sweatshop labor.

In 1997, Notre Dame drafted a code banning child labor, forced labor, workplace abuse, and unsafe conditions in factories manufacturing Notre Dame-branded merchandise. A similar code was adopted in January by the Collegiate Licensing Co., which oversees the $2.5 billion-a-year merchandise industry for U.S. colleges, the Associated Press reported.

ZURICH
The parent company of Swissair announced that it would pay $135,000 to the families of each victim killed when the company’s plane crashed off the coast of Canada last year, killing all 229 passengers.

SAirGroup chief executive Philippe Bruggisser told reporters that he had gone against the advice of his company’s lawyers and insurer and decided to provide each victim’s family with $135,000 as “immediate assistance,” the Reuters news agency reported.

The goodwill payments will not affect any further settlements or damages awarded to the victims’ relatives as part of the 22 lawsuits currently filed against SAirGroup and Boeing/McDonnell Douglas, which built the MD-11 airplane.

The companies face possible damages as high as $9.5 billion for the crash, the cause of which remains unknown.

NEW YORK
Newspapers and magazines are increasing their online content, but too frequently getting the story wrong in the push to keep their fast-paced Web sites up to date, according to a new survey about online news.

Survey co-author Steve Ross, a professor at Columbia University’s Graduate School of Journalism, says that news organizations are letting the medium interfere with the message by rushing to publication without adequately checking the facts.

The surge in news offerings on the Internet — a 400 percent rise in the past three years — is a laudable use of the new medium, Ross told the Associated Press.

But Ross said that journalists, rushing to scoop other outlets on the Web, “often got the story wrong, concentrated on breaking news rather than features, and skirted long-standing ethical practices.”

The survey of nearly 3,500 printed newspaper and magazine editors found that 58 percent offered companion Web sites.

WASHINGTON
The United States Olympic Committee (USOC) last week announced a series of sweeping reforms designed to curb the “culture of improper gift giving” and safeguard the U.S. Olympic bidding system from future ethics scandals.

USOC president Bill Hybl said that the Committee had adopted all of the recommendations made by an ethics panel investigating the current bribes-for-votes debacle surrounding the 2002 Winter Olympics in Salt Lake City.

Announced reforms include a ban on bid cities creating assistance funds, increased USOC oversight of U.S. cities’ bidding, and the creation of a compliance office to handle conflict-of-interest claims, the Reuters news agency reported.

The USOC also called on President Clinton to declare the Switzerland-based International Olympic Committee a “public international organization,” thus making it subject to U.S. laws criminalizing the bribery of international officials.

NEW YORK
Olympics sponsors are holding steady despite the current bribery scandal, insisted NBC Sports chief Dick Ebersol at last week’s International Radio and Television Society conference on restoring public confidence in the Olympic movement.

“There hasn’t been any fallout from advertisers to date,” said Ebersol, with the exception of John Hancock Financial Services, which is reconsidering its $13 million pledge for television advertising during the 2000 Sydney games.

But fellow panelist Shelley Thomas, head of communications for the Salt Lake Olympic Committee, disputed Ebersol’s assessment, telling Reuters that potential sponsors have told her that “they’re not ready to stand up at this point and put their logo next to the word ‘bribery’ in the headline.”

Special to Newsline from Canadian correspondent Errol P. Mendes

EDMONTON
A veteran judge from Alberta ignited an ethics firestorm after his ruling in a sex-assault case was reversed by the Supreme Court of Canada.

In a letter to the National Post, Justice John McClung attacked the concurring decision of the leading female judge on the Supreme Court, Justice Claire L’Heureux-Dube. Justice L’Heureux-Dube had characterized the lower court’s judgment as sexist and stereotypical of women.

Justice McClung linked Quebec’s growing male suicide rate with the female judge’s views of men’s attitudes. Justice L’Heureux-Dube’s husband had committed suicide in 1978.

When the legal profession reacted with outrage, calling for Justice McClung to step down, he apologized, claiming he did not know of the husband’s suicide when he wrote the letter. Several complaints have been filed with the Judicial Council of Canada, which could recommend that the Parliament of Canada remove the judge from office.

WASHINGTON
The Washington Post reports on the increasingly confusing legal tangle surrounding sexual harassment lawsuits, noting that high stakes, new legislation, and conventional pragmatism are pushing defendants to settle harassment cases even if they deny any wrongdoing.

In the Post, writer Sally Quinn reports that the recently enacted Rule 415, authorizing courts to investigate defendants’ sexual histories, is prompting lawyers to recommend that their clients settle sexual harassment lawsuits — even fraudulent ones — before they reach the courtroom.

Quinn notes that the stiff awards meted out in sexual harassment trials are forcing many companies to clarify acceptable behavior standards for employees, reevaluate the risks of mentoring programs, and draft “love contracts,” which rule out sexual harassment lawsuits by employees who become romantically involved.

DALLAS
An increasing number of companies are deleting e-mail archives and screening employees’ email messages in an attempt to ward off potential lawsuits, according to an Associated Press article examining corporate measures to unload what a Los Angeles lawyer calls “the smoking gun of the ’90s.”

Email usage in the United States has doubled over the past two years, according to the AP. And employers, worried about sexual harassment lawsuits and other potentially incriminating communications, are feeling uneasier than ever about their email archives.

The Associated Press reports that several companies are “shredding” their email archives by erasing them. Other companies are screening new messages for keywords that could lead to legal problems.

Corporate anxiety over incriminating email has been heightened by the use of email evidence in recent legal cases, including the Microsoft antitrust trial and the impeachment of President Clinton, the AP notes.

The corresponding boom in corporate screening of employees’ email has caused some critics, including the Electronic Privacy Information Center, to fight corporate prying by pushing for legislation protecting workers’ privacy.

WASHINGTON
The children of working mothers perform as well on tests as the children of mothers who stay at home, according to a new study released last week by the American Psychological Association.

The study’s authors analyzed data collected from annual interviews of 12,600 people examined each year since 1979, when they were between 14 and 22 years old, the Reuters news agency reported.

According to study co-author Elizabeth Harvey, a psychologist at the University of Massachusetts at Amherst, children whose mothers worked for the first three years of their lives showed only minor differences in test performance than those children whose mothers did not work. Those slight differences, Harvey reported, all faded as the children got older.

Children were tested for compliance, behavior problems, cognitive development, self-esteem, and academic achievement, Reuters reported.