Ethics Newsline®

“Aggressive fighting for the right is the greatest sport in the world.”

– Theodore Roosevelt (26^th U.S. president (1901-1909), 1858-1919)

From the Gallup News Service:

“[Last] week, the Federal Reserve Board raised two short-term interest rates, the federal funds rate and the discount rate, in a reported effort to ‘diminish the risk of inflation.’ One fear was that in the current robust labor market with workers in short supply, the demand for higher wages could push up inflation. But a new CNN/USA Today/Gallup poll, which asked workers themselves what level of raises they expect to receive, suggests that overall wage increases this year may be about the same as last year.

“Among Americans employed either part-time or full-time (excluding all self-employed), 26 percent expect to receive higher raises this year than they received last year, while almost the same number — 24 percent — expect to receive lower raises. Another 49 percent of workers expect to receive raises that are about the same as they received last year. This number includes those who received no raises last year and expect none this year as well.

“The pattern of these expectations is similar for both full-time and part-time workers. . . . These results suggest that — at least from the workers’ perspective — there is on balance no anticipation of significant salary or wage increases this year.

“It should be noted that these results do not address the size of the wage increases, just the proportion of workers who expect such increases. Still, workers with family incomes greater than $50,000 a year are no more likely to expect higher raises this year compared to last year than are workers with family incomes in the $20,000 to $50,000 range. However, workers with family incomes of less than $20,000 a year are considerably less likely to expect higher raises. . . .

One-third of Americans Expect Inflation to Outpace Income

“Despite the low overall rate of inflation, 34 percent of Americans expect that in the next year prices will go up faster than their incomes, while 20 percent expect their incomes to increase faster than prices, and 43 percent expect their incomes to increase just enough to offset inflation. . . .

LOS ANGELES
A California judge last week reduced a record $4.9 billion product-liability judgment against General Motors to a still-record $1.2 billion, saying that the harsh penalty was necessary to deter future abuse.

Earlier this year, a six-member jury ordered GM to pay $4.9 billion to six family members who were badly burned when their 1979 Chevy Malibu caught fire after a rear-end collision.

The jury ruled that the fire was the result of a deliberately ignored design defect by GM.

GM contested the ruling, arguing that the jury had been denied important evidence and had ruled out of passion instead of reason, according to the Reuters news agency.

Los Angeles Superior Court judge Ernest Williams reduced GM’s penalty, but ruled that the automaker had suppressed safety data “in order to maximize profits to the disregard of public safety.”

Last week, the plaintiffs offered to reduce GM’s penalty to $300 million in exchange for recalling and fixing cars with vulnerable rear gas tanks, the Los Angeles Times reported.

GM has said it will appeal the latest ruling.

Summer’s end invites reflection. With vacations past and a new season beginning, we naturally ask, “What’s ahead?” The most important answers concern our moral future. As we drift toward the new millennium, what high-leverage, first-intensity issues will most impact our values and challenge our ethics?

Here’s my take on it, under the heading of six trends:

1. Technology leveraging ethics. New technologies in communication, transportation, weaponry, and health care will vastly increase the reach and impact of single decisions. Clear, values-driven actions will have an unprecedented potential for good. But unethical decisions by single individuals can now create world-class disasters that will make Chernobyl look like small potatoes.

2. Rights giving way to responsibilities. The golden anniversary of the Universal Declaration of Human Rights reminds us that we’ve had fifty years of rights talk. Look for increasing emphasis on the commensurate responsibilities — social, economic, politic, and moral — that must accompany those rights. Done poorly, this trend could cause real backpedaling from the hugely important progress in human rights in this century. Done well, it could launch a whole new wave of commitment and accountability, moving from a “Gimme mine!” to a “How can I help?” mentality.

3. Linear thinking ceding to networking. The explosion of the World Wide Web is but a metaphor for this trend. The movement will be from the stepwise, vertical logic of reasoned cognition to the horizontal gathering of information through intuition and relationships. This may suggest a move from what writers like Carol Gilligan (”In a Different Voice”) see as a male-oriented ethic of justice to a female-oriented ethic of care. That’s good if it replaces the testosterone of competition with the compassion of sharing, bad if it undercuts rational insight with woolly psychobabble.

4. Stasis overcome by mobility. Symbol: the mobile phone, whose numbers have no fixed address. Evidence: a global flux of individuals, some pushed by forced migration but most drawn by economic or political allure. Requirement: to focus education not on career skills and job markets, but on core values and competencies, preparing students for immense, regular, and accelerating change. Moral challenge: to provide a sense of stability no longer available from the values of place, family, and cultural traditions.

5. Compliance yielding to trust. The old ethical model emphasized obedience to regulations. With the pace of innovation, there will be no time to develop regulations before the next generation of issues arrives. Nor will there be enough policemen to put behind every post to watch every employee, politician, parent, and professional. We’ll be forced to develop new levels of trust — becoming more trustworthy, and creating a world in which we can be more trustful. The Reagan-era mantra, “Trust, but verify,” will take on new significance as we see even the most tightly lawyered contracts coming apart when the character of one or more partners is ethically flawed.

6. Patients becoming customers. As managed care turns medical practice inside out, the age-old braid that united in a single individual the patient (who needed help) with the customer (who paid the bills) is unraveling into its twin strands. With customers now calling the shots, the ethical dilemmas facing caregivers, families, and the patients themselves will rise by orders of magnitude. And managed care is but a metaphor for pervasive change wherever there is a “professional” delivery of services — from education to investing, from law to lawn-mowing. Side effect: huge new data banks of personal information, now recombined into profiles designed “to help us serve you better.” When savings in costs collide with invasions of privacy, the resulting moral turbulence will spin off more ethical twisters than La Niña.

What to do about these trends? First, be aware of them. Spotting nascent change lets you address it before it reaches maturity.

Second, see them as right-versus-right issues. There’s a lot of good in the way things were and in where they’re going. Any moral system that tries to fit these trends into a right-versus-wrong mold is too unsophisticated to deal with 21^st century dynamics.

Third, go to school on our New England ancestors. They used well sweeps — those long poles with buckets on one end and counterweights on the other — to make gravity itself cancel the downdrag of a heavy load of water coming up the well shaft. Which provides another metaphor for our age, reminding us that survival depends on working with and not against the forces that impact us.

(c)1999 by Rushworth M. Kidder

That’s what the head of the U.S. Customs Service called last week’s sting operation that resulted in the arrests of dozens of airline employees on charges of smuggling. It’s an interesting view on employers’ responsibilities in monitoring the actions of workers and our lead story in this week’s edition of Business Ethics Newsline.

We have several compelling categories of news about business, ethics, and governance this week, including two stories from the health-ethics beat: a settlement by the makers of Norplant, and a report that some Mexican firms are requiring pregnancy tests as a precondition of employment.

We follow with a pair of stories about media ethics: the closing of a Turkish TV station after it aired critical reports about the government, and a verdict against a Web site that distributed what Ford Motor Company claimed were confidential documents.

Next, three reports about guns: a decision to bar a huge gun show from Los Angeles County property, a gun buy-back in Washington, D.C., and a report that police departments are selling used weapons to gun dealers — weapons that sometimes find their way back to the street.

We have three stories about governance and ethics, including reports on a suit against the U.S. Justice Department, the resignation of an official in British Columbia who faces a criminal probe, and bribery charges brought against the head of a dam project in the African nation of Lesotho.

From the United Kingdom come two stories about job stress there.

We conclude our wrap of the news with a story about Home Depot’s promise to become more sensitive to the environment.

And our report is capped with a story from the “Trendlines” file — looking at new ways for universities to obtain research money and new ethical problems encountered along the way — and a “Whatever Happened to…” report about the massive verdict against General Motors.

Have a productive, ethical week.

– Carl Hausman

MIAMI
Federal authorities arrested 58 people in Miami last week, including 43 employees of American Airlines and Lufthansa’s Sky Chefs catering service, for allegedly smuggling drugs, guns, and grenades into the United States.

The arrests were the result of a two-year investigation, launched after an American Airlines pilot complained that his coffee tasted “weird.” Investigators discovered that the coffee containers had been partly filled with heroin, the Miami Herald reported.

Tandem sting operations — dubbed “Operation Ramp Rat” and “Operation Sky Chef” — snared 58 employees at Miami International Airport, the reputed hub for the smuggling operation.

The employees allegedly used their security passes to gain access and stash drugs and weapons throughout American planes — in overhead compartments, wall panels, bathrooms, food carts, cargo holds, and wheel bays, the New York Times reported.

Both American and Lufthansa officials announced their full cooperation with the investigation, and no executives, pilots, or flight attendants were implicated.

But authorities roundly criticized the companies’ security procedures, noting that workers often showed up on their days off, entered restricted areas unchallenged, and abused company privileges to hide contraband, according to the Herald.

U.S. Customs commissioner Raymond Kelly said that last week’s arrests should serve as a “wake-up call” to airlines to bolster their security and safety procedures, CNN reported.

NEWARK, New Jersey
The makers of the contraceptive Norplant will pay an estimated $50 to $75 million to settle claims that the birth-control device caused severe and unexpected side effects.

More than 36,000 women had sued American Home Products (AHP) for allegedly failing to notify users that Norplant could cause excessive menstrual bleeding, severe headaches, nausea, and mood swings.

AHP has consistently denied the charges, insisting that Norplant’s packaging fully details the possible side effects, and that the women were responsible for choosing to use the product, according to a report in the Dallas Morning News.

Under terms of the settlement, Norplant is not required to admit any wrongdoing, but will reportedly pay $1,500 to each plaintiff to cover legal fees and removal of the surgically implanted contraceptive.

AHP, which has won a series of victories in Norplant-related lawsuits, said its settlement was “purely a business decision,” and warned that it would “aggressively” fight further lawsuits, the Reuters news agency reported.

Plaintiffs have 120 days to accept the settlement.

AHP still faces a host of lawsuits charging that the company withheld evidence that its fen-phen dietary supplement caused severe heart and lung damage. Analysts estimate that eventual damages in the fen-phen cases could top $3 to $5 billion, the Dallas Morning News reported.

MEXICO CITY
Mexican businesses continue to ask female applicants to take pregnancy tests despite government statements that the practice is illegal, the Associated Press reported last week.

Human rights groups have campaigned against the practice, charging that it is an invasion of privacy and is illegal under Mexican labor-practices regulations.

But businesses claim that federal law does not explicitly outlaw the practice, and that pregnancy tests are necessary for employers to avoid paying for federally mandated maternity leave.

Other Latin American countries, including Colombia and until recently, Brazil, have also allowed businesses to require pregnancy tests for female job applicants, according to the AP report.

ISTANBUL
The Turkish government last week ordered the temporary shutdown of a television station for airing highly critical reports of the government’s handling of earthquake recovery efforts.

The station, Kanal 6, was one of six national television stations targeted in a press crackdown meant to silence stations for criticizing public officials, especially Turkish health minister Osman Durmus.

The stations had castigated Durmus for reportedly rejecting offers of help from Turkey’s political enemies, Armenia and Greece, the Reuters news agency reported.

Press-rights groups decried the move as censorship, accusing the government of quashing criticism of its efforts to restore public order after a severe earthquake hit Turkey earlier this month, killing at least 12,000 people.

But prime minister Bulent Ecevit said that the press crackdown was necessary to preserve public morale after the disaster, according to the Anatolian news agency.

“It is the duty of the media to express people’s criticisms, complaints, and their misery, but [the targeted stations] are going too far”, Ecevit insisted, according to the Reuters report.

“At this time our people need a morale boost, so upsetting stories should be avoided,” Ecevit said.

Kanal 6 said it will appeal the government’s order.

DETROIT
Ford Motor Co. last week won a temporary restraining order requiring a Web site operator to stop publishing documents which Ford says are confidential.

Ford has accused Robert Lane, publisher of BlueOvalNews.com, of violating U.S. copyright and trade laws for allegedly posting and offering to sell Ford’s proprietary information — including blueprints, internal memos, and performance test results — over the Internet.

Lane argues that Ford is simply trying to silence his Web site, which publishes information about alleged Ford design flaws, information that is often leaked anonymously by Ford employees, the Detroit Free Press reported.

A U.S. district judge ordered Lane to strip his site of the materials in question until further court review, which is scheduled for this week.

The controversy has prompted renewed debate over free speech rights and the Internet, ecommerce consultant Wally Brock told the Free Press. “The question is whether Ford can sue to stop this site or whether it can simply do damage control and watch the guy continue,” Brock said.

LOS ANGELES
Los Angeles County last week banned the sale of ammunition and guns on county property, effectively canceling the heavily attended Great Western Gun Show, which has been held on the county fairgrounds for more than 30 years.

The Los Angeles County Board of Supervisors voted 3-2 to end the weapons sales following a series of recent incidents of gun violence, including an attack at a local Jewish community center and the shooting of a postal worker earlier this month.

Great Western president Karl Amelang denounced the vote as a misguided attempt to lay blame for gun violence on responsible firearms dealers at his company’s gun show, a gathering of mostly antique-weapons dealers that brings an estimated $9 million annually to Los Angeles.

Amelang called the vote “a thinly veiled attempt to destroy the constitutional rights of a legal entity,” and promised to challenge the decision in court, the Los Angeles Times reported.

WASHINGTON
The District of Columbia police last week sponsored a gun buy-back program, offering gun owners $100 and a no-questions-asked opportunity to turn in firearms.

The program, funded by assets confiscated from drug dealers, aims to get the city’s handguns, sawed-off shotguns, sawed-off rifles, and assault rifles off the streets.

Gun owners are not required to give their names, and are granted amnesty from city laws outlawing the possession of illegal firearms, the Washington Post reported.

After netting 1,164 guns during the program’s first day, D.C. police quickly upped the budget to $225,000, more than double the anticipated amount.

NEW YORK
While many critics applaud programs such as the D.C. gun buyback, some complain that law enforcement agencies are operating by a double standard — fighting to get weapons off the streets, while selling firearms to gun dealers, CBS News and the Reuters news agency reported.

Tens of thousands of handguns, shotguns, rifles, assault weapons, and grenade launchers have been sold by U.S. law enforcement agencies to gun dealers over the last decade, according to the CBS report.

The practice was brought to light when it was disclosed that the pistol used in the recent slaying of a California postal worker was purchased from a Washington State police department.

CHICAGO
Pizza Hut Inc. last week agreed to pay at least $160,000 and provide racial-sensitivity training to all employees who deal with the public as part of the company’s settlement of a racial-discrimination lawsuit.

Pizza Hut was not required to admit any wrongdoing in the case, launched by a black family who charged Pizza Hut with racial discrimination after being denied service at an Illinois restaurant in June 1996.

The settlement reached in May was supposed to remain confidential, but the Chicago Tribune published details after receiving a copy of the 14-page agreement last week, the Associated Press reported.

Pizza Hut director of public relations Jay Allison insisted that his company’s decision to expand its sensitivity training was merely an acceleration of an existing program in effect for more than 20 years.

MIAMI
Burger King Corp. last week ordered its name and logo to be removed from a West Bank restaurant after the fast-food outlet sparked Arab calls for a worldwide boycott of Burger King restaurants.

Burger King apologized for opening the franchise in the West Bank area of Malle Adumim, saying that its operator had misled corporate headquarters about the location of the restaurant in an area seized by the Israelis in the 1967 Middle East War, the Associated Press reported.

The company issued a statement apologizing for the incident and saying that Burger King would not approve “opening restaurants in the West Bank in this sensitive time in the peace process.”

WASHINGTON
A federal judge last week invited 12,400 former and current Justice Department lawyers to join a class-action lawsuit accusing the Department of deliberately withholding overtime pay earned by the lawyers.

The Justice Department is accused of keeping two sets of books — one in which lawyers were asked to falsely affirm that they only worked 40 hours per week, another in which actual work hours were logged.

The Justice Department used the latter account as the basis for Congressional funding, performance reviews, and billing legal fees to other parties, the New York Times reported.

The Times also reports that internal documents showed that Justice Department officials knew that what they were doing was illegal, but believed that paying lawyers for overtime would cost too much and reduce the agency’s culture of professionalism.

The class-action lawsuit, filed last year on behalf of nearly 200 lawyers, seeks a half-billion dollars in damages.

Special to Newsline from Canadian correspondent Errol P. Mendes

VANCOUVER
British Columbia premier Glen Clark resigned last week after it was revealed that he was under criminal investigation.

Press reports say Clark was charged with improper involvement in a casino license application by his next door neighbor, Dimitrious Pilarinos.

The premier denied any wrongdoing, but said he felt he could not continue in the job under such intense media scrutiny of the criminal investigations.

Police are probing whether Clark received free or underpriced home and cottage renovations in return for influence peddling in the casino license application.

Early this spring, police had raided the premier’s home in connection with these allegations.

On the eve of the premier’s resignation last week, a B.C. court released justification for the search warrant, including informant and police-surveillance evidence revealing numerous meetings between Clark and his neighbor, along with allegations that Mr. Pilarinos talked openly of the premier’s assistance with the license application.

Clark insists he was insulated from the decision on the license application and had paid in full for his home and cottage renovations.

Special to Newsline from Canadian correspondent Errol P. Mendes

TORONTO
A columnist writing in the National Post reports that a former CEO of a $2.4 billion dam project in Lesotho, a tiny country landlocked by South Africa, faces a criminal trial on charges of taking bribes.

Columnist Patricia Adams says Mashpha Sole is charged with accepting bribes from a major Canadian engineering company, Acres International, and 11 other multinational companies, including the Swiss-Swedish giant ABB, the Italian company Impregilo, and the German firm ED Zueblin.

The World Bank, which has financed approximately $155 million of the dam project, will also launch its own investigation to see if its contracts were also tainted by bribery, Adams reported.

Companies proved to be involved in corrupt activities could be barred from bidding on future World Bank projects, a grave financial threat to the 12 firms implicated in the Lesotho bribery charges.

LONDON
Job insecurity and staff cutbacks are causing increased illness and stress for U.K. workers, according to a new survey released last week by the Joseph Rowntree Foundation.

The report, “Job Insecurity and Work Intensification,” identified staff cutbacks as the chief cause of increased working hours and increased workload, the BBC reported.

One half of surveyed workers called staffing levels at their workplace either inadequate or “very inadequate,” and three-quarters said that management and employees are not “on the same side.”

The report found that feelings of job insecurity, especially among white-collar workers, are at their highest level in the United Kingdom since World War II.