Ethics Newsline®

“Hold yourself responsible for a higher standard than anybody else expects of you. Never excuse yourself. Never pity yourself. Be a hard master to yourself — and be lenient to everybody else.”

– Henry Ward Beecher (U.S. clergyman, 1813-1887)

From the John J. Heldrich Center for Workforce Development at Rutgers, the State University of New Jersey:

“The first survey to poll Americas working poor and unemployed on a broad range of economic and workplace questions finds that despite widespread national economic optimism, the current boom is leaving some American workers behind. . . .

“The typical respondent works 40 hours a week, is paid by the hour, has a child under 18, little or no paid vacation, has not received cash welfare or child care assistance, but at some time has received the Earned Income Tax Credit. . . .

“According to the survey, most (82 percent) of the working poor said they needed more education to obtain the job they want. If tuition remission were offered by their employer, 81 percent report that they would enroll in an education or training program. Only 18 percent of the working poor have received financial support from their employer to attend education or training outside of the workplace, and only 27 percent of all respondents have received government assistance for job training and education. . . .

“‘The survey finds that working poor and unemployed are in large numbers seeking a better life, and willing to work for it,’ said Carl Van Horn, director of the John J. Heldrich Center for Workforce Development at Rutgers University, and co-director of the survey. ‘The poorest workers we surveyed were more discouraged and less satisfied. But overall workers are seeking what most of us are seeking in the fast-changing economy: job advancement, education and training, access to information technology and the Internet, and good jobs in their communities. . . .’

‘The working poor are less satisfied (78 percent) with the total number of hours they work each week than the rest of the working population (88 percent). Only 24 percent of the working poor said they would like to work less hours, compared to 58 percent of other workers, and 24 percent of the working poor said they would like to work more hours, compared to 12 percent for the rest of the population.

“The working poor are less concerned about getting enough sleep (67 percent) than the rest of working Americans (86 percent); similarly, 62 percent of the working poor are concerned about the amount of stress they feel from work demands compared to 79 percent of the rest of the working population.

‘The working poor are much less satisfied with fundamental economic security issues than better-off workers. Almost three-quarters (73 percent) of non-poor workers reported being satisfied with the health and medical coverage provided by their employer, compared to 54 percent of the working poor who were satisfied. . . .

Implications for Employers and Policymakers

“The working poor and unemployed are working hard, but in most respects not moving ahead, the report concludes. While most of those surveyed report needing less than an additional $200 per month to meet their familys needs, this amount of money represents a substantial increase in hours worked at low wages. The working poor and unemployed lack access to the critical paths of opportunity in the new economyhigher education, ongoing job training, job growth in suburban neighborhoods, childcare support, and information technology. The report identifies a number of strategies to address the economic insecurity of low-income workers, and the barriers they face to gaining a foothold in the new economy. They include:

• “Increasing the minimum wage to $6.15 an hour–a policy decision supported by the vast majority of Americans.

• “Encouraging expansion of on-site childcare programs, and building on existing programs that provide ‘reverse’ commuter transportation to suburban job corridors.

• “Reinforcing the need for public investment in job training, job information, and work and career planning. The new federal Workforce Investment Act (WIA) of 1998 provides new direction and funding to improve the effectiveness of government-funded training programs, which are ready to play a larger role in preparing low-income workers and jobseekers.

“‘Earlier Work Trends surveys found that most Americans believe it is important for the government to do more to provide assistance for job training, basic education, and college,’ notes Carl Van Horn. ‘As technology and new forms of work organization create a workplace that requires greater skills and computer literacy, new investment and involvement in job training and education programs will help close the skills gap for Americas workers.’”

NEW YORK
Twenty-two Major League baseball umpires last week lost their jobs following a wave of mass resignations that were unexpectedly accepted by baseball brass.

Baseball executives and owners surprised the umpires by hiring replacements from the minor leagues and accepting many of the resignations, the New York Times reported.

The umpires, who were bitterly divided about the resignation strategy from the start, warn that the battle will continue.

But a coalition of umpires says that last week’s backfire shows that union management needs to be replaced.

The union has filed a lawsuit to halt the loss of umpires’ jobs, claiming that baseball executives have violated the union’s contract, according to the Times report.

Now and then, an incident appears that raises, in one chilling story, a veritable anthology of ethical questions. Such is the sorry tale of Robert P. Liburdy.

Dr. Liburdy was a cell biologist at California’s Lawrence Berkeley National Laboratory. His specialty: the relation of cancer to electromagnetic fields, a hot-button issue for those who worry that high-tension power lines cause human disease. Two of his papers, published in 1992, showed that electromagnetic fields (EMFs) influence the way calcium enters living cells — a potentially significant finding, given the role of “calcium signaling” in cell development. These surprising findings helped him win $3.3 million in federal grants to continue his work.

Trouble is, his data was faked. An investigation by the federal Office of Research Integrity (ORI), concluded in June, found that Dr. Liburdy “engaged in scientific misconduct in biomedical research by intentionally falsifying and fabricating data and claims.” He did indeed conduct the research. But when he wrote up his results, he conveniently ignored, in one instance, more than 90 percent of his data, selecting only those findings that bolstered his hypothesis.

Among the ethical questions:

• Integrity of researchers. Given the complexity and speed of today’s research, policing every experiment is impossible. So research standards depend greatly on the honesty of individual researchers. We trust them to be scrupulously accurate in reporting their data. But are we training today’s researchers not only in science but also in the ethics of its use? Or are we simply assuming that scientists are inherently ethical?

• Technological leveraging. In high-stakes issues ripe for demagoguery — as the EMF/cancer link certainly is — a single researcher fudging a few data points can now produce world-class consequences. In this case, research findings could trigger billions of dollars of mitigation efforts if power lines were torn down or whole communities relocated. As new technologies leverage our ethics in this way, are we sufficiently aware of the hard-dollar, bottom-line costs of unethical action?

• Coming to judgment. Liburdy and several fellow scientists are convinced he’s being pilloried unfairly. The problem, they say, lay in the way he graphed his data, not in his overall conclusions. ORI investigators dismiss that defense, saying his supporters haven’t seen the entire body of his data. Given the significance of the research, and with a professional reputation on the line, should ORI have taken four years to investigate the claim? Or does due diligence demand that kind of painstaking review, even if extended to only a few projects each year? If so, is society unwittingly sending a signal that yes, researchers can be nabbed for dishonesty, but that the odds of getting caught are nearly nonexistent?

• Punishment. Liburdy has entered into a Voluntary Exclusion Act with ORI. Neither admitting nor denying the charges, he has retracted several key graphs from his 1992 papers and agreed not to accept federal funding or serve on federal advisory committees for three years. Is a three-year probation a slap on the wrist, allowing him to return shortly to deluding the scientific community? Should he be barred for life from this kind of research? Or does this blot on his résumé effectively mean he’ll never work again? If so, given the human capacity for repentance and regeneration, is it fair to destroy his entire career?

• Ethical alarm systems. None of this would have come to light but for a whistleblower, who alerted the Lawrence Berkeley Lab in 1994. The lab investigated and alerted ORI. Whistleblowers often get a bad rap, and sometimes hazard their entire careers to bring forward unpopular findings. What should society do to reward the moral courage of those who, in cases like this, do step forward?

• Competition. Individual researchers sometimes see themselves as toiling against impossible odds as they chase scarce research dollars. If a “win at all costs” mentality (sometimes prevalent in modern sports and business) were to creep into science, would it put insurmountable temptations before researchers? Would they then justify a few tweaks of the data — just to ensure that they got continued support to do what they see as vitally important work? Are they in fact learning from one another how to do this?

• Character education. Some surveys suggest that about four out of five high school students cheat to pass important exams. Teachers often seem not to care, or to write off such cheating as an unimportant immaturity. What happens to those students when they grow up? As we emphasize the school-to-work connection, are our schools unwittingly training the next generation of fraudulent researchers?

This last point, of course, raises the big issue. If this is less a case of bad science than bad character, the consequences are indeed sobering for the business community. Almost every reader of this column is in a business employing researchers. Raise your hands, then, if you’re perfectly sure you haven’t already hired the world’s next Dr. Liburdy — and tell us what hiring screens you’ve put in place to be sure you haven’t.

(c)1999 by Rushworth M. Kidder

The promise of digital technology is accompanied by some peril, including the potential to easily duplicate so-called intellectual property. That’s the thread of this week’s lead stories in Business Ethics Newsline.

Our top five news items deal with the intersection of technology and morality: two stories about piracy issues in the United States and in Asia, a report about an ethics code for day-trading firms, a controversy surrounding Internet domain assignments, and a report about a Canadian court decision that may set a precedent for blocking junk email.

We continue with news about media ethics: a proposed boycott to protest the lack of Latinos in leading television roles; a change in ownership at the Manila Times that has some observers worried about press freedom there; a report about racism and medicine that a medical journal now says was misinterpreted; the firing of the same journal’s editor reportedly for being uncooperative in the parent company’s marketing deals; and a proposed code of ethics for media legal analysts.

Two stories this week deal with banking: a fine levied against a bank for pocketing money that should have been returned to customers, and a penalty against an international bank exacted in Japan — a move some observers believe signals a toughening of lax Japanese enforcement against foreign financial firms.

Next, two stories about equity issues: a decision in a Japanese wage-discrimination case, and several calls to boycott South Carolina because the Confederate flag flies over its Capitol.

Also this week, two stories about ethics in the travel industries: the British government’s efforts to contain “air rage” — unruly passenger behavior — and a suit against Carnival Corp. for allegedly lax security on its cruise ships.

We wrap up this week’s report with a story about a call for better corporate governance in developing countries, and an unusual labor-relations story about Major League umpires who themselves have been tossed out of the game.

Have a productive, ethical week.

– Carl Hausman

WASHINGTON
The U.S. Justice Department, the Federal Bureau of Investigation, and the U.S. Customs Service last week announced that they would join efforts to tackle the increasingly lucrative high-tech piracy industry.

The joint Intellectual Property Rights Initiative calls for tougher penalties for the theft of intellectual property, increases the priority of piracy investigations and prosecutions, and provides better training for investigators.

“At the same time that our information economy is soaring, so is intellectual property theft,” Deputy U.S. attorney general Eric Older said in a statement. “We are here to send the message that those who steal our intellectual property will be prosecuted. This is theft, pure and simple.”

Last year, Customs agents seized a record $76 million in counterfeit and pirated products — a small portion of the estimated $991 million lost to U.S. tax coffers due to piracy, according to the statement.

The agencies will initially focus on several key U.S. port cities, including Boston, New York, San Francisco, and Miami.

MOSCOW
Russian authorities last week used a bulldozer to crush nearly 500,000 pirated computer CDs in a public display meant to show that the country is serious about cracking down on high-tech theft.

The discs, including pirated copies of Microsoft’s Windows 98, were confiscated last June by Russian authorities, the Reuters news agency reported.

Some critics fault Russia for being slow to fight the booming piracy trade, which accounts for roughly 90 percent of the media products sold in Russia, according to industry experts.

But the government insists that it is committed to stamping out piracy, and has recently set up a new government agency exclusively responsible for fighting high-tech crime, Reuters reported.

In related news, China last week sentenced a convicted software pirate to four years in jail and a $36,000 fine in what observers say is the country’s first case involving software piracy.

A recent study from two watchdog groups reported that 95 percent of the business software installed on Chinese computers last year was pirated, according to Reuters.

HOUSTON
The Electronic Traders Association (ETA) last week adopted a set of ethical guidelines intended to ensure that day-trading firms engage in honest and transparent business practices.

The new Statement of Ethical Principles requires all ETA member firms to “be truthful in all communications with prospective customers” and “disclose fully and candidly” the risks of day trading.

Member firms are also obligated to decline doing business with people who “do not appear to have the ability to sustain losses, or intend to trade with retirement assets, or assets necessary for daily living.”

ETA president James H. Lee said in a statement that because of the Internet boom “it is more important than ever for day trading firms to observe high standards of ethical conduct.”

BRUSSELS
The European Commission last week began an informal investigation into what it says are possible unfair monopolistic practices by Network Solutions, Inc. (NSI), the U.S.-based company that administers most of the world’s Internet addresses.

The EC says its investigation was prompted by the complaints of several Scandinavian companies, which charged NSI with obstructing efforts to expand the domain-name registry system to other firms.

Currently, NSI enjoys the sole license to assign and manage domain names ending in .com, .org, and .net.

That monopoly is scheduled to end as soon as Washington regulators and NSI hammer out a deal for opening up the trade, the Associated Press reported.

But that process, too, ran into problems last week, as Washington warned NSI that its failure to fully cooperate with regulators could lead to a preemptive dissolution of its contract.

NSI head Jim Rutt last week told Congress that his firm was doing its best to make the transition from monopoly to competitor as smooth as possible.

But Rutt challenged the government’s desire to install a new governing body for Internet addresses, the Internet Corporation for Assigned Names and Numbers (ICANN), as needless meddling, according to the AP report.

Under ICANN’s proposed plan, NSI will lose its monopoly and be forced to compete with more than 50 accredited registrars, including European firms, according to the Reuters news agency.

NSI, however, will retain the right to maintain the master list of all registered names.

Special to Newsline from Canadian correspondent Errol P. Mendes

TORONTO
A recent court decision now gaining attention in the Canadian media may give legal backing to Internet service providers who cut off companies that send junk email.

The Globe & Mail reports that in February, an Internet service provider, Nexx Online Inc., deactivated a Web site called Beaverhome.com after it refused to stop sending unsolicited junk email, known as spam.

The owners of the site filed suit in an Ontario court. In a decision handed down in June, but only now coming to the attention of the public, madam justice Janet Wilson of the Ontario Superior Court rejected the request for reinstatement of the Web site.

She also ruled that Nexx was justified in terminating the Internet service contract because sending spam violated the emerging principles of “Netiquette.”

She also stated that the use of spam by online marketers is not allowed unless they have a contract with an Internet service provider that specifically allows the controversial practice.

Beaverhome.com was sending 200,000 email messages a day to promote the sale of furniture.

Nexx had received numerous complaints from persons receiving the spam and had a warning from its own network provider, Exodus Communications Inc., that the activity violated its own anti-spamming policies.

The Globe & Mail reports that Beaverhome.com is now using another company to host its Web site and continues to send spam.

HOUSTON
Representatives of the nation’s Latino community last week called for a one-week boycott of four major U.S. television networks to protest the lack of Latino roles on primetime shows.

The National Council of La Raza, an umbrella organization for 240 Latino groups, says that ABC, CBS, Fox, and NBC are doing their viewers a disservice by not casting more Latinos, the Associated Press reported.

“People build perceptions of the world around them based in part by what they see on television,” La Raza president Raul Yzaguirre said at the group’s annual meeting last week. “We want a balanced picture.”

Latinos make up 11 percent of the U.S. population, but fill less than two percent of the roles on primetime television, according to the AP report.

The Latino statement follows a similar call last month by the National Association for the Advancement of Colored People, which criticized the networks for “whitewashing” this fall’s new series.

CBS and ABC have asked for meetings to discuss the groups’ concerns and say that they are bolstering the minority roles on their fall shows, but insist that they began working on the problem well before the recent round of criticism.

The proposed La Raza boycott is scheduled to begin September 12, coinciding with National Hispanic Heritage Week, according to the Associated Press.

MANILA
The Manila Times last week printed its final edition under its current owners, who say they are selling the paper following a prolonged dispute with Philippine president Joseph Estrada.

The Gokongwei family’s decision to cease publication of the Times pending the paper’s sale has prompted some observers to warn that Philippine press freedoms may be in jeopardy, according to the Associated Press.

Estrada sued the Times earlier this year for libel over a story alleging government corruption, prompting a public apology from the Gokongweis that was condemned by Times editors, who maintained that the story was true.

Manila Times staffers charged that the paper’s closing is part of Estrada’s strategy to stifle the nation’s two leading newspapers, both of which have been critical of his first year as president.

The controversy comes on the heels of allegations that Estrada is pushing advertisers to pull their support from the Philippine Daily Inquirer, whose reporters have been excluded from informal press briefings.

Estrada has denied any wrongdoing in either case, insisting that he strongly supports freedom of the press.

BOSTON
The editors of the New England Journal of Medicine last week said that press reports exaggerated a previous Journal study reportedly showing medical discrimination against blacks and women.

The editors took responsibility for the distortion, saying that the study of catheterization heart-treatment rates had used an incorrect statistical method when analyzing data, the Reuters news agency reported.

That initial error led to “the media’s overinterpretation” of the results, the editors said.

The February study reported that blacks and women were 40 percent less likely to receive catheterization than white men. The actual figure is closer to 7 percent, according to Reuters.

“Although racism and sexism are prevalent in American life,” the Journal’s editors said, “the evidence of racism and sexism in this study was overstated.”

BOSTON
The New England Journal of Medicine last week dismissed its top editor, reportedly over his refusal to use the Journal’s prestigious name to endorse spin-off magazines and newsletters published by the Journal’s parent company, the Massachusetts Medical Society.

Dr. Jerome P. Kassirer, editor-in-chief for eight years, had repeatedly refused to allow the Journal’s name to be linked to the Society’s other medical publications, arguing that they were not subject to the same editorial standards as the Journal, the Boston Globe reported.

That position put Kassirer at odds with the Massachusetts Medical Society’s need to be “responsive to a new world of medical publishing,” medical society spokesman Frank Fortin told the Associated Press.

In a joint statement, Kassirer and Society president Dr. Janck Evjy explained Kassirer’s departure as the result of “honest differences of opinion,” according to the Reuters news agency.

Kassirer will leave his post on September 1.

SAN FRANCISCO
Legal analysts should adopt a code of ethics governing their conduct and comments when helping the media to cover ongoing trials, according to two law professors who are also well-known media analysts.

Citing frequent instances of inaccurate legal reporting during the 1995 O.J. Simpson trial, UCLA law professor Erwin Chemerinsky told the Associated Press that legal analysts’ misinformation “can do an enormous disservice” to both lawyers and the public.

Chemerinsky and Loyola law professor Laurie Levenson have drafted a set of voluntary ethics guidelines for legal pundits.

The guidelines call on lawyers to limit commentary to firsthand knowledge of the case’s proceedings, strive for neutrality, disclose any bias or conflicts of interest, and refrain from predicting jury verdicts, according to the AP.

Two prominent legal groups, the American College of Trial Lawyers and the National Association of Criminal Defense Lawyers, have adopted versions of the recommended guidelines.

NEW YORK
Bankers Trust Corp. was ordered last week to pay $60 million to settle criminal charges that the company illegally pocketed funds from unclaimed customer accounts and credits.

Bankers Trust pleaded guilty to the charges, which stemmed from $19.1 million in improper transactions between 1989 and 1996, the Associated Press reported.

U.S. attorney Mary Jo White said that the company doctored bank records to hide the misappropriated funds, which should have been held longer or turned over to the states as abandoned property.

TOKYO
Japanese regulators last week revoked the banking license of a local unit of the Credit Suisse Group for allegedly hiding funds and then obstructing an official investigation into the incident.

The Credit Suisse Group unit was charged with helping Japanese clients hide financial losses from regulators and investors by temporarily shifting the losses to other companies, some of which existed only on paper, the Associated Press reported.

Many observers noted that the harsh punishment marks a significant change in Japan’s policy toward foreign investment firms, which have often been exempted from the harsh scrutiny imposed on domestic companies.

The move was a “warning shot,” Standard & Poor analyst Hideki Naito told the Reuters news agency. “Japan’s regulators had been sweet to outsiders while taking a hard-line stance against domestic players. The view that Japan is an easy market for foreigners will change.”

Credit Suisse Group issued a statement saying that it will comply with the Japanese decision, even though it believes that “the sanction is disproportionate to the criticized conduct.”

TOKYO
A Japanese court last week ordered one of the country’s leading pharmaceutical manufacturers to pay roughly $260,000 to a former worker who charged that the company paid her less because of her gender.

Hisami Naka claimed that during her 30-year career at Shionogi and Co. she suffered persistent wage discrimination, receiving less pay than her male counterparts who performed similar work, the Associated Press reported.

The court ruled that companies “should pay women the same wages as men as far as they request women to do the same job in quality and quantity,” according to Japanese press reports.

Shionogi issued a statement saying that it “will decide what action it will take” after reviewing the ruling, according to the AP report.

Eighteen other wage-discrimination suits are currently pending in Japanese courts.

CHARLESTON, South Carolina
South Carolina’s refusal to stop flying the Confederate flag over the statehouse has sparked an economic boycott of the southern state by several civil-rights and religious groups.

Over the past two weeks, the Southern Christian Leadership Conference (SCLC), the National Urban League, and the state’s African Methodist Episcopal churches have canceled plans to meet in South Carolina.

The National Association for the Advancement of Colored People last month urged the boycott of South Carolina, saying that lawmakers’ refusal to lower the Confederate flag was tantamount to celebrating racism, the Associated Press reported.

SCLC president Martin Luther King III echoed that sentiment, saying that his group’s last-minute pullout was necessary to fight “discrimination and the politics of resentment that the Confederate flag reclaims.”

South Carolina currently reaps roughly $6.8 billion annually from tourism, according to the Reuters news agency.

The state could suffer substantial losses if the boycott spreads, Charleston Area Convention and Visitors Bureau chairman Skip Condon told Reuters. “This is a no-win situation,” Condon said.

Governor Jim Hodges has expressed support for pulling the flag down, but lawmakers have blocked any such move, insisting that the flag is a noble symbol of the state’s history and sacrifice during the Civil War.