Ethics Newsline®

LONDON
If you think Americans worship sports, try Britain. “Worship,” of course, is a metaphor: Nobody’s suggesting that the fans over here routinely engage in liturgical, ritualistic, or prayerful action. But the British commitment to sports so resembles a devotion to divinity that the metaphor is fast shifting into reality.

This past Sunday, that commitment reached new heights — and set forth a curious ethical dilemma. The reason: The World Cup opened in South Korea. Though little known among Americans (who use the word “soccer” to describe what everyone else calls “football”), the World Cup is the most-watched sports event in the world. It hosts “football” teams from around the globe, including England. And England’s opening game was on Sunday.

Ordinarily, that wouldn’t be a problem. But this year, for the first time, the championship games were held in the Far East. Given the time change, England kicked off at 10:30 A.M. London time — right when most Anglican churches were holding their Sunday services.

For unchurched fans, that was no problem. But what about those who do worship at churches? For each of them, the dilemma was sharply drawn: Do I go to church and miss the game, or watch the game and miss church?

Not surprisingly, the English clergy have been weighing in on the issue. Some delighted in the opportunity to anchor their weekly sermons to such a popular public event. One, in fact, wrote a hymn for the occasion and planned (according to the Times) to preach a sermon titled “Make Jesus the Center Forward of Your Life.” Another intended to station his warden in front of a television in the church hall to signal him whenever England scored a goal — so that he could work the score into his sermon.

But the real question concerned schedule. Should churches change the hour of their Sunday service to accommodate England’s team? Church hours are often a matter of long tradition and widely advertised within their communities. So some clergy were staunchly opposed to such tinkering — “barking mad,” one called the rescheduling efforts. But last Tuesday the Archbishop of Canterbury, head of the Church of England, declared that churches who wanted to change their time of service were free (and, from the sound of it, encouraged) to do so. “Worship comes first, of course,” said Archbishop Dr. George Carey, “but this [World Cup] comes round only every four years, so we can afford to be flexible.”

Given the issues of the world — potential war between India and Pakistan, explosive Middle East conflicts, threats of international terrorism, markets battered by distrust of accounting procedures — this story may seem almost frivolous. But look again. What’s at stake is a classic standoff between principle and popularity. It is right, on one hand, to honor the age-old tradition of ten o’clock worship — and to let no mere whim of the moment, even the World Cup, blow you off course. It is right, on the other hand, to accommodate worship to the modern age, finding ways to adapt its outward form to meet public thought on its own terms.

That standoff, of course, is not peculiar to the Anglicans. Most churches would argue that forms and traditions suitable for an earlier age need freshening and revitalizing if congregations are to continue coming. Yet most would also realize that there is a point beyond which you don’t go — a theology that cannot be fully aligned with popular culture, a set of principles that must not be compromised.

Nor is this standoff merely religious:

• Harvard University, struggling over grade inflation, seeks the right balance between holding high standards and yielding to the needs of its students seeking graduate-school admissions.
• Accounting firms, rooted in generally accepted accounting principles, worry that by seeming too principled they will offend their clients — and find themselves unemployed.
• Parents, aware that today’s media fare exceeds all limits placed on themselves when they were young, struggle to find the line between a validly protective adherence to standards and an overly restrictive rejection of modern life.

If there’s a formula for success, it may simply be this: Don’t compromise principles in order to embrace the future. Of course it’s true that resistance to progress can lock up our principles so tightly that we never put them into practice. But if core principles keep falling in the name of progress, that’s only progress in name; it won’t advance anything meaningful, but only water down the message.

Said another way, principles are essential for effective outreach — though outreach is needed to validate the principles.

(c)2002 by the Institute for Global Ethics

“It’s incredibly moving and kind that he did this. It’s good to know that there are still people like that.”

WASHINGTON
Energy services firm Halliburton Co. last week revealed that it is under investigation by the federal government for aggressive accounting practices that helped the company book hundreds of million of dollars in what the government claims are questionable revenues.

Halliburton switched its reporting rules in the fall of 1998, when the company was headed by future U.S. Vice President Dick Cheney and audited by scandal-tainted Arthur Andersen.

In 1998, beset by massive debt and legal liabilities acquired during a corporate takeover, Halliburton decided to change the way it recorded cost overruns for massive construction projects, according to the Times report.

Instead of counting those overruns as possible losses, Halliburton began marking them as revenues on the assumption that the funds would eventually be paid by the firms that had contracted Halliburton in the first place.

After Halliburton made the changes, it held off on telling investors for at least a year, according to the New York Times.

Despite the disputed nature of who would pay for cost overruns, they have accounted for a growing portion of Halliburton’s book revenues every year, climbing from $89 million in 1989 to $234 million last year, according to Newsday.

Last year, Halliburton got even more aggressive with its accounting practices, reporting some sales months before billing clients, and keeping disputed bills on the books for more than a year, the Times reported.

Halliburton press secretary Wendy Hall last week downplayed the controversy, telling Newsday that such bookkeeping practices are “pretty standard throughout the construction industry,”

Although none of Halliburton’s actions necessarily violates SEC rules, the agency is looking into the motives behind the changes — trying to find out whether they were enacted to deceive investors or the government.

WASHINGTON
Ernst & Young last week defended itself against allegations that the auditing firm violated conflict-of-interest rules by doing business with one of its clients, software maker PeopleSoft.

The U.S. Securities and Exchange Commission (SEC), under attack for lax scrutiny of the auditing industry, announced the investigation and related charges last week, USA Today reported.

Regulators accuse Ernst & Young of entering into an improper arrangement by auditing PeopleSoft’s books while also doing business deals with the firm for proprietary software from 1993 through 2000.

Ernst & Young last week said it has done nothing wrong.

“We are surprised and disappointed,” by the SEC’s action, the company said in a statement. “Our conduct was entirely appropriate and permissible under the profession’s rules.”

USA Today notes that auditing firm Arthur Andersen, whose alleged wrongdoing in the Enron case has brought harsh scrutiny on the SEC for lax oversight, had a similar arrangement with software maker Oracle.

NEW YORK
Two FBI agents were charged last week with feeding classified information on agency investigations to a Wall Street investor who made large profits by dumping the stock of companies in trouble with the law.

The agents, Jeffrey Royer and Lynn Wingate, allegedly searched FBI databases for the names of companies being investigated by the government, the Reuters news agency reported.

A federal indictment charges that before those investigations were made public, Royer and Wingate gave the information to online stock commentator Amr Elgindy, who then made money by “short selling” the stocks. Elgindy also allegedly used his Web pages to convince other investors to sell the stocks, thereby pushing prices down and further increasing his profits.

In short selling, investors “purchase” stocks at high prices buying the shares on credit with no money changing hands — and then sell them at lower prices, pocketing the difference as profits.

While most “short selling” is a mixture of hope and analysis that predicts a drop in stock price, Elgindy’s short selling was the result of illegal insider information, the government alleged last week.

“It’s hard to imagine a stronger case than what we have against Mr. Royer,” U.S. Assistant Attorney Kenneth Breen said last week, noting that FBI files and Royer’s business card had been found at Elgindy’s office.

Lynn Wingate, an FBI agent based in New Mexico, was allegedly recruited by Royer when he decided to leave the FBI to work directly for Elgindy in December, according to the Reuters report.

Royer and Wingate, who each face a maximum sentence of 20 years for racketeering and securities fraud, both pleaded not guilty at their arraignment last week.

WILMINGTON, Delaware
Hotel manager Marriott International Inc. is being sued for allegedly operating an elaborate system of illegal bribes and kickbacks that cost hotel owners millions of dollars in inflated fees, according to a lawsuit unsealed last week.

The suit, filed by Hong Kong-based CTF Hotel Holdings Inc., one of the world’s largest owners of Marriott hotels, was filed in April but kept under seal until last week because it contained confidential information about an unfolding deal, the Wall Street Journal reported.

CTF’s suit accuses Marriott and its Avendra subsidiary of forcing suppliers and service vendors to pay exorbitant fees in order to secure contracts with Marriott’s hotels.

Plaintiffs claim that in exchange for those bribes, the suppliers were allowed to overbill hotel owners for provided supplies and services, with a portion of the inflated fees being passed along to Marriott itself, according to the Journal.

Molloy Corp., a firm that supplies audiovisual equipment to Marriott hotels, was also named in the suit for allegedly charging hotel owners three times the cost of services rendered. Molloy then gave Marriott two-thirds of its profits as a kickback, the complaint alleges.

The lawsuit, which charges Marriott with breaches of fiduciary duty, racketeering, and commercial bribery, seeks unspecified compensatory and punitive damages.

Marriott has denied any wrongdoing, insisting that its actions are “consistent with the terms of our agreement with [CTF] and was done with their knowledge and consent,” according to Marriott CFO Arne Sorenson.

Since at least 1999, CTF has accused Marriott of a “chronic pattern of undisclosed kickbacks, secret affiliated deals, and misrepresentations," the Journal reported.

After CTF threatened to terminate its contract with Marriott, the two companies negotiated a new contract, but CTF says Marriott quickly violated its terms and returned to wrongdoing.

WASHINGTON
In what some observers characterize as the most significant patent ruling in decades, the U.S. Supreme Court last week gave a helping hand to inventors with a ruling that affords patent holders more protection against copycat products.

In a unanimous ruling, the Court said that patents, which are often narrowly worded due to legal restrictions, protect not only the actual specified aspects of an invention, but also the broader work as a conceptual whole.

In other words, if a patent filer is forced to explain that their metal widget is made of steel, a competitor cannot make a knock-off widget out of a different metal without violating the original patent.

Such issues were at the heart of a case before the Court, in which New York-based manufacturer Festo Corp. claimed that a Japanese firm hijacked its patent on a metal cylinder used in conveyor-like systems that move products down an assembly line.

Festo claimed that the firm, Shoketsu Kinzoku Kogyo Kabuishiki (SMC), created a near duplicate of its cylinder, simply using a different metal alloy and a different sealing ring, the San Francisco Chronicle reported.

After an initial court victory, Festo’s win was overturned by a federal appeals court, which said that the patent’s wording had been narrowed so much during filing that the rival product was technically a different product and therefore not covered by the patent.

Last week, the Supreme Court reversed that decision, arguing that “if patents were always interpreted by their literal terms, their value would be greatly diminished,” Justice Anthony Kennedy wrote.

Allowing a literal and narrow reading of patents to prevail would “risk destroying the legitimate expectations of inventors in their property,” Kennedy wrote.

The Court’s ruling reaffirms the 150-year-old legal concept known as the “doctrine of equivalents,” Los Angeles lawyer Jim Carmichael told the Los Angeles Times.

“It was to prevent someone looking at a patent and saying, ‘That’s a great idea. Let’s see how small a change I can make and bring out a competing product,’” Carmichael explained.

Last week’s decision reinforces that concept, redrawing the lines in the contentious battle over patent protections which try to balance the need to reward inventors for their research with the need to stimulate the economy by letting others piggy-back on new inventions, according to the Chronicle.

The Court’s ruling requires a new hearing for Festo’s claims in a lower court.

WASHINGTON
The U.S. Defense Department sprayed navy ships and sailors with chemical weapons, including sarin and VX, during bio-warfare tests conducted in the 1960s, the government admitted last week.

The tests were part of a secret program known as Project Shipboard Hazard and Defense (SHAD), which was designed to test the navy’s ability to deal with and decontaminate after a bio-weapons attack.

At least six of SHAD’s 113 experiments involved the use of live biological and chemical weapons, which were sprayed onto the decks of navy ships, tugboats, and barges in the South Pacific from 1964 to 1968, the New York Times reported.

Three of the tests used the nerve agent sarin or the nerve gas VX, which can cripple and kill within 10 to 15 minutes. A fourth test used the biological toxin SEB, which can incapacitate victims for weeks with flu-like symptoms. Two other tests used bio-weapon simulants, one of which was later found to be poisonous.

“We now know that our military personnel were exposed to sarin gas and VX nerve agent, which are both highly lethal, and other agents that are known carcinogens,” U.S. Rep. Mike Thompson (D-Calif.) said last week.

“It is only fair to inform service members, some of whom may not even know of their exposure, of the specific harmful agents used in SHAD tests,” added Thompson, who has been fighting for two years to get the Defense Department to release the information.

Last week, the Department of Veterans Affairs sent letters to over 600 navy sailors who may have been exposed to the toxins, some of which were sprayed into ships’ ventilating systems.

Although the government says log books from the vessels show no widespread illnesses resulting from the experiments, sailors were urged last week to get physical exams to ensure no damage has surfaced.

But many questioned whether the sailors were told of the complete nature of the tests and were sufficiently protected, reported the Times.

“When you read the overarching plans for the testing, people were to be protected,” Defense Department official Michael Kilpatrick told the Times. “But when we get to individual reports, we do not see things like informed consent or individual protection. We don’t have the records for what, if any, protection was given to people.”

Rep. Thompson expressed frustration with such findings, saying, “It seems to me enough time has passed that someone over there should have known who was involved and what was going on.”

Thompson claimed that information on only 12 of SHAD’s 113 experiments has been released to date.

TRENTON, New Jersey
Lucent Technologies, which owns the renowned Bell Labs research facility, last week said it had formed an independent panel to investigate suspicions of fraudulent research by a prominent Bell Labs research team.

The five-member panel will be looking into the data and analysis of J. Hendrik Schon, a 31-year-old German scientist wunderkind in the field of nanoelectronics, which focuses on the building of microscopic electronic components.

Over the past two years, Schon and his team published 16 papers in the world’s most prominent science journals describing their breakthroughs in creating molecule-sized transistors. Science magazine hailed their work as the biggest scientific breakthrough of 2001, the New York Times reported.

Although such groundbreaking research is commonly attended by routine skepticism, persistent questions over repeated text and suspiciously similar data have been raised, the Associated Press reported. In one instance, a prominent Cornell University research claimed that he had been unable to reproduce results of the experiments.

Schon told the AP last week he was “confident in the measurements that [he] made,” and that he was “fully cooperating with the panel.”

The team of investigators, drawn from prominent members of the scientific community, including a Nobel Prize winner and a physics professor from Stanford University, expect to conclude work by the end of the summer.

BALTIMORE
At least half of the players in pro baseball are doping with steroids, Ken Caminiti, the sport’s most valuable player in 1996, told Sports Illustrated last week, according to the magazine’s special report on steroid use in professional baseball.

“It’s no secret what’s going on in baseball," Caminiti said. "At least half the guys are using steroids. They talk about it. They joke about it with each other.”

Caminiti said he won his MVP title while using steroids and that he does not regret continuing to do so until his retirement last year, despite damage to his health.

“I’ve made a ton of mistakes,” Caminiti, a recovering alcoholic and drug user, told Sports Illustrated. “I don’t think using steroids is one of them.”

Caminiti and others say that steroids can give players the leverage they need to add bulk to their bodies, power to their swing, and dollars to their contracts.

“Basically, steroids can jump you a level or two,” Texas pitcher Kenny Rogers told Sports Illustrated. “The average player can become a star and the star player can become a superstar. And the superstar? Forget it. He can do things we’ve never seen before.”

While some players dispute the claim that half of the sport’s players are adding muscle via illegal means, many also say it is no one’s business how they get a leg up on the pay and performance ladder.

“What players take doesn’t matter. It’s nobody else’s business,” San Francisco Giants player Barry Bonds told the Associated Press. “The doctors should spend their time looking for cures for cancer.”

Bonds, who has bulked up by 40 pounds since the early 1990s, broke the single-season home run record with 73 last season. Bonds has denied using steroids, but says it is no one’s business.

Although the NBA (basketball), the NFL (football), and the International Olympic Committee have banned and begun testing players for steroids, the NHL (hockey) and MLB (baseball) have yet to follow suit.

Last week, baseball commissioner Bud Selig said he would like to ban the use of steroids by players — and tried to do so with a 17-point drug policy proposed last February. But Selig said the players’ association so far has refused to go along with the policy, calling it an invasion of privacy.

In the end, paychecks may have as much pulling power as privacy in blocking steroid screening, Caminiti told Sports Illustrated.

“Look at all the money in the game,” he said. “A kid got $252 million. So I can’t say, ‘Don’t do it,’ not when the guy next to you is as big as a house and he’s going to take your job and make the money.”

Retired major leaguer Chad Curtis said fans will likely turn a blind eye to the problem, too. “If you polled the fans, I think they’d tell you, ‘I don’t care about illegal steroids. I’d rather see the guy hit the ball a mile or throw it 105 miles an hour.’”

Wishes aside, the magazine’s report noted that the side effects of steroids may actually be benching players with injuries instead of helping them at the plate. While steroids are often used in rehabilitation of an injury, they can aggravate certain tendon and ligament ailments.

Major league players made 467 trips to the disabled list last season, with an average stay of 59 days — 20 percent longer than in 1997 — at a cost of $317 million, Sports Illustrated noted.

Anabolic steroids are illegal in the United States unless they are prescribed by a doctor for an existing injury. Possible side effects include tendon and ligament injuries, heart and liver damage, endocrine-system imbalance, elevated cholesterol levels, strokes, aggressive behavior, deficient testosterone levels, and genitalia dysfunction.

Special to Newsline from Canadian correspondent Errol P. Mendes

OTTAWA
The Ottawa Citizen is reporting that a poll conducted one day after Canadian Prime Minister Jean Chrétien fired Defense Minster Art Eggleton and demoted his public works minister for ethics breaches, Canadians want him to do more on the ethics front.

In the national poll conducted for the Ottawa Citizen, 70 percent of those polled say that the PM should go further to promote ethical behavior on the part of his cabinet.

Eighty-two percent of those polled agreed with the firing of the defense minister for giving a former girlfriend a $24,000 contract for a 14-page report on a subject that was already been studied by others connected to the department.

Sixty percent of those polled felt that the PM should also have fired his minister of public works, Don Boudria, for staying at a luxury cottage of a government contractor who had won millions of dollars worth of contracts. Instead, the PM demoted Mr. Boudria to the position of Government House Leader, a position he had held before.

Other cabinet ministers are also facing allegations of conflict of interest. Prime Minister Chrétien has promised major ethics reforms in the face of a storm of controversy over allegations of cronyism in the awarding of government contracts and the value of work done under those contracts.

The Royal Canadian Mounted Police is also investigating some of the contracts in question, the Citizen reported.

LONDON
U.K. teachers last week warned school boards that they need stronger support in dealing with disruptive and violent students — a growing number of whom are being barred and blacklisted by schools.

The move to keep violent students out of schools is growing — as is the number of altercations, with children as young as six being expelled for starting fires, hitting teachers, and sexually attacking other students.

Currently, 78 students are on a blacklist being maintained by the National Association of Schoolmasters Union of Women Teachers (NASUWT), the BBC reported last week. Schools can check the list to see if applicants have been expelled from other institutions.

The 2000-2001 school year saw 9,210 students expelled — an 11 percent rise over the previous year, with the greatest jump in primary schools, according to the BBC.

NASUWT has insisted that its teachers and school principals need to backed up by school boards, which often have overturned students’ dismissals under pressure from parents.

Without a unified front, the union says its efforts to keep teachers and students safe will fail, noted the BBC.

The U.K. government, which has been strongly criticized for a set of 1999 measures that restricted schools’ right to expel students, recently has switched course and enlisted on the union’s side.

The government has now issued guidelines urging school appeals panels not to overrule teachers when they decide to expel students for dealing drugs, bullying, or behaving violently.

From the International Labor Organization:

“Two million workers die each year through work-related accidents and diseases — and that is just the tip of the iceberg, the International Labor Organization (ILO) reported today.

“Latest ILO estimates for the year 2000 show that annually there are two million work-related deaths — more than 5,000 every day — and for every fatal accident there are another 500 to 2,000 injuries, depending on the type of job. In addition, the ILO said for every fatal work-related disease there are about 100 other illnesses causing absence from work.

“…The ILO said the number of estimated annual deaths among workers has clearly increased since 1990, mainly because work-related communicable diseases were not counted previously and the number of cases of work-related cancer and circulatory diseases have increased.

“During this same period, figures for fatal accidents went up slightly in developing countries but decreased in most industrialized countries….

“According to the ILO figures, the biggest killer in the workplace is cancer, causing roughly 640,000 (or 32 percent of deaths), followed by circulatory diseases at 23 percent, then accidents at 19 percent and communicable diseases at 17 percent. Asbestos alone, the report says, takes some 100,000 lives annually.

“Worse still, 12,000 children die each year working in hazardous conditions, Dr. Jukka Takala, Director of the ILO’s InFocus Programme on Safety and Health at Work and the Environment said.

“Agriculture, in which more than half of the workers of the world are employed, claims more than 50 percent of occupational fatalities, injuries, and diseases, Dr. Takala said….

“The evolving nature of work, however, has generated new occupational hazards, including musculo-skeletal disorders, stress and mental problems, asthmatic and allergic reactions, and problems caused by exposure to hazardous and carcinogenic agents, such as asbestos, radiation, and chemicals….

“The economic costs of occupational and work-related injuries and diseases are rapidly increasing, the report said. While it is impossible to place a value on human life, compensation figures indicate that approximately four percent of the world’s Gross Domestic Product (GDP) disappears with the cost of diseases through absences from work, sickness treatment, disability, and survivor benefits.

“ILO Director-General Juan Somavia said ‘at the ILO, we believe that the world has a moral obligation to act. We have seen the human cost of inaction which comes at an economic price. The loss in Gross Domestic Product resulting from this reality is 20 times greater than all official development assistance to developing countries.’…

“‘ILO studies show that where there is real social dialogue and community consciousness, risks to safety and health and exposure to hazards are reduced,’ Mr. Somavia said, ‘and when workers and employers can organize freely and bargain, the situation improves dramatically. These findings must be part of future strategies to promote occupational safety and health at work.’

“The ILO said about 80 per cent of occupational deaths and accidents could be prevented if all ILO member States would use the best accident prevention strategies and practices that are already in place and easily available….”

RE: Europe’s Rightward Shift: A Challenge to Moral Boundaries, May 20.

Dear Rushworth,

The arguments that justify this shift in attitude to the right are partly economic and partly seen as a defense of traditional cultures. Numerous inflows of immigrants, particularly Muslims, are seen as being so different and so numerous as to be threatening to what is considered as being French or British.

But the main threat to traditional cultures is globalization — the same cause that creates the desire to immigrate in the first place. Europe is moving towards the right and developing an unhealthy attitude towards foreigners. At the same time, there is an integration amongst Europeans through the European Union. This integration increases the fear that one’s own national culture is under threat.

While it is difficult to think that an increase in racism may have any benefit, it could well be part of the necessary process of becoming European. The process of creating an identity needs to resolve the conflicts that different values, attitudes, beliefs, and behaviors create. We hope these conflicts in “becoming European” can be resolved through discussion.

Perhaps the swing to the right is a sign that the shadow of World War II has passed and we can discuss more openly racial issues and be more tolerant of our own feelings of patriotism. The move towards the right is not just a European trend; it is much more a global swing, but I think at least in Europe there is a greater distance to swing before we reach an extremist area.

Cheers,
Bob Watt
United Kingdom

“I have no objections to churches so long as they do not interfere with God’s work.”

– Brooks Atkinson (Pulitzer Prize-winning U.S. journalist and theater critic, 1894-1984)