Ethics Newsline®

Out for a walk one morning last week, I passed a screened porch where a business executive was charging into his day on a mobile phone. He was explaining what sounded like a deal nearly consummated. The only thing left, he asserted, was just to “connect the dots!”

In recent weeks, that phrase has burrowed deep into the American lexicon — ever since we began hearing that the White House, the FBI, and the CIA may have had early warnings about the 9/11 terrorists. To be sure, the clues were scattered, imprecise, and vague. But shouldn’t they be held accountable? Couldn’t somebody have “connected the dots”?

Like many clichés, this one casts so wide a net that its use borders on the morally indefensible. In that regard, it resembles the popular cliché of an earlier generation: “Getting my ducks in a row.” That usually means “getting organized” or “neatening up my presentation” or some such thing. It’s a nice metaphor, until you examine its meaning.

For starters, how do ducks get in rows? Go watch a mother duck. She lines up her ducklings by taking a decisive lead, not by stopping to reorganize. Once she stops, the ducklings swarm around in gaggling disarray. But let her start swimming away, and they fall into a row behind her.

But the metaphor probably builds on something else: those metal cutout ducks used in shooting galleries. After they’ve been blasted down, somebody needs to stand them up again. “Getting your ducks in a row,” then, has overtones of something fun and simple on the great fairground of life. Look again, however, and it suggests the sly deceptions of the carnival operator, who organizes his ducks only in order to have apparently easy targets for unsuspecting customers. It is, in other words, a complex metaphor — and not a particularly positive one.

So it is with “connecting the dots.” The literal meaning, of course, comes from the child’s paper-and-pencil game, where numbered dots, apparently scattered in disarray, produce an amazing picture when connected in order. The phrase carries connotations of childhood innocence, of discovering order among chaos. It evokes the first stirrings of artistic creativity — the thrill of making a picture where before there had been nothing. Most subtly, it still suggests a task so simple that a four-year-old can do it.

Being unable to “connect the dots,” then, implies a profound and consequential failure of maturity, of success, of persistence, or of basic abilities. While adults sometimes fail to make connections, only the most inept children fail to connect dots. And if the adults can’t succeed where no four-year-old can fail — why, surely someone should hold those adults accountable!

So goes the logic. But the phrase biases the argument from the beginning. To be sure, it’s an appealing bias. In a complex world, such simplicity is seductive. In a scary world, there’s a need for euphemisms that let us talk about the enormity of events like 9/11 in gentle, nursery-like words. But the premise behind this phrase, and the view it implies of problem solving and decision making, may bear little resemblance to the situation at hand.

And that’s where the moral issue arises. If our language fails to assess the reality of the circumstances — and if we don’t even recognize that failure — then something is morally amiss. We’re not using the language; the language is using us.

The fact is that in international intelligence there are no “dots” numbered by some cosmic maker of kiddies’ workbooks and awaiting our magic pencil. This is no game for kids. Somewhere there are faint signals, disparate events, unconnected shards of evidence. Assembling them into an accurate picture of reality is the work of the most creative and seasoned minds in law enforcement.

That doesn’t mean there aren’t real problems with our intelligence gathering and analysis. In today’s world, these activities may not be coordinated. The analysts may lack access to the right signals. They may be underfunded, operating with antediluvian computers, having few human sources of information, lacking research and training in cutting-edge techniques of analysis.

But they aren’t kids, and terrorism isn’t a game. Their job is to make connections, not to connect dots. If we want them to do better, let’s at least take the responsibility of getting our language right.

(c)2002 by the Institute for Global Ethics

“The feeding frenzy is pretty much over. People started looking at making all these radical changes and decided there was a real cost involved and that it would not solve the Enron problem.”

HOUSTON
Accounting firm Arthur Andersen was found guilty of obstruction of justice last week in a verdict that is expected to bring about the demise of the troubled company.

A federal jury on Saturday ruled that the destruction of records was an attempt to hide evidence from investigators probing Andersen’s alleged role in obscuring the shaky financial condition of Enron Corp. from employees and investors.

Andersen had claimed that the destruction of the documents and computer files was routine housekeeping mandated by company policy.

The company could be fined half a million dollars. But what is expected to sound the death knell for the firm is a ban on the firm’s ability to audit publicly traded companies. Andersen also faces civil suits that could cost the company millions of dollars.

“Andersen is history, no matter what,” Itzhak Sharav, an accounting professor at Columbia University’s business school, told the Associated Press.

“Who wants to be associated with the company?” Sharav asked.

Andersen’s troubles evolved after it was alleged that the accounting firm knew of Enron’s financial shell game but did not reveal the information in audits conducted by Andersen. The case sparked nationwide scrutiny of the accounting industry, with critics contending that accounting firms that serve both as consultants and auditors are in an ethically untenable position.

After the U.S. Securities and Exchange Commission mounted a probe into the Andersen-Enron situation, many documents relevant to the investigation were shredded by Andersen.

Saturday’s decision appears to have opened new legal territory after the judge instructed jurors that they could convict without precise knowledge of which individuals acted with criminal intent.

Critics of the decision contend that the judge’s instructions amounted to a directed verdict against Andersen and buoyed an overly aggressive prosecution against a firm that was simply following its standard document retention policy.

WASHINGTON
Corporate CEOs will be required to personally vouch for the honesty and accuracy of their companies’ financial statements and annual reports under new standards proposed last week by the federal government.

The new requirements are part of a wider push to hold CEOs more accountable for the companies they run — a movement gaining momentum in the wake of Enron’s collapse last December.

Under increasing scrutiny, a record number of firms have begun restating their earnings, wounding investor confidence. Last week, the U.S. Securities and Exchange Commission (SEC) moved to stanch the seep of investor trust, announcing new rules meant to crack down on corporate deceit.

“We’ve seen examples of cheating, of chicanery, of fraud, of personal enrichment, and not enough concern about investors and employees,” SEC Chairman Harvey Pitt told PBS last week. Investors “don’t know if they can trust the CEOs or CFOs. They don’t know if they can trust their analysts or their brokers.”

The SEC’s proposed rules would require corporate heads to personally verify and endorse their firms’ financial statements — and face civil and criminal charges if fraud is later uncovered, according to the Reuters news agency.

The rules would also require companies to more quickly disclose a broader range of events, including the loss of significant clients or a change in a rating agency decision, explained the Washington Post.

Instead of having between five and 15 days to disclose such events, as they currently do, companies would have only two days to disclose an expanded list of events.

“The CEO of a company should not be able to say, ‘Gee, I didn’t realize’ or ‘I wasn’t aware’ or ‘I’m flying at 50,000 feet and therefore wasn’t paying attention to specific disclosures,” Pitt said.

The proposed rules are currently in a 60-day holding pattern for public comment. A final decision by the SEC commissioners is expected before the end of the year, according to Reuters.

NEW YORK
Longtime critics of lavish CEO pay packages may soon gain some powerful allies: leading pension fund managers, who say they are considering joining shareholder efforts to curb runaway pay.

At recent annual meetings, shareholders have tried to pass resolutions that would rein in executive pay, targeting firms that include Bank of America, EMC Corp., and Jones Apparel Group.

Nearly 40 percent of such efforts won shareholder approval this year, a sharp gain over the previous record of 25 percent, the Baltimore Sun reported.

Last week, the two men in charge of state pension funds for New York and North Carolina said they are considering joining such efforts to improve corporate governance and limited CEO pay.

As the sole trustees of their states’ pension funds, North Carolina Treasurer Richard Moore and New York Comptroller H. Carl McCall say they have a duty to shareholders to protect their funds.

One possible way of doing that, they say, is by controlling excessive CEO pay and corporate conflicts of interest — using their $172 billion in combined assets as leverage, according to a report last week from the Associated Press.

“If we set up standards that individual companies must comply with in order for their stocks to be purchased, then the free market will go a long way toward rectifying some of these problems,” Moore told the AP.

Last week, Fidelity Investments said it, too, is exploring the option of using its $557 billion in stock fund assets to fight golden parachutes used by corporate heads fleeing poorly managed companies.

“We don’t consider it a widespread issue, but it’s something we should look at,” Fidelity spokeswoman Anne Crowley told USA Today.

NEW YORK
Samuel Waksal, the former head of biotech firm ImClone Systems Inc., was arrested at his home last week for insider trading after he allegedly tipped off family members about bad news that would affect his company.

Waksal is accused of calling at least two family members last December after he privately learned the government was not going to approve the company’s key product, an anti-cancer drug called Erbitux.

Before the Erbitux failure went public, members of Waksal’s family sold more than $10 million of ImClone stock within 48 hours, prosecutors say. After the news was announced, ImClone stock plummeted by 90 percent.

Waksal himself reportedly tried to sell $5 million of ImClone stock, but two different brokerages refused to process the order without the approval of ImClone’s general counsel, according to the New York Times.

Although Waksal told an investigative panel of the SEC that he did not violate insider-trading laws, an examination of his phone records showed a flurry of calls to family members who promptly dumped their ImClone stock, according to the Times report.

The U.S. Justice Department and the Securities and Exchange Commission (SEC) last week charged Waksal with civil and criminal charges of conspiracy, securities fraud, and perjury.

Waksal’s lawyer, Mark Pomerantz, said the government’s case is based on circumstantial evidence. “The government misread that evidence and it overreacted in deciding to make today’s arrest,” he said.

At a congressional hearing into the ImClone controversy last week, Waksal invoked his Fifth Amendment right, refusing to testify lest he incriminate himself.

If convicted on all charges, Waksal faces up to 25 years in prison and millions of dollars in fines, according to the Associated Press.

Waksal’s brother, Harlan, who took over the company last month, is also under investigation for dumping $50 million of ImClone stock in early December, noted the AP.

WASHINGTON
Employers have the right to refuse jobs to disabled workers whose health could be harmed by workplace duties, the Supreme Court ruled last week in a case sharply dividing the disabled community and the nation’s employers.

Under the 1990 Americans with Disabilities Act (ADA), employers have the clear right to refuse jobs to disabled workers who could pose a “threat to others.”

The dispute before the Court centered on what happens when the threat is not to others, but only to the disabled worker — in this case, Mario Echazabal, an oil refinery worker with chronic hepatitis C.

Echazabal, who began working as a subcontractor at a Chevron refinery in California in 1972, was forced out of his job after Chevron learned of his condition, which could be exacerbated by toxic chemicals at the plant.

Under pressure from Chevron, Echazabal’s employer fired him after 25 years of service at the plant. Echazabal sued, saying he should have the right to work a job that could injure him, as long as nobody else is in danger.

Last week, the Supreme Court unanimously disagreed, saying Echazabal was interpreting the ADA too broadly, and that its “threat to others” enumeration was not meant to proscribe it from covering a “threat to self.”

“Chevron’s reasons for calling the regulation reasonable are unsurprising: moral concerns aside, it wishes to avoid time lost to sickness, excessive turnover from medical retirement or death, litigation under state tort law, and the risk of violating” workplace safety laws, Justice David Souter wrote for the Court.

Chevron lawyer Stephen Shapiro welcomed the ruling, saying it protects employers. Without such ADA leeway, “they could be faced with hiring people who they know would die on the job. And they would also be exposed to all sorts of litigation.”

Critics of the ruling say it enforces a paternalistic view that gives employers too much latitude to discriminate against disabled workers.

“This allows the employer to say we know what’s best for you,” James Esseks, an American Civil Liberties Union lawyer, told the Los Angeles Times. “Think of an example that seems absurd today: A company says to a person in a wheelchair, ‘You can’t work in a skyscraper because it would be dangerous to you if there was a fire.’ This [ruling] represents a version of that.”

Last week’s ruling is that latest in a series of seven ADA challenges that have come before the Supreme Court over the past four years. In every case, the Court has sided with employers, the Times reported.

WASHINGTON
State prisons have the right to compel convicted sex offenders to admit their guilt and confess to other crimes by revoking their earned privileges, a sharply divided Supreme Court ruled last week.

The 5-to-4 ruling fractured the Supreme Court along its increasingly distinct ideological fault line, with the more conservative members, led by Justice Anthony Kennedy, supporting the state of Kansas in the case.

Kansas had argued that the efficacy of its Sexual Abuse Treatment Program requires convicted sex offenders to admit their guilt and disclose all other past sex crimes. Prisoners, who can be convicted of new crimes revealed during the process, are given polygraphs to see if they are telling the truth, the Los Angeles Times reported.

Robert Lile, who was convicted of raping a high-school girl in 1983, refused to participate in the program, insisting on his innocence and noting that Kansas could prosecute him for disclosing any past crimes.

Kansas then retaliated against Lile, who had won eased treatment through good behavior, by revoking some privileges and transferring him back into a maximum security facility where conditions were harsher.

Lile sued, saying Kansas was punishing him for not participating in the sex offender program and its disclosure procedures, which could force him to incriminate himself against his wishes — and against the Constitution’s Fifth Amendment.

Last week, the Supreme Court ruled against Lile, saying that the benefits of strong-arming him into the sex offender’s program outweighed other considerations and failed to abrogate his freedoms in any meaningful way, noted the New York Times.

Dismissing arguments that stripping prisoners of visitation rights, exercise opportunities, and better prison jobs amounted to coercion, Kennedy wrote that such punishments “do not constitute atypical and significant hardships in relation to the ordinary incidents of prison life.”

Despite Kansas’s right to prosecute offenders for crimes admitted during the program, Justice Kennedy said that the program “does not compel prisoners to incriminate themselves in violation of the Constitution.”

Justice John Paul Stevens flatly disputed that claim, warning that the majority’s ruling marks a “watershed” in legal interpretation that jeopardizes the Fifth Amendment’s protections against self-incrimination.

In addition, “we ought to ask ourselves, what if this is one of those rare cases in which the jury made a mistake, and [an inmate] is actually innocent?” Stevens wrote in his dissent.

The Bush administration and 18 other U.S. states backed Kansas in the case, saying that treating sex offenders in prison is critical to curbing recidivism. According to one Justice Department study, only about 15 percent of sex offenders who complete such programs are arrested for sex crimes again.

ADDIS ABABA, Ethiopia
Nigerian president Olusegun Obasanjo last week urged Western countries to help in the recovery of government funds looted by corrupt African leaders over the past decades.

Speaking at a meeting of civil society groups last week, Obasanjo said that Africa’s struggling nations need a helping hand in taking back roughly $140 billion in pilfered funds.

About $1 billion stolen by former Nigerian leader Sani Abacha has been returned to date — but only after exhaustive efforts to wrest the money away from banks in Switzerland, Obasanjo said.

“If there is an international convention in place, it would have been easier to recover such monies,” he noted, saying African nations are formulating an international convention to facilitate such fund repatriation.

Obasanjo insisted that while corrupt African leaders were largely to blame, Western nations should shoulder some of the guilt as well, reported the BBC.

“It is not enough to accuse developing countries of corruption,” he said. “The Western world must demonstrate practical commitment to assist us by repatriating monies that have been stolen from our treasuries and stashed away in their financial institutions.”

Special to Newsline from Canadian correspondent Errol P. Mendes

OTTAWA
Canadian Prime Minster Jean Chrétien has unveiled new ethics guidelines for his Cabinet ministers to fend off the ethics controversies that have swirled around his government and Cabinet.

The ethics guidelines include immediate and retroactive disclosure of all donations to leadership bids of Cabinet ministers, new rules about who can lobby departments of Cabinet ministers while being active supporters of leadership bids, and new rules governing relations between ministers and Crown Corporations.

The PM has also promised legislation to reform fundraising for political parties, a new code of ethics for all elected members of Parliament, and increased independence for his ethics counselor.

While opposition parties claim that the reforms do not go far enough, supporters of the PM’s main rival, former Finance Minister Paul Martin, say there is a political motive behind some of the ethics reforms.

They claim that the last-minute change by the PM of the ethics guidelines to require retroactive disclosure of all donations to leadership bids within 30 days was designed to force Paul Martin to disclose his supporters.

While the former finance minister is under no obligation to do so, since he was removed from Cabinet, there will be intense political pressure for him to follow the example of other Cabinet ministers who intend to disclose who their supporters are within 30 days.

WASHINGTON
Republicans on Capitol Hill are compiling a list of Washington lobbyists and their party affiliations in a bid to deny access to influential Democrats, according to a report last week from the Washington Post.

Longtime Republican activist Grover Norquist is spearheading the project, which he says is aimed at getting more Republicans into top lobbying spots — and into the White House for advice and counsel.

Dubbed the “K Street Project,” Norquist’s goal is to create a listing of Washington lobbyists and their political affiliations, party donations, past jobs, and political connections. Members of trade associations and high tech firms are also being profiled.

Using the list, Norquist and his allies hope to push Democrats out of and Republicans into lobbying positions and Washington jobs from which they can advise lawmakers on a wide range of issues.

The project’s other goal is to help the White House and GOP lawmakers decide which lobbyists “deserve” access and which do not, one lobbyist involved in the project told the Post.

The K Street Project has been under way for at least four years, but is now being expedited by Norquist, who heads the Washington-based advocacy group Americans for Tax Reform.

Critics from both parties say the project is tantamount to blacklisting and political profiling, according to a report from the Associated Press.

WASHINGTON
The Bush administration last week took steps to weaken anti-pollution standards for coal-burning power plants, easing regulations in what environmental groups warn is a de factor rollback of the Clean Air Act.

Under pressure from Bush and Vice President Dick Cheney’s energy task force, the U.S. Environmental Protection Agency (EPA) last week said it would relax rules known as New Source Review.

Those rules, advocated by the Clinton administration, require coal-burning power plants to install modern anti-pollution devices when expanding their facilities or undergoing major renovations or repairs.

The energy industry, targeted in a series of lawsuits by the Clinton-era EPA for violating the rules, has fought New Source Review from the start, complaining of its cost, the Associated Press reported.

When Bush took office, his administration immediately began trying to weaken the rules, saying voluntary measures were preferable to enforceable regulations. Last week, Bush converted that viewpoint into policy.

The Edison Electric Institute, an energy industry trade group, last week praised Bush’s move. “At the end of the day, power plant operators need to be able to run their facilities without the perpetual threat of litigation” for exceeding pollution limits, said spokesman Dan Reidinger.

Environmental groups say such litigation simply defends existing laws and is critical to curbing greenhouse gas emissions, reported the AP.

“However they try to spin it, the Bush team is looking to adopt industry-sought changes that would weaken current clean-air protections,” Frank O’Donnell, executive director of the Clean Air Trust, said last week.

Critics of Bush’s plan, including the attorneys general of states along the East coast, say it will result in millions of tons of additional pollution each year from older coal-burning power plants, oil refineries, and other industrial plants.

Last week’s weakening of New Source Review coincided with the release of a new report from the EPA warning that greenhouse gas emissions by humans are the chief cause of global warming.

Bush, who has long dismissed such claims, called the report a product of the federal “bureaucracy,” according to the Reuters news agency.

NEW YORK
The city of New York has no right to prevent homeless people from sleeping on the steps of a prominent city church located in a posh shopping district, a federal appeals court ruled last week.

Three times last December, New York police came to the steps of the Fifth Avenue Presbyterian Church, located across the street from Trump Tower and Tiffany’s, and told the homeless to move elsewhere.

The church sued, saying that it had a constitutional right to shelter the homeless on its steps, regardless of city statutes and neighbors’ complaints, the Reuters news agency reported.

In court papers, the church insisted that it is “commanded by scripture to care for the least, the lost, and the lonely of this world” — and one way of doing that is by letting the homeless sleep on its steps.

The U.S. Second Circuit Court of Appeals agreed, ruling that the church had demonstrated “that its provision of outdoor sleeping space for the homeless effectuates a sincerely held religious belief and therefore is protected under the Free Exercise clause [of the First Amendment].”

From the Gallup News Service:

“Nationally, nearly four in five (78 percent) Americans are willing to give up certain freedoms to gain security, according to a recent study co-sponsored by the Gallup Organization and the University of Oklahoma Department of Psychiatry through a grant from the Oklahoma City National Memorial Institute for the Prevention of Terrorism (MIPT). The study also revealed Americans’ willingness to compromise certain specific freedoms:

• “Thirty (30) percent favor making it easier for legal authorities to access private communications such as mail, email, and telephone conversations
• “Seventy-one (71) percent favor requiring national identification cards containing fingerprint or citizenship information for all U.S. residents
• “Seventy-seven (77) percent favor requiring smallpox vaccinations for all U.S. residents

“‘The urge to strengthen government in a time of danger has been around a long time. The American people have, with important historical exceptions, done a good job of balancing individual liberties with the need to protect society,’ said MIPT Deputy Director Donald R. Hamilton. ‘Some restrictions placed on individuals have been temporary and some have been permanent. The good sense of the American people about how to balance freedom and security has proven durable over the long haul.’

“Nearly four in 10 Americans are very worried (8 percent) or somewhat worried (31 percent) that they or a family member will become a victim of a terrorist attack in the United States. Levels of worry about future terrorist attacks in the United States are considerably higher in New York City (19 percent very worried; 34 percent somewhat worried), compared with Washington, D.C. (9 percent very worried, 29 percent somewhat worried) and Oklahoma City (6 percent very worried, 26 percent somewhat worried)….

“Gallup has been tracking the question of the public’s concern about becoming a victim of terrorism for the last seven years. Not surprisingly, national levels are currently similar to those found prior to Sept. 11 with the exception of the weeks immediately following the 1995 Oklahoma City bombing. Current worry about future terrorism appears to be more heavily based on fear of attacks using biological or chemical agents (31 percent) than on subsequent bombings (22 percent).

“Compared to how they say they behaved prior to Sept. 11, four in five (84 percent) Americans say they are more alert (29 percent strongly agree; 55 percent agree). New York City respondents report significantly higher levels of alertness (38 percent strongly agree; 50 percent agree)….

“A comparison with Gallup historical survey data suggests (but does not establish, because the questions were not identical) that some attitudes and concerns are not new, but are more intense now than in the past….”

“The supreme belief of our society is the dignity and freedom of the individual. To the respect of that dignity, to the defense of that freedom, all effort is pledged.”

– Dwight D. Eisenhower (34th U.S. president, 1890-1969)