Ethics Newsline®

Here’s the world after September 11, 2001. And here’s a wand. If you could wave the latter to alter the former, and had only one chance, where would you go to wave it?

Here are my five choices, arranged from lowest to highest priority:

New York. Both the hole in the ground and the hole in America’s confidence need healing. So does the sense of suspicion that puts our own security above our trust in others. And while we’re in New York, let’s rebuild the public’s trust in financial markets and corporate centers. If a wand could reverse the looming doubt that ethics is possible within the corporate sector, the global future would surely look brighter. But since the issues facing the world go beyond economics and America, the wand might best be used elsewhere, such as…

Afghanistan. As the hunt for the Taliban began dropping from the headlines, the world’s focus on Afghanistan began to blur. It has sharpened again with evidence of continuing Taliban activities in that country, and with the attempted assassination of President Hamid Karzai. If Afghanistan backslides into a gaggle of warring fiefdoms and a training ground for al Qaeda operatives, much of this last year’s effort will have been wasted. But even if Afghanistan gets sorted out, that might only buy a bit of time. The real danger lies not in a single nation state but in a pervasive and vicious set of attitudes that can spring up in lots of places, including…

Pakistan. For a while, it seemed that democracy might prevail in Pakistan, despite the dictatorial leanings of President Pervez Musharraf. It also became clear that progress against the Taliban would depend on Western alliances with Pakistan’s leadership. Although those alliances upset India, their benefit in the war on terrorism seemed to trump that concern. Now President Musharraf is playing fast and loose with his nation’s constitution, determined to aggregate internal power in spite of (or perhaps because of) his newfound importance in the eyes of Washington. Not getting Pakistan right could lead to war with India, where nuclear stakes are immense. Fortunately, there’s evidence of restraint on both sides, and no threat of a mad determination to sacrifice one’s own population rather than reach an accommodation, unlike…

Iraq. Saddam Hussein’s history suggests that this kind of restraint may not operate in Iraq. He may well have the ability to create nuclear weapons, and he surely has the ability to deliver them via missiles. More important, he has the loyalty of some (perhaps fewer and fewer) key military officers throughout the country. What’s more, he’s cornered, with no place to go except, perhaps, into glorious oblivion. If a wand would remove Saddam without splintering Iraq into dozens of national and tribal shards, this might be the most important place to wave it, aside from…

Israel and the Palestinian Territories. If change can be created here, the global ripple effects will be immense. Unlike the other four choices, the goal here is less “old world preserved” than “new world created.” What’s at stake is not only a small piece of Middle Eastern turf. It’s the attitude of Muslim nations toward what they see as Western values. Steeped in conspiracy theories that see a pro-Israeli and anti-Muslim America in every shadow, these nations are watching for a change. Left unaddressed, the Israeli-Palestinian conflict destroys the West’s ability to address the other four issues. Why? Because this single issue makes it politically difficult for Islamic nations to take a stand against the ultimate weapon of despair that Palestinian extremists are perfecting: the suicide bomb.

And that weapon, after all, is the legacy of September 11. What happened in New York, Washington, and Shanksville, Pennsylvania, was the elevation of suicide to the level of a global weapon. Warfare in the past has taken for granted a rational desire for self-preservation within the enemy. If that’s gone, it produces enemies with nothing to live for — the most dangerous kind.

How to change that equation? Start with the Middle East. Maybe the most important thing the West can do is to help give would-be suicide bombers everywhere a sense of something worth living for. Let’s start with a region we know something about — a region whose brutal economics puts Israelis, with an average per capita income of $17,000, living inches from Palestinians with an average per capita income of $1,000.

Can a wand correct that? No. But economic development in the West Bank and Gaza might. If Palestinian peace could translate into jobs, homes, careers, marriages, and families for young men and women — as it does everywhere else in the world where economies work properly — the changes could be dramatic. If economic development can help reverse the impetus toward self-destruction, we surely will have found a key to creating a more peaceful post-9/11 world.

(c)2002 by the Institute for Global Ethics

“When you have spirited people, whether you agree with them or not, it adds a little yeast to the dough. In your country club, your church, and business, about 15 percent of the people are screwballs, lightweights, and boobs and you would not want those people unrepresented in Congress.”

–Former U.S. senator Alan Simpson (R-Wyo.), talking to the New York Times about this November’s departure of several high-profile members of Congress. Those on their way out or ousted in recent primaries include Rep. Bob Barr (R-Georgia), Rep. Dick Armey (R-Texas), Sen. Phil Gramm (R-Texas), Sen. Jesse Helms (R-North Carolina), Sen. Fred Thompson (R-Tenn.), Sen. Strom Thurmond (R-South Carolina), Rep. Gary Condit (D-Calif.), Rep. Cynthia McKinney (D-Georgia), and Rep. James Traficant (D-Ohio).

BATON ROUGE, Louisiana
Louisiana State University (LSU) last week fired a researcher under investigation for last year’s anthrax attacks following an order from the Justice Department, one of the school’s primary funders, to pull him off all government-funded research.

Dr. Steven Hatfill is one of 30 scientists and researchers under investigation by the government for last fall’s anthrax mail attacks, which killed five people.

Although the FBI has said Hatfill is no more or less important than any of the others being scrutinized, the Justice Department has publicized Hatfill as a “person of interest” and circulated only his picture on New Jersey streets where the anthrax letters may have been sent, reported the Associated Press.

On August 1, the Justice Department, a primary funder of LSU’s bioweapons research, again targeted Hatfill, sending an email warning the university to “cease and desist” from using him on all government-funded projects.

The next day, Hatfill was put on administrative leave. Last week, LSU fired both Hatfill and his supervisor, Steven Guillot, who they accused of being delinquent in notifying them of the government’s email.

LSU chancellor Mark Emmert insists the school’s decision was made independent of the government’s email, saying only he “concluded that it is clearly in the best interest of LSU to terminate this relationship.”

Hatfill, who insists he is innocent, last week decried his treatment at the hands of the Justice Department and its head, John Ashcroft.

“My life has been completely and utterly destroyed by John Ashcroft and the FBI,” Hatfill said in a statement. “My professional reputation is in tatters. All I have left are my savings, and they will be exhausted soon because of my legal bills.”

The Justice Department said that its decision to demand Hatfill’s sidelining was proper, saying its research grants are given on the condition that it can dictate who works on projects, reported the Washington Post.

WASHINGTON
Al Dunlap, the hard-hitting, job-slashing former CEO of Sunbeam Corp., last week agreed to pay a $500,000 civil fine and be barred from ever serving as an officer or director of a public company, following allegations of fraudulent bookkeeping.

Nicknamed “Chainsaw Al” for his penchant to cut payroll and staff sizes, Dunlap was heralded as the savior of struggling appliance maker Sunbeam, whose stock price soared on news that Dunlap would take the reins in 1996.

As part of his plan, Dunlap allegedly shifted revenue to artificially hike losses under previous management and inflate income under his own, faking at least $60 million in profits, reported the Associated Press.

This week’s deal, which did not require Dunlap to admit wrongdoing, follows a $15 million settlement last month with angry shareholders, who say they lost $800 million when the fraud was uncovered, sending Sunbeam into bankruptcy.

Sunbeam’s former chief financial officer, Russell Kersh, was also part of both deals, anteing up a total of $450,000 and agreeing to a lifetime ban from the executive and board suites of public companies.

While neither man was required to admit wrongdoing, USA Today says last week’s settlements were a clear victory for the government, which got everything — short of a confession — that it was seeking.

“This puts an end to Al Dunlap’s career in public companies,” agreed Richard Sauer, assistant director of enforcement for the U.S. Securities and Exchange Commission. “We think it’s a fair outcome. It includes all of the forms of relief we sought.”

Dunlap’s lawyer, Frank Razzano, also welcomed the deal, saying it would allow his client “to pursue his retirement,” according to USA Today.

Related suits against three other Sunbeam executives and the Arthur Andersen auditor who approved Sunbeam’s books during the affected years are scheduled to be heard early next year, according to the Reuters news agency.

Special to Newsline from Canadian correspondent Errol P. Mendes

ST. JOHNS, Newfoundland
The National Post is reporting that a world-renowned Canadian expert on psychopaths has told a national conference of police officers in Newfoundland that top corporate officials should be screened for psychopathic traits before being hired.

Dr. Robert Hare, a professor at the University of British Columbia, stated that résumés do not reveal the possible psychopathic disorders of applicants for top corporate positions.

He argues that if these individuals are to be responsible for billions of dollars of other people’s money, they should go through a checklist screening process that he is developing, which he calls B-Scan.

The checklist would look for personality traits associated with psychopaths, whom he estimates number about one percent of the Canadian population.

These traits include being callous and lacking a conscience for harm inflicted on others. Psychopaths, he says, tend to have few close relationships, have an inflated ego, are highly driven, are deceitful and short-tempered.

Dr. Hare stated that these types often rise quickly within large corporations, which are highly competitive environments.

Dr. Hare concluded that because these individuals care little about the impact of decisions on others, they are good budget cutters and down-sizers.

NEW DELHI, India
India last week renewed its effort to extradite a former Union Carbide executive from the United States, saying the man was a fugitive from justice who should face trial for the deaths of more than 3,000 people killed by a company accident.

The charges against former chief executive Warren Anderson stem from one of the world’s worst industrial accidents, which occurred during the early morning hours of December 3, 1994, when a holding tank began to leak.

The spill sent a rolling cloud of toxic gas through the city of Bhopal, killing 4,000 people in hours. Another 10,000 to 15,000 have since died, while thousands of others were permanently crippled, reported the Reuters news agency.

Anderson, who flew to Bhopal for a three-day visit following the accident, was arrested on charges of culpable homicide and released on bail. He fled to the United States before his trial, and never returned.

India, which has been seeking Anderson’s extradition for nearly 10 years, last week got a helping hand from Greenpeace and Britain’s Daily Mirror newspaper, which located the retired executive in New York.

The location of Anderson, long sought by the Indian government, sparked renewed calls for his extradition under a 1997 agreement with the U.S. government.

“If a team of journalists and Greenpeace managed to track down India’s most wanted man in a matter of days, how seriously have the U.S. authorities tried to find him all these years?” Greenpeace campaigner Casey Harrell complained last week in a released statement.

“The U.S. has reacted swiftly on curbing the financial corporate crimes of Enron and WorldCom, but has clearly not made much of an effort to find Anderson, responsible for the deaths of 20,000 people in India,” Harrell said.

Union Carbide, which paid a settlement of $470 million in 1989, has disavowed any involvement in the proceedings against its former executive. The company, which insists the disaster was caused by a disgruntled employee, still faces criminal charges in India, noted Reuters.

Nine Indian executives from the Bhopal pesticide plant have had charges against them reduced. Last week, the same deal was rejected for Anderson when judges said he deserved no leniency because he fled, reported the Guardian.

CHARLESTON, South Carolina
Prompted by recent scandals involving hazardous products, abusive priests, and inept doctors, the state of South Carolina last week took a step toward barring the use of secret lawsuit settlements, saying the practice was endangering public safety.

A ban on secret legal settlements “is a rare opportunity for our court to do the right thing,” Chief Judge Joseph Anderson Jr. wrote last week in a letter to colleagues, reported the New York Times.

Judge Anderson led the state’s nine other active federal trial judges in recommending the ban, which has been put up for public comment until September 30, at which point it could be formally adopted by the court.

Such a ban, Judge Anderson wrote, would help South Carolina “take the lead nationally in a time when the Arthur Andersen/Enron/Catholic priest controversies are undermining public confidence in our institutions and causing a growing suspicion of things that are kept secret by public bodies.”

Supporters of the move say it would open powerful organizations to public scrutiny for past misdeeds, which are often covered up by binding secret settlements and gag orders.

Such deals have often been struck by the Catholic Church in cases of alleged sexual abuse by priests, as well as by firms such as Bridgestone/Firestone, which hid evidence of faulty tires in secret settlements, according to the Times.

Such secrecy, Judge Anderson wrote, could cost public safety and people’s lives.

South Carolina’s move would put the state among a small minority that restrict secret settlements. Florida bars such arrangements if they have the effect of “concealing a public hazard.” Michigan unseals all secret settlements after two years, noted the Times.

Critics warn that such measures eliminate powerful incentives for parties to settle a case before it hits the courtroom, tying up legal resources and plaintiffs’ funds. They also say that secret deals protect settlement amounts, trade secrets, and other private information.

Jean Toal, Chief Justice of the South Carolina Supreme Court, said such protections could remain intact without hiding the actual outcome of a case — a middle ground that would benefit both sides.

“Sealing the economic terms of the settlement is only one part of it. We’re often talking about sealing the entire public record of the case,” Chief Justice Toal told the Times.

BEIJING
China last week blocked Internet search engine Google from the nation’s computers in an apparent bid to stabilize and control information ahead of November’s Communist party gathering.

The blockage was confirmed last week by press tests, but has not been officially acknowledged by China.

The block on Google is believed to be under way at the nine gateway computers run by the government, through which all of China’s Internet traffic must pass, according to a report from the BBC.

By installing filters on those nine computers, the government can put a choke hold on information it deems undesirable — a practice that frequently accelerates during periods of political change.

Chinese President Jiang Zemin recently urged propaganda officials to create a “sound atmosphere” for this fall’s meeting, at which a new generation of party leaders is expected to take control.

Since June, 150,000 unlicensed Internet cafes have been shut down by the government.

In China, residents are required to register with their neighborhood police bureau within 30 days of opening a Web account.

Since 1995, at least 60 laws controlling Internet content have been passed and more than 30,000 people hired by the government to monitor the keystrokes and Web hits of China’s Internet users.

Last week’s block is especially damaging because Google is widely regarded as one of the least-censored information providers in China, reported the BBC.

The Chinese-language service of U.S. firm Yahoo!, like many other operators, has signed a government pledge to censor information that would “jeopardize state security and disrupt social stability.”

A search for President Jiang’s name on Yahoo! turns up just 24 results. The same search on Google — at least before last week’s block — turned up 156,000 Web sites, according to a test by the Associated Press.

AUGUSTA, Georgia
Golf’s most-watched event will go commercial-free this year, following word from Georgia’s Augusta National golf club that it would rather drop commercial sponsors than open its membership to women.

Augusta’s decision, announced last week by club chairman William “Hootie” Johnson, means next year’s Masters tournament will be commercial free, a boon for the event’s 20 million TV viewers.

The deal is not so easy on the club, which now must finance the $5 million-plus tournament alone, though observers say gate fees and merchandising should cover the costs, reported the New York Times.

Last week’s decision by Augusta is the latest salvo in a dispute over the club’s membership of 300, among whom are no women and fewer than 10 African-Americans.

In June, the National Coalition of Women’s Organizations (NCWO) contacted the club to complain about its membership policies, asking for an explanation.

Augusta chairman Johnson fired back an angry missive accusing the NCWO of trying to bully the club into adopting changes its members do not want. The NCWO then contacted the companies sponsoring the Masters, asking whether they supported Augusta’s policies.

Last week, Johnson dismissed the corporate sponsors, eliminating them — and any pressure they could put on the club — from the equation, noted the Times.

“As I previously said, there may come a day when women will be invited to join our club, but that decision must be ours,” Johnson said in a statement last week.

The move keeps Cadillac, Citigroup, Coca-Cola, and IBM out of the fray, leaving CBS, which has televised the Masters every year since 1956, to bear the brunt of the NCWO’s scrutiny.

“We expect to have a conversation with CBS,” NCWO chairwoman Martha Burk told the Associated Press last week. “It will be about whether they want to broadcast an event, held in a venue that discriminates against half the population, and what kind of statement that makes about CBS as a network.”

CBS spokeswoman Leslie Anne Wade declined comment, according to the AP, except to note that “CBS will broadcast the Masters next year.”

NEW YORK
When celebrities use interviews on national news shows to talk about drug treatments that have helped them, they may have more on their minds than public service, according to a report last week from the Reuters news agency.

According to Reuters, a growing number of celebrities are being linked financially to the drug companies whose products they tout in apparently casual conversation.

Skater Peggy Fleming, actress Kathleen Turner, and rock singer Ann Wilson are among those profiled in the Reuters report on “stealth endorsements” for popular drugs.

Those ties, which TV executives insist are often undisclosed to them, create a troublesome conflict of interest for news anchors and others responsible for controlling the commercial messages of their shows.

After the New York Times ran a similar exposé on the issue last month, TV news networks pledged to better patrol the line separating their shows from drug company infomercials.

“This is a relatively new phenomenon that we’ve become acutely aware of,” ABC News spokeswoman Lisa Finkel told Reuters.

“I’m snickering at that statement,” Barry Greenberg, whose firm links stars with advertising agencies, nonprofits, and corporations, told Reuters. “It’s the publicists for the pharmaceutical companies who are making the pitches to these television programs.”

WASHINGTON
Stymied by Congress, President Bush is planning a backdoor push to get social-service funds to religious groups by rewriting federal rules to lower the barriers separating church programs from state dollars.

Bush tried to convince Congress to pass legislation endorsing such so-called faith-based initiatives last year, reported the Washington Post.

While he succeeded in the House, the Senate was less forthcoming, voicing concerns over using taxpayer dollars to fund religious-based social service programs that could proselytize and discriminate.

Top White House aides say Bush has decided to renew his efforts, saying that there are other ways of converting his campaign promises into law.

“We really want the legislation badly,” James Towey, head of Bush’s 10-person faith-based office, told the Post. “But this office isn’t just about federal legislation. This office is going to move forward with the president’s initiative.”

Last week, the Associated Press reported that five Cabinet agencies are currently rewriting federal regulations to ease the firewall separating religious groups from federal funds.

The White House has ordered the five government departments with faith-based offices — Education, Justice, Labor, Health and Human Services, and Housing and Urban Development — to each fund a seminar teaching religious groups how to better secure government grants under the new guidelines.

Over the next seven months, the White House expects those meetings to reach more than 5,000 religious groups, noted the Post.

OTTAWA
Canadian Prime Minister Jean Chrétien last week made a surprise announcement that Canada would vote to ratify the Kyoto protocol by year’s end, sparking a turf war with lawmakers over who has the right to make decisions affecting the entire country.

Chrétien’s pledge to push for passage of the Kyoto protocol, which would sharply reduce Canada’s greenhouse-gas emissions by 2012, sparked protests throughout the nation, especially in Alberta, home of oil and coal heavy hitters.

Firms in the province complain that their bottom lines will be crippled by the Kyoto protocol, which was launched in 1997 to combat global warming and climate change.

“Ratifying the Kyoto protocol now would be like signing a mortgage for a property you have never seen at a price you have never discussed,” Alberta Premier Ralph Klein said at a news conference.

“We still don’t know how much Kyoto will cost, how it will be implemented, and what role the different provinces will play,” Klein continued.

Chrétien and other Kyoto supporters say the threats posed by global warming warrant immediate action and that an accurate price tag for such a complex undertaking is impossible to compute, reported the National Post.

Chretien, speaking last week at the UN World Summit on Sustainable Development in South Africa said that regardless of its ultimate cost, his nation could no longer afford to delay adopting the Kyoto protocol.

“We have waited because of the provinces,” Chrétien complained. “We wanted to make a decision earlier, and we had a lot of discussion with the provinces and others, but there is a moment where a decision will be made. It is our federal responsibility.”

Canadian environment minister David Anderson told the Post that once corporations realize that reforms are going to be a reality of Canadian life, they will rally their research and development resources.

“If we move to ratification, then of course everybody takes up a new question, which is how do we ratify and how do we do it cheapest, how do we do it with the least dislocation?” Anderson said. “And that is when you are going to have people who have been quite negative, suddenly unleashing the ingenuity of private enterprise to keep costs down and keep industry competitive.”

Angry businesses and provinces have pledged to fight Chrétien’s decision, but note that widespread public support for the treaty may trump their efforts to crash Kyoto, according to the Canadian Press.

U.S. President George Bush dimmed hopes for Kyoto when he pulled out of the treaty last year, saying it would harm the U.S. economy. But now, with sudden support from Canada, China, and Russia, the Kyoto treaty could have enough signatories to be ratified.

From KPMG Forensic:

“A survey … has revealed that a huge number of respondents — 83 percent — would report their colleagues to their bosses for major incidents of fraud while 44 percent would report them for minor incidents, such as stealing office stationery.

“This is a marked change in the pattern of employee behavior says Alex Plavsic, head of Fraud Investigations at KPMG Forensic: ‘In the past, we’ve found that employees have felt less inclined to report obvious incidents of fraud due to their unwillingness to turn in their fellow employees, but now, as our survey shows, there has been a significant turnaround in people’s behavior.’

“‘The impact that some of the recent corporate failures have had on people’s lives, which have often resulted in huge numbers of job losses, may have led to a significant change of attitude towards fraud in the workplace. People now recognize that it is not a victimless crime and that those who are responsible should be reported and then held to account for their actions.’

“…The survey also gives an insight into the causes of fraud and found that 39 percent of respondents admitted to having lied to cover up for mistakes. This demonstrates the lengths that some employees are prepared to go to safeguard their positions, as well as indicating what represents the boundary of ‘acceptable’ behavior.

“One area which demonstrated some surprising results, was the reaction towards email and Internet use. Over half (51 percent) think that there should be some restriction on personal email at work, and a third of those surveyed (30 percent) thought personal email should be completely prohibited within the workplace. Furthermore, a high percentage (52 percent) think employers have the right to monitor staff emails, an area over which companies have been sensitive to in the past as it raises concerns over employee privacy.

“…The level of dishonesty that is thought to be acceptable varies depending on the ‘crime’ in question, with people bending the rules to suit their own purposes, such as taking a day off or stealing office stationery.

“The survey found that:

• “Forty-one (41) percent admitted to having lied in the past to their boss to enable them to have a day off.
• “Seventy-eight (78) percent thought it acceptable to steal items of stationery.
• “Fifty-two (52) percent would put personal letters through the work postage system.

“Alex Plavsic concludes: ‘It is important that employers create a culture in which people are encouraged to speak up and that they put in place a ‘whistle-blowing’ policy so that staff can report concerns in a confidential manner without fear of repercussions. It also gives staff some guidelines for what constitutes ‘right’ and ‘wrong’ in an environment where it may not always be obvious….’

“‘Lastly, it makes good business sense — if dishonesty and fraud are not reported at the earliest opportunity to stop fraud escalating this can, as we have seen, cause extremely serious and sometimes fatal problems….’”

Looking Back

If America is to be run by the people, it is the people who must think. And we do not need to put on sackcloth and ashes to think. Nor should our minds work like a sundial which records only sunshine. Our thinking must square against some lessons of history, some principles of government and morals, if we would preserve the rights and dignity of men to which this nation is dedicated.

–Herbert Hoover (31st U.S. president, 1874-1964)

Looking In

The things that will destroy America are prosperity-at-any-price, peace-at-any-price, safety-first instead of duty-first, the love of soft living, and the get-rich-quick theory of life.

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

Looking Ahead

Violence has ever achieved only destruction, not construction; the kindling of passions, not their pacification; the accumulation of hate and destruction, not the reconciliation of the contending parties; and it has reduced men and parties to the difficult task of building slowly after sad experience on the ruins of discord.

–Pope Pius XII (Catholic church leader, 1876-1958)