Ethics Newsline®

Last weekend in Washington, the National Governors Association gathered for a formal dinner with the president. For the first time in years, reporters were barred from the banquet by the White House.

For journalists, the stiff arm was a reminder that they should take nothing for granted, especially access to lawmakers. With their dance cards revoked, the Washington press corps stayed home on Sunday evening, flicking channels in their tuxedos and top coats, cashmere and pearls. Like the rest of us, they were told to wait for details.

If this were a one-off event, it might not mean much. But in a worrisome way, it points to a pattern: the Bush administration’s habit of staying silent, sealing papers, and closing doors. What’s fading out in the process is transparency, an attribute that for many people is so central to trust that it’s hard to think of ethics — or democracy — without it. Examples:

• In its preparations for an attack on Iraq, the administration has yet to secure sound public support at home and abroad. The Bush team has repeatedly insisted it has proof of Saddam’s evil intentions and capabilities — and that a hasty preemption by the United States is preferable to a slow de-fanging by the United Nations. Yet polls show the U.S. public, fresh from the largest civil protests in three decades, feels the case for going to war without the UN has not yet been made. And with the premise of war shifting to the unsettling paradigm of preemption, the stakes — and the need for clear, transparent reasoning — have never been higher.
• Transparency is at stake, too, in moves the new president made to permanently seal 68,000 memos and other papers left by his father’s administration. President Bush’s executive order, penned in November 2001, seals all confidential correspondence between President Reagan, President Bush’s father, and their aides, many of whom now serve top spots in the current administration. The administration’s action rebuffs portions of the 1978 Presidential Records Act, which was drafted to ensure government transparency and accountability. It’s now under legal challenge.
• Also being questioned is the administration’s refusal to reveal the names of industry executives who helped Vice President Dick Cheney draft the nation’s energy policy shortly after taking office. While denying any bias against environmental groups, the administration has refused to provide details about who helped write the plan, which closely tracks the wish lists of Bush and Cheney’s former industry colleagues. After months of stonewalling, a civil lawsuit has been filed to force disclosure under the Freedom of Information Act.
• Similar challenges are being filed against the administration for alleged bias in drafting other national policies, including clean air and forest management. Last week added snowmobiles to the list after President Bush sparked another legal fight by wedging open two of the nation’s most popular national parks to the machines, despite a $2.4 million Park Service study favoring a ban and 280,000 public comments — 80 percent of those received by the government — supporting that conclusion.
• Also of growing concern is the Patriot Act, passed by Congress and the president after 9/11, giving the government new tools — including wiretaps, detentions, and the right to block the public from judicial proceedings — to secretly hunt for terrorists. Now comes Patriot II. This new law would fix some problems with its predecessor while further expanding the government’s rights to secrecy, allowing officials to secretly detain U.S. citizens and impose strict gag rules on people subpoenaed by grand juries. Under repeated questions from Congress, the administration has steadfastly denied the existence of the Patriot II. Two weeks ago, a watchdog group blew the whistle after obtaining a leaked copy.

For an administration heavily populated by people who cut their teeth in the corporate world, the shift from the executive suite to the Oval Office may seem cumbersome with red tape and unprecedented demands for disclosure. Skipping those steps — especially when the result is hard but necessary medicine — can prove expedient. But it can also prove expensive. Unless government decisions are spelled out fully and transparently, they carry a cost: the public’s trust.

That trust has already been shaken by the collapse of Enron, WorldCom, Arthur Andersen, and the rest. Those failures are forcing corporate America to reexamine and explain itself, as a wary public demands transparency in exchange for renewed trust.

That’s a vital equation. Transparency, though uncomfortable, is essential to governance, whether corporate or public. It’s needed for the real bottom line — investors’ confidence in the economy, the public’s trust in a democracy — to remain strong. So far, the signs — on issues ranging from foreign policy to forest policy — are troubling. That’s a trend that should either be reversed or fully and tirelessly explained.

(c)2003 Institute for Global Ethics

“When the CIA comes and asks what you’ve read because they’re suspicious of you, we can’t tell them because we don’t have it. That’s just a basic right: to be able to read what you want without fear that somebody is looking over your shoulder….”

– Michael Katzenberg, co-owner of Bear Pond Books in Montpelier, Vermont, explaining his store’s new policy of purging customers’ purchase records upon their request. The move is meant to protect patrons from a little-known provision of the 2001 Patriot Act, which authorizes the government to force bookstores and libraries to turn over records detailing individuals’ reading habits. Those government requests cannot be challenged like traditional subpoenas and are kept secret from the public, the Associated Press notes. (“Bookseller Purges Files to Avoid Searches,” AP, Feb. 20.)

WASHINGTON
As the U.S. government prepares a new round of antiterrorism laws, civil liberties groups last week took aim at Justice Department efforts to increase the government’s right to secretly monitor groups and individuals.

One move came from the American Civil Liberties Union (ACLU), which filed an unusual suit asking the Supreme Court to consider Justice Department efforts to surveil people without their knowledge.

Under the hastily passed Patriot Act of 2001, the U.S. government was given freer rein to monitor the movements, interactions, and communications of individuals suspected of supporting terrorist causes.

The Patriot Act, passed weeks after the attacks of 9/11, allows such surveillance to take place in secret and without many long-standing safeguards. The ACLU says the measure violates the Constitution.

Since the law allows such surveillance to be carried out secretly, rights violations also remain secret, creating a situation in which victims remain unaware of the violations and are unable to file suit.

“The irony is no one can know for certain whether they are the subject of these secret surveillance orders because they’re secret,” Ann Beeson, associate legal director for the ACLU, told CBS News.

To force the issue, the ACLU last week filed suit on behalf of those who are being monitored without their knowledge, asking the Supreme Court to decide the boundaries of secret government surveillance.

The Court is likely to reject the suit, according to most observers.

While the ACLU action targets legislation already in place, the Center for Public Integrity last week directed its fire at legislation being drafted now by the Justice Department — a new raft of antiterrorism measures dubbed Patriot II.

The new act would give the government an even greater hand to covertly monitor individuals’ activities, reported Wired.

Included measures would allow the government to secretly detain suspects, abolish federal court orders limiting police surveillance of non-criminal organizations and public events, create a DNA database of suspected terrorists, and apply strict gag rules to people subpoenaed by a grand jury.

Lawmakers last week lashed out at the Bush administration for drafting and distributing the proposed laws to insiders in early January, while steadfastly denying to Congress that the law was being designed.

“As recently as just last week, Justice Department officials have denied to … the Judiciary Committee that they were drafting another anti-terrorism package,” Patrick Leahy (Vt), ranking Democratic member of the Senate Judiciary Committee, said in a statement. “There is bipartisan concern … about the administration’s lack of responsiveness to congressional oversight.”

The Justice Department countered with a statement saying the new law is needed both to fix problems with the Patriot Act and better protect the public. “It should not be surprising that the Department of Justice … discusses additional tools to protect the American people,” chided the statement.

The Center for Public Integrity last week published a leaked copy of the proposed law, known officially as the Domestic Security and Enhancement Act, on its Web site, reported Wired.

Russ Feingold (D-Wis.), the only senator to vote against the increasingly controversial Patriot Act of 2001, last week said he hoped temperaments would be different in Washington this time.

“I have serious concerns … and hope the Senate will give this bill more scrutiny than the first USA Patriot Act,” Feingold said.

BOSTON
A judge last week rejected an attempt by the Catholic Archdiocese of Boston to have more than 400 sexual-abuse lawsuits dismissed, throwing out the church’s argument that First Amendment provisions allowing free exercise of religion insulated it from prosecution.

In arguments before Superior Court Judge Constance Sweeney, the church had insisted that its officials were immune to secular laws since their activities were based on religious beliefs protected by the First Amendment.

Judge Sweeney roundly rejected that argument, saying its “result would be that church representatives could exercise all the rights and privileges the secular law affords yet not be burdened by any of the essential civil laws that protect the safety of all members of society, particularly children.”

The ruling was a blow to the church’s efforts to avoid litigation in the cases against the Boston archdiocese, whose leaders and priests are accused of perpetrating and covering up decades of sexual abuse of minors.

Jeffrey Newman, a lawyer representing 270 plaintiffs, welcomed last week’s ruling, telling the New York Times that it “puts the church in the same shoes as other individuals and other corporations.”

The Archdiocese of Boston, which said it is committed to settling the cases, has 30 days to file an appeal.

Following Judge Sweeney’s ruling, the archdiocese and lawyers representing many of the plaintiffs agreed to a 90-day hold on all litigation to allow settlement talks to proceed, reported the Los Angeles Times.

Mitchell Garabedian, an attorney representing 108 men and women allegedly abused by 41 Boston church officials, refused to sign on to the deal, saying his “clients simply do not trust the Archdiocese of Boston.”

Garabadian, who became frustrated with the church while brokering an on-again-off-again settlement with the archdiocese for 86 alleged victims of Father John Geoghan, said he would proceed with his lawsuit.

“I’m always willing to discuss settlement with the defendants’ lawyers, but I will continue to litigate,” Garabedian told the Times. “Experience has shown me that these matters need to be litigated.”

OAKLAND, California
The Oakland Police Department last week agreed to pay nearly $11 million to nearly 120 people, most of them black men, who claim they were beaten, arrested, and framed by four rogue cops known as the “Riders.”

The settlement stems from a two-year investigation into alleged police brutality and corruption launched after a 23-year-old rookie cop blew the whistle on his training officers during the summer of 2000.

Rookie cop Keith Batt quit the Oakland force after nine shifts with the Riders, filing allegations of random arrests, routine beatings of suspects, and falsified police reports that led to jail time for more than 80 innocent people, reported the San Francisco Chronicle.

Three of the Riders — Matthew Hornung, Clarence Mabanag, and Jude Siapno — face criminal charges. Their alleged ringleader, Frank Vasquez, is believed to have fled to Mexico.

Last week’s settlement ends nearly all of the civil cases filed by people allegedly victimized by the police. Terms of the deal, approved by a district court judge in January, were kept secret until last week.

The settlement calls for payments to plaintiffs ranging from $10,000 to $500,000, as well as systemic reforms of the Oakland Police Department, including a 24-hour hotline for abuse complaints, an “early detection” system to ferret out abusive cops, and five years of independent monitoring.

City attorney John Russo said the incident, while regrettable, was the result of a few rogue cops rather than a systemic problem, noted the Chronicle.

“Many urban police departments have problems with aggressive officers, and Oakland is no exception,” Russo said. But “we did not bury our heads in the sand. We acknowledged freely our faults, and we’ve worked arm in arm toward fixing the problem rather than hiding from or denying the problem.”

But some critics, including Rashidah Grinage of the group People United for a Better Oakland, disagreed with Russo’s assessment.

“The department created the framework for these men to operate,” Grinage contended to the Los Angeles Times. “For years there has been lax supervision. People have turned a blind eye. I call it benign neglect. But to lay the troubles off on four solitary officers is grossly inaccurate.”

The settlement still must be finalized by the Oakland City Council next month.

COLORADO SPRINGS
Pentagon officials traveled to Colorado last week to begin investigating charges of sexual assault at the Air Force Academy, including reports of rape that female cadets say have been ignored or blocked.

The allegations made headlines last week following a series of reports by Denver TV station KMGH-TV, which interviewed female cadets who complained their allegations of rape were dismissed, undermined, or twisted against them by academy officials.

“They have attempted to talk about it or find some assistance within the system. Instead they have systematically been told to shut up by other cadets or the system itself,” former Air Force captain Dorothy Mackey told the New York Times.

Mackey, who left the Air Force after allegedly being sexually harassed and then founded a group that tracks sexual assaults in the military, said the problem is widespread and widely ignored.

“I probably knew 100 women when I was at the Air Force Academy,” said a female cadet who left after allegedly being raped. “I would say 80 experienced a sexual assault, and probably 40 of them were rape.”

After being contacted by one cadet who said the Air Force Academy had ignored her rape, U.S. Senator Wayne Allard (R-Colorado) demanded a Pentagon investigation.

Academy Commandant Brig. Gen. Taco Gilbert has defended the institution’s efforts to curb sexual assaults following a similar scandal in 1993, but has come under criticism for appearing to cast blame on victims, noted the Times.

After establishing a sexual assault hotline in 1996, the academy received nearly 100 calls reporting abuse, including 13 rapes. During the same time, the academy says it investigated 20 cases, leading to dismissal of eight male cadets and no court-martials, reported the Times.

“I don’t think he gets it,” Allard said of Gilbert.

The Pentagon has said its investigation will focus on the entire Air Force, “with a particular emphasis on the Air Force Academy.”

NEW YORK
Health maintenance organizations (HMOs) can be sued for refusing to cover necessary medical treatment recommended by a patient’s doctor, even if that treatment is not specifically covered under the patient’s policy, a federal appeals court ruled last week.

The decision, widely condemned by the health care industry, reinterprets long-standing expectations of HMO immunity, giving greater latitude to patients’ rights.

The case centered on a suit filed by Bonnie Cicio, whose husband died in 1998 after the medical director of his HMO refused to pay for cancer treatment prescribed by his doctor, reported the New York Times.

The HMO, Vytra, said the prescribed treatment involving chemotherapy and a double stem-cell infusion was “experimental,” a classification of treatment not covered by his health care plan.

After two months of petitioning by Cicio’s doctor, Vytra partially relented, saying it would pay for chemotherapy and a single stem-cell treatment, a combination that is viewed as less effective, noted the Times. Cicio died shortly afterwards.

Bonnie Cicio sued Vytra for medical malpractice, saying the HMO’s two-month rejection of the prescribed treatment constituted medical malpractice.

For years, such suits have faced almost automatic rejection under ERISA, a federal law that includes provisions insulating health care providers from malpractice claims.

Last week’s ruling, which was partly based on several recent Supreme Court cases, could mark a watershed in reversing that trend, reported the Times.

The ruling from the U.S. Second District Court of Appeals found that when HMOs use coverage limits to reject a prescribed medical treatment, they are making both a contractual and a medical decision, the latter aspect carrying them into the malpractice realm

Industry insiders said the ramifications of last week’s ruling could imperil the industry.

“This decision is very sweeping,” Karen Ignagni, president of the American Association of Health Plans, the main trade group for the managed care industry, told the Times. “The health plan was making a determination about what is covered and what is not. If the court superimposes its view on the contract itself, it puts in doubt whether we can have any real contract negotiations.”

Connecticut Attorney General Richard Blumenthal took another tack, characterizing the ruling as a boon for patients.

“We deal with these types of complaints literally every day, by calling the HMO and saying, You’re doing the wrong thing here; the doctor says it’s medically necessary, and we hope you’ll do the right thing,” Blumenthal told the Times.

“Now we can say, You are legally responsible for this decision because you are denying care despite the treating physician’s decision,” Blumenthal added. “That’s going to wake up a lot of these HMO bureaucrats. The threat of liability is going to be very, very sobering for them.”

Last week’s ruling, built on an extensive analysis of recent court rulings and industry arguments, applies to only Connecticut, New York, and Vermont, but will likely influence other decisions across the nation, according to the Times.

NEW YORK
A federal judge last week gave the green light to a massive class-action suit accusing investment banks and high-tech firms of conspiring to inflate IPO prices during the stock-market bubble of the late 1990s, costing investors billions of dollars.

The decision by U.S. District Judge Shira Scheindlin keeps the suit in play by rejecting an attempt by the banking industry to have it dismissed for lack of sufficient evidence, reported the Associated Press.

Following Judge Scheindlin’s determination that plaintiffs’ lawyers had presented “a coherent scheme” of fraud and collusion by banks and tech firms going public, the case now moves into the discovery phase, allowing lawyers to subpoena documents and conduct interviews.

The threat that such sleuthing could uncover evidence in this case — as well as spark questions about other industry practices — will likely push finance firms to settle, noted a report from the Associated Press.

University of Michigan securities law professor Adam Pritchard said another concern is the sheer financial cost of jury damages if the case goes to trial.

“At this point the investment banks have to think seriously about settling,” Pritchard told the Reuters news agency. “If they lose (at trial) damages could be in the billions.”

The class-action suit alleges that investment firms conspired with tech firms to rig the IPO process, inflating commissions, hyping stocks with overly optimistic research, and requiring investors to buy shares after the IPO.

“Subsequent purchases at escalating prices falsely inflated the price of the shares. This very conduct evinces a strong inference that defendants intended to defraud the investing public,” Judge Scheindlin said.

Firms targeted in the suit include Credit Suisse First Boston, J.P. Morgan, Morgan Stanley, Robertson Stephens, and Salomon Smith Barney.

“We’re not going to settle this early,” plaintiffs’ lawyer Howard Sirota warned the Financial Times. “The documents will tell the tale.”

LONDON
Two of Britain’s best-known toy stores, Argos and Littlewoods, were hit last week with a record $35.5 million fine for colluding to keep the price of Hasbro products artificially high.

The fines — more than $27 million against Argos and more than $8 million against Littlewoods — are the highest ever assessed by the U.K. Office of Fair Trading (OFT) for violating competition laws, reported the BBC.

The OFT said the companies agreed in 1999 to block discounts on a range of Hasbro products, including board games Cluedo, Monopoly, Scrabble, and Trivial Pursuit, as well as Harry Potter merchandise.

Hasbro, which approached the OFT in September 2001 to blow the whistle on itself and the two-year scam, was granted a reprieve for its help and spared a $24.5 million fine.

“This case shows how leniency arrangements help uncover price-fixing agreements, which distort competition and keep prices artificially high,” OFT director general John Vickers said last week.

Both Argos and Littlewoods railed against last week’s ruling, vowing to appeal.

Littlewoods took the softer line, saying in a statement that it was “surprised and disappointed” by the OFT decision.

Argos adopted a tougher tone, denouncing the OFT investigation as a one-sided affair built on “unreliable and contradictory testimonies provided solely by Hasbro, which has been found guilty in a prior case and has negotiated full leniency in return for supporting the OFT’s unfounded case,” according to the Independent.

Last November, Hasbro was fined $7.8 million for entering into a related price-fixing agreement with 10 distributors.

BOSTON
A class-action suit filed last week accuses U.S. automakers of conspiring to keep consumers from crossing the border and purchasing cars from Canada, where autos often are much cheaper — an arrangement the suit says is costing U.S. buyers billions of dollars.

The suit, filed in both California and Massachusetts, alleges that automakers sell nearly identical vehicles on both sides of the border, but hike up the prices to hit U.S. consumers harder.

The suit, alleging antitrust violations, notes that a Ford Windstar sold south of the U.S.-Canadian border costs 26 percent more than the same vehicle sold from a Canadian lot.

Plaintiffs also accuse automakers of strong-arming Canadian dealerships to stop selling vehicles to U.S. consumers and resellers, threatening those who balk with steep penalties or franchise revocation.

The suit also says car companies are forcing their U.S. dealerships to reject warranties on cars bought in Canada — a campaign begun in early 2001, according to coverage from the Boston Globe.

The suit implicates nearly all of the major automakers and seeks triple damages for antitrust collusion, noted the Washington Post.

Ford spokeswoman Kathleen Vokes last week dismissed the suit as an example of “abusive class-action litigation,” insisting that price differences are due to “content, marketing strategies, and the competitive environment.”

If the suit succeeds, it could cause Canadian car prices to climb quickly, a result that “would decimate the Canadian market,” automotive consultant Dennis DesRosiers told the Globe & Mail.

NEW YORK
In a tit-for-tat exchange last week, Iraq and the United States took turns expelling a journalist from the other nation, with the United States citing alleged espionage and Iraq citing straightforward retaliation.

In New York, the action centered on Mohammad Hassan Allawi, who covers the United Nations for the Iraqi News Agency, reported the Reuters news agency.

Allawi, who has been covering the UN from New York for two years, was given 15 days to pack up his belongings and leave the country, along with his wife and five children.

Allawi insists he has done nothing wrong and is being punished for refusing a meeting with U.S. officials, who had asked to speak with him in private, according to the Washington Post.

Richard Grenell, a spokesman to the U.S. mission to the United Nations, said Allawi “has been asked to leave for engaging in activities considered to be harmful to the security of the United States,” but provided no details.

Iraq, which has complained of U.S. harassment of its diplomats and reporters, retaliated by promptly pulling the plug on four Fox News workers operating out of Baghdad.

After a meeting with Iraqi officials, Fox News reduced the expulsion to only one worker, correspondent Greg Palkot, leaving in place three Fox technicians who may be able to work with a replacement if Iraq relents.

“We will continue to appeal [to Iraq] that their best opportunity to tell their story is to have as many fair-minded journalists in place as possible,” John Stack, vice president of Fox’s news-gathering division, told the Post.

Special to Newsline from Canadian correspondent Errol P. Mendes

OTTAWA
In a move that will likely infuriate Hollywood film producers, workers in the U.S. movie industry, and U.S. politicians, the budget handed down by Finance Minister John Manley announced greater tax incentives for film production to migrate north from Hollywood.

The budget increases tax credits for foreign film and television producers to 16 percent of eligible Canadian labor expenses from the previous 11 percent tax credit.

The purpose is to make film production hotspots like Toronto and Vancouver even more attractive to foreign and U.S. film and television producers.

Films and TV shows produced in Canada have been labeled “runaway productions” by workers in the U.S. entertainment industry. These productions, which include the Oscar-nominated film “Chicago,” which was substantially produced in Toronto, have been condemned for being unfair competition given the lower Canadian dollar and tax incentives given by the federal and provincial governments.

From Ernst & Young LLP:

“More than two-thirds of companies around the world report having been the victim of corporate crime, according to an international study of fraud by professional services firm Ernst & Young LLP. In the vast majority of cases (85 percent), employees were the perpetrators of serious incidents of fraud. Of that group, over half (55 percent) of the fraudsters could be found among management.

“‘The numbers would indicate there is a disturbing rise in the amount of fraud by managers,’ says Nick Hodson, a partner at Ernst & Young and head of the firm’s investigative and forensic accounting team. ‘In our previous study, two years ago, only a third of fraud arose from the ranks of management; a jump of more than 20 percent. We can also conclude from the study that it pays to keep a close eye on new management since 85 percent of the managers committing the largest frauds have been in their jobs for less than a year,’ Mr. Hodson says.

“This is the eighth Ernst & Young corporate fraud survey, the longest running and widest ranging study of its kind, which is conducted every two years. Questionnaires were sent to company directors and managers at major companies around the globe, covering all key business sectors.

“For the first time in the 16-year history of the study, a majority of organizations (52 percent) indicate they have formal fraud prevention policies in place — compared with just one-third who had such plans in place two years ago. Hodson says the strategies for dealing with fraud range from codes of corporate governance to employee conduct policies.

“Respondents continue to identify internal controls as the most generally accepted method by which to prevent and detect fraud. ‘Prevention is better than a cure. However, in our experience of investigating fraud,’ says Mr. Hodson, ‘there is more often than not an internal control which should have prevented or detected the crime, but it was either overridden or not properly understood by the staff responsible for the control. Simply, having a policy doesn’t mean it’ll work. Enron had policies. People need to be educated and held accountable to any guidelines, or actual behavior is unlikely to change. Fraud-risk management must become a business process if we are to effectively battle white-collar crime.’…

“Among other findings of the Ernst & Young survey:

• “Fraud was not concentrated in any one geographic region, industry or size of organization….
• “More than half of fraud losses were relatively small in value (less than $100,000), however 13 percent involved over one million U.S. dollars — enough to seriously impact the profitability or even survival of an organization….
• “Companies are recovering greater portions of fraud losses (51 percent versus 29 percent in the 2000 survey) but most of it is being recovered is from insurers, banks, and suppliers, while recoveries from perpetrators remains low (about 20 percent)….
• “Public awareness is growing. The average annual number of fraud headlines (in Reuters) relating to corporate fraud has nearly doubled over the past 10 years….”

“Democracy is based upon the conviction that there are extraordinary possibilities in ordinary people.”

– Harry Emerson Fosdick (U.S. clergyman, 1878-1969)

When people in Wisconsin give you directions to Fish Creek, they typically show you the palm of their right hand.

“Here’s the city of Green Bay,” they say, pointing to the crotch where the extended thumb meets the hand along the shore of Lake Michigan. Tracing a line up the inside edge of the thumb to about the joint, they add, “and here’s Fish Creek.”

On a normal evening, you can drive it in about ninety minutes. The highway zips up along the bay, lying mostly flat and straight across the cherry orchards and dairy farms of Door County. The interstate takes you partway, but after that it’s a two-lane road.

The other day I flew into Green Bay late one evening for an ethics-and-leadership program at Gibraltar High School in Fish Creek, scheduled to start early the next morning. That night the drive was not going to be normal. The snow had come in that afternoon, and by the time we landed some three inches had settled onto the rental cars. Good thing these people are used to snow, I thought as I trudged out to the airport lot. Sure enough, there was a plastic brush-and-scraper on the floor of the four-wheel-drive SUV I’d reserved. So I brushed it clean and set off.

There’s an odd and lonely peace, I’ve noticed, that settles in on snowy drives. You have to attend to the details, of course. As the snow whips sideways across the highway, your high beams only blind you. Your wipers only help if it’s melting, which it wasn’t that night. The hard-packed snow on the pavement gives you a pretty good grip, but only in the track you’re in: Passing a plow or a slow-moving car isn’t much of an option. So you resign yourself to the rhythm, keep your eyes on the taillights ahead, and think about why you’re here.

Since 9/11, Americans have been thinking a lot about that. It’s as though we’d been traveling a clear, wide road into the future when something abnormal happened. It wasn’t that we came to a detour, where a well-marked diversion circled a problem and would shortly put us back on track. And it’s not that the road simply ended. Life’s gone on for most of us, and the scenery looks pretty much the way it always has.

But it’s as though somebody had peeled the highway up — the way you’d take masking tape off a wall — and stuck it down somewhere else. We’re still traveling along. The road’s still fine and smooth. But it seems to be leading to a slightly different place. In a subtle way, the calibration on our internal compass has changed, and the things we always thought we wanted — material success, popular standing, personal influence — no longer lie so squarely in the line of our bearings. It’s as though the promised destination — the Fish Creek of the mind, as familiar as the joint on your thumb, some three hours away — might not be there after all. It’s as though there might be no certainty to the comforting assertion that says, This is what the journey’s for.

By this part of my drive, the plows had pretty much given up. And the road, once a clearly delineated strip, had begun to merge seamlessly with the farmland on each side. I was following, I realized, the track of a single car somewhere out ahead. Had he not been there, I realized, the snow would have lain in a fine, smooth blanket all around, and the road could have been anywhere. But the driver ahead seemed to know where he was going. So even as the drifting snow began to fill in his tire tracks, I could move along pretty fast.

Then, about three miles from my inn, he turned sharply off onto a side road. The snow ahead lay unbroken, save for the deer tracks crossing the road. I could make out the odd tree, and now and then some fence posts off to the side. I was forced to slow to a crawl until, mercifully, a street light materialized through the whiteness, and then another, and I knew where I was.

As I drove up to the inn, it dawned on me how much I had been depending on that stranger. Because he’d gone ahead, I’d been able to keep up the pace. He didn’t know he was leading me, or that I had somewhere to be early that morning. He was just going about his business, oblivious to the example he was setting and the trail he was forging.

And in that moment I realized how much, in times like these, we need each other. In a way, we’re all out there in the elements, with the snows of confusion blanketing the long highways of the soul. Yes, we can do it alone if we have to. But it’s a big night by yourself — and a cold drive. There are others whose tracks have gone before, and we ourselves are laying down tracks for those we’ll never see. In the end, that’s what leadership is all about, and what the journey’s for.

(c)2003 Institute for Global Ethics

“The real question is not about intervention. It’s about why Tony Blair is not listening to the people of Britain. That’s not democracy; this is what democracy looks like.”

– John Game, 38, a doctoral student at London University, speaking on Saturday to a crowd protesting U.K. backing of a U.S.-led attack on Iraq. Saturday’s protests in London drew at least 750,000 supporters. “Significantly,” noted the New York Times, “the biggest demonstrations were in London, Rome, and Madrid, whose national governments side with the White House.”

* * * * *

“I do not seek unpopularity as a badge of honor. But sometimes it is the price of leadership and the cost of conviction.”

Prime Minister Tony Blair of the United Kingdom, speaking at a meeting of his Labor Party in Glasgow, Scotland, “billed as a major attempt to swing his fractious party behind him,” according to the Times.

(“Blair, Increasingly Alone, Clings to Stance,” New York Times, Feb. 16.)

WASHINGTON
With help from banks and lawyers, Enron Corp. and other leading U.S. firms have been employing byzantine networks of tax shelters and accounting tricks to cheat the government out of owed taxes, Congress was told last week.

The words of warning came after a four-volume report on Enron’s tax activities was delivered to the Senate Finance Committee, whose members said the Internal Revenue Service (IRS) simply is being outgunned by corporate scams.

“The report paints quite a shocking picture of Enron’s tax gimmicks and structured transactions and executive compensation,” said Max Baucus (D-Mont.), ranking minority member of the committee.

“Bad as Enron is going to come out, the deeper concern is this is just not Enron alone. It involves lots of other companies and how they inundated the IRS, out-complexed the IRS,” Baucus warned.

According to the congressional probe, Enron paid no federal income taxes from 1996 through 1999 and only $63 million between 2000 and 2001, largely by using 881 offshore subsidiaries concocted for tax-avoidance reasons, reported the Reuters news agency.

While Enron’s efforts to evade taxes were front and center at last week’s hearing, the accounting actions of other powerful firms were also on the spot, noted the New York Times.

Among the committee’s chief concerns is the way many firms use two sets of figures — one for shareholders, the other for the IRS — to skew revenues to suit their interests, showing profits to shareholders but losses to the government.

In 1998, for example, corporate profits reported to the IRS were $155 billion less than those reported to shareholders, likely the result of tax shelters built to boggle the IRS, Harvard economist Mihir Desai told the Times.

In 1999, the nation’s 10,000 largest firms — those most able to afford such shelters — made 26 times the profits of the next tier of companies, but paid only 20.3 percent in taxes, compared to 30.9 percent paid by the second tier, noted the Times.

Such figures, as well as last week’s report on Enron, will “help Congress know what needs fixing,” Senate Finance Committee chairman Charles Grassley (R-Iowa) declared.

BETHLEHEM, Pennsylvania
Bethlehem Steel Corp. last week asked a bankruptcy court to nullify a promise of lifetime health care coverage made to 95,000 of the company’s retirees and their dependents, saying the firm needed to shed the commitment in order to be attractive to potential buyers.

If approved, the move would leave many of Bethlehem Steel’s oldest workers bereft of health care coverage and facing rates likely to soar from the set $6 monthly fee to as much as $300, reported the Associated Press.

The request by the bankrupt steelmaker was not a surprise to its longtime employees, but still carried a sting for a generation of workers who spent their lives devoted to one employer, expecting the same in return.

“It was capitalism’s version of socialized medicine,” James Van Vliet, a retired Bethlehem Steel vice president, told the AP. “And it was an implied contract. It was the company and the workers saying, ‘We are going to take care of each other.’”

Bethlehem Steel chairman and CEO Robert Miller said the company’s decision was “difficult, but unavoidable” if a planned sale to the International Steel Group was to proceed.

Bethlehem Steel, which employed 300,000 at its World War II height but dropped to 12,000 before declaring bankruptcy in October 2001, said it would save roughly $19 million a month by dropping the coverage.

“There was no way the retirees were going to have benefits,” Chuck Bradford, of independent research firm Bradford Research, told the Reuters news agency. “That’s one of the critical criteria. Before any of these acquisitions can occur all the legacy liabilities have to go.”

Bethlehem Steel asked the court to nullify its responsibility to its retirees by March 31, a decision the court is expected to make within two weeks, noted Dow Jones.