Ethics Newsline®

Last Saturday, one of the overlooked moral challenges of war became visible. That day, the New York Times devoted its entire front page — six stories and five briefs — to the war in Iraq and to nothing else.

In one sense, that’s appropriate: A war of this scale deserves our attention. Unlike prior wars, this one is displaying unprecedented concentrations of intensity. We’re seeing new military firepower that can destroy targets while avoiding civilians. And we’re seeing new U.S. media coverage that includes some half-dozen channels vying with CNN to provide continuous coverage. We’re also seeing footage from Al Jazeera, an Arab television network that shares few of the West’s viewpoints or news values, making it harder for coalition commanders to control the images being broadcast.

True, this is no World War II. There’s little doubt about the immediate military outcome. But given the ugly diplomatic run-up to the invasion and the ongoing peace protests around the world, the long-term political outcome could change the face of U.S. strategic alliances for decades to come. Recognizing all of this, the savvy editors of the Times bet we would drop everything — including last weekend’s usual folderol surrounding the Oscars — to concentrate on Iraq.

They were right. But that very concentration suggests one of the dangers of war: Even in wartime, war is not the only news worth knowing. We’re missing important stories that would otherwise be high up on the front page. Last Saturday such stories included Congressional approval of the Bush administration’s tax cuts, a $10.1 billion conviction of Philip Morris for marketing fraud, and the conclusion of South Africa’s groundbreaking Truth and Reconciliation Commission.

At best, then, there’s an opportunity cost to the war — a vacuum of important things we need to know. At worst, there’s the Jo Moore syndrome. She’s the now-discredited media adviser in Britain’s Department of Transport who on September 11, 2001, with the entire world watching television images of the tragedy in the United States, emailed her communications staff a message reading, “It is now a very good day to get out anything we want to bury.” She knew the next day’s papers would have no room for bad news from her department. So she urged her staff to take cover behind the tragedy in hopes no one would notice. And no one did, until her memo came to light some weeks later and she was blasted for insensitivity.

A small issue, admittedly, but it points to a serious moral problem. There is a kind of opportunism that takes advantage of the famous fog of war to perpetrate things that, in normal times, would scandalize citizens everywhere and call down the opprobrium of nations. Most notable, these days, is the calculated belligerence of North Korea, which would normally be front and center at the United Nations Security Council. Close behind is the assassination of Serbia’s Prime Minister Zoran Djindjic, a far more important event than our inattention made it seem.

There’s also a squadron of significant but less-urgent developments flying below the radar of our moral concern: a sudden crackdown on dissent in Cuba, the ratcheting up of threats against journalists elsewhere in Latin America, a burgeoning ethnic conflict in Nigeria that further erodes the world’s oil supply.

Finally, there are domestic policies that, in ordinary times, would be getting far more scrutiny. These include the administration’s plan to award rebuilding contracts for postwar Iraq quickly and solely to U.S. firms, and the continued pressure from the U. S. military to ease up on environmental restrictions that might slow the pace of weapons testing and training.

The point, here, is that the fog of war can tempt us to squander one of our most precious resources: our attention. Are we being hoodwinked by editors conspiring to keep news from us? Not at all. They’re providing exactly what we seem to want: a surfeit of detail about military matters that wholly captivates our attention.

In this sense, we’re vulnerable to that oldest of military tactics, the diversion. When a spectacular explosion on one side draws every sentry’s eyes, it’s easier for the enemy to sneak up on the other side. Taking serious notice of the war is a necessity. Becoming transfixed by it is a diversion. This is still a nation that needs to uphold law and order here and abroad — which is harder to do if we’re not paying attention.

(c)2003 Institute for Global Ethics

“It is simply not ethical to put animals in harm’s way. War is a human endeavor and while people and political parties may decide war is necessary, animals cannot. They never enlisted, they know nothing of Iraq or Saddam Hussein, and will probably not survive.”

– Dawn Carr, a spokeswoman for People for the Ethical Treatment of Animals, speaking to the BBC about U.S. military plans to deploy sea lions, dogs, and other animals in the war against Iraq. The BBC profiles the Navy’s dolphin and sea lion project, which uses the animals to detect and snare underwater enemies and mines. (“Let Slip the Sea Lions of War,” BBC, Mar. 11.)

Special to Newsline from editor Carl Hausman

NEW YORK
As images of bombing flood into living rooms, various news media are speculating on the impact of televised images that so far have shown the shock and awe of fireworks but little up-close action.

The situation became more complicated late Sunday when it was announced that Iraqi TV and a Qatar-based network were broadcasting pictures of the bodies of slain U.S. soldiers, focusing on their faces, and airing video of prisoners of war.

Iraq’s decision to show the captured POWs on television is a violation of the Geneva Conventions’ requirement that prisoners be protected from public curiosity, International Committee of the Red Cross spokeswoman Nada Doumani told the Associated Press.

Most Western media so far have declined to run the photos, insisting that the ethics of the situation demanded discretion, and that using such images would further the propaganda aims of the Iraqis.

Under the current system of “embedding” journalists with military units, reporters ride along with large groups of military. Unlike the situation in Vietnam, there are few freelancers to scout the aftermath.

New York Times writer Alessandra Stanley reported that the usual method of reporting on war is following the trail left by victims. Combat, she writes, is “mostly conveyed by shots of a crowded refugee tent or a collapsed high-rise, a bloodied sidewalk, a full hospital ward or an open grave.” But in the opening days of this war, “the Pentagon took viewers on a thrilling ride-along with the warriors. Videophones, portable satellites and night-sight scopes brought the world a riveting display of American power, but it was a sanitized look, showing a little sweat, not blood and tears.”

Stanley asserts that, “in the opening moments of the war, 24-hour cable news shows and network newscasts seemed almost drunk with their access, filling television screens with astonishing images. The mushroom clouds rising from bombed government buildings in Baghdad were shown over and over, as were the tableaus of a marine tearing down a poster of Saddam Hussein surrounded by a handful of cheering Iraqi villagers.”

The Wall Street Journal says in a March 21 editorial that gruesome up-close images from the 1991 Gulf War may have played a role in the outcome of the campaign. “Pictures of the devastation — and fear of a backlash — so worried U.S. leaders that they encouraged the first President Bush to end the war prematurely. The Republican Guard escaped, as did Saddam.”

The Journal also speculates that Iraqi leadership is planning to orchestrate horrific images for the camera, staging atrocities that will provide propaganda value. The editorial also notes that while it is inevitable that there will be many civilian casualties, “their sight serves Saddam’s interests, not those of the allies.”

The Washington Post notes that the international press generally, though not uniformly, has filtered war reports through the lens of national politics. British tabloids have provided largely favorable coverage, the Post reports, with the Sun placing blame for the casualties largely on “the wicked dictator,” Saddam Hussein. French media have taken a slightly anti-American tack, reports the Post, with the large French paper Le Monde carrying a banner headline, “the American war has begun.” Many Arab news outlets were quick to show pictures of casualties. Al-Jazeera, the Qatar-based satellite network, broadcast interviews with Iraqi casualties and provided extensive coverage to anti-American demonstrations, according to the Post.

Special to Newsline from Canadian correspondent Errol P. Mendes

OTTAWA
Canadian prime minister Jean Chrétien has firmly stated that the U.S.-led invasion of Iraq is unjustified, but last week urged a ratcheting down of rhetoric, warning that anti-war statements could be exploited by Saddam Hussein.

Chrétien has argued that the case for military action against Iraq was not sufficiently made, saying that Canada would have participated in a military action if it had been approved by the United Nations Security Council.

However, in the prime minister’s view it would only have taken a few more weeks for the Security Council to have determined whether full Iraqi cooperation on disarmament was possible.

This view is shared by a majority of the Canadian population according to recent polls. Adding to the body of Canadian opinion, an open letter signed by 31 Canadian professors of international law at universities across the country, including this correspondent, details why the military action in Iraq is contrary to international law and the UN charter.

Despite the breadth of anti-war sentiment in Canada, Chrétien last week urged his fellow politicians and Canadian citizens to ease up on the rhetoric, saying he wished the U.S. armed forced would “do as well as possible.”

“At this point I think there is no use debating the reasons why some people think war is necessary and some people think it is not. We should not say anything that would comfort Saddam Hussein,” Chrétien told journalists, according to a report from the Reuters news agency.

WASHINGTON
The federal government last week carried out a nighttime raid on the headquarters of HealthSouth Corp., the nation’s No. 1 operator of rehabilitation hospitals, looking for evidence to support claims that the firm’s CEO masterminded a scheme to overstate HealthSouth’s earnings by $1.4 billion.

CEO Richard Scrushy is expected to face charges of criminal fraud, allegedly carried out at his command since at least 1999 in order to con investors into believing the firm was meeting earnings expectations.

Investigators suspect Scrushy and other executives oversaw the scheme, baldly inflating numbers in order to meet revenue targets, reported Bloomberg News.

“HealthSouth executives dug themselves into a financial hole and sought to fill it with lies,” charged U.S. Assistant Attorney General Michael Chertoff.

A suit filed last week by the U.S. Securities and Exchange Commission (SEC) relies heavily on testimony from the firm’s former CFO, Weston Smith, who agreed to plead guilty and cooperate with investigators.

Smith and, soon, Scrushy are the first executives to be charged under last year’s Sarbanes-Oxley corporate reform act, which stiffens penalties for CEOs and CFOs who knowingly sign off on bad figures.

Under the threat of such prosecution, which can carry jail sentences of up to 20 years, a large number of U.S. firms restated their finances last year — 330 in 2002, a figure 22 percent higher than in the previous year, noted Bloomberg.

HealthSouth’s Smith has agreed to plead guilty to conspiracy to commit securities fraud and wire fraud and to filing false SEC certifications. The U.S. Justice Department said it is pursuing criminal charges against Scrushy, noted the New York Times.

“This case ranks up there with the likes of Enron and WorldCom,” alleged Richard Wessel, district administrator in the SEC’s Atlanta office.

WASHINGTON
Merrill Lynch and four of the brokerage firm’s former executives were charged last week with helping Enron mask accounting fraud that helped the firm inflate profits by $60 million in late 1999.

The charges, centering on two transactions, were quickly settled by the nation’s No. 1 brokerage, which agreed to pay $80 million in civil fines, restitution, and interest.

The settlement, earmarked for investors burned by Enron’s collapse, keeps documents uncovered by federal investigators out of the hands of lawyers filing similar claims for private plaintiffs, reported the Associated Press.

Four former Merrill Lynch executives were also named in the suit, filed last week by the U.S. Securities and Exchange Commission (SEC).

The four defendants include former Merrill vice chairman Thomas Davis and investment-banking managing director Schuyler Tilney, both of whom were fired last fall after refusing to answer Congress’s questions about their involvement in the suspected fraud.

All four defendants deny any wrongdoing, reported the AP.

NEW YORK
Using a legal accounting rule now under attack, nine of the largest U.S. firms last year converted $30.61 billion in pension fund losses into pretax earnings of $7.9 billion, noting the true numbers only in annual report footnotes.

The technique is legal, but under increasing fire by regulators, who argue that recent corporate scandals point to a need for more transparency than the suspect rule — FAS 87 — provides, according to a report last week from Bloomberg News.

FAS 87 was adopted by the U.S. Financial Accounting Standards Board (FASB) in 1985 — an attempt to help companies report the status of long-term investments often jostled by short-term market volatility.

The rule permits U.S. firms to use estimated pension investment gains, instead of actual gains or losses, to “smooth” away short-term market volatility, FAS 87’s primary author, Tim Lucas, told Bloomberg.

In good years, FAS 87 prompts firms to understate investment windfalls — suppressing 1999’s actual gains of $55.19 billion to the $5.34 billion reported by the firms, for example.

In bad years, like 2001, it has the opposite effect of masking steep losses that could worry investors — a type of Botox for the balance sheet.

In 2001, the rule allowed Verizon to report $4.68 billion in losses as $2.5 billion in profits, helped SBC Communications count $3.4 billion in losses as $1.14 billion in earnings, and gave Lockheed Martin the leeway to report losses of $1.4 billion as gains of $160 million, according to a Bloomberg analysis.

“The $160 million that is listed as income, according to FASB, is just that, a list of numbers on paper and not cash income, and no indication of the fund’s performance on the market,” said Lockheed spokeswoman Meghan Mariman.

FASB chairman Robert Herz says such losses may soon move from footnotes to front pages, advocating a review of FAS 87. “I don’t like the FAS 87 model,” Herz told Bloomberg. “I believe you’re better off showing what actually happened.”

TOKYO
Japanese regulators last week slapped Nikko Salomon Smith Barney with a four-week ban from making securities transactions on its own behalf, accusing the firm of making bogus trades to bilk a client out of $1.7 million.

Nikko Salomon, a joint venture between U.S.-based Citigroup and Nikko Cordial, Japan’s third-largest brokerage, apologized for its actions, saying it accepted the penalties.

The firm was accused of rigging the market last July by issuing massive “buy” orders early in the day for certain shares. Those “buy” orders, purportedly made on behalf of clients, would pump up the stocks’ prices by day’s end, when Nikko Salomon would sell its shares and then buy more at the inflated price.

According to regulators, Nikko Salomon billed its customer for the price of the latter batch of shares while tucking away the profits from the first batch, pocketing millions of dollars in profits in the process, reported the Washington Post.

At times, Nikko Salomon’s scams were so blatant that rival brokerages began calling Japan’s Securities and Exchange Surveillance Commission to complain about the skewed prices, according to the Post.

Regulators responded last week by hitting the firm with a 20-business-day ban on making trades on its own behalf. It will still be allowed to conduct trades on clients’ behalf, noted the Associated Press.

Reuters notes that last week’s action is part of the government’s stepped-up campaign against brokerage and banking fraud ahead of the close of Japan’s fiscal year, which ends this month.

Last month, J. P. Morgan Chase & Co. was barred from trading in Japan for 10 days as punishment for irregular transactions, according to Reuters.

PARIS
Paris prosecutors last week began making their case against 37 former executives of Elf Aquitaine who are accused of carrying out a massive scheme of bribery and embezzlement on behalf of the former oil giant.

Along with 36 others, the defendant list includes Elf Aquitaine’s former president, Loik Le Floch-Prigent, widely fingered for blame in the misuse of $145 million in public funds by the former state-run oil firm.

Prosecutors suspect that Le Floch-Prigent and other executives funneled funds to French politicians and African leaders from the 1960s through the 1990s, currying favor and business contracts, reported the BBC.

Last week’s trial, which follows eight years of government investigations, is the latest in a series of efforts to prosecute Elf Aquitaine’s management for alleged abuses.

The company was privatized and purchased in 1999 to form TotalFinaElf, a French-Belgian firm, reported the Associated Press.

NEW YORK
A federal judge last week dismissed a lingering lawsuit over Union Carbide’s deadly gas leak in Bhopal, India, in 1984, saying the firm has done enough and too much time has passed.

The suit was filed in 1999 by a woman who said she became sick after moving near the Union Carbide plant, where a toxic gas leak killed 4,000 people on the evening of December 2, 1984.

More than 20,000 others were injured by the leak, and more than 14,400 ultimately died from illnesses caused by the gas leak, which Union Carbide said was the result of sabotage by a disgruntled worker.

Last week, U.S. District Judge John Keenan said Union Carbide no longer should be held accountable for claims stemming from the disaster, reported the Associated Press.

The company, which owned a slight majority in the plant in 1984, paid a $470 million settlement and sold its ownership in 1994, using the proceeds to build a hospital in Bhopal.

“This contribution goes far to satisfy any further obligation defendants have to citizens of Bhopal,” Judge Keenan said, dismissing the suit last week.

Lawyers for the plaintiff said they have not decided yet whether to appeal.

WASHINGTON
The federal government last week filed suit against the nation’s five largest tobacco companies, accusing them of scheming to defraud the public about cigarettes’ dangers and demanding the forfeiture of $289 billion in profits from the past five decades.

The suit alleges that the firms — Brown & Williamson, Liggett Group, Lorillard Tobacco, Philip Morris, and R. J. Reynolds — met in a New York hotel in 1954 to orchestrate a campaign to hook young smokers while hiding the health risks.

Last week’s suit claims that Big Tobacco’s “scheme to defraud permeated and influenced all facets of defendants’ conduct — research, product development, advertising, marketing, legal, public relations, and communications — in a manner that has resulted in extraordinary profits for the past half-century, but has had devastating consequences for the public’s health.”

The suit, which accuses the industry of continuing such efforts, marks the federal government’s attempt to take up tobacco litigation similar to the suit that won 46 states a settlement with the industry worth $206 billion in 1998.

That settlement forced the tobacco industry to release more than 38 million pages of documents, many of which formed the basis for the federal suit, filed last week by the U.S. Justice Department.

The New York Times notes that the suit surprised many, as Justice Department head John Ashcroft had opposed the lawsuit as a senator and had curtailed funding needed by investigators examining the evidence.

“For this Justice Department to pursue this case so aggressively is very significant,” William Corr, executive vice president of the Campaign for Tobacco-Free Kids, told the Times.

The tobacco industry has denied any attempt to defraud the public, saying its statements and apparently incriminating documents are being taken out of context.

“Ultimately, the industry’s position was very much misunderstood by the public, by the media, and by the government,” Ken Bass, an attorney for Brown & Williamson, the U.S. arm of British American Tobacco, told CNN.

Calling the government’s $289 billion demand “a ridiculous figure,” Bass dismissed the federal suit. “They’ve put everything and the kitchen sink into these documents in the hopes that something sticks,” he told the Times.

The federal suit is scheduled for trial in September 2004.

CORPUS CHRISTI, Texas
A Texas jury last week gave a legal reprieve to German drug giant Bayer AG, rejecting a $560 million lawsuit accusing Bayer of hiding the dangers of a drug pulled from store shelves after at least 52 deaths.

The drug, Baycol, was designed to combat cholesterol. After going on the market in 1997, it was linked to severe side effects, including rhabdomyolysis, a potentially fatal muscle disease that can lead to kidney failure.

Hollis Haltom, an 82-year-old engineer, sued Bayer after taking Baycol and contracting the disease, reported the Associated Press.

Haltom’s lawyers accused Bayer of putting Baycol on the market despite knowing of its undisclosed dangers. Bayer lawyers denied the charges, insisting that they followed U.S. drug guidelines throughout the process.

A Texas jury agreed with Bayer, clearing the company of wrongdoing and saying Haltom’s illness had not been definitively linked to his Baycol usage.

The ruling sent Bayer shares up 40 percent on the German stock exchange, as investors breathed a sigh of relief at the firm’s win in the first of 8,400 Baycol suits to go to trial, noted the AP.

Lawyers for Halton, who declined a settlement offer to pursue his case in court, said they are considering an appeal.

NEW YORK
More than a quarter of the U.S. public say it is acceptable for doctors to lie to health insurers in order to get medical care for patients being denied coverage, according to a new report released last week.

The study, which surveyed 700 people in the fall of 1999, presented two hypothetical scenarios in which HMOs denied coverage to patients, even though their doctors were recommending treatment.

In all, 26 percent of those surveyed said it would be ethical for doctors to deceive HMOs in order to obtain the desired care, instead of going through time-consuming appeals or merely accepting the HMOs’ decision.

Given the same scenarios, 11 percent of doctors said lying was justified, reported the Reuters news agency.

“Our finding of such considerable public support for physician gaming of the system raises concern about the amount of trust the public places in healthcare institutions to allocate resources fairly,” lead author Dr. Caleb Alexander told Reuters.

The study, published in the March 18 issue of the Annals of Internal Medicine, also highlights the ethical plight of doctors forced to choose between providing needed care and being honest.

“Doctors have a real tightrope to walk in balancing their obligations to patients … with their obligations to the larger society,” noted Alexander, a research fellow in the Robert Wood Johnson Clinical Scholars Program at the University of Chicago.

A spokeswoman for the American Association of Health Plans last week dismissed the study as biased, saying it unfairly portrayed the HMO industry and provided unrealistic scenarios.

From the Gallup News Service:

“…According to Gallup’s annual Environmental Issues survey, updated March 3-5, the percentage of Americans rating the nation’s energy situation as ‘very serious’ is 28 percent, up from 22 percent in March 2002 (but still well below the 58 percent recorded in May 2001).

“Once again, a solid majority of Americans, 56 percent, predict that the country will face a ‘critical energy shortage’ in the next 5 years. This is similar to the 60 percent who felt this way in March 2001, but higher than the 48 percent recorded in March 2002.

“The rise in public concern about energy could be the result of the latest round of gas price increases or it could be related to uncertainty about the flow of Middle Eastern oil given the confrontation with Iraq.

“The same Gallup Environmental Issues poll indicates that public approval for President Bush’s handling of energy policy has fallen somewhat over the past year. The percentage saying he has done a good job dropped to 39 percent, down from 46 percent in March 2002. This is similar to the 6-point decline seen for his handling of the environment (50 percent said he was doing a good job on the environment in 2002 vs. 44 percent today). However, rather than a specific reflection of Bush’s energy and environmental policies, these declines could be the natural result of the decline in overall public support for the president over the past year, as the Sept. 11 rally effect that initially boosted his job ratings has faded, and public concerns about the economy have mounted….

“Despite the apparent increase in energy concerns over the past year, Gallup finds no change in Americans’ policy preferences on energy matters; these tend to favor the positions espoused by environmentalist groups rather than those of the Bush administration.

“When asked which of two approaches the United States should use to solve the nation’s current energy problems — more production of oil, gas, and coal supplies, or more conservation of existing supplies by consumers — Americans choose conservation over production, 60 percent to 29 percent. While this has not changed over the past year, 2 years ago (in 2001), a slightly higher number (33 percent - 35 percent) sided with energy production.

“There has been little change in the choice Americans make when asked whether the environment or development of U.S. energy supplies should be given priority. By a 49 percent to 40 percent margin, more people still choose the environment, although by a slightly smaller margin than last year.

“These general sentiments carry over to public preferences on specific energy policy proposals. …A large majority of Americans — roughly three-quarters or more — favor energy conservation proposals for business and industry and for automobile fuel standards (policies consistent with the Kyoto international global warming treaty from which the Bush administration has withdrawn the United States). By contrast, a majority of Americans oppose opening up the Arctic National Wildlife Refuge in Alaska for oil exploration as well as expanding the use of nuclear energy….”

“There is absolutely no inevitability as long as there is a willingness to contemplate what is happening.”

– Marshall McLuhan (Canadian educator, 1911-1980)