Is ethics a zero-sum game? Is there only a finite amount of it in the universe? If you use up a lot in one place, is there less left elsewhere?

Observers of the U.S. House of Representatives may think so. Over the last six years, as ethics has come roaring into public prominence, it has all but vanished from the House radar. I can think of no period in the last decade when the word “ethics” appeared more frequently in the headlines — not only in stories about government, but in reference to business, education, sports, scholarship, science, the judiciary, the military, and even the church. During that same period, ethics issues in the House have fallen into a chasm of silence.

Now a group of eight nonprofit watchdog groups convened by the Campaign Legal Center and including Common Cause wants that changed. The coalition seeks to strengthen the House ethics committee, officially named the Committee on Standards and Official Conduct. In the past, House ethics battles were high-stakes dramas, resulting in one former Speaker resigning (Texas Democrat Jim Wright) and leading to a $300,000 fine for another (Georgia Republican Newt Gingrich). Exhausted by these battles, members inaugurated in 1997 a kind of truce between Republican and Democratic members to prevent ethics charges from being used as political weapons.

At the same time, a House rules change also prevented outsiders from raising ethics charges against members. The watchdog coalition, spotting some alarming ethical hotspots in the House, wants that rule changed back. Nobody inside the House is willing to raise alarms, it says — and nobody outside is able to.

That’s a good suggestion. But the real problem lies in confusion over the roles of morality and legality. We need clarity on three things:

1. Ethics and law aren’t the same. Ethics is best understood, as Lord Moulton of Bank wrote some 80 years ago, as “obedience to the unenforceable” — obedience to those broad but unactionable values and virtues of a culture. Law, by contrast, is obedience to whatever can be enforced through penalties and sanctions. The Committee on Standards and Official Conduct is concerned less with ethics than with law. Its task is to enforce specific rules which, if broken, lead to punishment. It has no mandate to be the ethics police.

2. Letting itself become an ethics body blurs its real duty to regulate. As a result, the House committee ends up practicing Ethics Lite, a hybrid that combines unsystematic and ad hoc methods of values-based moral reasoning with watered-down versions of judicial practice unprotected by rigorous due process. Like most multipurpose tools that do several things indifferently and nothing really well, it is constantly in danger of producing either flaccid ethical chatter or the rigorless findings of a kangaroo court.

3. Standards and conduct are necessary but not sufficient. A separate body, with the word ethics in its title, needs to consider cases where the regulations are silent — where neither a House rule nor a federal statute has been breached. Ethics addresses issues where nothing is illegal but where public judgment questions the rightness of an action. Such issues come in two flavors: right versus wrong (involving good and bad behavior) and right versus right (involving two ethically defensible but mutually opposing views).

Increasingly the nation is faced with issues demanding moral resolution that lie beyond the law. Consider two current examples:

One concerns egregious compensation among some charitable foundations. Legally, foundations can pay trustees what they wish. Ethically, the public is outraged. Unless the foundation community itself effectively mounts a regime of self-regulation — based on its own ethics — it may find itself facing new legal restraints.

The other concerns reports of U.S. Supreme Court Justice Antonin Scalia’s duck-hunting trip with Vice President Dick Cheney. Here there are compelling moral arguments on both sides: allowing the justices the right to enjoy friendships and interchanges usual to people in their positions on the one hand, and preventing justices from being swayed (or, more importantly, giving the impression that they may be swayed) by the perks of office and personal loyalties on the other.

Both sorts of issues — right-versus-wrong and right-versus-right — need our careful attention these days. To go after these complicated questions with only the blunt instrument of compliance is, finally, to reinforce that tired old saw that says, “Well, if it ain’t illegal, it must be ethical.” Nothing could be further from the truth. The nation deserves a higher conception of ethics than that.

(c)2004 Institute for Global Ethics

“We were dealing with it as a compliance issue. In hindsight, we missed some opportunities . . . to engage earlier.”

– Jonathan Capacasa, Environmental Protection Agency director of water quality for the U.S. region that includes the District of Columbia. According to the Washington Post, federal authorities “responsible for ensuring the safety of Washington’s water knew about the toxic levels of lead and the likely solution more than a year ago but took no action.” (“D.C. Lead Issue Was Debated for Months,” Washington Post, Mar. 16)

WASHINGTON
Days before shareholders approved a merger of the two firms, Bank of America and FleetBoston Financial last week agreed to pay $515 million for alleged mutual-fund trading violations that hurt smaller investors.

As part of the settlement, eight members of the board of directors of Nations Funds, which oversees Bank of America’s mutual funds, will resign or not be reappointed when their terms expire next year.

The firms’ $515 million in penalties, coupled with an agreement to reduce investors’ fees by $160 million over the next five years, makes last week’s deal the largest settlement to date in the ongoing mutual fund scandal.

Allegations of market timing and other abuses have rocked the $715-million mutual fund industry since last September, when New York attorney general Elliot Spitzer pledged to rout out abuses.

One of Spitzer’s earliest victory’s found Canary Capital Management LLC agreeing to pay $40 million to settle charges that it engaged in market timing and after-market trading.

Though not charged at the time, Bank of America was implicated as one of Canary’s trading partners, noted the Associated Press. Last week’s deal ends Spitzer’s scrutiny of the firm.

The agreement also marks the first time that the mutual fund crackdown has targeted a board of directors. Spitzer last week said that shift is deliberate and should put other boards on notice to do the right thing.

“What we are signaling to the fund world is that board activity is going to be a subject of significant inquiry on our part,” Spitzer said, according to the New York Times. “Where boards were not sufficiently inquisitive about the role of market timers and late traders, we will seek appropriate redress.”

Of the penalties assessed last week, Bank of America will pay $125 million in fines and $250 million in restitution to investors. FleetBoston will pay $70 million in fines and another $70 million in restitution.

Special to Newsline from Canadian correspondent Errol P. Mendes

OTTAWA
Nortel shares plummeted 21 percent on news last week that the company’s audit committee and a law firm were disputing recently announced financial results that stated that Nortel made a profit of $732 million in 2003.

In the wake of this news, the company has put its chief financial officer and controller on paid leave while the company works on a restatement of its financial reports, which will be the second restatement in recent months.

Meanwhile, the financial sectors in Canada and the United States are questioning the status of $140 million in bonuses for the management of the company — bonuses paid for stock performance based on results that are now in dispute.

A Nortel spokeswoman told the Globe & Mail that it would be “inappropriate to speculate” about whether the bonuses could be revoked.

Both the U.S. Securities and Exchange Commission and the Ontario Securities Commission are conducting inquiries into the accounting dispute.

WASHINGTON
The federal government last week tried to quell a mounting controversy by launching a probe into allegations that a former official barred the release of cost estimates for the new Medicare bill.

Richard Foster, an actuary at the U.S. Department of Health and Human Services (HHS), says he was threatened with firing if he provided figures showing that the Medicare bill would cost much more than the Bush administration was saying.

The Medicare bill, which was signed into law last December after a marathon session of congressional arm-twisting and head butting, was set at a maximum cost of no more than $400 billion over the next ten years.

In January, the White House disclosed that its actual cost would be $534 billion, reported the New York Times.

Foster, who says his boss, Thomas Scully, threatened to fire him if he responded to congressional requests for estimates, had been predicting since last June that the bill’s true cost would be between $500 billion and $600 billion.

After Foster went public with his allegations, Republican and Democratic lawmakers alike blasted the HHS for withholding information that likely would have impacted their vote on the Medicare bill last November.

“They had to keep the vote open three hours to get this bill passed,” Rep. Gil Gutknecht (R-Minn.) told the Times. “If members had known that there were already in hand estimates that were significantly higher than the one that was advertised, I think it would have been even harder to get the votes.”

“You undermine the credibility and integrity of the legislative process any time you deliberately withhold information from Congress,” added Sen. Olympia Snowe (R-Maine). “You hamstring our ability to do the best job we can.”

So far, Scully, who left the government in December for private consulting work, denies threatening to fire Foster, although he admits joking about it, reported the Washington Post.

Scully told a reporter with Knight Ridder, which first reported Foster’s allegations, that Liz Fowler, a lead lawyer for the Democrats on the Senate Finance Committee, would confirm his efforts to ensure the actuary’s independence.

“He’s a liar,” she said of Scully, according to Knight Ridder.

Scully’s former boss, HHS head Tommy Thompson, also failed to back Scully last week, characterizing him as a tough-to-manage employee who may have crossed the line.

“Tom Scully was running this. Tom Scully was making those decisions,” Thompson insisted to the Post.

“There seems to be a cloud over this department because of this,” Thompson added last week, announcing the probe. “We have nothing to hide. So I want to make darn sure that everything comes out.”

In related news, the House of Representatives’ ethics committee last week said it was launching a formal investigation into allegations that Republican leaders tried to bribe Rep. Nick Smith (R-Mich.) into voting for the Medicare bill. Although the bill passed, Smith refused to change his vote and has since backed away from his accusations that he was offered a bribe, according to the Associated Press.

WASHINGTON
The U.S. Environmental Protection Agency (EPA) circumvented the standard rule-making process when drafting new guidelines for mercury emissions, blocking required scientific studies and drafting the rule with portions of text written by energy industry advocates, according to a report in the Los Angeles Times.

The revelations have forced EPA administrator Michael Leavitt to announce a review of the proposed rule and the process that created it.

Many environmental regulators, both Republican and Democratic, said the process of drafting the mercury rules violated accepted standards and appeared to have been driven not by science, but by politics.

Bush appointee Jeffrey Holmstead, who heads the EPA’s Office of Air and Radiation, and his senior advisor, William Wehrun, told EPA staffers that the normally required studies on the effects of mercury were not to be performed. Both men formerly worked as attorneys for Latham & Watkins, a national law firm representing large coal-fired utility plants, which wanted lenient regulations, noted the Times.

“I was floored,” one participant, who has served several administrations, told the Times. “We pointed out that the studies were required that the data runs were promised to a federal advisory committee.”

After being promised the research, that committee — a 21-member advisory panel tasked with making recommendations on evaluating the science behind mercury regulations — was effectively disbanded by the EPA.

“We were cut off without any warning or explanation,” panel co-chair John Paul, the Republican director of the Ohio Regional Air Pollution Control Agency, told the Times.

The Bush administration, packed with former energy industry executives, chose a process “that would support the conclusion they wanted to reach,” Paul charged.

The EPA then drafted the provisional rule for mercury emissions, slated to become effective in December, with portions of text written by Latham & Watkins and by West Associates, an energy industry advocacy group, according to the Times.

“I think it is outrageous,” Russell Train, a Republican who headed the EPA during the Nixon and Ford administrations, told the Times. “The agency has strayed from its mission in the past three years.”

Those charges echo separate reports released earlier this month by two groups of scientists alleging that politics instead of science are driving many of the Bush administration’s decisions, affecting policy and quality of life for decades to come.

EPA head Michael Leavitt last week said he now has asked for recommendations of needed studies — the same information that staffers say they were barred from gathering last year, according to the Times.

Former EPA head Christie Todd Whitman, who oversaw the agency while the mercury regulations were drafted, said she “did not know that we were cutting a process short or shortchanging the analysis.”

Taking fire, the EPA last week also admitted that its proposed regulations, which predicted a 70 percent drop in power-plant mercury emissions by 2018, ignored the agency’s determination that such a reduction would not be reached until 2025, if ever.

“What our models now show is that we wouldn’t get there as soon as we expected we would,” Jeffrey Holmstead, the Bush appointee accused of blocking the normal studies, told the Washington Post last week.

RIYADH, Saudi Arabia
After months of slowly embracing democratic reforms, the Saudi government last week reversed course, arresting pro-democracy activists and intellectuals pushing for human rights and government reforms.

Three days of arrests began in the port city of Jiddah, then moved to the capital city, Riyadh, and the Eastern Province, with at least a dozen reformers jailed, reported the Christian Science Monitor.

“It’s an extraordinary step backward in respect to the several moves forward they’ve taken,” an unidentified U.S. government official told the Monitor.

Those arrested included signatories of a December petition to the Saudi royal family, requesting that the country’s government be transformed into a constitutional monarchy, reported Al-Jazeera.

Under pressure from the U.S. government, the Saudi government recently has taken steps to increase openness, easing press restrictions, announcing planned municipal elections, and creating a human rights organization.

Many of those arrested last week were believed to be planning the formation of a rival human-rights watchdog independent of the government, which they contend cannot be wholly trusted to police itself.

With that announcement apparently imminent, the government of Crown Prince Abdullah began arresting critics, including signatories of the plan as well as a lawyer who had spoken critically of the arrests to Al-Jazeera, noted the Associated Press.

While the government later released three of the arrested reformists, at least nine remained behind bars, according to the AP.

The Saudi Press Agency issued a statement saying the activists and scholars were arrested “for interrogation about issuing statements that do not serve the unity of the homeland or the integrity of the society.”

UNITED NATIONS
United Nations secretary-general Kofi Annan last week announced a probe into charges that U.N. officials had colluded with Iraqi leader Saddam Hussein to bilk the U.N.’s Oil-for-Food program of billions of dollars.

The U.N. faces allegations that staffers participated in kickback schemes and ignored corruption while overseeing the Oil-for-Food program, launched in December 1996, reported the Reuters news agency.

That program allowed Iraq to export oil as long as revenues were used to pay for reparations or humanitarian needs for Iraqis hit hard by U.N. sanctions enacted after Iraq’s 1990 invasion of Kuwait.

The current Iraqi Governing Council says it has found documents detailing bribes, skimming, and other scams that helped Saddam Hussein and others steal between $2 billion and $4.4 billion from the Oil-for-Food program.

The U.S. General Accounting Office last week told a congressional subcommittee that the illicit gains pocketed by Saddam Hussein from such schemes and illegal oil exports now were estimated to be $10.1 billion — much higher than the previous estimate of $6.6 billion, reported CNN.

While pledging to investigate, Annan also noted that his hands were tied when it came to extending the probe to officials, middlemen, corporations, and banks from member nations, reported Reuters.

Annan called on member nations from the U.N. Security Council — Britain, China, France, Russian, and the United States among them — to authorize similar investigations into their officials and firms.

SEATTLE
The federal government has opened a criminal investigation into allegations that the U.S. Department of Agriculture (USDA) falsified records to bolster confidence in its testing system for mad cow disease.

The USDA, accused of having an inadequate testing system for mad-cow disease, filed reports documenting that the nation’s first known carrier of mad cow disease, slaughtered last December, was a “downer,” meaning it was too infirm to stand and had been flagged for testing.

The USDA’s testimony contradicts three people — the man who slaughtered the animal, the hauler who transported it, and the slaughterhouse owner — who say the cow was not a downer.

“That cow was a walker,” Dave Louthan, the man who says he killed the infected cow, told the Seattle Post-Intelligencer earlier this month. “I’ve been screaming about this for two months and they didn’t do anything about it.”

In a sharp break with the USDA and a slaughterhouse vet, Louthan said he believes the government’s documents were changed after the fact, disputing the officials’ records of the cow and its condition.

If Louthan and the others are right, the fact that the cow was tested may have more to do with sheer luck than with a reliable screening system as the USDA has been maintaining, according to critics.

“The fact that this cow was found to have mad cow was a fluke,” Jack Pannell, communications director for the watchdog Government Accountability Project, contended to the Post-Intelligencer. “The surveillance system should be examined to see whether it’s scientifically based and designed to actually find [mad cow].”

The USDA continues to deny any wrongdoing, insisting its records are accurate.

JOPLIN, Missouri
A former worker at a microwave popcorn factory was awarded $20 million last week by a Missouri jury that found two firms responsible for exposing him to a hazardous chemical that has damaged his lungs.

While working at the factory in the 1990s, Eric Peoples, 32, was exposed to massive amounts of diacetyl, a chemical that gives microwave popcorn its buttery flavoring.

Diacetyl also causes severe damage to the respiratory system when it is handled without proper ventilation and protection — deficiencies that Peoples alleged were present at the Jasper, Missouri, plant.

Last week, the jury agreed, finding that diacetyl’s manufacturers — International Flavors and Fragrances Inc. and its subsidiary Bush Boake Allen Inc. — failed to warn workers about its dangers.

They slapped the two companies with $20 million in penalties, including $18 million for Peoples, who must undergo a double-lung transplant in about 10 years.

The jury also awarded $2 million to Peoples’ wife Cassandra for loss of companionship, reported the Kansas City Star; life expectancy for recipients of lung transplants is an average of only 10 years, noted the Associated Press.

“Eric feels like he’s in prison,” his lawyer, Ken McClain, told jurors. “He’s going to eventually go through the physical pain of a lung transplant, knowing that he’s going back to prison again because he’ll eventually get lung disease again.”

Peoples last week said that while he was awed by the jury’s award, he wished it had never been necessary.

“I’d give it all back if I could,” Peoples told the Star. “Like I said at the trial, if they could give me my lungs back, I’d get up and walk out of this courtroom right now. But we all know that isn’t going to happen.”

Twenty of Peoples’ coworkers also have filed suit, with another 20 planning to sue, according to the Star. Similar suits also are under way in Illinois, Iowa, and Nebraska, reported the AP.

International Flavors and Fragrances Inc. said it will appeal last week’s ruling, insisting that while it produced the toxic buttery flavoring, it was not in charge of working conditions at the Missouri plant.

ARLINGTON, Virginia
USA Today last week said it had found “strong evidence” that former reporter Jack Kelley had lied, plagiarized, and fabricated portions of his work for the paper, which had nominated him for five Pulitzer prizes.

The paper’s findings come after seven weeks of inquiry into more than 720 stories written by Kelley from 1993 through 2003, reported USA Today.

Examining expense reports, phone records, official documents, and witness accounts, the review panel said it had found severe defects in Kelley’s work.

There is “strong evidence that Kelley fabricated substantial portions of at least eight major stories, lifted nearly two dozen quotes or other material from competing publications, lied in speeches he gave for the newspaper, and conspired to mislead those investigating his work,” the paper reported.

Kelley last week continued to deny any wrongdoing, although he failed to counter the panel’s findings with facts sufficient to outweigh the charges, according to the paper.

“I feel like I’m being set up,” Kelley said.

Last week, USA Today said it would continue to review Kelley’s work, would withdraw its five Pulitzer nominations for Kelley, and would flag his archived stories to alert readers to the probe.

“As an institution, we failed our readers by not recognizing Jack Kelley’s problems. For that I apologize,” USA Today publisher Craig Moon said last week. “In the future, we will make certain that an environment is created in which abuses will never again occur.”

WASHINGTON
With “March Madness” under way, millions of basketball fans are glued to the tube, getting an eyeful of both college basketball and beer ads, a combination that sends the wrong message, critics charged last week.

While beer and liquor ads are banned on nearly three-quarters of the nation’s college campuses, most schools still allow alcohol ads to play during sports broadcasts of their teams.

Critics contend that the split in policy effectively allows alcohol firms to use college athletes, many of whom are too young to drink, to drum up business for their products on TV, USA Today reported last week.

The Center for Science in the Public Interest has taken up the battle cry against such ad policies, asking schools to sign a pledge that they will eliminate alcohol ads during sports broadcasts.

Only 105 schools so far have signed on to “The College Commitment.” The center now is asking 1,200 more schools to get on board, according to USA Today.

“It’s inconsistent to say you want to discourage underage drinking and turn around and huckster the stuff on your broadcasts,” said Andy Geiger, athletics director at Ohio State, the first school to sign the pledge. “I’m concerned about the message.”

For their part, alcohol firms say there is no moral inconsistency in the current practice, saying the vast majority of people watching college sports on TV are of legal drinking age.

“I think it’s ethical and good business,” Anheuser-Busch vice president of consumer affairs John Kaestner told USA Today. “We want to be where our customers are.”

Neither the NCAA nor the University of Missouri at Columbia have a problem with the current policy, noted the paper.

“Anheuser-Busch is our No. 1 corporate client when it comes to cash,” Missouri’s athletics director said, pointing to the need to meet budget figures. “We have to deal with real-world revenue issues.”

From the Pew Global Attitudes Project:

“A year after the war in Iraq, discontent with America and its policies has intensified rather than diminished. Opinion of the United States in France and Germany is at least as negative now as at the wars conclusion, and British views are decidedly more critical. Perceptions of American unilateralism remain widespread in European and Muslim nations, and the war in Iraq has undermined Americas credibility abroad. Doubts about the motives behind the U.S.-led war on terrorism abound, and a growing percentage of Europeans want foreign policy and security arrangements independent from the United States. Across Europe, there is considerable support for the European Union to become as powerful as the United States.

“In the predominantly Muslim countries surveyed, anger toward the United States remains pervasive, although the level of hatred has eased somewhat and support for the war on terrorism has inched up. Osama bin Laden, however, is viewed favorably by large percentages in Pakistan (65 percent), Jordan (55 percent) and Morocco (45 percent). Majorities in all four Muslim nations surveyed doubt the sincerity of the war on terrorism. Instead, most say it is an effort to control Mideast oil and to dominate the world.

“There has been little change in opinion about the war in Iraq — except in Great Britain, where support for the decision to go to war has plummeted from 61 percent last May to 43 percent in the current survey. In contrast, 60 percent of Americans continue to back the war. [L]arge majorities in Germany, France, and Russia still believe their countries made the right decision in not taking part in the war. Moreover, there is broad agreement in nearly all of the countries surveyed — the U.S. being a notable exception — that the war in Iraq hurt, rather than helped, the war on terrorism.

“Americans have a far different view of the wars impact — on the war on terrorism and the global standing of the U.S. — than do people in the other surveyed countries. Generally, Americans think the war helped in the fight against terrorism, illustrated the power of the U.S. military, and revealed America to be trustworthy and supportive of democracy around the world.

“These notions are not shared elsewhere. Majorities in Germany, Turkey, and France — and half of the British and Russians — believe the conflict in Iraq undermined the war on terrorism. At least half the respondents in the eight other countries view the U.S. as less trustworthy as a consequence of the war. For the most part, even U.S. military prowess is not seen in a better light as a result of the war in Iraq.

“Publics in the surveyed countries other than the United States express considerable skepticism of Americas motives in its global struggle against terrorism. Solid majorities in France and Germany believe the U.S. is conducting the war on terrorism in order to control Mideast oil and dominate the world. People in Muslim nations who doubt the sincerity of American anti-terror efforts see a wider range of ulterior motives, including helping Israel and targeting unfriendly Muslim governments and groups.

“Large majorities in almost every country surveyed think that American and British leaders lied when they claimed, prior to the Iraq war, that Saddam Husseins regime had weapons of mass destruction. On balance, people in the United States and Great Britain disagree. Still, about three-in-ten in the U.S. (31 percent) and four-in-ten in Great Britain (41 percent) say leaders of the two countries lied to provide a rationale for the war.

“In that regard, opinions of both President Bush and British Prime Minister Tony Blair are negative. Large majorities in every country, except for the U.S., hold an unfavorable opinion of Bush. Blair is rated favorably only by a narrow majority in Great Britain but fully three-quarters of Americans. In contrast, U.N. Secretary-General Kofi Annan is viewed positively in nearly all nine countries surveyed, with Jordan and Morocco as prominent exceptions.”

“In practical matters, the end is not mere speculative knowledge of what is to be done, but rather the doing of it. It is not enough to know about Virtue, then, but we must endeavor to possess it and to use it, or to take any other steps that may make us good.”

– Aristotle (Greek philosopher, 384-322 B.C.)