Ethics Newsline®

Source: National Wildlife Federation press release, June 24.

Can something legal be wrong? Yes, but that distinction isn’t always obvious. Take the case of some Texas teachers who retired last week. They raced against a legal deadline to get themselves paid two pensions instead of one. If they — and Congress — had only zoomed the ethics lens out a bit farther and seen a bigger picture, maybe they wouldn’t have assumed so readily that whatever isn’t illegal must be ethical. Here’s the story:

Texas, unlike most states, runs its own pension fund, the Teacher Retirement System of Texas. Because educators pay into it during their working years, they’re excused from the federal Social Security system. That’s fair: Since they pay nothing to the feds, they get no Social Security checks when they retire.

With one exception. Until Congress closed a loophole last week, teachers whose final day of work was with a government entity that paid into both retirement systems qualified for Social Security if their spouse also paid into Social Security.

So for years, retiring Texas teachers have worked at their regular jobs right up to their next-to-the-last day. Then, for that final day, they hired on with one of about a dozen Texas school districts that paid into both funds and agreed to help teachers navigate the loophole. Most of these educators spent the day as furniture movers, file clerks, or janitors. But that was enough to make their records show they were paying Social Security at the time of retirement. So the federal government had no choice but to pay them a second pension on top of their Texas pension.

Those special districts loved it. According to the Dallas Morning News, districts charged teachers up to $700 for the privilege of working that single day. The hard-pressed districts used those fees to buy computers, school buses, and other necessities.

Nor did the teachers object to paying. The newspaper reports that more than 16,000 teachers have plunked down the fee. In return, some of them reaped as much as $1,700 extra each month for the rest of their retirement. This year, with the loophole closing July 1, an unusually large group of teachers chose to retire and claim their double benefit.

What’s wrong with this picture? After all, nobody did anything illegal. Didn’t the fee-reaping districts need that money for their schools? And didn’t traditionally underpaid teachers deserve a boost to their retirement income?

Congress didn’t think so, seeing the problem as one of inequitable treatment. Why, legislators asked, should some government employees get to double dip while others don’t?

An equally potent argument centers on the unfairness of reaping an unearned benefit. True, Social Security isn’t meant to repay only what you contribute. It’s an insurance plan, not a savings account. While some workers put in more than they get back, the reverse is also true. As with any insurance policy, however, the deal between Social Security and working Americans is a simple one: If you pay nothing in, you’re not covered. If, like the Texas teachers, you violate that deal, who pays? All of the other insured workers across the country. Is that fair?

Then there’s the question of teachers as exemplars. What’s the lesson they send their students when they willingly engage in antics as weird as they are extreme? When they travel for one day to hire on with a district where they’ve never worked, forking over substantial sums to do menial tasks, how are they helping their students understand the difference between the appearance of and the substance of true work? How do they have any standing to critique the ethics of some parts of corporate America? When accountants invent curious shelters that cause investors or taxpayers to pay more so that a few insiders can benefit, how can these teachers help their students understand the difference between the legal and the ethical?

But it’s easy to blame the teachers. It’s easy to forget the age-old truth that few things tempt good people more than easy money. Congress is to be commended for closing down that temptation. But it’s to be blamed for placing such a massive ethical burden on otherwise good people in the first place. We sometimes imagine that legislative power resides in being able to say, That’s illegal. More dangerous is the power to say, That’s legal — to take a situation that ought not to be and say, That’s okay. When teachers are tempted to draw out what they haven’t earned, shift the financial burden onto other taxpayers, and then imagine they’ve done nothing wrong, something really is wrong — not only with them, but with the system around them.

©2004 Institute for Global Ethics

“There may have been 3,000 to 4,000 people here as of 5 P.M. yesterday. Now, as you can see, no one is here.”

– United Nations spokesman Fred Eckhard, looking over the empty refugee camp at Mashtel in Sudan’s Darfur province. Hours before UN secretary general Kofi Annan was to visit, Sudanese authorities emptied the camp of thousands of refugees victimized by government forces and the Janjaweed, renegade militias accused of engaging in ethnic cleansing. The months-old genocide has reached a crisis stage, with Western nations finally interceding and demanding that the government rein in the abusive forces. (“UN Officials Stunned to Find Refugee Camp Emptied in Sudan,” Chicago Tribune, July 2)

WASHINGTON
The U.S. Supreme Court last week issued a firm legal rebuke to the Bush administration, handing down two decisions denying the executive branch’s claims that it can hold enemy combatants indefinitely without appeal.

After the terrorist attacks of 9/11, the Bush administration claimed that wartime powers gave the president the right to round up perceived enemies, including U.S. citizens, and hold them incommunicado as long as it deemed necessary.

Last week, the Supreme Court said such detentions are unconstitutional and must stop, warning that, “a state of war is not a blank check for the president when it comes to the rights of the nation’s citizens.”

That opinion from Justice Sandra Day O’Connor came in the case of Yaser Hamdi, a U.S. citizen held for two years without charges on the basis of a confidential nine-paragraph statement from the Pentagon, reported the New York Times.

In its 8-to-1 ruling, the court said Hamdi’s detention was either illegal from the outset or had become illegal due to failures by the Bush administration to allow Hamdi to challenge his incarceration — a violation of constitutionally protected due process.

“Indefinite detention for the purpose of interrogation is not authorized,” O’Connor wrote. “History and common sense teach us that an unchecked system of detention carries the potential to become a means for oppression and abuse of others.”

While striking a blow to the sweeping wartime powers claimed by the Bush administration in its anti-terrorism campaign, the court did allow some wiggle room, noting that that judicial discretion should be used to balance detainees’ rights with the nation’s safety.

“Striking the proper constitutional balance here is of great importance to the nation during this period of ongoing combat,” O’Connor noted. “But it is equally vital that our calculus not give short shrift to the values that this country holds dear or to the privilege that is American citizenship.”

That view was echoed in the court’s related ruling, which centered on 16 of the hundreds of enemy combatants now being held at a U.S. naval base in Guantánamo Bay, Cuba.

The Bush administration had argued that the detainees, seized during the post-9/11 war on Afghanistan, were not being held on U.S. soil, were not U.S. citizens, and therefore lacked the protections governing both.

The court rejected those arguments, ruling that the naval base, while on leased Cuban land, had long been operated and functioned essentially as U.S. land on which U.S. law holds sway, and that the legal principle of habeas corpus applied not to the detainees, but to the one — here, the U.S. government — doing the detaining.

Citizens and noncitizens alike must be allowed to challenge their confinement, the court ruled, according to the Times.

The court said detainees must be allowed a “fair opportunity to rebut the government’s factual assertions before a neutral decision-maker” or judge, but stopped short of outlining the particulars of the process.

That view was reproved by Justice Antonin Scalia, who criticized the decision as too far-reaching.

In a third case, the court turned away an appeal by a lawyer representing Jose Padilla, a U.S. citizen arrested in Chicago and accused of being an enemy combatant. The court dismissed the case on a technicality, ruling that it should have been filed in South Carolina, where Padilla is now being held, instead of in New York, when he was initially detained.

WASHINGTON
In a controversial case, the U.S. Supreme Court last week upheld the right of foreigners to use U.S. courts to sue over human rights abuses committed overseas — a decision closely watched for its implications in the wake of abuse at the Abu Ghraib prison.

In its decision, the court ruled that an obscure 1789 law passed by the first U.S. Congress and signed by President George Washington has modern applications that go beyond its initial target of thwarting high-seas piracy and similar crimes.

According to the court’s 6-to-3 ruling, the law, known as the Alien Tort Statute (ATS), also sweepingly protects people anywhere in the world from human rights abuses perpetrated by any foreign power.

That view is bitterly disputed by many U.S. companies, some of which currently face lawsuits for alleged abuses — often energy firms accused of suppressing locals or damaging their lands — reported the New York Times.

The Bush administration also fought the ruling, which could have implications stemming from the government’s actions in Iraq. Two government contractors, CACI and Titan Corp., recently were sued on charges of abusing Iraqi prisoners in their custody. That lawsuit was filed partly on the basis of the ATS, reported the Associated Press.

While the court said such lawsuits are authorized by U.S. law, it urged judges to exercise caution in accepting ATS-based cases that could impact the purview of the other branches of government.

“There is a strong argument that federal courts should give serious weight to the executive branch’s view of the case’s impact on foreign policy,” Justice David Souter cautioned in the court’s ruling.

While last week’s decision was hailed as a landmark win by human rights groups, the specific case that led to the ruling was defeated, reported the AP.

In that case, a Mexican doctor abducted by bounty hunters hired by the U.S. government filed a lawsuit after eventually being acquitted of drug charges in a U.S. court. While a federal appeals court said damages were warranted, the Supreme Court disagreed, ruling unanimously that his abduction and detention were too fleeting to warrant classification as human rights abuses.

WASHINGTON
The U.S. Supreme Court again blocked a law meant to keep children from viewing Internet porn, ruling that the measure was too broad, could curb access to legitimate health sites, and could infringe on the right of adults to access legal content.

The ruling in Ashcroft v. American Civil Liberties Union marked the third time that the court has ruled against a 1998 law passed by Congress, saying that while the law’s intentions are good, its mechanics likely violate the First Amendment, reported the Associated Press.

The court’s 5-to-4 majority said that the case should be debated again in trial so that new technology, such as Internet filters that could block porn from kids, could be considered as a better alternative to a possibly unconstitutional law.

Special to Newsline from Canadian correspondent Errol P. Mendes

OTTAWA
The Supreme Court of Canada last week issued a controversial decision that ISPs cannot be held responsible for copyright infringement by music downloaders.

The Court ruled that when it comes to the transmission of music files, ISPs are merely conduits for the information, analogous to the telephone system.

To decide otherwise would be impractical and unfair to the ISPs and prevent the free flow of information, according to the court.

Justice Ian Binnie, writing for the court, stated that “the capacity of the Internet to disseminate works of arts and intellect is one of the great innovations of the information age.”

The ISPs had argued that they were merely conduits and had not authorized any infringement of copyright belonging to music producers. The music industry fears that as a result of the decision they would be limited to going after individual downloaders, which is difficult to do in Canada due to other court decisions.

The court did leave the door open to possible copyright infringement actions against ISPs that have provided specific portals for music downloading.

JERUSALEM
Ordering the government to find a better balance between security and humanitarian needs, Israel’s High Court last week took steps to block and reroute construction of a wall isolating parts of the West Bank.

In two decisions, the court ruled that while Israel has the right to build the controversial wall as a means of protecting itself, walled-off Palestinians also have the right to have their needs and communities considered.

Last Wednesday, the court ordered Israel to reroute a 19-mile section of the 400-mile wall, saying its path was ill considered and would devastate many Palestinians by cutting them off from farms, school, and jobs, according to the BBC.

The next day, the court granted a restraining order to freeze construction on another section of the 400-mile wall, indicating that the path again may need to be altered, reported the New York Times.

Israel, which seized the occupied land in the 1967 war with Jordan, says the barrier is necessary to prevent access by Palestinian suicide bombers. Palestinians say the move is simply another land grab, according to the BBC.

Whatever the motive, the three-judge panel of the High Court last week said Israelis’ safety must be balanced with Palestinians’ welfare as the barrier divides the population.

“The route that the military commander established for the security fence … injures the local inhabitants in a severe and acute way while violating their rights under humanitarian and international law,” Chief Justice Aharon Barak wrote for the court.

Israel’s Defense Ministry said it will abide by the rulings.

The International Court of Justice, which has been asked to examine the legality of the wall, is expected to issue its non-binding findings later this week, according to the BBC.

WASHINGTON
Continuing to court both controversy and conservative Christians, the Bush/Cheney reelection campaign is asking churchgoers to lobby their fellow congregants and send in church directories to campaign organizers.

The latest moves were first reported by the Washington Post, which obtained a copy of a Bush/Cheney document sent to conservative Christians with an August-through-October timeline for campaign activities.

The material asks delegates to supply state campaign headquarters with church directories and lists of “all nonregistered church members and pro-Bush conservatives,” “recruit 5 more people in your church to volunteer for the Bush Cheney campaign,” and post notices on church bulletin boards or in Sunday programs “about all Christian citizens needing to vote.”

Bush/Cheney spokesman Scott Stanzel said the efforts to court evangelicals are a legitimate move to involve everyone in the political process and do not violate the letter of the law, reported the Associated Press.

The Post notes that others are not convinced, especially in the wake of other recent moves to solicit help from churches, including a request by President Bush for help from the Vatican.

The IRS declined to say last week whether the latest request by the campaign would cause participating churches to lose their nonprofit status, but issued a warning following news last month that Bush/Cheney had sent a letter seeking to recruit 1,600 “friendly congregations” in Pennsylvania for campaign work

Churches, like other tax-exempt charitable groups, “are prohibited from directly or indirectly participating or intervening in any political campaign on behalf of, or in opposition to, any candidate for public office,” the IRS warned in a June 10 letter to the Republican and Democratic national committees.

While religious organizations are allowed to engage in nonpartisan debates, distribute voter guides, and conduct voter registration drives, if those efforts show “a preference for or against a certain candidate or party . . . it becomes a prohibited activity,” the letter said, according to the Post.

WASHINGTON
More than 220 government officials have spent time on the payrolls of the country’s top 20 federal contractors over the past seven years, according to a new report released last week by a watchdog group.

The report from the Project on Government Oversight (POGO) highlights what is widely known as the revolving door — lawmakers’ cozy relationship with the federal contractors they once regulated or worked for.

“The revolving door has become such an accepted part of federal contracting in recent years that it is frequently difficult to determine where the government stops and the private sector begins,” the report said.

Lockheed Martin, the world’s largest defense contractor, has taken the most turns in the revolving door, with 57 senior government officials on the payroll at some point. Boeing (33), Raytheon (23), Northrop Grumman (20), and General Dynamics (19) were next in line, reported the Washington Post.

Prompted by a recent scandal involving a senior Defense official hired by Boeing after helping the company negotiate a controversial contract, Sen. John McCain (R-Ariz.) plans to hold hearings on the subject this month.

But others say the system is working fine, making for better products and services by facilitating a give-and-take between regulators, lawmakers, corporate boards, and company executives with real-world experience.

“Who do you want designing equipment that is going to be used in combat? Individuals who have been on the battlefield,” Lockheed spokesman Tom Jurkowsky, a former Navy officer, told the Post.

And while some people overstep, former Rep. Vic Fazio (D-Calif.), who now works for a firm that lobbies his former colleagues, says there are ways that companies can stay in the clear.

Having a former member of Congress as a director is a good way “of keeping [a company] in touch with that world,” Fazio, who serves on Northrop Grumman’s board, told the Post. “I do not lobby for them.”

Last week’s report contends that more safeguards are needed, according to United Press International.

“Legal loopholes need to be closed, conflicts of interest and ethics laws need to be simplified, and the entire process needs to be open to public scrutiny,” POGO general counsel Scott Amey told UPI.

SIOUX FALLS, South Dakota
A frequent speeder on his home state’s roadways, former U.S. Rep. Bill Janklow, who was convicted earlier this year of killing a motorcyclist while speeding, was given a pass for years by the state’s troopers, according to a local paper that received a copy of an official inquiry.

Janklow, who served as South Dakota’s governor from 1979 to 1987, was given 11 speeding tickets as a private citizen from 1990 to 1994, reported the local Argus Leader.

But after winning a second term in November 1994, state troopers backed off, issuing no speeding tickets despite stopping him 16 times, according to Leader.

Last year, Janklow ran a stop sign while speeding on a rural road, killing a motorcyclist.

In a report from the South Dakota Highway Department, the troopers who declined to ticket Janklow said they did so for a variety of reasons, including respect and fear of retaliation.

Four of the troopers said they let Janklow go because they “felt they were instructed not to arrest the governor or feared repercussions by doing so,” patrol superintendent Col. Dan Mosteller wrote in the official report.

Mosteller and his predecessors all insist they never pressured troopers to give Janklow preferential treatment.

Janklow claimed that he had justification to speed, according to the Associated Press. “Almost every incident where I was driving as governor I was going to important things for South Dakota,” Janklow said. “I lived in Pierre. Pierre is 100 to 150 miles from anyplace where there’s concentrations of people.”

Current South Dakota Gov. Mike Rounds said the report’s findings “confirmed that we had to step back and as management go back and confirm with the Highway Patrol officers that they should treat everybody the same, regardless of whether they were a judge or a legislator or a constitutional officer or the governor.”

Janklow was released from prison in mid-May after serving 100 days for reckless driving and the second-degree manslaughter of motorcyclist Randy Scott, according to the AP.

LONDON
A new report released last week warns that U.K. nonprofits are failing to do an adequate job of explaining their activities, finances, and priorities, warning that they could lose donors’ trust if they fail to improve.

The report was issued by the Charity Commission, an industry watchdog, which reviewed the annual reports and accounts of 200 of the largest nonprofits in England and Wales, reported the Guardian.

The survey found that 73 organizations relying primarily on government funding were among the least transparent, and that nearly half — 92 — failed to meet government requirements on accounting for the work of volunteers.

Discussing the report’s findings, chief charity commissioner John Stoker noted that “while there are some very good examples, too many charities in our study did not meet even the basic requirements.”

Warning that a loss of transparency could cloud donors’ trust and cripple nonprofits, Stephen Ainger, chief executive of Charities Aid Foundation, told the BBC that the industry needs to take action quickly.

“If we are to retain the trust and confidence of donors, the charity sector must be raising its game and providing the range of information that donors are likely to demand,” Ainger noted.

From Public Agenda:

“When typical citizens talk about business ethics, what really gets under their skin are executives who enrich themselves while driving their companies into the ground. Protecting employees’ jobs, they say, should be a top ethical priority for American business. When executives talk about ethics, they are very concerned about the damage that recent scandals have done to business’ reputation and the need to restore public trust.

“In a new study based on focus groups with typical Americans and interviews with executives and experts, Public Agenda in collaboration with the Kettering Foundation found that ordinary citizens define ethics more broadly than do business executives. But in ‘A Few Bad Apples? An Exploratory Look at What Typical Americans Think about Business Ethics Today,’ the two groups found some areas of agreement on such issues as the root causes of corporate scandals and the debate about new laws and regulations. But views differed on executive pay and were dramatically different on the subject of job protection and layoffs.

“According to Public Agenda president Ruth A. Wooden, ‘…Business and the public are coming from very different starting points: the public as consumers and employees, and business leaders as managers and decision makers. What is especially interesting is that both groups see a general decline in values contributing to recent scandals. Business leaders were especially concerned that the actions of a few ‘bad apples’ had done much to tarnish the reputation of the vast majority of honest and ethical executives.’

“Americans and Executives Split on Jobs

“Saving jobs is where business leaders and citizens show marked differences of opinion. Over and over, focus group participants said that … preserving jobs should be a major ethical priority for business and that layoffs should be a last resort. In contrast, most business leaders saw jobs as a business rather than an ethical or moral issue. In interviews, they made it clear that sometimes layoffs are an inevitable part of staying competitive.

“Greed and Weak Values

“Focus group participants often said greed and poor values were at the root of many scandals. They believed that executives at some of these corporations had either lost their moral bearings or never had sound values to begin with.

“Focus group participants were most aggravated over Enron-type situations where executives enriched themselves as their company was dissolving, pensions were being lost, and employees were losing their jobs….

“Business leaders cited the problem of greed and declining values in society as a whole, as well as on the part of certain corporate executives. But they also stressed that by far, most business executives act ethically, even in the face of relentless pressures for profits that can make it tempting to cut corners for short-term gains. They also stressed the importance of moral leadership and said that a company’s ethical stance is set at the very top.

“Both business and the public agreed that recent corporate scandals are part of a larger erosion of ethics and morals. ‘People just do things to get ahead now. We just think about ourselves and not the community. It’s a more selfish time,’ said a Texas woman.

“Reward Success, Not Failure

“Some business leaders told Public Agenda that executive pay had gotten out of proportion, and a number predicted that increasingly, compensation will be tied to fundamental performance. However, others noted that even if a company is struggling and laying off workers, high pay for a strong leader can make sense.

“While ‘baffled and even indignant’ at executives who cash in while their companies are foundering, many focus group participants did not seem to begrudge high salaries for executives who were instrumental to their companies’ success. They admired those who protect their employees, provide a good product, and respect their customers….”

“A community is like a ship; everyone ought to be prepared to take the helm.”

– Henrik Ibsen (Norwegian poet and dramatist, 1828-1906)