Ethics Newsline®

When Chile’s aging former strongman, Gen. Augusto Pinochet, was indicted last week on charges of murder and kidnapping, I was reminded of an extraordinary day that I spent in the Chilean capital, Santiago, in the mid-1990s. First, some background.

Pinochet’s infamous rule, which began in 1973 with a coup against the Marxist-leaning president, Salvador Allende, ended in 1990. Chile’s National Commission on Truth and Reconciliation published its report in 1991. Amid massive controversy, the Commission offered state-sponsored murderers immunity from prosecution in return for their complete truth-telling.

From those findings the Commission built a meticulous historical edifice. It pointed to horrendous crimes — deaths, disappearances, torture, rapes — by the right-wing regime. Yet the economy, which had been sliding toward a Cuba-like paralysis under President Allende, had become one of the beacons in South America. As a gesture of reconciliation, Pinochet’s successor, President Patricio Aylwin, allowed the general to remain as head of the armed forces.

In that context, I was invited by Mónica Jiménez de Barros — a former member of the Commission, an early target of Gen. Pinochet, a member of the Institute’s advisory council, and one of the most morally courageous people I know — to give a daylong seminar on ethics for some leading public figures in Santiago. From the opening introductions, it was clear this would be quite a day. At a table toward the rear sat a group of liberal editors and writers — long-haired, fiery-eyed, passionate, and articulate. At a table down front were two close-cropped colonels in crisp uniforms who defiantly introduced themselves not merely as army officers but as officers in “General Pinochet’s army.”

As we began, I shared with them a framework for thinking about right-versus-right dilemmas, particularly those that pitted justice against mercy. Mónica then shuffled the tables to put officers and journalists together. When we began our small-group discussions of several dilemmas, I steeled myself for outbursts and rage.

They never came. Somewhere in my files there’s a photograph of a well-starched colonel and a bohemian journalist leaning across a table toward each other, gesturing. But there’s nothing fractious in their interchange. Instead, they’re deep in conversation about the moral issues surrounding one of the dilemmas.

At the end of the afternoon, one of the colonels sought me out. Shaking my hand — clutching it, in fact, until he’d finished what he had to say — he told me that he wished everyone in the army could have been there. As he spoke, his eyes were moist with feeling.

A moment like that says something powerful about the ability of moral dialogue to bring opposing sides together. But it says even more about the courage of Chileans of every political stripe to face up to the degradation of state-sponsored terror and lay it to rest. The details of those crimes have resurfaced in the wake of Judge Juan Guzmán Tapia’s charges. So have some old questions. Should a tyrant stand trial for his crimes, or should a society seek healing by moving beyond the punishment of a frail octogenarian? It’s the same dilemma that faced the National Commission, where justice cried out for punishment while mercy demanded some kind of forgiveness.

Yet the judge’s bold indictment last week also raises new questions. Does it indicate that Chile has matured to the point that it can implement the kind of justice where murderers get their due? Or does it merely indicate that Chile has hardened to the point of exacting revenge? Will Gen. Pinochet’s pending trial respect a core tenet of the National Commission, which is that those who tell the truth win amnesty? If he tells all, will ethics demand that he be forgiven even though the evidence demands that he be punished? Whatever the outcome, will Chilean society be the better or the worse for it?

That last question matters most. Its answer, I think, lies with the colonels and the bohemians of today. If Pinochet’s prosecution drives them back to their respective tables of animosity and distrust, Chile itself will be the loser. But if both find closure to a grisly chapter in their nation’s grand history — so that they can continue in civil dialogue with one another — the judge’s effort will have been well rewarded.

©2004 Institute for Global Ethics

“Troops crossed the line of departure.”

– U.S. Marine 1st Lt. Lyle Gilbert, speaking on October 14 to CNN in an attempt to deceive insurgents in Falluja about the timing of last month’s U.S.-led offensive. The military’s attempt to dupe insurgents — the attack actually did not start until three weeks later — was part of a disinformation campaign that also effectively deceived U.S. viewers of CNN.

“Information is part of the battlefield in a way that it’s never been before. We’d be foolish not to try to use it to our advantage.”

– Unnamed senior Bush administration official, discussing the government’s use of psychological operations, also known as “psy-ops”

“The movement of information has gone from the public affairs world to the psychological operations world. What’s at stake is the credibility of people in uniform.”

– Unnamed senior Defense Department official, discussing the potential threat posed by psychological operations, propaganda, and disinformation used by the government

LONDON
The British government’s effort to indefinitely detain terrorism suspects was dealt a severe blow last week by the country’s highest appeals court, which rejected the policy as a violation of U.K. law and principles.

In an 8-to-1 ruling, the special panel of the House of Lords said the government’s policy contravened Britain’s heritage of freedom as well as the European Convention on Human Rights, to which Britain is a signatory.

In passing the 2001 Anti-Terrorism, Crime and Security Act, the British Parliament gave Prime Minister Tony Blair’s government the right to lock up indefinitely a subset of foreigners without charging or trying them.

That policy, which mirrors a Bush administration position struck down in June by the U.S. Supreme Court, threatens a fundamental premise of the nation’s liberty — “freedom from arbitrary arrest and detention” – Lord Hoffman wrote in a caustic denunciation.

“The real threat to the life of the nation, in the sense of a people living in accordance with its traditional laws and political values, comes not from terrorism but from laws such as these,” Hoffmann wrote, according to the New York Times. “That is the true measure of what terrorism may achieve. It is for Parliament to decide whether to give the terrorists such a victory.”

The justices told Parliament to either scrap the detention policy as a violation of European human rights, or amend it so the policy no longer covers only foreign suspects who would be tortured if deported.

“What cannot be justified here is the decision to detain one group of suspected international terrorists defined by nationality or immigration status, and not another,” Lord Bingham of Cornhill wrote.

The country’s new Home Office head, Charle Clarke, said the current detainees — 17 men, according to press estimates — will not be released until the government has time to consider its position.

LOS ANGELES
Energy firm Unocal Corp. last week agreed to settle charges that it turned a blind eye to atrocities allegedly committed in Myanmar, also known as Burma, by military forces protecting the company’s $1.2 billion oil pipeline.

Last week’s announcement ends two lawsuits filed against California-based Unocal over allegations that villagers were raped, murdered, and forced into labor to build the pipeline between 1993 and 1998.

Fourteen anonymous villagers, backed by U.S. human rights groups, filed the lawsuits, which Unocal fought until a federal court ruling in June set a trial date for last week, reported the Associated Press.

On the same day that trial was to begin last week, both parties said the courtroom showdown would be called off in favor of a settlement that will pay villagers and fund education and living condition improvements.

While the precise terms were not disclosed, attorneys issued a joint statement saying the deal would “provide substantial assistance to people who may have suffered hardships in the region.”

California State Treasurer Phil Angelides, who last year warned Unocal on its treatment of workers abroad, last week called on the company to provide details of the settlement, according to the AP.

“I made it very clear to Unocal over one year ago that we need a coherent explanation as to why they continue to operate in Burma, a country in which American companies are now banned from making new investments,” Angelides said. “Because the allegations of human rights violations — which include murder, rape, and slave labor — are so severe, nothing short of full transparency and a full commitment to human rights by Unocal will suffice.”

While the United States banned corporate involvement with Myanmar in 1997, Unocal continues to operate there under a waiver due to contracts that predated the law, noted the Reuters news agency.

Unocal, which has weathered sharp criticism for its continued involvement with the country’s repressive regime, says its contracts have helped improve the education, health care, and economic opportunities for locals, added Reuters.

A joint status report on the settlement must be filed with a federal court by February 1, 2005.

WASHINGTON
After weathering more than two years of scandal, Time Warner agreed last week to pay $510 million to settle civil and criminal charges related to accounting irregularities at its AOL operations.

The proposed deal centers on more than $400 million in AOL income that was improperly booked as advertising revenue, along with other transactions from 1999 through 2002 still under review.

The settlement calls on Time Warner, which merged with AOL in 2001, to pay $300 million to the Securities and Exchange Commission (SEC) and $60 million to the Justice Department.

The firm also will be required to adopt institutional reforms and ante up $150 million for a civil litigation fund for shareholders who have sued the company over the scandal, which cost them billions of dollars, reported the New York Times.

Anticipating the proposed penalties, Time Warner already has set aside $500 million, noted the Washington Post.

While parts of the deal still need approval, news of the settlement raised hopes that Time Warner will be able to strengthen its revenues as regulators loosen strictures slapped on the firm two years ago.

As a signal of the détente, AOL and Time Warner have promised to cooperate with continuing investigations, and the Justice Department said it would defer criminal prosecution for two years and drop it altogether if the company reforms, according to the Post.

Still, regulators said Time Warner will have to earn back their trust, warning that no executives have been given immunity and that the government will be watching the firm to make sure reforms take hold.

If the company fails, “the deal is off, and they are in a world of trouble,” U.S. Deputy Attorney General James Comey told USA Today.

WASHINGTON
Federally backed mortgage finance giant Fannie Mae used improper accounting techniques for more than three years, skewing its books and misleading investors, according to a review by regulators.

The examination of Fannie Mae’s financial records was undertaken by the U.S. Securities and Exchange Commission (SEC) after rival mortgage firm Freddie Mac fell foul of accounting rules in 2003.

The Freddie Mac scandal forced a $5 billion restatement and the removal of five senior executives, reported the Reuters news agency. Fannie Mae and its top executives likely face a similar fate, analysts warned last week.

SEC chief accountant Donald Nicolaisen last week said Fannie Mae “did not comply in material respects” with two standard accounting practices,” helping the company to hide revenue volatility from investors from 2001 to mid-2004.

The SEC review found that Fannie Mae improperly booked $13.5 billion in losses and $4.5 billion in profits over the years, likely forcing the firm to restate revenues by a total of $9 billion, reported the Washington Post.

Last month, Fannie Mae chairman and chief executive Franklin Raines said such a restatement was likely, insisting that the accounting rules were “highly complex” and that the firm always “intended to do the right thing.”

The Office of Federal Housing Enterprise Oversight (OFHEO), the supervising agency slammed for being asleep at the wheel when Freddie Mac’s abuse came to light, disputed Raines’ contention, issuing a scathing report in September that called Fannie Mae’s accounting violations “pervasive and willful,” according to the Post.

“It’s not a matter where they made a good-faith effort to try to comply with the rules,” OFHEO director Armando Falcon, Jr., told lawmakers. “They did not comply with rules that they clearly understood.”

While the SEC and others continue investigating, a Fannie Mae spokesman last week said the company “will take the steps necessary to comply fully with the SEC’s determination.”

WASHINGTON
The U.S. Food and Drug Administration (FDA) continued to face tough scrutiny last week over its procedures for approving and monitoring the safety of drugs, with lawmakers urging the agency’s head to protect a prominent whistle-blower.

Twenty-two members of Congress signed a letter to acting FDA head Lester Crawford, asking about reports that whistle-blower David Graham, who testified last month about FDA problems, has been facing retaliation by agency officials.

The letter asks that an alleged “smear campaign waged by some within the agency” be investigated, with “appropriate action … taken against those who were involved,” reported the Associated Press.

FDA spokeswoman Kathleen Quinn said the agency would “not comment on personnel matters.”

In related news, advocacy groups last week released the full results of a 2002 survey of FDA scientists that examined the researchers’ confidence in the FDA’s drug-approval and safety-monitoring processes.

The survey, released only after a vigorous Freedom of Information Act claim, found that while a majority have confidence in the FDA drug-approval process, more than a third were only “somewhat confident” or had no trust in the safety decisions.

Roughly two-thirds of the researchers were not at all confident or only somewhat confident that the agency adequately monitors the safety of drugs once they are put on the market.

Nearly one-fifth of the surveyed scientists said they had come under pressure to approve a drug despite concerns about its safety, efficacy, or quality. More than one-fifth said scientific dissent was either discouraged or stifled entirely, reported the Washington Post.

“The scientists’ concerns warrant further investigation as Congress reviews drug approval practices at FDA,” Union of Concerned Scientists executive director Kathleen Rest said in a press release.

BRASILIA, Brazil
More than 90 people, including the former head of the Central Bank, should be investigated for probable money laundering, a congressional probe in Brazil has concluded.

Punctuating years of questions and investigative sorties, Congress last week released a 742-page report examining suspected money-laundering transactions worth $80 billion to $150 billion.

The findings of the so-called Banestado investigation are preliminary and may be amended by Congress before the final version is put to a vote this week, reported the BBC.

The report names 91 people, including several prominent figures, as likely perpetrators of money laundering from sources spanning drugs, smuggling, and other crimes, noted the Reuters news agency.

Among those singled out are former São Paulo mayor Celso Pitta and former Central Bank president Gustavo Franco, who established bank account rules that facilitated many of the suspect fund transfers.

Some have accused the government’s investigation of being politically motivated, reported Reuters.

From Cornell University:

“In a study to determine how much the public fears terrorism, almost half of respondents polled nationally said they believe the U.S. government should — in some way — curtail civil liberties for Muslim Americans, according to a new survey released today (Dec. 17) by Cornell University.

“About 27 percent of respondents said that all Muslim Americans should be required to register their location with the federal government, and 26 percent said they think that mosques should be closely monitored by U.S. law enforcement agencies. Twenty-nine percent agreed that undercover law enforcement agents should infiltrate Muslim civic and volunteer organizations, in order to keep tabs on their activities and fundraising. About 22 percent said the federal government should profile citizens as potential threats based on the fact that they are Muslim or have Middle Eastern heritage. In all, about 44 percent said they believe that some curtailment of civil liberties is necessary for Muslim Americans.

“Conversely, 48 percent of respondents nationally said they do not believe that civil liberties for Muslim Americans should be restricted….

“The survey also examined the relation of religiosity to perceptions of Islam and Islamic countries among Christian respondents. Sixty-five percent of self-described highly religious people queried said they view Islam as encouraging violence more than other religions do; in comparison, 42 percent of the respondents who said they were not highly religious saw Islam as encouraging violence. In addition, highly religious respondents also were more likely to describe Islamic countries as violent (64 percent), fanatical (61 percent), and dangerous (64 percent). Fewer of the respondents who said they were not highly religious described Islamic countries as violent (49 percent), fanatical (46 percent), and dangerous (44 percent). But 80 percent of all respondents said they see Islamic countries as being oppressive toward women.

“‘Our results highlight the need for continued dialogue about issues of civil liberties in time of war,’ says James Shanahan, Cornell associate professor of communication and a principal investigator in the study….

“Shanahan notes: ‘Most Americans understand that balancing political freedoms with security can sometimes be difficult. Nevertheless, while a majority of Americans support civil liberties even in these difficult times, and while more discussion about civil liberties is always warranted, our findings highlight that personal religiosity as well as exposure to news media are two important correlates of support for restrictions. We need to explore why these two very important channels of discourse may nurture fear rather than understanding.’

“Researchers found that opinions on restricting civil liberties for Muslim Americans vary by political self-identification. About 40 percent of Republican respondents agreed that Muslim Americans should be required to register their whereabouts, compared with 24 percent of Democratic respondents and 17 percent of independents. Forty-one percent of Republican respondents said that Muslim American civic groups should be infiltrated, compared with 21 percent of Democrats and 27 percent of independents.

“On whether mosques should be monitored, about 34 percent of the Republicans polled agreed they should be, compared with 22 percent of Democrats. Thirty-four percent of Republicans said that profiling of Muslim Americans is necessary, compared with 17 percent of Democrats.

“The survey also showed a correlation between television news-viewing habits, a respondent’s fear level, and attitudes toward restrictions on civil liberties for all Americans. Respondents who paid a lot of attention to television news were more likely to favor restrictions on civil liberties….”

“Liberty is not merely a privilege to be conferred; it is a habit to be acquired.”

– David Lloyd George (British statesman and prime minister, 1863-1945)