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Archive for March, 2005

Public Rebukes Congress for Intervening in Schiavo Case

Mar 28th, 2005 • Posted in: Statline



What is Life?

Mar 28th, 2005 • Posted in: Commentary

Several times in recent weeks, I’ve clicked on the news in my hotel room to find Terri Schiavo’s now-familiar face staring at me from her hospital bed. That’s not surprising, except that the hotels were in Budapest, Vienna, and Prague.

Why has the case of a brain-damaged woman in a Florida hospice achieved such global resonance? The right-versus-right dilemma it raises is, after all, rather straightforward. On one hand, it’s right to honor the sanctity of life. Ms. Schiavo deserves to live as much as any other patient. You can make a powerful moral case for doing whatever needs to be done to protect her life.

On the other hand, it’s right (as the courts have decreed) to remove her life support system. Here the moral case rests on the need to respect her wish, as shared with her husband and found persuasive by the courts, not to use artificial methods to prolong her life. This moral case also rests on determinations by physicians that, given her condition, continued medical care would be futile.

How to resolve the issue? Should we argue, with Immanuel Kant, that ethics gets done when we take our stand on a maxim — like “always preserve life” — and seek to turn it into a universal principle? If so, we’ll probably contend that she should be kept alive, no matter the consequences and no matter her wishes. But what if we argue, with John Stuart Mill, that ethics gets done when you do the greatest good for the greatest number? In that case, perhaps, she should be allowed to die, preserving the right of countless others to make their own end-of-life decisions.

Though proponents on either side might not think so, both of these positions are morally right. In this regard, the Schiavo case is not unlike scores of end-of-life cases that hospital ethics committees face each year.

Then why are we talking about this one with such intensity? In part, it’s because the Schiavo case raises issues that didn’t exist until modern medical technologies made it possible to maintain life in this way. Some of the intensity also may arise from manipulation by and of the media — a concerted effort by both Schiavo’s parents and husband to rally supporters by garnering as much public attention as possible. Political calculations by Congress, Florida legislators, Gov. Jeb Bush, and the President also may be at play, according to a memo (of unclear provenance) sent to Republican senators that called the Schiavo case a “great political issue” to woo religious conservatives for the 2006 election cycle. Still others may point to the rich human drama of a case that pits parents against husband, and heroic medical interventions against natural bodily processes.

But don’t overlook the broader context. The case comes at a time of increased public alarm over rising healthcare costs, seemingly untrustworthy drug companies, underperforming pharmaceutical regulators, medical specialization that depersonalizes the patient-physician relationship, and rising interest in alternative healthcare systems. Taken together, these trends reflect increased doubts about the healthcare profession. They also may spawn a fear that, if the Schiavo case sets standards requiring long-term maintenance of patients on life support, the result could further escalate healthcare costs. Not surprisingly, a March 22 Gallup Poll found Americans siding with the right-to-die arguments: By a 52 percent to 39 percent margin, respondents agreed with a federal judge’s decision that the feeding tube removed on March 18 should not be reinserted.

For all of these reasons, then, the case is more difficult than the dilemma at its core. The real difficulty, however, is one that few in the media are discussing. It is that, at a basic philosophical and metaphysical level, we don’t know what life is. Scientists try to define it clinically, of course, and legislators determine it legally. But in cases like this, their confident assertions fail to provide answers. Meanwhile, the popular politics of abortion, euthanasia, and stem-cell research, while raising the same “what is life” questions, give little guidance.

Is life, as Shakespeare’s Macbeth said, merely “a tale told by an idiot, full of sound and fury, signifying nothing”? Or is it, as Shelley held, “a dome of many-coloured glass” that “stains the white radiance of eternity”? Is it, as religion holds, something spiritual and eternal — or is it, in Darwin’s terms, simply a principle of “natural selection, or the preservation of favoured races in the struggle for life”? Is life a communal expression studied by anthropologists and sociologists, or an individual voice heard in poetry and song? Above all, does life have a moral and ethical purpose, or is it blind, predetermined, and unconscious?

These are essentially moral questions. They are just beginning to be heard, tentatively, in the Schiavo debate. If we’re going to develop a citizenry that can come to terms with the new dilemmas posed by modern medicine, however, we can’t leave these questions to the last moment. They deserve deep discussion in our schools. They need broad airing in the press.

Above all, these questions must be brought squarely to the forefront of professional ethical education. They must permeate the domains of medicine, law, politics, and journalism. It is within those domains, after all, that today’s conversations about Ms. Schiavo are mostly taking place. While raising such questions won’t guarantee that all of us find common ground, it will help us become better ethical thinkers and avoid oversimplification and shallowness. Without this capacity for a probing moral discourse about the nature of life, is it any wonder the case seems so difficult, the public so perplexed, and the coverage so intense?

©2005 Institute for Global Ethics



Breaking It Down

Mar 28th, 2005 • Posted in: What They're Saying

“It’s just too sexually oriented, you know, the way they’re shaking their behinds and going on, breaking it down. And then we say to them, ‘Don’t get involved in sex unless it’s marriage or love, it’s dangerous out there,’ and yet the teachers and directors are helping them go through those kind of gyrations.”

– Texas State Rep. Al Edwards, discussing the reasoning behind his proposed legislation to curb “sexually suggestive” cheerleading, dance, and other performances at school functions. Edwards’ bill would penalize school districts that allow ribald performances by reducing state funding on a per-instance basis. (“Lawmaker Seeks to End Sexy Cheerleading,” AP, Mar. 18)



Parents, Congress Fail to Get Terri Schiavo Back on Feeding Tube

Mar 28th, 2005 • Posted in: News

WASHINGTON
Legislators, lawyers, pundits, protestors, and competing family members all squared off last week in a fierce ethical and legal debate over the fate of Terri Schiavo, a Florida woman in a “persistent vegetative state” for the past 15 years.

Schiavo’s husband Michael has been fighting to end her life, saying she did not want to be kept alive via life support. Her parents, Bob and Mary Schindler, want her kept alive via a feeding tube.

The extensively litigated case erupted into national controversy last week after Congress hastily intervened, adopting a one-time-only law effectively blocking the removal of Schiavo’s feeding tube.

Congress’s remarkable intercession called for the appointment of a judge to review the case before life support could be removed.

The judge, randomly chosen by a computer, last week rejected Congress’s arguments and the Schindlers’ pleadings, saying the legal system upheld the right of Terri’s husband to make her end-of-life decisions.

The Schindlers last week failed to convince an appeals court panel, the full appeals court, or the U.S. Supreme Court to overturn that decision, apparently exhausting their legal options, according to press reports.

The Florida legislature and Gov. Jeb Bush, both of which have been rebuked for allegedly violating the Constitution in efforts related to Schiavo, also failed last week to wrest legal control of Terri Schiavo from her husband.

Terri Schiavo, who was removed from life support last week, is expected to die soon.



Pentagon Refuses to Reopen Inquiry into Alleged Abuse of Reuters Workers

Mar 28th, 2005 • Posted in: News

WASHINGTON
The U.S. Defense Department last week said it would not reopen an investigation into allegations that U.S. soldiers abused three Iraqis working for the Reuters news agency in January 2004.

The Reuters workers, as well as an Iraqi freelancing for NBC, said they were beaten, tortured, and sexually humiliated by U.S. soldiers for three days before being released without charges.

The Pentagon, which said the soldiers in question swore under oath that they had not tortured the Iraqis, last week said its investigation had been “sufficient.”

“It is unfortunate that Reuters remains dissatisfied,” Lawrence Di Rita, special assistant to Defense Secretary Donald Rumsfeld, said last week.

Noting that none of the Iraqis had been interviewed by investigators, Reuters global managing editor David Schlesinger last week criticized the Pentagon’s inquiry as a “clearly flawed investigation into a very troubling incident.”



Government Accused of Redacting Memos to Hide Unflattering Charges, Not Secrets

Mar 28th, 2005 • Posted in: News

WASHINGTON
The U.S. Justice Department was accused last week of blacking out portions of official documents simply to shield the government from embarrassment, not to protect national security as allowed by law.

The memos, first released in December to the American Civil Liberties Union, were released with fewer redactions last week after pressure from Sen. Carl Levin (D-Mich.), reported the Washington Post.

The newly revealed portions include concerns that U.S. interrogation techniques at Guantánamo Bay, Cuba, were producing information that was “suspect at best” and might be undermining future trials of terrorism suspects.

Levin last week lambasted the government, saying the “previously withheld information had nothing to do with protecting intelligence sources and methods, and everything to do with protecting the [Department of Defense] from embarrassment.”

A Justice Department spokesman declined to comment on the nature of the redactions. A Defense Department spokesman said policy allows for redactions “based solely on national security and privacy,” the Post reported.



U.S. Soldier Denied Refugee Status In Canada

Mar 28th, 2005 • Posted in: News

Special to Newsline from Canadian correspondent Errol P. Mendes

TORONTO
An Immigration and Refugee Board Panel last week denied refugee status to a U.S. paratrooper who sought refuge in Canada to avoid being sent to fight in Iraq.

Jeremy Hinzman, his wife, and their young son fled to Canada last year after learning that he would be sent to Iraq to fight in a war he claims violated international human rights law.

Hinzman, who served in Afghanistan in a noncombatant role, said fighting in Iraq would compel him to commit “atrocities” given his belief that the Iraqi war is “illegal,” reported the Agence France-Presse.

Hinzman sought refugee status, saying he would be persecuted for his beliefs if returned to the United States, where he faces a court martial and possible five-year jail sentence.

The Refugee Board last week rejected Hinzman, saying the punishment he faces is not “excessive or disproportionately severe.”

Hinzman’s lawyer said he would appeal the decision to the Federal Court of Canada. If that fails, he will seek to stay in Canada on compassionate grounds, he added.

At least six other U.S. soldiers have filed for refugee status in Canada, noted the AFP.



New Report Slams British Military for Bullying Recruits

Mar 28th, 2005 • Posted in: News

LONDON
Young recruits in the British Army continue to face unacceptable levels of bullying, harassment, and injury, highlighting the need for immediate reform, an independent inquiry concluded last week.

Armed Forces Minister Adam Ingram commissioned the review following the deaths of four young soldiers at Deepcut barracks between 1995 and 2002, reported the Guardian.

The new analysis, which recommends a top-to-bottom reform of the Armed Forces, comes one week after another review from the House of Commons harshly criticized the military culture on multiple counts.

The new review by the Adult Learning Inspectorate (ALI) comes down hard on the military, saying that past pledges to improve the treatment of recruits have amounted mostly to lip service.

Much of the bullying “is tacitly or explicitly condoned as ‘traditional’ even though it is officially forbidden,” says the report, which also faults the military for lax safety procedures, degrading living conditions, and a slowness to grasp society’s understanding of equality and diversity.

The report warns that the failure to curb bullying has led not only to injury and abuse, but also to increased rates of recruits dropping out, damaging future military operations by reducing the number of quality soldiers and officers.

“The armed services have much to be proud of but the risks to young recruits, many of whom are away from home for the first time, are too high,” ALI’s chief inspector, David Sherlock, said.

Armed Forces Minister Adam Ingram said he would respond to the ALI and House of Commons reports by proposing reforms to Parliament, according to the Guardian.



United Nations Issues Report on Sexual Abuse of Refugees

Mar 28th, 2005 • Posted in: News

UNITED NATIONS
Conceding that refugees have been sexually abused by the peacekeepers sent to protect them, the United Nations last week called for stronger action from nations typically slack in prosecuting such abuse.

The United Nations said refugee abuse has been reported at peacekeeping missions in Bosnia, Cambodia, Congo, East Timor, Kosovo, and West Africa, reported the Associated Press. In many cases, refugee women and girls are forced to have sex with UN peacekeepers in exchange for food or money.

A UN report released last week concluded that the United Nations often lacks legal powers to prosecute abusers and that nations supplying the peacekeepers often decline to pursue charges when staff return home.

The report calls on nations to more diligently prosecute cases of alleged abuse, warning that without such backbone, the system will continue to break down, putting refugees at greater risk, according to the AP.

UN Secretary General Kofi Annan released a statement urging member states “to act with determination and due haste.”

“Resolving the problem of sexual exploitation and abuse by United Nations peacekeeping personnel is a shared responsibility and can only succeed with firm commitment and action by both the Secretariat and Member States,” Annan said. “We are committed to implement the necessary reforms as quickly as possible.”

In other news, critics of the UN last week questioned its decision to use revenues from the Oil for Food program to pay legal fees for the program’s former head, Benon Sevan, who stands accused of corruption involving the $64 billion humanitarian operation.

UN spokesman Fred Eckhard last week defended the legal support, but noted that it ended when independent investigators accused Sevan of specific charges in early February, reported the Associated Press.



AIG Fires Two Executives for Failing to Cooperate with Investigators

Mar 28th, 2005 • Posted in: News

NEW YORK
Insurance firm American International Group (AIG) last week fired two of its top executives after they refused to cooperate with an investigation into possible accounting fraud at the firm.

Chief financial officer Howard Smith and reinsurance vice president Christian Milton were fired “pursuant to company policy that requires employees to cooperate with government authorities” on company issues, a spokesman said.

The two men, who already had been placed on leave, were terminated after invoking their Fifth Amendment right against self-incrimination, reported the New York Times.

At least three government offices — the New York attorney general, the Justice Department, and the Securities and Exchange Commission — are investigating the company for bookkeeping irregularities.

Under pressure, AIG chief executive Maurice Greenberg, who headed the company for nearly 40 years, resigned earlier this month. He still serves as the firm’s non-executive chief, noted the Times.



Time Warner Settles Fraud Charges for $300 Million

Mar 28th, 2005 • Posted in: News

WASHINGTON
Three months after settling related criminal charges, Time Warner Inc. last week agreed to pay $300 million to settle civil charges of fraud for overstating the company’s revenues from 2000 through 2002.

Federal investigators accused Time Warner of deliberately overstating both revenues and the number of Internet subscribers following its ill-fated merger with AOL, reported the Washington Post.

The company settled the criminal allegations for $210 million last December, anteing up with $300 million last week to settle civil charges, bringing the government’s case against the company to a close.

Time Warner still faces about 30 class-action lawsuits related to the fraud.

The Securities and Exchange Commission (SEC) also settled with three Time Warner executives accused of negligently failing “to pursue facts and circumstances” that would have detected the fraud.

While none of the executives — all of whom remain employed as Time Warner’s chief financial officer, controller, and deputy controller paid any penalties, the SEC last week said it may pursue other officers.

As part of its settlement, Time Warner must restate its revenues by $500 million for the affected period, bringing the total reduction to $690 million, noted the Post.

The firm, which was not required to admit wrongdoing, also must allow an independent examiner to inspect transactions with 17 other companies from June 2000 to December 2001 for other possible fraud.



‘No Role for Government in Schiavo Case’: ABC Poll

Mar 28th, 2005 • Posted in: Research Report

From ABC News, with analysis by Gary Langer:

“Americans broadly and strongly disapprove of federal intervention in the Terri Schiavo case, with sizable majorities saying Congress is overstepping its bounds for political gain.

“The public, by 63 percent-28 percent, supports the removal of Schiavo’s feeding tube, and by a 25-point margin opposes a law mandating federal review of her case. Congress passed such legislation and President Bush signed it early today [March 21].

“That legislative action is distinctly unpopular: Not only do 60 percent oppose it, more — 70 percent — call it inappropriate for Congress to get involved in this way. And by a lopsided 67 percent-19 percent, most think the elected officials trying to keep Schiavo alive are doing so more for political advantage than out of concern for her or for the principles involved.

“This ABC News poll also finds that the Schiavo case has prompted an enormous level of personal discussion: Half of Americans say that as a direct result of hearing about this case, they’ve spoken with friends or family members about what they’d want done if they were in a similar condition. Nearly eight in 10 would not want to be kept alive….

“Views on this issue are informed more by ideological and religious views than by political partisanship. Republicans overall look much like Democrats and independents in their opinions.

“But two core Republican groups — conservatives and evangelical Protestants — are more divided: Fifty-four percent of conservatives support removal of Schiavo’s feeding tube, compared with seven in 10 moderates and liberals. And evangelical Protestants divide about evenly — 46 percent are in favor of removing the tube, 44 percent opposed. Among non-evangelical Protestants, 77 percent are in favor — a huge division between evangelical and mainline Protestants….

“Regardless of their preference on the Schiavo case, about two-thirds of conservatives and evangelicals alike call congressional intervention inappropriate. And majorities in both groups, as in others, are skeptical of the motivations of the political leaders seeking to extend Schiavo’s life….

“…A third of Americans say they’ve had friends or family members who passed away in a hospital or other care facility after life support was removed; nearly two in 10 say they were personally involved in that decision. People who’ve been personally involved in such a decision are more apt than others to support removing Schiavo’s feeding tube and to say they personally would not want life support.

“There are differences among age groups. Senior citizens are more apt than others to strongly support removing Schiavo’s feeding tube, and also more apt to oppose federal intervention….”



The Value of Life

Mar 28th, 2005 • Posted in: Quote from the Ethics File

“A man who dares to waste one hour of life has not discovered the value of life.”

– Charles Darwin (English scientist, 1809-1882)



Widening Divide on Fighting a War that One Believes to be Morally Wrong

Mar 21st, 2005 • Posted in: Statline



Steroids in Baseball: Before They were Illegal, were They Wrong?

Mar 21st, 2005 • Posted in: Commentary

“I wanted to get your thoughts,” ESPN Radio talk show host Chuck Wilson wrote me the other day, “on the argument that steroid use in baseball, prior to its being banned from the sport, does not constitute ‘cheating.’ I have argued that players who used steroids cheated the sport. My co-hosts and many listeners have argued that it’s only cheating if you break stated rules. What do you think?”

It’s a great question, because it seems to be about only baseball. In fact, it’s about business, government, education, the professions — anything that puts scandals into the headlines. But let’s stick with baseball, where it rings hollow for three reasons.

First, it overlooks the distinction between law and ethics. Law is obedience to the enforceable. When laws or rules are laid down, there’s typically a punishment for breaking them. Rules compel obedience because of fear of penalty.

Ethics, by contrast, is obedience to the unenforceable — to the powerful canons of our culture. What compels ethical obedience is a communal agreement about wrongness. A thing can be wrong even though it breaks no stated rule, calls forth no punishment, and is not illegal.

So if the argument is that “it wasn’t illegal to use steroids before they were illegal,” that’s self-evident. But if it’s that “it wasn’t unethical to use them before they were illegal,” that doesn’t necessarily follow, since ethics and law differ so fundamentally.

Second, the “it’s not cheating” argument doesn’t square with the way we use that word. Some examples:

  • Suppose a father, after promising to pay his young daughter for mowing the lawn, withholds the money because he’d rather keep it. Is she being cheated? Most would think so, but show me the law that makes it illegal.
  • If I share with you my plan to buy a house for a certain price, and you race out and trump my bid by one dollar, did you do anything illegal? No. Did you cheat me? That’s the word that would spring to my mind.
  • We have largely abolished legal penalties for adultery, but we still say someone “cheats” on his wife. As the term implies, we still think of such behavior as wrong.

What about steroids? They’ve long been thought wrong in amateur sports and in public opinion. In the early days of black-and-white television, I remember seeing bulked-up East German athletes at the Olympics and hearing reporters say that steroids were suspected. The very tone of their reports made it clear that this, to them, was “cheating” — maybe not illegal in some countries, but surely wrong.

Why “wrong”? Because, third, steroids aren’t morally neutral. They damage bodies through prolonged use and give unfair advantage to those who use them. In the past, given the public distaste for steroids, many athletes refused them, so the only users were athletes who either felt no moral tug from that distaste or overcame that tug through rationalization. Result: a classically unlevel playing field on which winning arose not from athletic prowess but from unfair competition.

So why cheat? Because it appears to work. It shouldn’t surprise us that those willing to act unethically often seek advantage over those holding to the ethical; it’s been ever thus. But it should sadden us to see the argument of effectiveness used to justify cheating. The notion that a thing is right merely because it works arises from the worst sort of ends-justifies-the-means logic. By that logic, every form of cheating should be embraced and even encouraged, because through it you “win.”

That false logic, in this case, could end up destroying baseball. How? Well, we already have a sobering example of a fine sport — wrestling — still honored at the collegiate level but wholly discredited in the professional arena. It’s hugely popular on cable TV, but nobody treats it as a sport any more. It’s now seen merely as commercial entertainment.

What happened? A surprisingly simple thing: loss of public trust. When you and I say of any game, “That’s a sham,” it begins to spiral downward into mere showmanship. What if the public comes to suspect — after hearing all of the public justifications for cheating voiced by athletes, coaches, and commentators — that the whole thing is a fraud? We’ll start to lose trust. Then the question will not be whether professional baseball joins professional wrestling as a schlock sport, but simply when. Professional wrestling is probably gone for good. If baseball joins it, there won’t be any returning.

The moral: Trust once lost — in baseball, as in business, politics, love, and friendship — is devilishly hard to rebuild. Not incidentally, Chuck Wilson has asked to leave ESPN Radio after 14 years of hosting sports shows that raise questions like this — since, apparently, his managers think their audiences aren’t interested in such ideas. But that’s another column.

©2005 Institute for Global Ethics



Pride

Mar 21st, 2005 • Posted in: What They're Saying

“I let my pride get in my way…. I am ashamed to be here today, and I accept full responsibility for my actions.”

– John Rowland, the former governor of Connecticut, speaking last week at his sentencing after being found guilty of corruption while in office. U.S. District Judge Peter Dorsey sentenced Rowland to one year in prison, four months of house arrest, and three years of probation. (“Conn. Ex-Gov. Rowland Gets Year in Prison,” AP, Mar. 18)



Ebbers Convicted on All Counts in $11 Billion WorldCom Fraud

Mar 21st, 2005 • Posted in: News

NEW YORK
A New York jury last week found former WorldCom chief executive Bernard Ebbers guilty of securities fraud, conspiracy, and filing false documents, rejecting his “know nothing” defense in what many say should serve as a warning to other CEOs awaiting trial for leading their firms into scandal and bankruptcy.

The 12-member jury convicted Ebbers on all counts, agreeing with prosecutors that a man smart enough to turn a tiny phone company into a telecom superpower was not dumb enough to draw a blank when looking at a balance sheet, as Ebbers claimed during the trial.

“You can’t sell yourself as a genius to investors but then portray yourself as someone who flunked math to the jury,” Stephen Meagher, a former federal prosecutor in San Francisco, told the Los Angeles Times.

Ebbers’s efforts to portray himself as unschooled in finance failed to fly with the jury, especially after his evasive testimony compounded doubts raised by former WorldCom chief financial officer Scott Sullivan.

Sullivan, who has pleaded guilty to fraud and faces up to 25 years in prison, testified that Ebbers knew about WorldCom’s financial problems and pushed him to distort numbers to meet Wall Street’s expectations.

While Ebbers’s lawyer accused Sullivan of lying in a bid to lower his prison time, the Times noted that Ebbers’s alleged motives included $400 million in personal loans that hinged on his collateral of WorldCom stock, the value of which crashed after the company’s troubles were exposed.

WorldCom declared bankruptcy in July 2002 under the weight of $11 billion in fraudulent accounting, emerging last year as MCI.

Ebbers, who faces up to 85 years in prison after being convicted on all seven counts, is scheduled for sentencing on June 13. His lawyer said he will appeal.

Asked for reaction to the Ebbers verdict, MCI employee Leanne Tight, who hired on with WorldCom in 1999, said her fellow workers at MCI’s headquarters in Virginia “are pleased.”

“But this wasn’t any great surprise,” Tight told the Washington Post. “And to see somebody else suffer doesn’t bring back any of our retirement plans or help the people who have been laid off or change the impact this has had on our business. He will pay for what he has done, but this is a sad, sad episode in our history.”

Analysts noted that the jury’s rejection of Ebbers’s defense could spell trouble for other fallen chiefs, including HealthSouth’s Richard Scrushy and Enron’s Kenneth Lay and Jeffrey Skilling, all of whom face charges related to fraud already admitted to by their subordinates, reported the New York Times.



SEC Sues Former Qwest CEO and Executives for Fraud

Mar 21st, 2005 • Posted in: News

DENVER
The U.S. Securities and Exchange Commission (SEC) last week filed civil charges against Joseph Nacchio, the former chief executive of Qwest Communications International, and 10 other executives accused of orchestrating the firm’s $3 billion bookkeeping fraud.

Nacchio and the others are accused of bullying workers into distorting balance sheets to meet investors’ expectations when the firm, then known as U.S. West, was wooing a 2000 takeover bid by Qwest.

Regulators accused Nacchio of creating a “culture of fear” by putting “extreme pressure” on subordinate executives, resulting in fraud that forced the company to restate more than $2 billion in revenue for 2000 and 2001, reported the Reuters news agency.

Along with Nacchio, the SEC filed suit against 10 Qwest executives, including the company’s former president and two former chief financial officers. The SEC settled immediately with four of them, noted Reuters.

The SEC, which settled its complaint with Qwest itself last October for more than $250 million, now is targeting individual executives for their salary raises, bonuses, and stock sales during the time of the alleged fraud.

The government wants Nacchio to surrender $216 million and is eyeing $84 million from the other alleged co-conspirators, reported the New York Times.

Nacchio and others last week released statements denying any wrongdoing.

The charges come at a particularly inopportune time for Qwest, which is vying to outbid Verizon for ownership of MCI, the firm formerly known as WorldCom, whose one-time head, Bernard Ebbers, was convicted of fraud and conspiracy last week.



Questions Continue over Integrity of U.S. Contracts in Iraq

Mar 21st, 2005 • Posted in: News

WASHINGTON
Questions about U.S. contracts in Iraq resurfaced last week with reports examining fraud allegations against Halliburton and the murder of a subcontractor who warned about corruption. Among the developments:

  • Pentagon auditors said Halliburton may have overcharged the U.S. government by more than $100 million, according to an October 2004 audit obtained and detailed last week by the Los Angeles Times.

The audit by the government’s Defense Contract Audit Agency upped the estimate of suspect billing from an earlier $61 million to roughly $108 million, criticizing Halliburton for charging an “illogical” price for delivering fuel in Iraq.

The report also accused Halliburton and its KBR subsidiary of misleading auditors, poorly managing subcontracts, and failing to deliver requested documents to justify its bills, according to the Times.

A Halliburton spokeswoman said the high costs were justified by the wartime environment, saying, “the facts show that KBR delivered fuel crucial to the Iraqi people when failure was not an option.”

  • Also last week, a former procurement manager at Halliburton, was charged with fraud for allegedly rigging a fuel contract to overcharge the U.S. military by more than $3.5 million.

Former KBR procurement manager Jeff Alex Mazon was charged with 10 counts of fraud at a federal court in Atlanta. A Kuwaiti businessman allegedly in on the deal was also indicted, reported the BBC.

  • The Los Angeles Times last week published a report on the murder of Dale Stoffel, a U.S. subcontractor who suspected Iraqi officials were skimming funds with the help of a Lebanese middleman. Stoffel, who told U.S. officials that he was considering going public with his concerns after they failed to intercede, was shot to death shortly afterwards. A previously unknown militant group claimed responsibility.

The Times reports that while a second Lebanese middleman involved in the contract has since been barred for corruption, the U.S. government continues to work with Raymond Zayna, the man Stoffel suspected of fraud. Nearly $25 million routed through Zayna for payment to Stoffel remains unaccounted for, the Times noted.



Bush Administration Rejects Warning about Video News Releases

Mar 21st, 2005 • Posted in: News

WASHINGTON
Rejecting criticism that public relations pieces designed to look like genuine television news reports are unethical, the Bush administration last week said it will continue making and distributing video news releases, and that it is the responsibility of television stations to inform viewers of the source of the videos.

Last month, the Government Accountability Office (GAO), Congress’s nonpartisan investigative arm, again warned that such releases may cross the line into illegal “covert propaganda” if funded with taxpayer dollars.

The releases in question mostly include video segments featuring pseudo reporters who pose rehearsed questions to officials and praise government programs without addressing criticisms or problems.

While the exterior packaging discloses the government’s role, the videos themselves often omit the disclosure, leading viewers to believe they are watching news from an objective source, noted the New York Times.

Last week, the Justice Department issued a memo directing government agencies to ignore the GAO’s warnings, saying it does not agree “that the covert propaganda prohibition applies simply because an agency’s role in producing and disseminating information is undisclosed or ‘covert,’ regardless of whether the content of the message is ‘propaganda.’”

The Justice Department memo also said the GAO’s ruling is unenforceable, noting that only its own Office of Legal Counsel provides binding legal interpretations, according to the Times.

President Bush last week agreed, saying his administration would continue making video news releases, which he defended as factually based and unbiased, even if their provenance remains undisclosed.

The government contends that its packaging provides sufficient disclosure, saying the blame lies with local TV stations that fail to tell viewers when the fake news segments are coming from the government.

GAO Comptroller David Walker last week faulted the administration for adopting a legalistic, compliance-based approach that sidelines the ethical aspects of providing fake news segments to the public.

“This is more than a legal issue. It’s also an ethical issue and involves important good government principles, namely the need for openness in connection with government activities and expenditures,” Walker told the Washington Post. “We should not just be seeking to do what’s arguably legal. We should be doing what’s right.”

Noting the administration’s argument that its actions are within legal bounds, Walker said the battle likely will be taken up elsewhere. “Congress has got to settle it — either Congress or the courts,” he said.