Ethics Newsline®

For more information, see this week’s Research Report.

by Rushworth M. Kidder

They shout, threaten, and burst out in inexplicable rage. They won’t return messages. Their language is belittling, their tone of voice condescending. They’re uncooperative during routine activities and impatient with questions. But they’re brilliant, successful in their fields, and key generators of revenue for their organizations.

Sadly, we all know people like that. We’ve even developed names for such behavior: impolite, intimidating, threatening, disruptive, abusive, or just plain rude. But chances are we stopped short of unethical. Why? Because however nasty and unpleasant the behavior, we’re not sure it lacks moral conscience, so we write it off as a fluke of personality rather than a failure of principle. After all, we say, isn’t everyone entitled to a quirk or two? And really, who is it hurting?

Earlier this month, that last question was answered with surprising force from an unexpected source: the Joint Commission, the leading accrediting body for health-care organizations in the United States. Its “Sentinel Event Alert” for July 9, one of a series of brief reports on threats to health-care quality, is titled, “Behaviors that undermine a culture of safety.” Summarizing years of research, it concludes that “intimidating and disruptive behaviors” in the health-care professions can “foster medical errors, contribute to poor patient satisfaction and to preventable adverse outcomes, increase the cost of care, and cause qualified clinicians, administrators and managers to seek new positions in more professional environments.”

Translated into layman’s language, that means that intimidation causes mistakes, offends patients, ups costs, and drives away staff. And that’s not all. Depending on how you read the quiet euphemism of “preventable adverse outcomes,” it appears that intimidation, in a high-stakes medical setting, could actually kill people.

So much, then, for brushing aside intimidation as unfortunate but not unethical. It’s clear that in places like Robert Mugabe’s Zimbabwe, Saddam Hussein’s Iraq, or Omar Hassan al-Bashir’s Sudan, intimidation in the hands of tyrants ends up littering the landscape with bodies. It’s also clear in school settings that unrestrained bullying, a classic form of intimidation, can be a precursor to tragedies like the 1999 shootings at Columbine High School in Colorado. Now it appears that the same impulses may have devastating effects even within otherwise well-run organizations.

On global as well as local stages, then, intimidation, which relies on fear to impose its will, is not only indefensible but unethical. But is it rare? No, says the Joint Commission study, citing research showing that “40 percent of clinicians have kept quiet or remained passive during patient care events rather than question a known intimidator.” Not limited to physicians and nurses, these behaviors also “occur among other health care professionals, such as pharmacists, therapists, and support staff, as well as among administrators.” Nor is intimidation restricted to gender or to certain disciplines. It is, however, somewhat foreseeable among individuals who “exhibit characteristics such as self-centeredness, immaturity, or defensiveness.” What’s more, the healthcare culture has “a history of tolerance and indifference to intimidating and disruptive behaviors,” which “often go unreported, and therefore unaddressed” from fear of retaliation and reluctance to blow the whistle.

The Joint Commission, of course, focused on the narrow bandwidth of its own profession. But these findings reach far beyond health care. Substitute your favorite professional arena — teaching, business, law, politics, religion, government, the military — and this report still sheds light.

Fortunately, so do the report’s 11 “suggested actions” for addressing intimidation. Some are strictly managerial. They include skills-based training and coaching, surveillance, interprofessional dialogue, and the use of “cultural assessment tools” to “measure whether or not attitudes change over time.” But perhaps the most important message is that ethical values are essential to combating intimidation. The report’s first recommendation insists that an organization’s code of conduct, as well as the training surrounding it, must “emphasize respect.” Peppered throughout the remaining recommendations are other core ethical values, including accountability, empathy, trust, and equity.

The report doesn’t use the word ethics — which in health-care circles still largely refers to medical rather than managerial issues. Yet the report’s message is profoundly ethical. Intimidation may not be illegal, but it’s unquestionably immoral, and the corrective lies in ethical constructs. Other professions need to follow the Joint Commission’s lead. They should recognize intimidation as an issue of morality rather than manners. They should research its prevalence and destructiveness. They should insist that it be treated as a “zero tolerance” issue. And they should address it by building cultures of respect, equity, and integrity. That would put us well on our way to corralling one of society’s most subtle, perverse, and destructive traits.

©2008 Institute for Global Ethics

Questions or comments? Write to newsline@globalethics.org.

“Our country has long turned a blind eye to the misdeeds of our heroes. If you have athletic talent or money or fame, the law is applied much differently than if you are slow or poor or an average American trying to get by. At the same time, all sports have for far too long given the benefit of the doubt to its heroes who seem too good to be true, even when common sense indicates they are not.”

– Newly appointed chief executive of USA Track & Field Doug Logan, urging President Bush in an open letter last week not to pardon disgraced Olympic sprinter Marion Jones, currently serving jail time for “lying to investigators about her use of performance-enhancing drugs,” reports the New York Times

Source: New York Times, July 23.

For more information, see: Related Newsline story, July 21 — Related Newsline story, June 9 — Related Newsline story, Nov. 26, 2007 — Related Newsline story, Nov. 19, 2007 — Related Newsline story, Oct. 8, 2007.

Opponents say it creates ‘moral hazard’ by forgiving, rewarding reckless behavior

WASHINGTON
The U.S. Senate, in a rare weekend session, approved a package of legislation designed to prevent thousands of home foreclosures.

The bill, which President Bush has pledged to sign promptly, would give hundreds of thousands of qualified borrowers a chance to refinance with government-backed mortgages. It also will throw a financial lifeline to Fannie Mae and Freddie Mac, the agencies backing almost half of the nation’s home loans, reports the Boston Globe.

But as the New York Times reports, the measure, which was passed by the House earlier in the week, has sparked controversy on a number of fronts, including an ethics dilemma entangled in the bailout.

Opponents of the measure argue that the mortgage rescue rewards unscrupulous and reckless lenders and borrowers, according to the Associated Press.

“This bill has moral hazard written all over it,” Rep. Jeff Flake (R-Ariz.) said during the debate in the House on Wednesday, according to the Times. “We are pretending to chain a monster here and we are, instead, letting that monster loose.”

Some, such as Sen. Jim DeMint (R-SC), argued that the bill represents an unprecedented and counterproductive government intrusion into the housing market, reports National Public Radio.

“No matter what’s wrong with [the bill], most of the members of this Senate are going to come in and vote for it,” DeMint told NPR. “[They're going to] check the box and go home and say they did something for housing. I’m afraid they may compromise the future of America as they do it.”

Sources: New York Times, July 27 — AP, July 27 — NPR, July 27 — Boston Globe, July 26.

For more information, see: Related Newsline Commentary, July 14 — Related Newsline story, July 14 — Related Newsline story, July 7 — Related Newsline story, June 16 — Related Newsline story, June 9.

Critics don’t like government control of what people eat and restaurant group says it will hurt mom-and-pop eateries, but advocates say the stuff is a public health menace

SACRAMENTO
In what proponents say is a victory for public health — and in what detractors charge is another symptom of an encroaching nanny state — California last week banned trans fats in the state’s restaurants and bakeries.

While some cities, such as New York, Philadelphia, and Seattle, have enacted similar bans, California is the first U.S. state to pass such a law, reports the San Diego Union-Tribune.

Trans unsaturated fats, shorthanded as trans fats, once were thought to be a healthy alternative to butter, but recent research shows they are much more harmful than once thought, significantly raising the risk of heart disease, reports ABC News.

Adding to the dilemma is the fact that the substances not only are tasty to many consumers but also have a long shelf life, making them attractive to restaurants and fast-food outlets.

The California Restaurant Association opposed the ban, saying it will impose an unfair burden on mom-and-pop restaurants and bakeries, notes the San Francisco Chronicle.

The ban will take effect January 1, 2010, according to Los Angeles TV station KABC. It will not apply to packaged foods sold in stores.

Sources: San Diego Union-Tribune, July 27 — San Francisco Chronicle, July 26 — ABC News, July 26 — KABC, Los Angeles, July 16.

For more information, see: Related Newsline story, Nov. 5, 2007 — Related Newsline story, Aug. 13, 2007 — Related Newsline story, June 18, 2007 — Related Newsline story, Feb. 5, 2007 — Related Newsline story, Dec. 11, 2006.

European Commission will have to decide whether to keep the goods off shelves; one report it requested says there are doubts as to whether cloning is ‘ethically justified’

BRUSSELS
European Union science advisers say milk and meat from cloned animals is probably safe, though the panel’s lukewarm endorsement makes it unlikely that such products will reach store shelves soon.

Food safety concerns are classified as “unlikely” by the European Food Safety Authority report, but the document does say there are limited amounts of data on which to draw a conclusion, according to the EU Observer.

The International Herald Tribune notes that an earlier report from an ethics commission also will be taken into account when the European Commission eventually decides whether to approve cloned-animal products.

The European Group on Ethics in Science and New Technologies has determined that there are “doubts as to whether cloning animals for food supply is ethically justified,” according to UPI.

Among other concerns, cloning, while generally producing a superior animal, also produces a high number of animals born with deformities, notes the Toronto Star.

Sources: Toronto Star, July 25 — EU Observer, July 25 — International Herald Tribune, July 24 — UPI, July 24.

For more information, see: Related Newsline story, May 27 — Related Newsline story, Jan. 22 — Related Newsline story, Jan. 7 — Related Newsline story, Nov. 19, 2007 — Related Newsline story, Nov. 6, 2006.

New York Congressman files ethics complaint against himself; state files charges against former Spitzer aides; and selections for new Office of Congressional Ethics are announced

WASHINGTON
Several stories with ethics angles were the topics of Washington news last week:

• New York congressman Charles Rangel last week took the unusual step of filing an ethics complaint against himself. USA Today reports that the powerful Democrat is battling accusations he improperly used his office to raise money for a nonprofit public-policy center, and is confronting press reports saying he occupies four rent-stabilized apartments in a luxury Harlem complex, one of which he uses as a campaign office. Rangel wrote the committee requesting the probe and said he would accept the panel’s findings if he “inadvertently violated House rules.”
• A state ethics panel last week said it filed charges against three aides for former New York governor Eliot Spitzer, Reuters reports. The aides are accused of gathering and leaking information about one of Spitzer’s political opponents. The scandal was known as Troopergate because state police reportedly compiled the information about Senate majority leader Joseph Bruno’s travel on state aircraft.
• House speaker Nancy Pelosi (D-Calif.) and minority leader John Boehner (R-Ohio) last week announced their joint appointments to a newly constituted House ethics panel. The Hill, a publication covering Congress, lists the appointees as former CIA director Porter Goss (R-Fla.), Rep. David Skaggs (D-Colo.), former Rep. Yvonne Brathwaite Burke (D-Calif.), former Rep. Karan English (D-Ariz.), former House chief administrative officer Jay Eagen, and former congressional staffer Allison Hayward. The panel, called the Office of Congressional Ethics, will conduct initial reviews of complaints and make recommendations to the full ethics committee.

Sources: Hill, July 26 — Reuters, July 26 — USA Today, July 26.

For more information, see: Related Newsline story, June 23 — Related Newsline story, Mar. 17 — Related Newsline story, Feb. 18 — Related Newsline story, Feb. 18.

Bush says Mugabe’s government is illegitimate and seized power through violence

WASHINGTON
The White House last week imposed additional sanctions against Zimbabwe, protesting the disputed reelection of Robert Mugabe, who was criticized widely for using violence to intimidate backers of his opponent.

Saying that the Mugabe government is “illegitimate” and sponsors violence, President Bush signed an executive order imposing restrictions on individuals and corporations linked to the Mugabe regime, the BBC reports.

U.S. companies and citizens are barred from doing business with the targeted Zimbabwe firms and individuals, reports MarketWatch.com, and all assets of the Zimbabwe firms in the United States are frozen.

Similar sanctions have been imposed by the European Union.

The U.S. restrictions were proposed after broad international sanctions were derailed early in July by Russia and China, which vetoed a U.N. Security Council resolution backed by Britain, France, and the United States, reports CNN.

In related news, Mugabe and opposition leader Morgan Tsvangirai agreed to begin talks aimed at solving Zimbabwe’s economic and political meltdown. According to the Washington Post, the pact is seen widely as a victory for Tsvangirai, who dropped out of the presidential runoff in June, saying his candidacy endangered the lives of his supporters.

Sources: Washington Post, July 25 — CNN, July 25 — BBC, July 25 — MarketWatch.com, July 25.

For more information, see: Related Newsline story, July 21 — Related Newsline story, July 7 — Related Newsline Commentary, June 20 — Related Newsline story, June 30 — Related Newsline story, Apr. 28.

Opposition leaders, who tried unsuccessfully to overturn current parliamentary government, go on TV to brandish wads of cash they say were offered to rig vote

NEW DELHI
A dramatic corruption scandal is roiling politics in India.

After failing to dislodge the current government in last week’s parliamentary confidence vote, members of an opposition party accused the ruling coalition of offering more than $2 million in bribes, according to the Wall Street Journal.

While corruption is hardly a new factor in Indian politics, the charges electrified media there because of the spectacular way they were leveled: Opposition lawmakers took to the floor of Parliament during a debate and brandished wads of cash they say had been offered to them to throw the vote, reports Voice of America.

In response, a member of the ruling party filed a defamation suit against the cash-waving legislators, reports the New Delhi Television Network.

Sources: NDTV, July 25 — Voice of America, July 24 — Wall Street Journal, July 24 — Bloomberg, July 22.

For more information, see: Related Newsline story, July 21 — Related Newsline story, June 30 — Related Newsline story, June 23 — Related Newsline story, Apr. 28 — Related Newsline story, Nov. 5, 2007.

Silvio Berlusconi long has claimed that the judiciary is mounting a political vendetta against him

ROME
Italian prime minister Silvio Berlusconi, embroiled in a corruption scandal, last week won a significant battle outside of the courtroom by convincing the Senate to pass a law that could grant him immunity from prosecution.

India’s lower house of parliament, the Chamber of Deputies, approved the measure earlier in July.

The Financial Times reports that Berlusconi’s lawyer has yet to determine whether the measure actually will be employed in his client’s defense.

Berlusconi said the new law would put an end to the “unacceptable persecution” he has endured since entering politics in 1994, according to the Agenzia Nazionale Stampa Associata, Italy’s largest news agency.

For years, Berlusconi has accused the judiciary of waging a politically motivated vendetta against him. His critics say Berlusconi has abused power, engaged in corrupt activities, and abused his ownership of the state media to suppress criticism.

”In Italy there is a section of the magistrature that is dedicated to undermining the election results and wishes of the Italian people,” Berlusconi told the ANSA.

The new law grants sweeping political immunity to the prime minister, the president, and the speakers of the two parliamentary chambers — the four most powerful positions in Italian government, reports Forbes.

Sources: AFP, July 26 — Agenzia Nazionale Stampa Associata, July 24 — Financial Times, July 24 — Forbes, July 23.

For more information, see: Related Newsline story, Dec. 22, 2003 — Related Newsline story, June 30, 2003 — Related Newsline story, Oct. 28, 2002 — Related Newsline story, May 20, 2002 — Related Newsline story, Apr. 8, 2002.

British doctors ignite controversy with medical journal editorial calling for the British to save the environment by limiting number of children

LONDON
The British press last week was intrigued by a controversial essay in the British Medical Journal that calls for couples to help the environment by having no more than two children.

According to the U.K. Guardian, the editorial calls on family doctors to encourage the view that big families are environmentally tantamount to driving a gas-guzzling car.

The London Daily Telegraph reports that John Guillebaud, emeritus professor of family planning and reproductive health at University College London, and general practitioner Dr. Pip Hayes wrote: “Unplanned pregnancy, especially in teenagers, is a problem for the planet, as well as the individual concerned. ”

“But what about planned pregnancies?” they ask in the editorial. “Should we now explain to U.K. couples who plan a family that stopping at two children, or at least having one less child than first intended, is the simplest and biggest contribution anyone can make to leaving a habitable planet for our grandchildren? ”

Britain’s population is projected to swell from 60.6 million to 77 million by 2050, London’s Daily Mirror reports, and according to the editorial, introducing a two-child policy would reduce that figure to 55 million.

In a Mirror survey piece, proponent Rosamund McDougall, policy director of a population control advocacy group, argues in favor a two-child policy: “We are suggesting that people think seriously about the impact of population growth, and about peaceful solutions.”

“Nature’s ways of dealing with overpopulation are cruel — famine, disease, and wars over diminishing resources. It’s madness to think that the U.K. will be isolated from worsening developments worldwide,” McDougall argued. “We are more crowded than China and England is the fourth most densely populated country in the world. In the last half century we’ve accommodated an extra 10 million people and the stresses on our resources are clear.”

But Julie O’Neill, mother of 12 children, disagreed when interviewed by the Mirror: “I can see where their argument is coming from — the need to think about the future of our environment — but there are so many other important issues they should talk about. What about couples with no kids who own gas-guzzling [sport-utility vehicles nicknamed] Chelsea tractors? What about all the emissions from aeroplanes used by people to fly around the world on holiday several times a year?”

Sources: Guardian, July 25 — Telegraph, July 24 — Mirror, July 24 — Daily Mail, July 24.

For more information, see: Related Newsline story, July 21 — Related Newsline story, May 5 — Related Newsline story, May 5 — Related Newsline story, Apr. 21 — Related Newsline Commentary, Sep. 17, 2007.

One key step to stopping fraud, says Deloitte, is establishing a strong ethical corporate culture

From Deloitte:

“As anti-fraud enforcement levels have surged to an all-time high in the investment management industry, a recent online poll, conducted by Deloitte, found that nearly one-quarter (23.8 percent) of respondents’ companies do not have a ’suspicious transaction’ monitoring system and an additional 32.4 percent of respondents were not aware of whether their firms did.

“‘Because hedge funds, private equity firms and other investment managers are often incorporated offshore and serve a client base of high net worth individuals from around the world, these organizations can be potential targets for suspicious transactions that may be part of money laundering, Foreign Corrupt Practices Act violations and other fraud schemes,’ said Michael Shepard, a principal in the Anti-Money Laundering practice of Deloitte Financial Advisory Services LLP (Deloitte FAS)….

“While 39.2 percent of respondents’ surveyed said that their companies maintain formal anti-money laundering policies and procedures, one in 10 (10.1 percent) respondents’ surveyed said that their companies have not addressed money laundering at all. An additional 31.7 percent of respondents surveyed do not know whether their firm has established formal anti-money laundering policies and procedures.

“Investment management firms must also be wary of potential FCPA violations. The FCPA states that it is a federal criminal offense for any company or individual doing business in the U.S. to offer, pay or authorize a bribe to a foreign government official to gain business advantage. While the FCPA was passed in 1977, enforcement has increased dramatically in recent years. Yet, despite the increase in the number of enforcement actions, 13.6 percent of respondents surveyed indicated that their companies have not addressed FCPA risk at all; 12.1 percent said that their organizations had addressed FCPA risk, but have not established a program to address the risk; and 10.9 percent said that their organizations have an established FCPA program, but that it needs improvement….

“According to Deloitte, some of the key steps that can help mitigate fraud, money laundering and FCPA violations include:

• “Establish a consistent organizational culture that does not condone fraudulent activity….
• “Institute an anti-money laundering compliance program. Such a program should be designed to address several areas including: assessing risk, establishing proper governance and reporting structures, designating an anti-money laundering compliance officer and conducting an enterprise-wide training program….

“More than 500 executives from the banking and security, financial services and investment management industries responded to the polling questions….”

For the full press release from Deloitte, July 23, click here.

Editor’s Note: Deloitte is a corporate sponsor of Ethics Newsline®.

“Human kindness has never weakened the stamina or softened the fiber of a free people. A nation does not have to be cruel to be tough.”

– Franklin D. Roosevelt (32nd U.S. president, 1882-1945)

Dr. Rushworth Kidder, author of How Good People Make Tough Choices and Moral Courage, will host a symposium to discuss his next book (tentatively titled Good Kids, Tough Choices: Seven Lenses for Ethical Parenting), on September 23, 2008, in St. Louis, Missouri.

This special event will provide a forum for participants to discuss ethics and parenting issues with Dr. Kidder prior to the book’s publication. The symposium will be limited to 20 participants to ensure an intimate dialogue with Dr. Kidder.

To register or to receive more information, please email Andrea Curtis or call 800-729-2615. Further information also can be found in this PDF.

For more information, see this week’s Research Report.

by Rushworth M. Kidder

OXFORD, England
In recent weeks, the U.S. presidential candidates have been traveling overseas to bolster their foreign-policy credentials. Like presidents before them, their task will be, in the words of that shopworn adage, to think globally but act locally.

But what does “think globally” mean? A deceptively simple question, it surfaced during a meeting of internationally minded think tanks here at Oxford University last week. Convened by the New York-based EastWest Institute, it brought together representatives from Brazil, China, Dubai, Ethiopia, Great Britain, India, Latvia, Russia, Singapore, Switzerland, Turkey, and the United States. The stated goal was to create a world-class alliance of public-policy research organizations, provisionally called the Global Leadership Consortium. But the conceptual challenge arose from a troubling fact: Much so-called “global thinking” is little more than narrowly national thinking strutting on an international stage.

English novelist Jane Austen, it turns out, may help sort this out. We’ll get to her in a moment. First, though, take a more homey example: U.S. energy policy. It is driven largely by national needs in the face of global pressures. True, those who think about energy — presidential candidates, for example — need to know the geopolitics of suppliers like Iraq and consumers like China. They must be internationalists, and they must travel to be so. But that’s no guarantee that they will think globally. If they see their goal solely as defending U.S. energy interests, they will wear their global hats atop only a national uniform.

Genuinely global thinking, by contrast, aspires to a universal standpoint. It seeks to rise above positions viewed by some nations as truth but by others as mere self-interest. Freeing itself from the provincial, the national, and even the regional, it gravitates toward a perception of truths so broadly acknowledged as to be apparently universal. It seeks energy policies that benefit all nations. Yes, it wears the hat of local and national action, but always as part of a global uniform.

At that notion, of course, the very walls of Oxford seem to recoil. “Nonsense!” they cry out. “How, given the multiplicity of cultures, can there be any universally acknowledged truths? Isn’t every truth simply somebody else’s fiction? How dare you disturb our exquisitely differentiated view of the universe by asserting so transcendent a commonality?”

So perhaps it was propitious that our meeting was held at Lady Margaret Hall. As the first college at Oxford University for the education of women, its walls have seen generations of thinkers demanding common educational opportunities in the face of sharp differentiations between genders. And perhaps it was not accidental that the words of Jane Austen, who never could have attended Oxford, though two of her brothers did, wafted into our conversation. “It is a truth universally acknowledged,” she wrote in the famously witty opening sentence of Pride and Prejudice, “that a single man in possession of a good fortune must be in want of a wife.”

Her words are rich with the irony of overstatement — what, after all, can a gaggle of chattering rural women be expected to know about so Oxford-like a construct as universal truth? Yet this sentence throws down a gauntlet to the naysayers. Is there a culture anywhere that disagrees with her proposition that wealthy single men ought to get married — not for giddy romantic reasons, but for the practical social purpose of propagating children they can well afford to raise and thereby perpetuating the culture?

If we can find one such “truth universally acknowledged,” might there be others? Can we, in other words, identify a basis for a kind of universal thinking that escapes the boundaries of nationalism and regionalism, looks at life from a global perspective, and sees things the way that people from a variety of cultures agree they should be seen?

In an age proud of its ability to deconstruct universals, that may seem a tall order, but one place to start looking is at ethics. It appears that some “universally acknowledged” values — honesty, responsibility, respect, fairness, and compassion — are held in common by many cultures around the world. If that’s true, global thinking can begin profitably by seeing the world through the lens of those values.

Another lens, as several of the conferees noted, focuses on trends of thought that might broadly be called expansive. Such trends move from the immediate to the long-term, from the one-dimensional to the multidimensional, from the partisan to the integrated, and from the self-centered to the community-focused. Thinkers rooted in these trends are more apt to think globally than nationally.

A third lens helps distinguish between two classes of issues. One class comprises those issues that are genuinely global — so interdependent that they lie beyond the ability of any single nation or region to control. Climate change, energy security, weapons of mass destruction, global terrorism, and the architecture of global markets all force us to think beyond the interests of even the largest nation or region — to look down from above, as it were, and see all the parts at once. A second class of issues — food security, governmental corruption, low-income housing, gender equity, and education reform among them — occur across the globe but don’t require that overarching view: Any single nation can make progress on them even if others don’t.

Can a group of think tanks, using these three lenses of shared values, expansive trends, and interdependent issues, help promote truly global thinking? If so, they can pool their valuable national and regional perspectives to help move governments toward holistic, transnational, and universal perspectives. They can help the world’s major corporations grasp the difference between the merely multinational and the genuinely global. And they can do so in ways that strengthen, rather than degrade, the local, tangible benefits that governments and businesses provide.

©2008 Institute for Global Ethics

Questions or comments? Write to newsline@globalethics.org.

Several readers commented on last week’s commentary by Rushworth Kidder, in which he asserted that the root causes of the problems faced by Fannie Mae and Freddie Mac, the government-backed institutions guaranteeing the majority of home mortgages in the United States, were the millions of “little gray lies” and “petty fudgings” in mortgage applications and the subsequent investments based on those loans.

One reader had this reaction: “The plague of ‘little lies’ which beset the mortgage market had behind it a stiff wind of profit without risk. I — wink, wink, nod, nod — write the mortgage and collect unreasonable fees, then bundle them and pass along the risk to the aggregator. Obscene profits are made at each step, but there is really inconsequential risk to the profit takers as the market is too big to be allowed to fail. This is simply a pyramid scheme dressed in the cloth of making possible the American dream of universal home ownership.”

Another expressed frustration with U.S. leadership in general and wondered how a government so “deep in red ink and not embarrassed at all” could be expected to impose effective regulation on banks and business that have “grown up in a culture of sharp practices.”

And a reader who maintains that the complexity of the process removed the consequences of the actions from the actions themselves posited that “Jefferson once opined that every generation or two, all institutions should be abolished and started all over. Perhaps he was right.”

– Compiled by Ethics Newsline® editor Carl Hausman

“The Commission’s determination that CBS’s broadcast of a nine-sixteenths of one second glimpse of a bare female breast was actionably indecent evidenced the agency’s departure from its prior policy.”

– An excerpt from Monday’s ruling by a federal appeals court overturning a $550,000 indecency fine against CBS Corp. over Janet Jackson’s “wardrobe malfunction” during the 2004 Super Bowl halftime show. The three-judge panel of the 3rd U.S. Circuit Court of Appeals ruled that the Federal Communications Commission (FCC) “acted arbitrarily and capriciously” when fining CBS since the punishment deviated from the agency’s longstanding practice of issuing fines only when the content was so “pervasive as to amount to ’shock treatment’ for the audience,” reports the Associated Press. “Like any agency, the FCC may change its policies without judicial second-guessing. But it cannot change a well-established course of action without supplying notice of and a reasoned explanation for its policy departure,” the court ruled.

Source: AP, July 21.

For more information, see: Related Newsline story, June 12, 2006 — Related Newsline story, Apr. 25, 2005 — Related Newsline story, Feb. 28, 2005 — Related Newsline Commentary, June 28, 2004.

In addition to U.S. crane collapses, there’s concern over construction safety in India; also, financial toll from Boston’s Big Dig skyrockets

VARIOUS DATELINES
The fatal collapse of a crane last week in Houston focused international attention on issues of ethics and regulation — concerns reflected in a variety of stories in the United States, Canada, and India. Among the stories:

• Four people were killed and seven injured in a crane collapse at a Houston oil refinery, an accident that comes in the wake of increased scrutiny of crane safety after recent crane-related deaths in Las Vegas, Miami, and New York, reports the Associated Press. An AP survey found that cities and states have widely varying rules about construction cranes, and some have no rules at all, relying on federal guidelines that critics say are outdated. The cause of the collapse had not been determined as this issue of Newsline went to press.
• In an article headlined “Incompetence and Corruption Haunt Crane Work,” the New York Times claims that investigators are finding that amidst the city’s construction boom, the industry remains loosely regulated. Times reporter William Rashbaum writes: “Last month, the city’s chief crane inspector was arrested on charges that he took bribes, in part to ensure that some crane company employees would pass their city licensing tests. He is accused of giving the company a copy of the test and the answers.” Twice in the past four months, Rashbaum notes, “large tower cranes have toppled to the streets of Manhattan, leaving nine people dead and focusing intense scrutiny on an industry that rarely attracts attention despite its imprint on the skyline…. While crane accidents are far from routine, they have cast a spotlight on some industry flaws that have been all but habitual — job site payoffs, union corruption, and weak city oversight — at a time when New York’s building boom has made the crane a ubiquitous presence.”
• An investigation into a crane-related death in Vancouver has put the blame on insufficient training, according to a report from the Canadian Press. Authorities concluded that the operator received between 20 minutes and 90 minutes of training and “had little practical or theoretical knowledge of crane operations,” according to the investigator’s report.
• India’s building boom is taking a suddenly steeper toll in injuries and deaths, according to a report from the Wall Street Journal. “Safety standards always have been an issue in India, whose building boom is helping the country maintain an economic growth of almost 9 [percent] a year,” Journal reporters Eric Bellman and Jackie Range report from New Delhi. “The number of accidents is also climbing in mining, manufacturing, and brick-making as those industries expand, experts say.” Small construction companies typically pay little attention to training and safety, the report claims.
• A massive construction project that has been haunted by safety issues, legal challenges, and cost overruns returned to the news last week, when Massachusetts residents learned that the “Big Dig” project — a tunnel system under the busy central area of the city — not only ballooned to a $15-billion price tag but will carry an additional $7 billion in interest, according to an investigative report by the Boston Globe. The debt has diverted maintenance and repair money from deteriorating roads and bridges across the state, reports the Globe. Criminal and civil litigation continues over the project, with federal prosecutors alleging that a contractor lied about safety and construction procedures in a section of a tunnel that collapsed and killed a motorist in 2006.

Sources: AP, July 18 — Boston Globe, July 17 — New York Times, July 16 — Wall Street Journal, July 16 — Canadian Press, July 16 — Boston Globe, June 24.

For more information, see: Related Newsline story, June 9 — Related Newsline story, May 27 — Related Newsline story, Mar. 31 — Related Newsline story, Aug. 6, 2007 — Related Newsline story, July 16, 2007.

Corruption issues top the news from several continents

VARIOUS DATELINES
Accusations of graft and vote-buying made headlines last week. Among them:

• The corruption probe of Israeli prime minister Ehud Olmert continued last week, with a U.S. financier testifying that he gave Olmert $150,000 in cash stuffed into envelopes, according to reports from the Voice of America and the Jerusalem Post. At issue is whether the money constituted legal campaign contributions, as Olmert claims, or whether the cash was used illegally for Olmert’s personal gain and to finance his lavish lifestyle when he was mayor of Jerusalem, as prosecutors claim.
• The European Union, which has been threatening for months to take away aid from Bulgaria if that nation does not clamp down on corruption, appears to be ready to carry through. EU officials have frozen a billion-dollar fund overseen by Bulgarian politicians whom the EU no longer trusts, reports the Economist. According to an unidentified diplomat cited in the piece, some of those funds may be withdrawn altogether unless Bulgaria can prove that EU funding is not being siphoned off by corrupt officials and organized crime.
• Indonesian authorities arrested a ember of Parliament last week on charges of taking bribes from developers. Forbes reports that Yusuf Emir Faishal is the sixth MP to be detained so far this year in a sweeping corruption crackdown. Indonesia is regarded widely as one of the world’s most corrupt nations and rates near the bottom of Transparency International’s Global Corruption Perceptions Index, notes Forbes.
• India’s government, priming for a crucial no-confidence vote, has been accused of widespread vote buying, according to a report from the Times of London. Jeremy Page, reporting from Delhi, writes: “In the run-up to Tuesday’s vote, Delhi has been gripped by a frenzy of mud-slinging, back-slapping, and deal-making as the Congress Party and its main rivals try to make up the numbers. An MP said this week that the Government was offering to pay as much as 250 million rupees ($5.9 million) for each vote in parliament.” According to Page’s dispatch, the government secured three votes by agreeing to name an airport for the father of a leader of a regional party, and is planning to free six jailed MPs for the vote, four of whom are convicted murderers.

Sources: Voice of America, July 18 — Economist, July 18 — Times of London, July 17 — Jerusalem Post, July 16 — Forbes, July 16.

For more information, see: Related Newsline story, July 7 — Related Newsline story, June 30 — Related Newsline story, June 23 — Related Newsline story, June 16 — Related Newsline story, June 2.