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

by Rushworth M. Kidder

According to chaos theory, the flap of a butterfly’s wings in Brazil can influence a tornado’s track in Texas. But can a $600 bill for horse manure convulse the Mother of Parliaments, threaten a government, and help extend a global recession? Apparently so, given the moral outrage now seething through the United Kingdom.

The manure tab — along with invoices for mouse poison and sunflower seeds, worth another $6.30 at today’s exchange rates — was submitted as a parliamentary expense by David Heathcoat-Amory, a backbench Conservative in the House of Commons, to maintain the gardens at his second home near Glastonbury.

By itself, the Glastonbury grift would be inconsequential. But as part of a pastiche of revelations published in recent weeks by one of London’s most respected newspapers, the Daily Telegraph, it has become part of a scandal that has gripped the British conscience with unrelenting force. The newspaper’s stories have detailed the expenses claimed by members of Parliament (MPs) under rules that allow them to recover costs for maintaining second homes in London. According to the newspaper, scores of MPs have claimed reimbursement for items ranging from cleaning a country-house moat and purchasing a trouser press to completing major renovations and covering excessive mortgage payments. Some members, by switching their second-home designation between various properties, effectively have used taxpayer funds to upgrade and sell homes — and, in at least one case, to avoid paying capital gains on the sale.

Outrageous? Evidently. The picture of high-living public servants fiddling their expense reports couldn’t have come at a worse moment, as their constituents struggle through a severe economic downturn.

Historic? Profoundly. Last week’s resignation of Michael Martin over this issue marks the first forcible removal of a sitting speaker of the House of Commons in more than 300 years.

Economically troubling? Apparently. Standard & Poor’s, the credit rating agency, lowered its outlook on Britain to negative for the first time last week, noting not only a growing national debt but swelling public uncertainty in the run-up to the next election, due by mid-2010.

Politically transformative? Quite possibly. Polls suggest that the scandal, which is tainting the Labour, Conservative, and Liberal parties alike, is ginning up new interest in the country’s far-right British National Party and the more moderate U.K. Independence Party.

But illegal? Here things get tougher. Under Westminster’s rules, many of these expenses were completely legal. Others were apparently so commonplace that they easily slipped by under the everyone-else-is-doing-it test. In any case, the fiscal impact is minute: Rolled together, these payments are merely a rounding error in the Chancellor of the Exchequer’s accounts.

But that’s not the point. The dazzling significance of this development is precisely its butterfly-wing smallness. Students of chaos theory, noting that tiny changes in initial conditions can have enormous long-term impacts, like to explain that a boulder balanced on a mountain peak could roll into any one of several different valleys depending on a half-inch adjustment to its starting position. At Westminster, similarly, even a small deviation of Parliament’s attentiveness — given the international leverage of London’s financial markets — could theoretically spell the difference between a short and a long recession.

If Parliament had been able to focus its energy for the last two weeks on global economic progress rather than local constituency outrage, would London still have its triple-A outlook from Standard & Poor’s? Absent this scandal, would a majority of voters have remained loyal to one of the nation’s two major parties, rather than invoking Shakespeare’s towering curse — “a plague o’ both your houses!” — and perhaps edged the nation closer to the multiparty chaos plaguing so many parliamentary democracies? Would British subjects have retained a greater modicum of trust in the ethical standards of their public officials?

By its very nature, public trust is ultimately reflected in public sentiment. And in the end, it is public sentiment that will determine the course of this recession. How and when consumers decide to spend — how they execute billions of choices as they perch like boulders on the peaks of millions of family budgets around the world — will shape the course of our collective future. But consumers only spend when they believe the economy is healthy enough to let them replenish their personal coffers. And that belief grows directly out of their trust that politicians will do the right thing — a trust that, over the last two weeks in Great Britain, has been shattered.

Maybe flaps over corruption, even about things as slight as Glastonbury manure, really can change the global economy. Maybe a small moral deviation in the initial conditions of a dynamic economic and political system really can make a long-term difference. Maybe, in other words, these British butterflies are proving something we’ve long suspected: that in ethics, as in chaos theory, it really is the little things that matter most.

©2009 Institute for Global Ethics

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

“The lesson here is that these cases aren’t going away. If a jury found Shell guilty, this would change the behavior of the industry pretty quickly.”

– Arvind Ganesan, the head of the business and human rights practice at Human Rights Watch, talking to the New York Times about this week’s trial of oil giant Royal Dutch Shell on charges of crimes against humanity. Shell will be put on trial in New York for its alleged role in abetting the execution of Nigerian author and activist Ken Saro-Wiwa, a thorn in the company’s side over its operations in impoverished African communities. Shell has denied the charges, but must prove its case in court — one of multiple legal cases against international oil companies operating in developed countries — notes the Times.

Source: New York Times, May 22.

For more information, see: Related Newsline story, Sep. 27, 2004 — Related Newsline story, Mar. 31, 2003 — Related Newsline story, Apr. 1, 2002 — Related Newsline story, June 25, 2001 — Related Newsline story, Apr. 2, 2001.

President acknowledges that some terror suspects may have to be held indefinitely without trial; harsh interrogation remains on agenda as Obama and former VP engage in unusual public debate; House Speaker says she’s said all she’s going to say on question of what she knew about waterboarding and when

WASHINGTON
Conflict over the moral and legal ramifications of imprisoning terror suspects continued to simmer last week. Among the coverage:

• President Barack Obama last week acknowledged publicly for the first time that some Guantánamo Bay detainees may have to be held indefinitely without trial, the Washington Post reports. Commenting on one of the most divisive ethical issues in his young administration, Obama said: “We are going to exhaust every avenue that we have to prosecute those at Guantánamo who pose a danger to our country…. But even when this process is complete, there may be a number of people who cannot be prosecuted for past crimes, but who nonetheless pose a threat to the security of the United States.” Dueling moral arguments surfaced immediately, notes the Post: Some claimed that Obama was left no choice because of Bush administration actions, while others said a “legacy” policy that violates human rights is still unacceptable, regardless of the circumstances that shaped it.
• National security and the treatment of Guantánamo detainees were subjects of an unusual debate between President Obama and former vice president Dick Cheney carried out via foreign policy speeches. Cheney accused Obama of weakening U.S. security and insisted that the Bush administration acted constitutionally, claiming that “enhanced” interrogation techniques saved thousands of lives. Obama countered by claiming that Guantánamo has weakened national security by becoming a “rallying cry for our enemies,” saying there are more reliable and more moral methods of gaining testimony than by torture.
• House speaker Nancy Pelosi late last week said she would no longer answer questions about her assertion that the CIA lied about waterboarding, the Associated Press reports. Pelosi is at odds with the current director of the CIA, who said records showed Pelosi was informed that waterboarding had been used in interrogations of terror suspects. Pelosi denied ever being told. Release of further documents have not clarified the dispute, reports the AP, because those papers were found to contain several errors.

Sources: Washington Post, May. 22 — CNN, May 22 — AP, May 22 — CNN, May 21.

For more information, see: Related Newsline story, May 18 — Related Newsline story, Apr. 27 — Related Newsline story, Apr. 20 — Related Newsline story, Apr. 13.

More than 2,000 people have given evidence in nine-year probe

DUBLIN and BELFAST
A scathing report on abuse in Ireland’s church-run schools and orphanages documents decades of sexual abuse, beatings, and near slave-like conditions at the institutions.

ABC News reports that the study chronicles sexual, physical, and emotional abuse by Catholic priests and nuns from 1930 until the current system of church-run schools was closed in the 1990s.

Cardinal Sean Brady, leader of the Catholic Church in Ireland, responded, according to ABC, by saying, “I am profoundly sorry and deeply ashamed that children suffered in such awful ways in these institutions. Children deserved better and especially from those caring for them in the name of Jesus Christ.”

The report by the Commission to Inquire into Child Abuse, published last week, concludes that cases of sexual abuse were covered up by the congregations that ran the institutions and offenders were routinely transferred to other locations, where they often abused again, reports Dublin-based Irish Times.

More than 2,000 people gave evidence in the nine-year inquiry, according to TIME magazine. The report contains 2,600 pages in five volumes.

In addition to sexual abuse, the report documents routine beatings and “penal colony” conditions in workshops, farms, and laundries, where the students provided free labor for the religious orders.

The Irish government also was criticized for colluding in the silence, notes the Reuters news agency.

A lawsuit by the Christian Brothers prompted the commission to omit names of the alleged abusers from the report, and no one will be prosecuted, according to Reuters.

Sources: Reuters, May 22 — ABC News, May 22 — Irish Times, May 21 — TIME, May 21.

For more information, see: Related Newsline story, May 12 — Related Newsline story, Apr. 21 — Related Newsline story, Dec. 10, 2007 — Related Newsline story, Sep. 17, 2007 — Related Newsline story, Sep. 10, 2007.

Companies cite need to protect corporate image; not surprisingly, most workers don’t agree

NEW YORK
The boss wants to keep an eye on the image you project on social-networking sites like Facebook and Twitter. That’s the message from a new Deloitte survey that underscores the practical and ethical dilemmas faced by workers who want to communicate freely on their own time and companies that have spent fortunes to burnish their image and want to protect it, reports BusinessWeek.

Sixty percent of the executives interviewed by Deloitte said they believed they had a right to monitor how employees portray themselves and their organizations. But more than half of the employees questioned say their social communication is none of their employer’s business, according to a summary of the study in Bizjournals.com.

A variety of news media worldwide localized the results of the survey and examined the often-uncomfortable mix of social media and employment. The Sydney Morning Herald, for example, profiled a worker who bemoaned her love life in Facebook only to find that her venting had become the hot topic in the boardroom of her marketing company.

The Financial Times notes that the dilemma recently played out among media employees themselves after Dow Jones imposed ethics restrictions on how workers at the Wall Street Journal and other publications could use Facebook and Twitter.

Prohibitions against “friending” confidential sources and promoting one’s own work were among the strictures, according to an Editor & Publisher column that reprinted an internal Wall Street Journal email.

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

Sources: BusinessWeek, May 21 — Bizjournals.com, May 19 — Sydney Morning Herald, May 18 — Financial Times, May 18 — Editor & Publisher, May 14.

For more information, see: Related Newsline story, Apr. 6 — Related Newsline story, Feb. 23 — Related Newsline story, Jan. 12 — Related Newsline story, Dec. 10, 2007 — Related Newsline story, Dec. 3, 2007 — 2009 Deloitte “Ethics & Workplace Survey,” undated.

Executive with Chinese state news agency lectures Western media who “covered up” roots of financial crisis; columnist returns speaking fee and gets a lecture from rival paper; Google resumes massive digitizing project after settlement on copyright infringement

VARIOUS DATELINES
Controversies involving free press, conflict of interest, and intellectual property were major topics last week. Among the stories:

• Official Chinese news agency Xinhua delivered an ethics lecture to the Western press last week, claiming that Western media covered up lies by the financial establishment and protected powerful interests. The context of the scolding, reports the Wall Street Journal, is that China’s newsgathering will be crucial to a new international financial landscape emerging after a monetary collapse brought on by the Western media’s failure to protect the system. Xinhua vice president Lu Wei told delegates at a Shanghai conference that the world-market implosion occurred “under a situation where news gathering was monopolized, communication power was controlled, risks were hidden, the truth covered up, market information was disseminated to represent selected groups, falsities clouded investor judgment and brought finance to the abyss.”
• The Los Angeles Times is hectoring the New York Times about ethics guidelines pertaining to speaking fees, reports journalism blogging site Media Bistro. The speaking-fee flap started after New York Times columnist Thomas Friedman returned a $75,000 speaking fee because it came from an Oakland, California, government agency. Taking money from any government group is prohibited under New York Times guidelines, says the L.A. paper, because it can cause a perceived or real conflict of interest in coverage. Los Angeles Times columnist James Rainey says Friedman did not return several of his calls seeking comment, although a New York Times spokeswoman did acknowledge that the fee was turned. New York Times public editor Clark Hoyt did get a comment from Friedman: “The people in Oakland got a free lecture,” Friedman said, “and I got a free lesson.”
• In one of the most visible disputes over the ethical and legal implications of digitizing intellectual property, the University of Michigan expanded an historic agreement with Google to allow public access to millions of digital pages made from the university’s books and journals. The Detroit News reports that the move was made possible after Google reached a settlement with a group of authors and publishers who filed suit for copyright infringement. As it’s planned now, the new project will allow searchers to see previews of many books and then offer provisions for purchasing larger sections.

Sources: New York Times, May 24 — Wall Street Journal, May 22 — Media Bistro, May 21 — Los Angeles Times, May 21 — Detroit News, May 21 — Los Angles Times, May 13.

For more information, see: Related Newsline story, May 18 — Related Newsline story, Apr. 27 — Related Newsline story, Apr. 20 — Related Newsline story, Mar. 30 — Related Newsline story, Feb. 23.

His mother spirits him into hiding, fueling the latest in a series of disputes over the rights of religious practice versus the rights of the state to protect children

NEW ULM, Minn.
Religious conviction, medical science, and the law were at odds last week as a Minnesota mother disappeared with her cancer-stricken son, defying court orders that the youngster receive chemotherapy.

Colleen Hauser and her 13-year-old son Daniel fled their rural Minnesota home last week, prompting a nationwide search that ended on Monday night after the pair gave up their attempt to flee treatment, reports the Associated Press.

The Hausers belong to a religious group that advocates natural and homeopathic treatments.

Newsweek reports that the Hauser case is the latest in a string of incidents in which medical treatment imposed by law has come into conflict with parents’ beliefs, including recent controversies involving mandatory inoculation and children’s rights to medical privacy.

In what is typically a thorny series of moral dilemmas, state law frequently weighs the risks associated with the treatments versus the perceived benefit. “There’s got to be a balancing of potential benefits against potential harm,” Alan Meisel, director for the center of bioethics and health law at the University of Pittsburgh, told Newsweek. “In some situations you have a treatment where the likelihood of success is very small, and in situations like that, the courts are much less likely to order the treatment.”

Most states have legal exemptions that provide limited protection to parents who withhold medical care on religious grounds, reports USA Today. Those laws also typically discourage prosecution of parents whose children die following such disputes.

Press commentary spanned a spectrum of views, reports the Week, a news-summary magazine. One medical analyst condemned the parents for making a “martyr” out of the child, another advocated mandatory chemotherapy while complaining that the state moved an a draconian fashion in this case, and another physician urged readers not to judge the boy’s parents too harshly, noting that chemotherapy is a grueling process that “can indeed give even a dying person pause.”

Sources: AP, May 25 — The Week, May 22 — USA Today, May 21 — UPI, May 20 — Newsweek, May 18.

For more information, see: Related Newsline story, Feb. 9 — Related Newsline story, Dec. 22, 2008 — Related Newsline story, July 14, 2008 — Related Newsline story, Feb. 6, 2006 — Related Newsline story, Jun. 21, 2004.

Tobacco companies and credit-card firms altering business plans; MBAs face discouraging job market

NEW YORK and WASHINGTON
Among the top news from the business-ethics file:

• A federal appeals court last week upheld a lower court’s ruling that tobacco companies conspired to deceive smokers into thinking that “light” and “low-tar” cigarettes were safer than standard smokes. Bloomberg reports that three major tobacco companies say they will appeal, claiming that banning the terms “light” and “low tar” — a move delayed pending the first appeal — would cost hundreds of millions of dollars.
• Credit card firms, confronted with legislation that is expected to cut their income from fees and interest rate hikes, are changing their business plans, according to the New York Times. The firms are focusing on those individuals most likely to pay their current debts, and are using what some would view as an intrusive collection of data to extract speedy repayment. Times writer Charles Duhigg contends that credit card firms are now interested in understanding customers’ lives and psyches in order to manipulate customers into paying as much of their debt as possible.
• CNBC reports that the financial crisis that obliterated many of the leading investment banking houses has changed not only the world of finance but the options available to newly minted MBAs. Recruiters tell CNBC that companies are hiring about half the number of MBAs as last year.

Sources: Bloomberg, May 22 — AP, May 22 — New York Times, May 21 — CNBC, May 20.

For more information, see: Related Newsline story, May 4 — Related Newsline Commentary, May 4 — Related Newsline story, Aug. 25, 2008 — Related Newsline story, May 14, 2007 — Related Newsline story, Jan. 22, 2007.

New study shows leaders of low-reputation firms use broad, evasive language

BOSTON
A new study purports to show that certain types of evasive language in a CEO’s annual letters to stockholders can be a warning sign to investors, reports the Christian Science Monitor.

Two professors from the University of Nebraska at Lincoln found that the CEOs of companies with high reputations used clearer, more direct language than those heading firms of lower repute.

“The good guys use shorter words, fewer words — and the words they do choose are concrete words,” Janice Lawrence, director of the university’s business ethics program and coauthor of the study, told the Monitor. “The bad guys use more adjectives; their words are longer; and the words aren’t as concrete.”

Using content analysis software, the researchers could sort the letters from high-reputation firms and low-reputation firms correctly 81 percent of the time.

While co-author Lawrence concedes that the average investor can’t detect the symptomatic language with the efficiency of the computer, she tells the Monitor that people often can rely just on gut feeling.

“We’ve all had times when someone gave a talk and you feel they just talked all around the issue and didn’t get right down to it,” Lawrence said.

Source: Christian Science Monitor, May 20.

For more information, see: Related Newsline story, Mar. 9 — Related Newsline story, Feb. 2 — Related Newsline story, Jan. 26 — Related Newsline story, Jan. 19 — Related Newsline story, July 27, 1998.

Pew survey charting the rise of independents also finds that the “proportion of voters citing moral values as most important has declined sharply since 2004″

From the Pew Research Center:

“Centrism has emerged as a dominant factor in public opinion as the Obama era begins. The political values and core attitudes that the Pew Research Center has monitored since 1987 show little overall ideological movement. Republicans and Democrats are even more divided than in the past, while the growing political middle is steadfastly mixed in its beliefs about government, the free market and other values that underlie views on contemporary issues and policies. Nor are there indications of a continuation of the partisan realignment that began in the Bush years. Both political parties have lost adherents since the election and an increasing number of Americans identify as independents.

“The proportion of independents now equals its highest level in 70 years. Owing to defections from the Republican Party, independents are more conservative on several key issues than in the past. While they like and approve of Barack Obama, as a group independents are more skittish than they were two years ago about expanding the social safety net and are reluctant backers of greater government involvement in the private sector. Yet at the same time, they continue to more closely parallel the views of Democrats rather than Republicans on the most divisive core beliefs on social values, religion and national security….

“…Taking an average of surveys conducted this year, 36% say they are independents, 35% are Democrats, while 23% are Republicans….

“Republicans and Democrats hold increasingly divergent views about the role of government, the environment and many other issues. As the partisan divide widens, the overall course of the public’s thinking is being determined by the tilt in opinions among the growing number of independents, who have a more moderate ideological point of view….

“But independents continue to be much closer to Democrats than to Republicans with respect to social values, religiosity and beliefs about national security….

“What is clear is that the Republican Party is facing formidable demographic challenges. Its constituents are aging and do not reflect the growing ethnic and racial diversity of the general public. As was the case at the beginning of this decade, Republicans are predominantly non-Hispanic whites (88%)…. At the same time, the average age of Republicans increased from 45.5 to 48.3, while the average age of Democrats has remained fairly stable. For the first time in at least two decades, Republicans are older than Democrats on average.

“Republicans continue to be disproportionately comprised of Southerners (39%) and white evangelical Protestants (35%)….

“Fully 75% of Republicans today say that government regulation of business does more harm than good, up from 57% two years ago….

“There is no sign that the public is turning inward in response to difficult economic times. A larger share of Americans — and especially Democrats — completely agree that the U.S. should play an active role in world affairs….

“While opinions about global engagement and foreign affairs have not been affected by the recession, this is not the case with respect to environmental attitudes. The public continues to broadly support stricter environmental laws and regulation, but its willingness to pay higher prices, and suffer slower economic growth for the sake of environmental protection has declined substantially from two years ago….

“The values survey finds wide political and religious differences over traditional values and social policy issues, such as gay marriage. However, issues relating to religion and morality clearly have less political punch than during the 2004 election. The current survey finds that just 10% say they would consider moral values as the most important issue in their vote in a hypothetical presidential election….

“As the proportion citing moral values as most important has declined sharply since 2004, the economy and jobs have come to dominate the public’s concerns: 50% now point to the economy as most important compared with 21% of voters in the 2004 post-election survey….

“Moreover, over the past decade there has been erosion in the percentage of Americans holding conservative views on family, homosexuality and gender roles. The decline in social conservatism is a result of generational change. Younger age cohorts are less conservative than older ones…. Societal change in these values is mostly a consequence of newer generations replacing older ones.

“Following the election of Obama, blacks now have a more positive view of American society….”

For more information, see: Full press release from Pew, May 21 — Full text of report from Pew.

“To profit from good advice requires more wisdom than to give it.”

John Churton Collins (English literary critic, 1848-1908)

For more information, see: Pew press release, May 11 — Related Newsline Research Report, May 11.

by Rushworth M. Kidder

As a small boy, I grew up with a 1920s Louis Armstrong recording of W. C. Handy’s “Loveless Love.” In his trademark gravelly voice, the cornet player they called Satchmo delivered a pithy social commentary that has stuck with me through the years:

Love, oh love, oh loveless love,
Has set our heart on goalless goals:
From milkless milk and silkless silk,
We are growing used to soulless souls.

Such grafting times we never saw –
That’s why we have a pure food law.
In everything we find a flaw,
Even love, oh love, oh loveless love.

If Satchmo were around today, imagine how he could have improvised on that theme of “grafting times!” Here’s a snapshot from last week alone:

• Chipmaker Intel was fined $1.45 billion by the European Commission for antitrust violations. The EU’s competition commissioner, Neelie Kroes, said that Intel “went to great lengths to cover up its anticompetitive actions” and “harmed millions of European consumers.”
• The trustee overseeing the Bernard Madoff bankruptcy filed $6.1 billion in lawsuits against investors whose profits (in one case reaching 950 percent in a single year) raised strong suspicions that they were party to, rather than victims of, Madoff’s Ponzi scheme.
• Laura Pendergest-Holt, the chief investment officer for Stanford Financial Group, was indicted on charges related to a suspected $8 billion fraud by Texas billionaire R. Allen Stanford’s Houston-based company.
• German authorities announced they were investigating truck-maker MAN, one of the country’s largest industrial firms, on charges of paying bribes topping $1 million in Germany and possibly much more elsewhere.

And that’s just the big-dollar financial stuff. Also bubbling away:

• The New York Times is reporting that a former Army surgeon who published a favorable scientific study of a drug sold by Medtronic — for whom he was a paid consultant — fabricated data about soldiers at Walter Reed Army Medical Center, forged the signatures of his co-authors, and overstated the effectiveness of the drug.
• Investigators into the February 12 crash of Continental Connection Flight 3407 fingered pilot inattention as cause of the crash. The idle chatter that left them unprepared to respond to stall warnings was, according to the airline’s director of operations, Dean Bandavanis, a lack of “integrity,” which he defined as “doing the right thing when nobody’s watching.”
• A stinging report by the New York inspector general identified the state’s ethics commission as the source of leaks to former governor Eliot Spitzer during the commission’s 2007 investigation of his activities. Governor David Paterson has demanded the resignations of all 12 commission members.

What to do about it all? One approach, of course, is more rule-making. In a widely reported speech last week, U.S. assistant attorney general Christine Varney called for tough new antitrust regulations, effectively reversing the more laissez faire approach of the Bush administration. While noting that there is “no adequate substitute for a competitive market, particularly during times of economic distress,” she concluded that “passive monitoring of market participants is not an option” and identified antitrust regulation and enforcement as a “frontline issue” in the government’s response to the economic downturn.

Which takes us back to Satchmo. If he were updating Handy’s lyrics for 2009, he might have noted that investors buy trustless trusts, pilots take careless care, and citizens get ethics-less ethics commissions. But his riff goes deeper. When integrity ebbs, the response is inevitable: We get the Pure Food and Drug Act of 1906, or the Sarbanes-Oxley Act of 2002, or the upcoming flood of financial-industry regulations. In other words, we get more rules.

But Satchmo’s real chiller is his last line. Under the steady water-drip of corruption, we’re numbed into accepting “loveless love.” When ethics collapses, our deepest emotional and intuitional feelings are betrayed, squelched, and deadened by counterfeits that look like love but aren’t. We catch a glimpse of what it would be like to live in a moral void that can’t tell the real from the fake.

For that condition, law-making offers no real remedy. These days, the old saying that “You can’t legislate morality” is truer than ever. There’s no rule that can impose integrity on a populace that doesn’t care about it. Integrity grows up from within, among people who see that they can’t survive without it. Just as there’s no quick fix for loveless love, there’s no legislative pill for valueless values. Yes, we’re in for whole new round of “pure food law.” But unless today’s rule-makers also hammer home an expectation of integrity — calling strongly on individuals and organizations to do the right thing even though nobody’s looking — we’ll find ourselves still duped by counterfeits.

I suspect Satchmo knew all that. But he also sang with an optimistic twinkle in his eye. His music, rooted in the gospel singers’ against-all-odds faith, grew out of the tailgate Dixieland that celebrated funerals with buoyant hope. He knew his audience wouldn’t settle for milkless milk, silkless silk, or loveless love. So he warned them about flimflams, feints, and frauds. Sometimes that warning is all it takes to spark the vigilance that bites the coin, holds the twenty up to the light, casts aside the phony, and demands the sort of moral reform that goes deeper than any rule can reach.

©2009 Institute for Global Ethics

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

“The publication of these photos would not add any additional benefit to our understanding of what was carried out in the past by a small number of individuals. In fact, the most direct consequence of releasing them, I believe, would be to further inflame anti-American opinion and to put our troops in greater danger.”

– U.S. president Barack Obama, explaining last week his U-turn on releasing photos depicting prisoner abuse by U.S. troops and personnel in Iraq and Afghanistan. The photos — some of which have been leaked and reprinted in Europe — reportedly are similar to those that sparked the Abu Ghraib scandal. Obama’s about-face is examined in a New York Times piece that looks at how similar suppress-versus-release dilemmas have been handled by past administrations and courts. The key question, notes the article: “How much potential harm justifies suppressing facts, whether from My Lai or Iraq, that might help the public judge the way a war is waged in its name?”

Source: New York Times, May 16.

For more information, see: Related Newsline story, Apr. 30, 2007 — Related Newsline story, Mar. 13, 2006 — Related Newsline story, Feb. 20, 2006.

Tribunals revived, stunning some who anticipated end of process; Obama changes stance and says he will fight release of photos showing prisoner abuse by U.S. troops; House speaker and CIA chief espouse different versions of who knew what about waterboarding — and when

WASHINGTON
Treatment of terrorism suspects was the axis of much ethical debate last week. Among the top stories:

• Reviving a legal and moral controversy that arose during the Bush administration, President Obama announced last week that he will reinstate military tribunals for some Guantánamo Bay detainees. CBS News reports that the move shocked many who claim the secret tribunals are unconstitutional and deprive the accused of basic rights. Many of those critics expected the president to end the practice completely. Obama says the tribunals have been revamped to afford defendants stronger legal protection, including banning evidence obtained through torture or coercive methods and limiting use of hearsay. Obama was critical of the tribunal system when running for office.
• President Obama last week announced that he will fight the release of photos allegedly showing incidents of prisoner abuse by U.S. soldiers in Iraq and Afghanistan. U.S. News & World Report says Obama’s about-face — he previously supported release of the images — came after he was convinced that the photos could prompt violent retaliation against the military.
• Another layer to the ethical onion being peeled in the ongoing dispute over waterboarding: CIA director Leon Panetta last week denied a claim by House speaker Nancy Pelosi that the agency misled her about the use of harsh interrogation techniques. The Washington Post reports that Panetta insisted that the CIA informed congressional leaders about interrogation methods in September 2002. Pelosi said she attended the meeting but was told only that the CIA was considering using waterboarding. Panetta argues that records indicate Pelosi was told that waterboarding, also called controlled drowning, had been used on terror suspect Abu Zubaida, and that the instance was described in detail.

Sources: CBS News, May 16 — Washington Post, May 16 — U.S. News & World Report, May 15.

For more information, see: Related Newsline story, May 11 — Related Newsline story, May 4 — Related Newsline story, Apr. 27 — Related Newsline story, Apr. 20 — Related Newsline story, Apr. 13.

Leaked details of parliamentarians’ expenses show they’ve been taking taxpayer money for non-existent mortgage expenses, chandeliers, and even moat-cleaning on their country estates

LONDON
While Britain has endured several political-ethics scandals in recent years, few have sparked the outrage of what’s been dubbed the “expenses scandal.”

According to the Associated Press’s London bureau chief Paisley Dodds, few of those prior scandals “tarnished all three of the country’s main political parties in a single stroke.”

“Leaked lawmaker expenses for chandeliers, pornography, moat upkeep on country estates, and other claims,” Dodds writes, “have enraged voters — many of whom have lost jobs and homes during Britain’s deepening recession.”

“Talk show lines buzzed Friday with irate callers. Websites flashed reader comments comparing politicians to greedy bankers. And commuters clenched newspapers with such headlines as: ‘Parliament’s Darkest Day’ and ‘House of Ill Repute.’ Many politicians were being heckled during events that had been scheduled long before the leak.”

The furor comes after records of parliamentarians’ expenses were leaked to the press. So far, two MPs have been suspended, according to Reuters. One of the suspended lawmakers was alleged to have taken $20,000 in compensation for a mortgage he already had paid off.

Scotland Yard is now looking into whether criminal charges are to be filed in any of the cases, reports the Times of London.

Sources: AP, May 16 — Reuters, May 16 — Times of London, May 16 — BBC, May 15.

For more information, see: Related Newsline story, Feb. 2 — Related Newsline story, Sep. 29, 2008 — Related Newsline story, Aug. 4, 2008 — Related Newsline story, July 23, 2007 — Related Newsline story, May 14, 2007.

Brian Mulroney denies wrongdoing, but says he did not show good judgment in taking cash-stuffed envelopes from businessman and lobbyist

OTTAWA
An ethics inquiry into former prime minister Brian Mulroney has riveted the attention of Canadians.

The probe centers on the relationship between Mulroney and German-Canadian arms dealer and lobbyist Karlheinz Schreiber.

Dominating hearings last week was testimony that Mulroney took cash-stuffed envelopes from Schreiber in the 16 months after he stepped down as prime minister in 1993, reports the CanWest news service.

Mulroney says he was retained by Schreiber’s firm to do consulting after he left office, and was surprised when Schreiber gave him cash — the amount is pegged at between $225,000 and $300,000 — in envelopes during three separate meetings, reports the Canadian Press.

Critics have alleged that arrangement for the payments may have been made while Mulroney was in office, a possible breach of Canada’s ethics code.

Mulroney has denied any wrongdoing, but admitted that taking the cash payments was a “significant error in judgment,” reports the Toronto Star. Mulroney also conceded that he created the appearance of impropriety by putting the money into a safe-deposit box, rather than depositing it into a bank account.

Mulroney said Schreiber explained the cash payments by saying he was an international businessman and only dealt in cash, according to a report from CTV.

Sources: CanWest, May 16 — Canadian Press, May 16 — Toronto Star, May 16 — CTV, May 15.

For more information, see: Related Newsline story, June 2, 2008 — Related Newsline story, Mar. 3, 2008 — Related Newsline story, Feb. 25, 2008 — Related Newsline story, Feb. 18, 2008 — Related Newsline story, Feb. 4, 2008.

European Union alleges that the computer chip-maker funneled secret rebates to computer manufacturers

LONDON
Computer chipmaker Intel was fined roughly $1.45 billion by the European Commission (EC) last week for violating antitrust regulations.

The EC said Intel engaged in illegal anticompetitive practices to exclude competitors from the market, including giving hidden rebates to computer manufacturers if they bought their chips from Intel, reports technology network CNET.

Intel plans to appeal the EC decision and is preparing to fight similar allegations in the United States, according to the San Jose Mercury-News.

Intel CEO Paul Otellini told the Wall Street Journal that he is “baffled” by the allegations and says that Intel never played any of the tricks alleged by the EC, insisting that there is no evidence whatsoever to back up the claims.

The EC fine is expected to prompt numerous civil suits against the company, notes trade journal PC World.

Sources: San Jose Mercury-News, May 16 — PC World, May 16 — CNET, May 15 — Wall Street Journal, May 15.

For more information, see: Related Newsline story, Apr. 12, 2004 — Related Newsline story, Apr. 6, 2003 — Related Newsline story, Apr. 16, 2001 — Related Newsline story, Oct. 2, 2000 — Related Newsline story, Nov. 15, 1999.

The complex investments have been blamed, in part, for lack of transparency that led to monetary implosion

NEW YORK and LONDON
The Obama administration last week proposed new regulations for the murky world of derivatives.

According to the Los Angeles Times, derivatives — complex and exotic investment vehicles — played a major role in the reckless financial gamesmanship that brought down insurance giant AIG and shook markets worldwide.

MSNBC adds that the proposal would, for the first time, enable regulators to shine a light into the inner workings of the derivative markets, regulate the firms that issue them, and curb the risks that traders can take.

One of the more likely regulatory mechanisms, according to Bloomberg, is a system that will require data on derivatives to be posted on the Internet.

The London-based Financial Times notes that the September 2008 collapse of Lehman Brothers was a key turning point in the long-forestalled efforts to regulate derivatives because it demonstrated the vast exposure of markets worldwide to the contagion of one derivative-based implosion.

Sources: Los Angeles Times, May 15 — MSNBC, May 14 — Bloomberg, May 14 — Financial Times, May 14.

For more information, see: Related Newsline story, May 11 — Related Newsline story, Mar. 30 — Related Newsline Commentary, Mar. 2 — Related Newsline story, Oct. 27, 2008 — Related Newsline Commentary, Oct. 20, 2008.