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

Given the way Capt. Chesley B. “Sully” Sullenberger III retired from US Airways, you couldn’t be blamed for thinking that pilots land airliners in the Hudson River every day.

It’s been a little over a year since a flock of geese knocked out both engines of his Airbus A320 during its ascent from New York’s LaGuardia Airport, giving him and first officer Jeffrey Skiles only minutes to choose a plan, put it into action, and glide the plane safely into a splashdown with no loss of life. Earlier this month, after 30 years with his company, Capt. Sullenberger wrapped up his career with a distinct lack of fanfare. In an age starved for heroes and stark mad for celebrity, he refused to be lionized or put on a pedestal. That day, he simply commanded a final flight from Ft. Lauderdale to Charlotte, walked off the plane into a brief news conference, and joined a private farewell party in the crew room.

But then, that’s been his point all along: If need be, the kind of thing he did on January 15, 2009, should be just a part of a day’s work for a true professional. Learning by flying crop dusters as a teenager in North Texas, he’s been studying his profession ever since. He’s deeply concerned at what he sees as the declining standards in his industry and the lack of experience among newly hired pilots. For him, the competencies and standards that come from time-on-task practice are crucial. “There’s simply no substitute for experience in terms of aviation safety,” he said after his final flight — a point he drives home in his recent book, Highest Duty: My Search for What Really Matters. “My message going forward,” he told the media in Charlotte, “is that I want to remind everyone in the aviation industry, especially those who manage aviation companies and those who regulate aviation, that we owe it to our passengers to keep learning how to do it better.”

Good points, but there’s more to his story than simply experience. Some people have had 30 years of experience; others have had one year of experience 30 times. What makes the difference? In this case, I’d chalk it up to his moral courage — his willing endurance of significant danger for the sake of principle. Without that, no mere tallying of years and skills could have produced that life-saving performance.

But wait! the cynics bluster, Anyone in that situation, if they knew enough, would have done what he did. He’s not a hero, and there’s no special morality to his act. He’s just a guy pressed to the wall who figured out how to save his own skin.

I disagree. Lots of people “know” what to do, but in the heat of the moment, they lose their focus, surrender to fear, and either freeze up or panic. Of course training helps. Of course experience is essential. But unless we marry the experience gained from steady, repetitious practice to a willingness to address danger in the service of our values, we’ve missed the point. Sullenberger grasps this values component. He understands that when serving as a commander in charge of others, he has the moral responsibility for their safety and security.

Here at the Institute, our research on morally courageous individuals tells us that the key to standing for conscience can be articulated in a single word: trust. If you have no trust — no confidence that things just might work out for the best — you’ll never take a stand for courage. Why would you, if you’re absolutely convinced that everything is futile and all hope is gone? It’s hard to see how, if that had been Sullenberger’s mental state, he could have used those tense minutes over New York for such good decision making, rather than falling into despair or surrendering to doubt. What mattered about his experience is not just that he had it but that he trusted it.

What Sullenberger’s example teaches us, then, is that in training future leaders we’ve got to build not only experience but courage. For that, we need to help them cultivate trust and confidence. We need to build in them a settled habit of grace under pressure. And we need to help them develop an irreversible sense of responsibility — not only for themselves but for those within their radius of concern and control.

Looking at what might have become of Flight 1549 that winter day, I’m immensely grateful for Sullenberger’s decades of experience. But I’m even more grateful for his level-headed confidence, his conviction that failure wasn’t an option, and his willingness to endure danger for the sake of principle — in short, for his moral courage. That, for me, is what makes him a real hero.

©2010 Institute for Global Ethics

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– Lynn Turner, a former chief accountant for the U.S. Securities and Exchange Commission, talking to the New York Times about the role that auditing firm Ernst & Young may have played in obscuring financial schemes before the collapse of Lehman Brothers. Turner was talking about new findings by a court-appointed examiner, whose yearlong investigation into Lehman’s collapse was released last week in nine volumes and 2,200 pages.

“Now government regulators have what some lawyers call a road map for further inquiry into former Lehman executives like Richard S. Fuld, Jr., and the auditing firm Ernst & Young,” which certified Lehman’s “financial statements despite receiving warnings from a whistle-blower who said there were accounting improprieties,” reports the Times.

The Times notes that an Ernst & Young “spokesman said on Thursday that the firm stood by its work for 2007, the last year it conducted an audit of Lehman’s financial results.”

Source: New York Times, Mar. 12.

NEW YORK

An investigation into the financial machinations used by Lehman Brothers in the run-up to its spectacular bankruptcy has stunned even the most jaded observers of Wall Street scandals, according to press reports.

MarketWatch reports that Lehman used an accounting maneuver to make itself look stronger than it actually was — a trick used so often that one executive likened it to a “drug” — according to the bankruptcy-court-appointed examiner’s report.

Called a repurchase agreement, or “repo,” the arrangement involves the transfer of assets in exchange for cash with a side agreement to pay back the money and retrieve the assets at a later date.

But Lehman used a clause in accounting rules to classify the repos as sales, even though the company was still obliged to pay back the money — a tactic, reports MarketWatch, that may not have been blatantly illegal but deceptively made the balance sheets look stronger than they were.

The 2,200-page report by examiner Anton Valukas is expected to provide ammunition for plaintiffs looking to sue former Lehman officials, reports BusinessWeek.

Valukas’s report singles out Lehman’s then-CEO Richard Fuld as a culprit, saying he was “at least grossly negligent in causing Lehman Brothers to file misleading periodic reports,” according to BusinessWeek.

Barron’s reports that Fuld has denied any knowledge of accounting trickery.

According to an analysis from the Financial Times, some of the fallout from the Lehman bombshell is likely to rain down on auditors — in particular, Ernst & Young (E&Y).

Writes the FT’s Rachel Sanderson: “The report’s allegations center on claims that E&Y took no steps to question or challenge the non-disclosure by Lehman executives of their use of $50bn of temporary, off-balance sheet transactions, known as Repo 105, that flattered the bank’s financial position…. The claims against E&Y, although exceptional, give grist to a growing lobby questioning the purpose of auditors in providing investors with a true picture of the financial health of a company.”

Lehman Brothers’ 2008collapse, the largest bankruptcy in U.S. history, is thought widely to have been one of the motivators of the avalanche of financial disasters that crushed many sectors of the global economy.

Sources: Financial Times, Mar. 14 — Barron’s, Mar. 13 — Bloomberg, Mar. 13 — MarketWatch, Mar. 13.

For more information, see: Related Newsline story, Jan. 25 — Related Newsline story, Jan. 19 — Related Newsline Commentary, Dec. 21, 2009 — Related Newsline Commentary, Oct. 5, 2009 — Related Newsline story, June 15, 2009.

VARIOUS DATELINES

The ethical controversies surrounding Toyota continued to gain speed last week. Among the coverage:

• The district attorney of Orange County, California, filed a lawsuit against Toyota, alleging that the automaker sold thousands of cars despite knowing that they had the potential to accelerate out of control, USA Today reports. The suit accuses Toyota of deceptive business practices and asks for $2,500 for each violation. Toyota had no immediate comment on the suit.

• ABC News is in the midst of an ethics controversy after editing a two-second shot of a tachometer out of sequence in a piece about the reported acceleration problems in Toyota vehicles, reports the Associated Press. ABC produced the TV story about a professor’s suggestion that a design flaw could cause a short-circuit allowing undetected sudden acceleration by the car’s computer system. ABC cut in a shot of a tachometer, a dashboard display that measures engine revolutions, that actually was taken before the ride illustrated in the piece. ABC said it spliced in the canned shot because it was impossible to get a quality image while the car was moving, insisting that the edited-in shot displayed a similar result to the tachometer reading during the drive. ABC has admitted making an error in judgment when inserting the clip, according to the AP. Toyota has disputed the accuracy of the ABC report.

• A California man who called 911 to say his 2008 Toyota Prius was accelerating out of control is now the subject of some skepticism, according to a report from CTV. James Sikes, a real estate developer, adamantly insisted that his claim was not a hoax, although numerous blogs and anonymous tipsters have attempted to cast doubt on his story, saying that Sikes is in financial trouble and may in fact be the next “balloon boy,” according to the CTV report. Sikes said he pressed the brake, without result, for more than 30 miles as his car sped out of control. But according to the Reuters news agency, some reports say investigators have concluded that the pattern of wear on the brake was inconsistent with Sikes’s account.

Sources: Reuters, Mar. 14 — USA Today, Mar. 13 — CTV, Mar. 12 — AP, Mar. 12.

For more information, see: Related Newsline story, Mar. 1 — Related Newsline story, Feb. 22 — Related Newsline story, Feb. 15 — Related Newsline story, Feb. 8 — Related Newsline story, Feb. 8.

VARIOUS DATELINES

China continued to be the touchstone for a variety of moral controversies last week. Among the stories:

• Google said it is “99.9 percent certain” that it will shutter its censored Chinese Internet search engine, reports CBS News. Google and Chinese authorities have been at an impasse over China’s contention that foreign firms do not have the right to flout its laws. Google had protested Chinese censorship, claiming that saboteurs linked to the Chinese government may have been behind attempts to hack into Google’s databases in search of information about human rights protestors.

• China is planning to introduce a new training system that requires journalists to be more thoroughly educated in communist theories of news. The London-based Guardian reports that a government official wants to impose the training because some mainland reporters have been giving journalism a bad name because they are not properly trained in the communist doctrine, which holds that the press exists to reinforce the leadership of the country. An editors’ trade publication, editordsweblog.org, says the course will conclude with a qualifying test. The strictures apparently will apply only to mainland journalists.

• China hit back at U.S. criticism of its human rights policies, saying that U.S. workers are hurt by lack of health insurance and that Washington has trampled citizens’ rights with post-9/11 security measures, the Agence France-Presse reports. The report accuses the United States of using human rights as a “political instrument to interfere in other countries’ internal affairs, defame other nations’ image and seek its own strategic interests.” China’s broadside came after a U.S. State Department report criticized the country’s repression of activists.

Sources: Guardian, Mar. 13 — CBS News, Mar. 13 — AFP, Mar. 13 — Editorsweblog.org, Mar. 12.

For more information, see: Related Newsline story, Mar. 8 — Related Newsline story, Mar. 1 — Related Newsline story, Mar. 1 — Related Newsline story, Feb. 22 — Related Newsline story, Feb. 8.

VARIOUS DATELINES

The parameters of privacy were examined in several stories last week. Among the coverage:

• The U.S. Supreme Court will take up a case involving how far the government can go in checking the backgrounds of some employees, reports the San Francisco Chronicle. The case involves a California NASA facility that required a group of workers — who did not handle classified information — to submit to a government probe that would seek information about them from any source and pose intrusive questions about work habits, finances, alcohol or drug use, and emotional stability. More than two dozen workers refused to sign a waiver authorizing the probes and were threatened with termination. A federal court blocked the firings, saying the workers were given a choice between a job and their constitutional rights. According to the Chronicle, the government appealed the case, claiming the lower court decision could hinder security.

• A Pennsylvania professor says it was just a joke, but university officials are taking it seriously, suspending the sociologist for posting references to killing students on her Facebook page, reports ABC news. Gloria Gadsden posted: “Does anyone know where I can find a very discrete hitman? Yes, it’s been that kind of day.” and later, “had a good day today. DIDN’T want to kill even one student. . Now Friday was a different story.” She says it was a joke, and that she believed the comments were on a page that could be seen only by her friends and family, but was caught unawares by Facebook’s new relaxation of privacy standards. Officials at East Stroudsburg University said that the suspension was justified given security concerns in academia, ABC reports.

• Netflix is canceling its second million-dollar prize in its contest to come up with a more accurate system for recommending movie choices to consumers based on their viewing habits. The cancellation, reports Wired, came after a lawsuit by an unidentified female plaintiff who says the company’s data on her movie preferences was not sufficiently safeguarded and could have made it possible for her to be outed as a lesbian. The online DVD rental company had released massive data sets to teams of researchers, offering a prize for a new algorithm that could predict viewers’ preferences more accurately. But a university study later warned that the data was not sufficiently anonymized, noting that it conceivably could be tracked to individual viewers. Complicating the issue is the fact that video rental records are protected specifically by federal law.

Sources: Wired, Mar. 12 — San Francisco Chronicle, Mar. 9 — ABC News, Mar. 3.

For more information, see: Related Newsline story, Mar. 8 — Related Newsline story, Feb. 8 – Related Newsline Commentary, Feb. 1 — Related Newsline story, Feb. 1 — Related Newsline story, Dec. 21, 2009.

VARIOUS DATELINES

Distracted driving was the focus of several news reports last week. Among the coverage:

• AT&T launched an ad campaign against distracted driving, and the approach is unusual: According to the Atlanta Journal-Constitution, the company’s ad campaign features actual text messages sent or received just before the cell-phone-using driver caused a fatal or serious car accident. “We asked one of our focus groups to take our their [mobile] devices and read the last text they received. When we asked if that particular message was worth the potential risk of reading while driving at 65 miles an hour, you could have heard a pin drop,” Cathy Coughlin, a senior executive vice president for AT&T’s mobile division, headquartered in Atlanta, told the paper.

• Police officers and paramedics are starting to question whether their arrays of dashboard computers, radio, navigation systems, and cell phones are a help or a hazard, reports the New York Times. While there is no large collection of hard data about linkages between distracted driving and crashes in emergency vehicles, the Times reports that there are many frightening anecdotes about emergency personnel crashing into other vehicles while absorbed with radios or GPS systems. One ethical issue, reports the Times, is that the increasing use of such devices comes at a time when regulators and legislators are trying to crack down on the use of such gadgets by regular drivers. Emergency personnel interviewed for the Times piece say they are trying to find the right balance between risks and benefits.

• Federal Communications Commission (FCC) chairman Julius Genachowski addressed the dangers that technology poses for the young in a wide-ranging speech last week, going beyond the typical warnings about predators and pornography. According to CNET, Genachowski noted that “a quarter of U.S. teens with cell phones say they have texted while driving. According to the National Highway Transportation Safety Board, 80 percent of fatal teen accidents are caused by distracted driving.”

Sources: CNET, Mar. 12 — Atlanta Journal-Constitution, Mar. 12 — New York Times, Mar. 10.

For more information, see: Related Newsline Commentary, Feb. 1 — Related Newsline story, Sep. 14, 2009 — Related Newsline story, July 9, 2007 — Related Newsline story, Apr. 24, 2006 — Related Newsline story, Dec. 9, 2002.

VARIOUS DATELINES

Politics and ethics continued to make uncomfortable company last week. Among the stories:

• A corruption case that has divided a nation for years is back in the news as supporters of ousted Thai prime minister Thaksin Shinawatra mounted a series of protest rallies. Protestors are calling for new elections, claiming that the current prime minister maneuvered into office with the connivance of the military, reports the Bangkok Post. Ironically, massive demonstrations were partly the impetus for the ouster of Thaksin about four years ago amid corruption charges.

• GOP leaders continued to press for an investigation into former Rep. Eric Massa’s (D-NY) alleged sexual harassment scandal, reports CNN. Republicans say they need to know who knew more details, including whether House leaders did enough to deal with allegations that Massa made sexually suggestive remarks to a staffer. Some observers cited in the CNN piece argued that the call for a probe to continue — even after Massa resigned, citing health reasons but acknowledging the impact of the pending investigation — is simply a campaign of political payback.

• Former Illinois Gov. Rod Blagojevich wants his corruption trial delayed until November, reports the Chicago Tribune. Blagojevich’s attorneys argue that they cannot properly prepare for the scheduled June trial because they need to know the outcome of a pending U.S. Supreme Court case involving the doctrine of “honest services” fraud, a statute requiring public officials to perform their jobs honestly. The statute has been challenged on constitutional grounds.

• All earmarks should be banned from the U.S. House and Senate, the Washington Post contends in an editorial. While acknowledging that Congress constitutionally is granted the power of the purse, the Post’s editorial board argues that elimination of the practice also would eliminate the worst of the abuses that give the impression lawmakers are for sale. The editorial notes: “Seven House members, including Northern Virginia Rep. James P. Moran Jr. (D), collected more than $840,000 in political contributions from employees and clients of a lobbying firm, Paul Magliocchetti and Associates Group (PMA), during a two-year span. In that same period, the lawmakers, strategically situated on the Appropriations defense subcommittee, directed more than $245 million in earmarks to clients of PMA…. If you think those two facts are unrelated, you are qualified to be on the House ethics committee. The panel recently found that ’simply because a member sponsors an earmark for an entity that also happens to be a campaign contributor does not, on these two facts alone, support a claim that a member’s actions are being influenced by campaign contributions.’… The ethics committee acknowledged that ‘there is a widespread perception among corporations and lobbyists that campaign contributions provide enhanced access to members or a greater chance of obtaining earmarks.’ Gee, how could anyone have gotten that impression?”

Sources: Bangkok Post, Mar. 13 — CNN, Mar. 12 — Washington Post, Mar. 12 — Chicago Tribune, Mar. 11.

For more information, see: Related Newsline Commentary, Mar. 8 — Related Newsline story, Mar. 8 — Related Newsline story, Feb. 22 — Related Newsline story, June 8, 2009 — Related Newsline story, Mar. 16, 2009.

ORLANDO

SeaWorld Parks and Entertainment still is facing an ethical dilemma over what to do with the largest killer whale in captivity after the prized animal killed a trainer in front of spectators, the Wall Street Journal reports.

It has been more than two weeks since Tilikum dragged a trainer underwater and pummeled her. While the orca has been on occasional public display in a pool at the Orlando theme park, it has not been involved in any performances, the Journal reports.

Not only are orcas big business, notes the Journal, but they represent a huge investment: A killer whale can bring almost $10 million on the open market, and years of preparation are necessary for an orca to perform in a show.

SeaWorld’s CEO Jim Atchison ruled out euthanasia: “We’re not in the business of punishing our animals,” he told the Journal, adding that the company is still “trying to get our arms around the incident.”

Source: Wall Street Journal, Mar. 10.

For more information, see: Related Newsline story, Mar. 1 — Related Newsline story, Dec. 21, 2009 — Related Newsline story, Oct. 12, 2009 — Related Newsline story, Mar. 3, 2008 — Related Newsline story, Mar. 26, 2007.