Category: business ethics

The Costs Of Corporate Crime

On By southwerkIn business ethics, Capitalism

Steven Mintz
Steven Mintz, the Ethics Sage, has a post on a subject dear to my heart, “How much damage does corporate crime do to the United States?” Each year in my ethics class I ask my students to estimate the damage and comment on it. He has filled out that damage estimate with some new information. I am very appreciative and next Fall my students are going to be reading this post.

Professor Mintz’s post is entitled, Business Fraud. Most of the first paragraph is below but I want you to go to his site and read the whole thing. This subject is a critical factor in whether or not we should do more about business ethics or not. If his figures (or mine) are in anyway correct, our nation is being crippled.

In my last blog I wrote about the ever-increasing cost to society of criminal fraud that targets investors. Fraud in business organizations also seems to be on the rise despite all efforts to reduce it following well-publicized accounting frauds at Enron and WorldCom. According to research conducted by the Association of Certified Fraud Examiners (ACFE) in 2008, U.S. organizations lose an estimated 7 percent of annual revenues to fraud. Based on the projected U.S. Gross Domestic Product this percentage indicates a staggering estimate of losses around $994 billion among organizations, despite increased emphasis on anti-fraud controls and recent legislation to combat fraud. Also, the median dollar loss caused by fraud schemes was $175,000. More than one-quarter of the frauds involved losses of at least $1 million. …

The costs may be 994 billion dollars, 7 percent of annual revenues, lost to corporate fraud. That doesn’t include corporate crime like dumping pollutants, evading taxes, killing or maiming workers by evading safety regulations, etc.

Is that enough reason to put business ethics as a primary legal and economic concern in every governing body from the cities to the federal government?

James Pilant

Let’s Make The Armed Forces Eat Gulf Seafood!

On By southwerkIn business ethics, ethics

This is from Washington’s Blog. The original title is Secretary of the Navy Hatches Brilliant Plan to Sell More Gulf Seafood and Transport Oil to the War Zone.

From the Times-Picayune –

Navy Secretary Ray Mabus, who doubles as President Barack Obama’s point man on Gulf Coast oil spill recovery, is pressing America’s armed services to consume as much Gulf seafood as possible.

Navy Capt. Beci Brenton said Monday that Mabus has talked with Secretary of Defense Robert Gates and the secretaries of the Air Force and Army, and his staff has talked to the Defense Commissary Agency, which operates a worldwide chain of stores for military personnel, making the point “that we should be buying Gulf Coast seafood.”

In a meeting Monday with Ewell Smith, executive director of the Louisiana Seafood Promotion and Marketing Board, Mabus reaffirmed his commitment to using the tools at his disposal to help the Gulf seafood industry recover from the damage the BP oil spill has done in reality and perception. The board is gearing up for a large-scale national marketing campaign, with $30 million in BP money and millions more in federal dollars, to reassure restaurants and markets across the country that Gulf seafood is safe.

Okay, they are having trouble selling seafood that may be (or is) contaminated with oil or chemical dispersant and the armed services are being pressured to buy some. Since the fellow in question is Secretary of the Navy, we should probably put the word, pressured, in quotation marks and note that the armed services (at least the navy) are going to buy gulf coast sea food.

Is this wise?

In about twenty years, when we can get some good data on the long term health effects, we will have a clear picture of whether or not this was a good idea.

In my mind, if there is choice between seafood from the gulf and somewhere else, that really isn’t a choice. I don’t like oil in my food. I’m just weird that way.

Thanks to the anonymous guys at Washington’s Blog for bringing this to my attention.

James Pilant

We are in a War of Ideology (via Chink In The Armor)

On By southwerkIn business ethics

The web site, Chink in the Armor, is not for the faint hearted. The outrage bubbles. The anger seethes.

Fairly often, my rage bubbles up when I am writing about these business ethical lapses. He has more anger than I have and I have a lot.

I am just putting down the first sentence and then the first paragraph of this gentleman’s post –

I am pissed. I am seriously pissed. And here are some of the things I am seriously pissed about

1) My daughter will probably NEVER see her 87 year old grandfather again because we live on the left side of this country and he lives on the right side. What with the implementation of the Gestapo/Stasi/TSA Fascist Police State, we will NEVER travel on the airlines again. It is my responsibility to protect my child from evil and she will NOT be subjected to her first cavity search by the Goons of the TSA. Feel the Love.

Go here for the rest.

I think that is a fair representation of the writing. I want you to read it. I like anger. I don’t think there is enough out there.

James Pilant

P.S. I have looked over this web site for some more information about the writer, you know, the kind of stuff you find on the back of a book. I didn’t come up with any. If the author would like to let me know about this, I will be happy to expand this blog entry to include or create a brand new post.

U.S. Urges Requirement To Keep Mortgage Records (via Chink In The Armor)

On By southwerkIn business ethics, Capitalism

From Reuters through the blog, Chink In The Armor –

The U.S. Justice Department urged Congress on Wednesday to require mortgage companies to retain records for 10 years to make it easier to prosecute fraud.

Rita Glavin, acting head of the department’s criminal division, told a hearing of the House of Representatives Judiciary Committee that mortgage settlement statements and other loan documents are critical to investigating or prosecuting fraud.

But they can be hard to get from lenders, brokers and title companies that provide loan services. “All too often, such entities go out of business, and their records are either abandoned or destroyed,” Glavin said in testimony submitted to the committee.

She said half of the top 10 U.S. subprime mortgage originators in the second half of 2006 had either gone out of business or been sold a year later.

Kuttner: The Fix Is In, The End of Social Security (via Dissenting Democrat)

On By southwerkIn business ethics, Capitalism

Social Security is definitely an ethical matter. Millions of Americans pay taxes on their wages with the expectation that they will some day get benefits. Now, our “leaders” in Washington says it is too expensive and we can’t afford it. Nonsense.

I like this blog. There is a lot of passion. However, it’s mainly political so I don’t get too much business commentary out of it. However it may very well be to your taste.

New Plan for Seniors' Retirement? Soylent Green Robert Kuttner in a recent issue of Politico had this to say: "Obama is finally getting the bipartisanship he craved — but entirely on Republican terms. Republicans win three ways. They have a Democratic president doing their work for them, destroying the Democratic capacity to use affirmative government to address dire national problems and annihilating his own party. " http://www.pubtheo.com/page. … Read More

via Dissenting Democrat

Let The Age Of False Information Begin!

On By southwerkIn business ethics, Capitalism

Our Internet privacy is disappearing. Probably the government is looking at our posts down to the last comma and thirty to forty companies have embedded cookies to follow our visits and there enough tracking software on us to tell if we spent nano seconds at one place or another.

So, they are playing games with us and manipulating us.

Let’s manipulate back.

On your social networking sites, move a lot. If you always wanted to live in Hawaii, get a map and find a nice place and declare it your home. Move every couple of months. You can live in fictional places from Francis Bacon’s New Atlantis to John Foster Caine’s Xanadu (a double header – fictional character and fictional place). What about birthdays? These are excellent ways for people to track down medical and financial information about you. Well, have you ever wanted to have two birthdays in a year? Why be a piker, have three or four. Change them every few weeks.

Political beliefs? Give up being a boring Democrat or strict Republican. Vote with the crew of the Enterprise, join the “wild” party, declare yourself at one with the hopes and aspirations of the Pirates of the Carribean.

How about being tracked on the internet and having your every move sold to spammers and marketers determined to exploit this knowledge? At the end or beginning of your web surfing, go wild. Visit this web site and discover how to build your own coffin. Go to the World Wildlife Fund and discover how to adopt a beaver! Fill your your web trackers with useless and incorrect information. Make their tracking as useless as time permits.

Ah, the tough one, how do we write e-mails to annoy the Department of Homeland Security? It’s easy. Now, you’ve heard people say to put words in like terrorist or bomb. Don’t do that. Write e-mails in praise of the Department of Homeland Security or the FBI or the DEA and alway include the latest plot these agencies have foiled. The computer will probably have to cough up all these e-mails to an actual person to discern the seriousness of the message. What will they find? – that you like the government! What could be more harmless?

Now, there are a few of you saying, “James, you shouldn’t be messing with the American government’s ability to catch terrorists?” To which I reply, “They have never said or alleged at any time that they are reading our e-mails. So, obviously, there is no surveillance and you are doing no harm at all. You can’t interfere with non-existant privacy violations, can you?”

“If they were monitoring our e-mail, that would be a clear violation of the Fourth Amendment, so you see they can’t be doing that. What’s more I love the Deparment of Homeland Security. What a bunch of great guys! I sleep better at night knowing that they are looking out for me!”

What about you? Have you ever become tired of that same old face in the mirror? It’s time to live a little! Get yourself a new e-mail. Become a movie star, a little old lady, an heiress or a Wall Street executive. Creat a dozen new e-mail addresses, every single one with a new version of yourself. Didn’t Walt Whitman say, “I am multitudes!” Be a multitude. Leave a few blog comments in your new identity. Try out some interesting points of view.

If all these turkeys want to collect information on you, help them out. Give them tons of information. Be cooperative. Don’t just show them the data from one person but dozens.

And do log on and post from different computers. Use programs that disguise or block identity searches, so our friends can grow and develop as human beings (whatever doesn’t kill us, makes us stronger!!).

These people are kind enough to take an interest in us. We should take an interest in them and help them out with a much data as possible.

James Pilant

China Following Old American Policies?

On By southwerkIn business ethics, Capitalism

The policies of Alexander Hamilton and Abraham Lincoln are guides to the Chinese Communists and their economic policies.

Irony?

James Pilant

American Policy Not Fair To The Middle Class

On By southwerkIn business ethics, Capitalism

RT is really laying it on the line. I sometimes disagree with their take on things, but I agree with this one.

James Pilant

Is “Grownups” The Worst Film Of 2010, NO!

On By southwerkIn business ethics1 Comment

It may well be the worst film of the decade.

I saw it all the way through. Here’s how that happened.

My wife likes Adam Sandler and we saw the preview. It looked funny and romantic. So, we and our 17 year old son set out to see the film. We sat him between us. It was just an accident but it changed the whole night. After about a half hour, I wanted to walk out but I didn’t want to spoil the film for Renee. Renee wanted to walk out on the film but didn’t want to spoil the film for me. Since, Jake was sitting between us, neither one of us could explain our exuberant hatred of the film. So, I saw the whole thing.

When you see a film like that, there should be some kind of celestial balance, a cosmic sense of fairness, that gives you the time back.

Here’s the preview –

Every single workable joke is in that preview. Watch it twice, you’ll then know every thing you’ll ever want to know about the film.

What does this have to do with Business Ethics? They knew what a turkey this was as soon as they had the film put together and they still put it out there when they should have taken it out to sea and given it a decent watery grave, or burned it on funeral pyre or, similarly, sent it straight to video.

It wasn’t just unethical, it was cruel.

James Pilant

Bailed Out Banks In Trouble Again?

On By southwerkIn business ethics, Capitalism

From the Huffington Post –

Nearly 100 banks previously rescued by the federal government are again poised to fail, despite billions of dollars of support from the American Treasury.

The number of banks on the brink of collapse rose from 86 to 98 during the summer months, according to analysis of federal data from the Wall Street Journal. The banks in question have received $4.2 billion dollars in aid through the Troubled Asset Relief Program (TARP). Most of the troubled institutions are relatively small.

The latest sign of distress in the financial system suggests the bailout may have simply been a stopgap solution for a sector still contending with the aftershocks of the greatest banking crisis in 80 years.

If you own a business in the United States and you lose money instead of making it you go out of business. If you are a bank, the government runs to you with large bags of money and gets you back on your feet.

But twice? It’s only been two years. Is the government going to save these banks and, if so, do it again in two years.

What’s the ethics here?

Those who have committed crimes should be punished? Okay, have the banks been investigated for fraud?

The incompetent should not be rewarded for botched work or destroying their business. Has the government in the previous bailout or in the one likely to happen now, asking about competence and cleaning house in these institutions? Shouldn’t those who have ruined the banks by poor management find jobs elsewhere?

Ethically, is it wise to encourage the kind of behavior you get when you bail out failing institutions? Doesn’t that encourage immoral activity like risk taking? Doesn’t that give bank officials the impression that risky behavior is to be encouraged? If you win, you win big. If you lose, your dear Uncle Sam will find money for you?

What do you as a citizen want to happen? Maybe the government should’ve asked that question, “What results are we looking for in this bailout?” two years ago?

James Pilant