Friday, November 4, 2011
GlaxoSmithKline: Born Again Ethically?
Thursday, October 27, 2011
Hedge Fund Lobby: Breaching Ethics
The full essay is in Cases of Unethical Business, available in print and as an ebook at Amazon.com.
Sunday, October 23, 2011
Deloitte: A Culture of Least Resistance
Saturday, October 22, 2011
Limited Tenure For CPA Firms?
The full essay has been incorporated into "A Proposal: Limited Tenures for CPA Firms" at Institutional Conflicts of Interest, available in print and as an ebook at Amazon.
1. Emily Chasan, “Keeping Auditors on Their Toes,” The Wall Street Journal, October 19, 2011.
2. Ibid.
Friday, October 21, 2011
Conflicts of Interest at the Federal Reserve
Material from this essay has been incorporated into "The Federal Reserve" in Institutional Conflicts of Interest, which is available in print and as an ebook at Amazon.
Monday, September 5, 2011
AOL Ignores TechCrunch’s Conflict of Interest
The full essay is at Institutional Conflicts of Interest, available in print and as an ebook at Amazon.
Monday, August 29, 2011
In the Eye of the 24/7 News-Cycle: Profits & Attention-Seeking
Thursday, August 18, 2011
Fraud at S&P: A Conflict of Interest
The full essay is at Institutional Conflicts of Interest, available in print and as an ebook at Amazon.
Monday, August 15, 2011
Congressional Earmarks: A Personal Conflict of Interest
Wednesday, August 3, 2011
The Debt-Ceiling Disaster Flick, Hollywood-Style
Sunday, July 31, 2011
On the Entitlement to Exceptionalism
1. John Blake, “Do You Speak Christian?” CNN, July 31, 2011.
2. Ibid.
3. Ibid.
Tuesday, July 26, 2011
Bad Psychology and Political Violence: A Toxic Cocktail
Tuesday, July 19, 2011
Jamie Dimon of JPMorganChase Exploits an Institutional Conflict of Interest
Saturday, June 18, 2011
Banks on Reserve Requirements: An Institutional Conflict of Interest
1. Deborah Solomon and Victoria McGrane, “Lenders Dig in on Rules,” The Wall Street Journal, June 16, 2011.
Friday, June 17, 2011
Amtrak’s Conflict of Interest
On June 15, 2011, U.S. House Republicans called for the breakup of Amtrak’s de facto monopoly of intercity and interstate passenger-rail transport in the United States. Specifically, Republican lawmakers proposed that the lucrative northeast routes be opened to private providers. For example, Richard Branson’s Virgin Trains had been seeking to provide service between Boston and Washington. Of course, letting one of the providers build and own the tracks even as other providers use the tracks would put that owner-provider in a conflict of interest in charging the other providers for their use of the track, so it would be preferable to have the U.S. Government supply the tracks and charge all of the private providers of train service.
The full essay is at Institutional Conflicts of Interest, available in print and as an ebook at Amazon.
Long Term Capital Management: An Institutional Conflict of Interest
The full essay is at Institutional Conflicts of Interest, available in print and as an ebook at Amazon.
Monday, June 6, 2011
Wall Street Banks: Price-Making and Law-Breaking?
The full essay is in Cases of Unethical Business: A Malignant Mentality of Mendacity, available at Amazon.com.
Friday, June 3, 2011
Ignoring Institutional Conflicts of Interest
The full essay is at Institutional Conflicts of Interest, available at Amazon.
Tuesday, May 31, 2011
FIFA: Weaving an Unethical Web in a Sport
Sunday, May 29, 2011
Partisan Journalism at Fox News: Stockholders and Democracy
Wednesday, May 25, 2011
Rating Moody’s and S & P: A Structural Conflict of Interest
Wednesday, May 11, 2011
Wall St. Bonuses and TARP: A Tale of Two Cities
Sunday, May 1, 2011
Paper Tigers: Firewalls Forestalling Institutional Conflicts of Interest
Saturday, April 30, 2011
Goldman's Ethical Conflict of Interest: Obviated or Enabled?
The full essay is at Institutional Conflicts of Interest, available at Amazon.
Monday, April 25, 2011
Going to Work: Is Money the Exclusive Motive?
On doing what you love, see "Corporate Analogies."
On curtailing greed, see "God's Gold through the Centuries."
Wednesday, April 20, 2011
Business Ethics in the Business World: A Glimpse from Goldman Sachs
Goldman Sachs’ ethics code reads in part, “[We] expect our people to maintain high ethical standards in everything they do. . . . From time to time, the firm may waive certain provisions of this Code.”[1] The explicit conditionality is notable and significant. I contend that among other reasons, a negative impact on the bank’s financial position and/or profits is apt to trigger such a waiver not only at Goldman Sachs, but from the business standpoint more generally.
The full essay is in Cases of Unethical Business, available at Amazon.com.
1. William D. Cohan, Money and Power: How Goldman Sachs Came toRule the World (NY: Doubleday, 2011).
A Structural Conflict of Interest in Feinberg's BP-Claims Disbursement Office
Tuesday, April 19, 2011
Conflicts of Interest for Public Officials: How Broad?
Michael Carrigan, a member of the City Council in Sparks, Nevada, “says he was trying to make sure his vote on a proposed casino, one that his campaign manager helped develop, did not pose an ethics problem.”[1] Carrigan backed the Lazy 8 casino project proposed by Red Hawk Land Co. Carrigan’s friend and campaign manager, Carlos Vasquez, worked as a consultant on the project. The question is whether the elected official’s relationship to his campaign manager who was a consultant on a project to be voted on constitutes a conflict of interest sufficient for the official to have not voted. The Sparks city attorney told Carrigan that he could vote on the project as long as he publicly disclosed his relationship with the project consultant. The attorney was obviously thinking in terms of transparency. Carrigan made the recommended disclosure. The Nevada Ethics Commission, however, claimed after the vote that Carrigan had a conflict of interest and should have abstained even with the transparency. In its reprimand, the commission cited ethics law that says public officials must not vote when their judgment could be affected by a commitment or relationship to someone in their household, a relative, business partner, or a person “substantially similar” to those specified. The commission classifies the campaign manager in the “substantially similar” category because Carrigan’s loyalties to his campaign manager would have affected his judgment. Caren Jenkins, executive director of the Nevada Ethics Commission, explains, “Here was a friend, a buddy, a close confidant. If Mr. Carrigan ever thought it was in his best interest to vote against the project, would he have?”[2] Carrigan sued the commission for its reprimand, claiming it violated his free speech rights. The Nevada Supreme Court sided with Carrigan, who pointed to the fact that he was not in business with his campaign manager. The Nevada Supreme Court said the catch-all category the commission cited failed to “limit the statute’s potential reach (or) guide public officers as to what relationships require recusal.”[3] The state court said the law “thus chilled speech.” In its appeal to the U.S. Supreme Court, the lawyer representing the commission argues, “State and local legislators have no personal ‘free speech’ right to cast votes on particular matters, much less ones in which they have a personal interest.”[4] The Reporters Committee for Freedom of the Press similarly claims that rules such as Nevada’s are important to ensure politicians don’t vote based on personal interests.
In 2009, the U.S. Supreme Court
ruled by 5-4 that a West Virginia judge should have withdrawn from case because
of a risk of bias. The court majority said judges must sit out a case when a
risk of bias arises because a person with a significant stake in the case “had
a significant and disproportionate influence” in getting the judge on the
bench. In the present case, Carrigan’s campaign manager had a significant
influence in getting Carrigan elected, but did his consulting role at the
casino constitute a significant stake, and, if so, was it only in the past, or
did the consultant/campaign manager stand to benefit financially after the
vote?
Regarding the Nevada ethics law, a
campaign manager can be regarded as similar to a business partner. The
vagueness of last category in the law is poor legislation, but it does not
nullify the similarity in the present case. In fact, I contend that the law
does not go far enough, for it excludes friendship. Presumably a public
official would want to see one of his friends benefit even if there is no
financial relationship between the official and the friend. Suddenly the
vagueness in the law does not seem to be a formidable problem, but, rather, a
virtue.
In general, a conflict of interest in politics or business need not involve a financial relationship between the decision-maker and the other person. The problem with sidestepping votes to avoid any conflict of interest is that too many votes may be missed. Moreover, evading votes when an official might be tempted to vote in line with his or her more particular interest can be interpreted as giving up on the civic duty to vote in line with the public good; it is assumed that if there is a personal interest involved, the official will act on it rather than the good of the city. In other words, the Nevada law essentially punts by separating a voting official from conditions in which voting in the public interest would be felt as a duty (there being an opposing motive in line with the official’s own interest extended out to business associates, relatives and friends.
As for the Nevada ethics law, that its vagueness somehow “chills speech” is perplexing. The same kind of conflation seems to take place when spending money is reckoned as political speech. The court seems to have been assuming that the vagueness would mean that officials would be skipping many votes, and therefore “silenced” by the law. Even if the law is too broad in its coverage, to consider voting as “speech” is patently absurd. To vote is not to speak. To claim that one is proffering his opinion by voting magnifies a side-effect out of what it means to vote. A vote takes place after the give and take of opinions in order to settle the question. Hence, “the vote is on the question” rather than being an elaboration of the question. A vote is a collective decision rather than a dialogue. We are therefore back to the problem of whether too many votes would be skipped.
At some point, if the duty of civic virtue is trampled upon, no law can bracket the corruption. In the end, it is up to the popular sovereign, the people, to evaluate their elected officials with respect to the voting records. As for the officials, skipping a vote to avoid a conflict of interest must be weighed against the duty to vote. From the standpoint of the latter, a skipped vote is a failure, even if it is to obviate a hard choice. Ideally, public officials would stand up to their particular relations and explain to them that the public trust is bigger than them and the relations. Yet if the official foresees himself succumbing to the temptation of expediency, skipping a vote would be worth evading the duty.
2. Ibid.
3. Ibid.
4. Ibid.
Tuesday, April 12, 2011
Labor-Management Relations: Starving Workers as a Childish Tactic
The full essay is in Cases of Unethical Business: A Malignant Mentality of Mendacity, available in print and as an ebook at Amazon.