Google Executives Evaded Jail Time in Brazil: Is Business Too Powerful?

In late September 2012, the Brazilian state police detained the head of Google’s operations in the state after the company’s management failed to act on an electoral judge’s order to remove videos from its YouTube site criticizing a candidate in a rural county election. Separately, a judge ordered Google to remove a religiously-offensive video, which had sparked riots in the Middle East, within ten days or face fines. Google’s lawyers claim that the company is not responsible for what users upload. Earlier in the year, Brazil’s government threatened the head of Chevron’s operations there with arrest and passport-confiscation after a small leak occurred in the company.

Brazil, the largest South American state.   (World Atlas) 

The Wall Street Journal goes on to note the opinion of legal analysts that no executive at Google or Chevron was likely to “set foot in jail.” Brazil’s appeals process is long, and companies like Google and Chevron have deep pockets for legal defense. Consequently, even business practitioners convicted of major white-collar crimes are rarely, if ever, jailed in Brazil. Even so, the threats could thwart the South American state from being able to attract foreign direct investment. In other words, competition for foreign companies gives governments an incentive to look the other way in enforcing state law. Put another way, the lowest common denominator in terms of holding corporations accountable on the constraint of law and order could be one of the consequences of the spread of capitalism around the world. No public official wants to risk turning a potential “job creator” away.

Especially with the separation of ownership and control in the modern corporation, managerial accountability is crucial to ensuring that corporations abide by judicial orders. In many cases, senior managers can get away with making corporate-policy decisions that essentially ignore the constraints manifesting as judicial orders because deep corporate pockets can pay any resulting fines. Senior executives can be rather “free-wheeling” on corporate policies because the officials themselves—as citizens—are not subject to fines or imprisonment.

Corporations are not citizens; rather, the associations are creatures of the state created for particular purposes. Therefore, it can be said that the citizens operating the associations can and indeed should be held criminally liable for any “corporate” wrong-doing. Put another way, the actual decision-makers should be held accountable criminally for any decisions that violate a law or a judicial order. Otherwise, “corporations” can evade the law while their managers have little incentive to treat it as a constraint on profit-seeking.

Corporations do not act apart from the human beings within. An association just is its members. The people responsible for a “corporate” decision that violates the law can at least in many cases be identified, even if as scratched initials on the margins of a policy proposal. In fact, the police could charge a corporate official whose role the offending policy falls under even if that official had been negligent in not having kept up on the decision made by his or her subordinates. So coverage of responsibility is something that can be applied to particular people within the management of a company. Such coverage, if resulting in real jail time, would doubtless get managers’ attention rather quickly, as opposed to merely fining a company’s treasury. Unfortunately, Brazilian officials had a disincentive to implement such coverage with consequences with teeth, due to the countering pressure to attract businesses rather than repel their decision-makers.

Lest it be thought that creating an international body with the power to imprison executives of MNCs for crimes against an international code, the problem of how to enforce Brazil’s law on an international organization (e.g., Google) would go unanswered. One “consensus” global code would not touch on the regional and local specificities in criminal law. That people in Brazil were offended by a video does not mean that a global consensus would necessarily emerge in favor of criminalizing the video. For one thing, some governments support free speech even on opinions that are offensive to a majority.

The problem can be said to be that of cultural particularity vs. economic globalization. Both are viable and thus must be recognized. Multinational corporations must legally at least be multi-domestic in responding to cultural-legal particulars even while being the instruments of efficient international competition. Both values are legitimate, and yet they are in conflict at least in terms of the enforcement of local law. Statesmanship on behalf of such law even at the risk of losing a potential foreign business investing in local jobs is unfortunately all too rare, given the countervailing greed involved in attracting suitors away from other potential hosts.

All too often, leadership is gloss for greed rather than based on standards and principle. Put another way, the “principle” of efficient comparative advantage is often used by self-promoting governments as a means of obfuscating the real selling-out of the country’s own laws, which in turn ideally reflect moral values that are held by society. The question is perhaps whether governance structures geared to real accountability for business practitioners can be designed to counter the hegemony of greed over principled leadership. The political influence of the practitioners and their respective corporate treasuries over the governance itself—the creature coming to dominate its Creator—compounds the difficulty and suggests that it is no accident that corporate executives rarely see jail time.

Source:

Jeff Fick and John Lyons, “Google’s Brazil ChiefDetained; Court Bans Anti-Islam Video,” The Wall Street Journal, September 27, 2012.

Extrapolating from the Arab Spring to Corporate Social Responsibility

Richard Branson, founder of Virgin Atlantic and a myriad of other companies, sees a natural extension or follow-through from the pro-democracy protests in the Middle East and North Africa to more corporate social responsibility. As much as I would like to think that the twenty-first century proffers a new world, I think we have to acknowledge the weight of the political, economic and social strictures that we have uncritically inherited.

According to USA Today, “Branson says it took him seven years to realize businesses are part of the problem as they focus narrowly on profit and exhaust natural resources. Now, he believes the world has changed in the last several months, with revolutions in the Middle East, the earthquake and tsunami in Japan, riots in London, famine in East Africa, and debt crises around the world. He quotes the band REM: "It's the end of the world as we know it … and I feel fine." Seven years? Branson has been thinking on all cylinders. Even if businesses are not part of the problem, the default of business is to make profit by turning resources into products to be consumed. This is the raison d’etre (i.e., the reason for being) of the modern corporation. Viewing its inherent function, as per its design, as part of “the problem” may simply be due to the sheer magnitude of a large corporation’s operations. In other words, a large foot is apt to leave a large footprint.

Moreover, changes in government, protests, natural disasters and a systemic overreliance on debt-financing by governments do not necessarily mean the end of the world as we know it. I wish this were so, but people in power have a nasty habit of retaining it, even if under subterfuges if necessary. For example, the military rule in Egypt at least as of the beginning of 2012 may put the “revolution” in 2011 in perspective. That is to say, the old guys are still in charge, so how much of a revolution was it? Furthermore, it would be naïve to believe that the corrupt relationship between business and government in Japan has been expunged by the post-tsunami clean-up. It is doubtful, for example, that TEPCO has been born-again as if baptized by the tsunami. 

The larger point Branson is making in his statement is that corporations will no longer be part of the problem because the world as we know it is no more. He cites several instances of corporate social responsibility to make his point. However, the business of business is still to make money, and much of CSR is still essentially marketing writ large. Without changing the design in corporate law, it is foolhardy to believe in a brave new world of corporate capitalism. It is at the very least a stretch to assume that pro-democracy protests or changes in government will somehow convince business executives to engage in CSR. Even in terms of corporate or “stakeholder” democracy, the linkage is tenuous because the expectation that governments should be democratic does not extend to corporations because the two are typically viewed as different domains. So to Branson, I would say, nice job with your companies and even on CSR, but let’s not get carried away on some jet to nirvana. As much as we would like to see the world remade rather than carrying on with baggage from the twentieth-century, we would get further toward this goal by keeping our legs on the ground.

Source:

Kathryn Caravan, “Branson’s ‘Screw Business As Usual’ Has High Points,” USA Today, January 23, 2012. 

Naked Royalty: Prince Harry and the Sun

In publishing naked pictures of Prince Harry on holiday in Nevada, the Sun in Britain ignored the warning from the press watchdog that had warned the Sun that it would be breaching a privacy provision in the state of Britain’s press code. That the warning followed an appeal to the Press Complaints Commission from St. James’s Palace, which is Prince Charles’s home and office in London, suggests that the warning came from “the firm” itself to protect one of its own.

                   

A naked royal hits the newsstands in Britain.         Tony Melville/Reuters

As for the Sun, the value in printing pictures that had already been widely published by TMZ and other parties on the internet may lie more in revenge than in a bump in immediate revenue. If so, it is nonetheless striking that the Murdoch paper would defy the palace in the wake of the government investigation of phone-hacking and illegal payments to police employees and public officials centered on Murdoch. In ignoring the warning, he might have been giving the state the finger (i.e., payback). Given the charges against one of Murdoch's tabloids, the publisher's motive could not have been moralistic.

“The Sun is not making any moral judgment about Harry’s nude frolics,” the newspaper said. “Far from it. He often sails close to the wind for a royal — but he’s 27, single and a soldier. We like him.” Indeed, as a single man at the peak of his physiological prowess, Harry Windsor should not be expected to conduct himself as would be fitting for an eighty-five-year-old monarch. 

A few weeks after Harry's pictures were published, Kate Middleton awoke to find topless pictures of herself published on the front page of an out-of-state tabloid. She had been on holiday at a secluded house in the south of France with her husband, Prince William, who promptly began efforts to sue the publication after learning of the pictures. The editor of the tabloid then hinted that she had pictures of the royal couple engaged in sex while at the house. 

Again, the issue is not so much of morality, but, rather, of the right of privacy of not just public figures, but members of a head of state. When not engaged in duties or otherwise in public, such members (and perhaps the problem is to have an entire family included under "head of state," but such is the nature of royalty) are, after all, people. As human beings, they need and deserve some privacy at the very least to unwind. Considering the arrogance that can come with celibrity, it is in our interest that public figures are grounded in some sense of a normal existence, at least periodically. In fact, the whole royalty thing can be regarded as artificial--that of placing a few human beings so far "above" the rest. The gulf from God to man dwarfs any distance we think we see between ourselves. Indeed, perhaps the distance we create and enforce between ourselves is that gulf between humanity and God.

Moreover, it goes against the Golden Rule to cause another person to feel shame for something that is rather normal in ordinary life. Young people have parties, and newlyweds should feel secure in being intimate with each other or at the very least "letting their hair down" when it is reasonable to assume they are alone and "on their own time." Staking William and Kate out--spying on their private affairs--is underhanded and violates their right to "normal lives" as much as is possible given their "jobs." In other words, the press over-extend the artificial life of celebs and thus violate the human persons themselves. We ought to be encouraging celebs to be down-to-earth and we should relate as much as possible to them as we do to other people in our everyday lives. I have little interest in meeting a royal at a "function," but I would enjoy chatting under normal conditions with one. Fundamentally, celebs are simply other human beings, and I suspect that they crave to be treated as such. At least this is what I have found in talking one-on-one to a few during their "off-time." Tim Russert, the late host of NBC's political talk-show, "Meet the Press," was for example incredibly down-to-earth in chatting with me in a hallway before he was to speak to a group. Our impromptu chat was spontaneous and natural. In making such normal interactions more difficult by violating privacy, the press extenuates artificiality at the expense of that which is natural. There is already far too much social distance between human beings; we don't need to encourage it by making people who are well-known afraid of people. 

Sources:

John F. Burns, “Murdoch Paper Defies a Warning and Exposes Prince Harry,” The New York Times, August 24, 2012. 

Scott Sayare, "French Court Rules Against Magazine on Royal Photos," The New York Times, September 18, 2012.

Frank Lloyd Wright: A Modern Renaissance Man

Perhaps no greater Renaissance man has been cited in American history than Thomas Jefferson. He wrote on the native plants of his country, Virginia, ran a plantation, designed buildings, founded a university, surveyed land,  was the head of state in Virginia, wrote a declaration of independence, and was the third president of the new American Union. More than two centuries after Mr. Jefferson, however, a cleft had become well-ensconced in American society between being an intellectual and a practitioner. The typical lawyer or physician, who holds two undergraduate degrees due in part to the political sense that a well-rounded citizenry makes a good electorate, has scant interest in intellectual endeavor. Indeed, one might even say that the “professions” place scant value on such activity; it is not “real work” or of the “real world.” The disdain is palpable, particularly in among the self-righteous in America. Yet Mr. Jefferson was able to bridge this gulf; so too can we. More contemporary examples can be cited to illustrate the mere possibility. The requisite delimiting "pruning" self-discipline might come as a surprise to people who presume that Renaissance breadth is borne of a wayward inability to "stay put."

When it was announced in 2012 that Frank Lloyd Wright’s archive was to be moved from his foundation to Columbia University and the Museum of Modern Art in New York City, it was reported that the architect had some six hundred manuscripts, as well as more than 23,000 drawings and forty large-scale architectural models and more than 300,000 pieces of correspondence. He also had a formidable art collection, though it would stay with the foundation. The number of manuscripts is what caught my eye. How many manuscripts is a leading lawyer or physician likely to written, even in his or her own field of work? What was behind Wright's foray into writing?

It can be said that Wright was a genius. In a world populated by victorian houses, he saw something very different. Seeing something different (having that genius) might have been enough to stir the jealousy of the city bosses in his native Madison in Wisconsin—they twice ignored the results of the referendums (which they wrote!) to ok the construction of a city building designed by the famous architect. Genius, however, does not account for Wright's foray into writing; rather, he must have valued the endeavor and sensed that he could do it very well. Even though he could have rested on his architectural laurels, he wanted to excel beyond his native fauna, and he was willing to put forth the effort.

Frank Lloyd Wright's "Falling Water" house.           FLW Fdn Archives/NYT

Similarly, the famous  clothing designer in the E.U., Karl Lagerfeld, came to excell at more than one field. Specifically, from having taking pictures of the models wearing his designs, he branched off into photography in its own right late in his career (instead of taking retirement), even though he could have rested on the reputation of his clothing line. He gained a reputation as a photographer from publishing a book of his photos taken at the French palace.

It is not that a genius in a field feels entitled to venture onto other fields as if doing so is of value in itself. Rather, there must be a sense of being able to extend one’s excellence without sliding onto mediocrity. This does not necessarily mean that the two fields are related. Excellence can be found in a disparate discipline. Yet this does not mean trying anything. Even within one's native field, one must limit oneself to what one can do well.

Being willing to let go of what is beyond oneself is part of being able to extend one’s excellence. The director of the Frank Lloyd Wright Foundation, for example, was willing to give up most of the valuable archive because he recognized that Columbia and the museum were better-fitted to house it. “It’s what guarantees the deepest impact, the highest level of conservation and access in perpetuity, said Sean Malone. “The potential for new audiences far outweighs the personal desire to have it close by.”  All too often, people feel a clinginess to what they have, or want to have something both ways. We want to retain our cake and eat it too. In being willing to give up something valuable out of a recognition that another institution would be better suited to house it, Malone evinces the sort of mature mentality that modernity could use. Moreover, delimiting what his foundation can do well enabled Malone to ask: “what else can I do excellently?” It is ironic that pruning lays the groundwork for a Renaissance person being able to extend his or her excellence (a virtue) on to other, even disparate, fields. In Malone’s case, in being freed up from the care of an archive for which is organization was ill-suited for anyway, he freed himself up to apply his strengths to other vintures, such as writing on virtue ethics, for example.

Beyond intelligence, a certain mentality that includes character or a virtue ethic involving self-discipline undergirds the bringing together of intellectual endeavor and praxis in the “real world” in a way that exudes excellence. A willingness to strive while others snooze and a value on excellence can catapult a person from the confines of a profession. A deeper, or more enriched sense of what it means to be human can result as one experiences the best in more than one domain of human experience. Just as a Buddhist would say that the “other shore” does not really exist (at least as another shore), one could say that the gulf between academia and the excellent practitioner exists only in the mind. It is a societal illusion perpetuated by a certain culture that values some things and not others. Fortunately, examples that transgress this illusion exist even in modernity. It is up to the rest of us to notice, and then decide whether we have it in ourselves to go the extra mile on a second or third course.

In the end, it is the human spirit that flourishes in the context of excellence achieved in more than one way. No one is inherently trapped in the routine of a lifeless job whose boredom reduces the task to money. Nevertheless, I suspect that sometimes it takes the words of a friend or two to enlighten a person so trapped as to where his or her passion lies. Then it is up to the person to seize the excellence within (carpe diem) and put forth the effort, to be active rather than static before it is too late.

Source:
Robin Pogrebin, “A Vast Frank Lloyd WrightArchive Is Moving to New York,” The New York Times, September 4, 2012.