“The university accepts legal and moral responsibility for the mistakes that our training staff made on that fateful workout day of May 29.”

University of Maryland athletic director, Damon Evans, and university president, Wallace D. Loh, in a statement released following their meeting with the parents of Jordan McNair. In that meeting, Mr. Evans and Dr. Loh explained the findings of the university’s investigation: Medical staff failed to immediately treat Jordan for heatstroke when he fell ill after performing 10-110-meter sprints.

The investigation will continue as the head football coach has been put on leave and the university “has parted ways” with strength coach, Rick Court. Others on the football training staff were also put on leave. The investigation will focus on what has been called a “toxic culture” in the football program, also called “abusive and humiliating.”

The conduct in NCAA programs during the off-season has been a concern for some time.

The acceptance of legal and moral responsibility is important. But, why does it always take such tragic events before culture issues are addressed? Culture controls behavior. Culture drives behavior. Culture rewards behavior. And culture is a tough thing to investigate. Worse, few leaders are willing to believe the findings of a culture audit unless and until there is a tragedy. Every leader should be commissioning culture audits so that they can know “the way things are really being done around here.”

Time and time again, in the midst of a culture audit or during the reporting out of findings, the Barometer finds CEOs and boards unwilling to accept that there are elements of their organization’s culture that need to be fixed. The usual responses:

“Yes, but look at how well we are doing.”
“Yes, but we are known for our community, environmental, diversity commitments.”
“Yes, but you did not interview enough people.”
“Yes, but I have known _________ for so many years, I find this hard to believe.”

Yes, but it always plays out the same way — talk to Volkswagen, Wells Fargo, Penn State, Michigan State, BP, and on and on. Front-page headlines and a CEO who offers, “Who knew?” A culture audit goes right to the front lines of the organization, where the real information is found. At Wells, it was the tellers, feeling pressure to get or just create new accounts and new account services. At Penn State, it was the pressure of maintaining and protecting a winning football program that kept janitors who witnessed Sandusky’s shower behavior with young boys quiet. At BP, the workers on the rigs, the pipelines, and the refineries who knew the real story on safety. The only question is whether CEOs are willing to seek out that information before their cultures produce the inevitable tragedies.

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John Grisham Takes on Prosecutors

In a Wall Street Journal op-ed, novelist John Grisham asks for consequences for prosecutors who have continued to receive a flood of exonerations because of the following misconduct:

1. Concealing evidence that would benefit defendants
2. Fabricating evidence to convict the defendants
3. Making false statements to the court and defense attorneys
4. Offering perjured testimony
5. Cutting deals with witnesses in custody who may be inclined to testify to anything in exchange for freedom
6. Using “junk science” experts as witnesses
7. Intimidating favorable and unfavorable witnesses in cases

The editorial calls for disciplinary action against prosecutors. Mr. Grisham is correct — prosecutors who engage in the above behaviors need to experience consequences. Mr. Grisham forgot one small detail — to look at similar layers of misconduct on the defense side and throughout the civil calendars in the courts. Prosecutors are not alone in lawyer misconduct cases. Mr. Grisham wants a public commission to be created and charged with handling prosecutorial misconduct. Funny, the state bars have been charged with the same responsibilities, under the auspices of their state supreme courts. Seems to the Barometer that the call for action should go to the self-policing mechanism of professional organizations that has obviously fallen short.

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OJ Simpson “Fit” Test Arises Again: Can $60,000 in Cash Fit in a Ferragamo Bag?

Norman Seabrook, the former head of the corrections officers’ union in New York City, is on trial for corruption charges. The allegations are that Mr. Seabrook took $60,000 in cash in exchange for directing union funds into a risky hedge fund. The cash was allegedly delivered to Mr. Seabrook in a Ferragamo bag. However, the judge raised the question, “Can $60,000 even fit in that bag?” The prosecutor in the case re-enacted a scenario by placing three stacks of cash inside bag in front of the jury and adding, “There is still an ocean of room in that bag,” as he held the bag up for the jurors to see. If the cash fits, you cannot acquit,” would be the new mantra, courtesy and a flip of the OJ glove one, “If the glove does not fit, you must acquit.” Verdict pending.

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The Ethics of Scolding Relatives Publicly

Bobby Goodlatte, the son of U.S. Representative Robert W. Goodlatte (R. Va.), chair of the House Judiciary Committee, used Twitter to announce that he had donated the maximum amount to his father’s opponent in his district in rural Virginia. Bobby, a Silicon Valley investor and product designer, added, “2018 is the year to flip districts, let’s do this.” Bobby is disturbed about former FBI agent Peter Strzok’s dismissal, “I’m deeply embarrassed that Peter Strzok’s career was ruined by my father’s political grandstanding. That committee hearing was a low point for Congress.” Young Bobby received a number of invitations to Thanksgiving dinner in response to his tweets.

Dr. David S. Glosser, uncle of Stephen Miller, the architect of the Trump immigration agenda, wrote in an online essay that he has watched his nephew’s actions with “dismay and increasing horror.” Dr. Glosser argues that immigration is part of “our family’s life in this country,” and that his nephew’s involvement in politics may have made him “numb” to the “resultant human tragedy” and “blind to the hypocrisy” of the decisions he and President Trump are making.

The Barometer has no doubt that both son and uncle have strong feelings about FBI agents and immigration, respectively. However, there is a consideration here — that of family peace. And in the Goodlatte scenario, there is the ethical backdrop of honoring father and mother that thy days may be long upon the earth. Surely the ties that bind can overcome temporary political passions. The emotions of protecting FBI agents and immigrants can perhaps best be channeled into one-on-one discussions with the ones we love who happen to be in public life and who have a voice and access through which their relatives can be heard.

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The Bystander Effect in Chicago

They will not tell the police what they know. The friends, families, and neighbors of the Chicago shooting victims continue to remain sullen and mute. The no-snitching rule in Chicago is alive, well, and seemingly mandatory. Some say it is “bad karma,” and that they will reap what they sow if they tattle.

In a way they are right. By refusing to offer what they know, the neighbors, friends, and families allow the perpetrators to escape accountability. Only about 26% of the shooting cases investigated in Chicago result in criminal charges. In 2017, that Chicago rate dipped to 17.5%. In Chicago nonfatal shooting cases, the figure for charges to investigation is only 5%. The national average for such charges is 59%.

When we say nothing we become part of the problem.

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The West Virginia Supreme Court Impeachment: All Four Justices Charged

Last month West Virginia Supreme Court Justice Menis Ketchum entered a guilty plea to one felony count of wire fraud. A federal investigation found that now former Justice Ketchum used a state fuel credit card to purchase case for trips, including one to his country club. Following his resignation, West Virginia lawmakers voted to recommend impeachment of the remaining four justices for “unnecessary and lavish” expenditures including $3.2 million to refurbish their offices. Among the items purchased: a $31,924 couch, $42,000 antique desk, and $33,750 for a new floor. Other charges in the impeachment proceedings include the use of state funds to frame pictures for home, use of state vehicles over holidays, and, well, just all kinds of personal expenditures that would get us all fired should we use employer funds for such.

Between the federal and state governments, these are the fourth, fifth, sixth, and seventh remodeling scandals. Let’s all join together to help elected and appointed officials find their nearest Macy’s or Ashley’s furniture. Even the Pottery Barn can get you in a nice desk for under $1,000. Assume that you are using your own money and spend accordingly. You can avoid federal corruption charges and impeachment using that formula.

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Wells Fargo and Another Incentive Problem: This Time In Its Wealth Unit

The SEC received four letters from Wells Fargo wealth advisers in Phoenix and two from wealth advisers in Orange County. The letters told the same story. In order to qualify for an incentive program, based on revenue, advisers to Wells customers with accounts in Wells’ wealth unit directed their clients into investment products in which Wells was the majority owner. The result was that the advisers collected revenue that counted for their goals, but, because they had steered their clients into Wells products, Wells earned management fees on the investments.

The incentive program worked like this: Advisers had goals of $64,000 in annual product sales for private-bank clients, or those with assets above $2.5 million on the Investment Fiduciary Services platform. If they didn’t hit the target, they were removed from top branches.

Wells says it has controls in place to prevent such placements. Might want to check those controls. More to come.

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Conflicts and Retiring Members of Congress

This year 32 House members and 3 Senators are retiring. What will they all do after they leave elected office? Well, we don’t know. We should know because Congress passed the Billy Tauzin legislation in 2007. Billy Tauzin was a Republican member of the House and played a key role is shepherding through legislation that resulted in financial benefits for pharmaceuticals. At the same time, watchdog groups alleged, then-Representative Tauzin was negotiating for a position as the head of a pharmaceutical trade group, the Pharmaceutical Research and Manufacturers of America. The legislation required retiring members to make public disclosures of their job efforts undertaken while still serving.

Between 2008 and 2016 there were 349 retirements from the House. Only 2% of the group made disclosures about their job efforts. On the Senate side, 59 Senators resigned in the same period and 14% made disclosures about job efforts. So far for 2018 — nada. No retirees have made any disclosures.

There are only two ways to manage a conflict: don’t do it or disclose. It is not an option to not disclose and then add when questioned, “I don’t believe I have a conflict,” or “This would not influence my vote.” These are not discretionary calls. Disclosure is required. How much of a conflict it is is left to the public, and they are the ones who can then object and explain why there must be a recusal from either the vote or the job discussions. But, the public needs the information before it can voice objections.

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Facebook Asks Banks For Data on Customers

Sure, why not? What could possibly go wrong here? COO Sheryl Sandberg should have leaned in a tad more on that strategy.

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Urban Meyer: Ohio State and Lessons Learned from Michigan State, Penn State, etc.

Urban Meyer, which sounds a bit like a furniture and appliance store, is Ohio State’s head football coach. Mr. Meyer has been suspended pending a 14-day investigation into what Mr. Meyer knew about the domestic abuse incidents by a former assistant coach some years back. The abuse was an ongoing problem.

Mr. Meyer began his career Illinois State, trotted through Colorado State and then on to Notre Dame. The young man went to Utah and put them on the sports maps, and then on to Florida where he gathered 3 national championships, an amazing record, and more NFL drafts than one can shake a stick at. Mr. Meyer is a coach’s coach, and finally grabbed the head coach position at Ohio State. He was suspended when the university decided it needed to investigate Mr. Meyer’s actions and/or inactions.

Mr. Meyer said he did all that he was supposed to do when informed about the domestic abuse. The Barometer does not know what “doing all that you were supposed to do” means, but has heard it before, from Joe Paterno, and throughout the Michigan State responses to the Nassar molestation of young gymnasts. Penn State and Michigan State lost their presidents over their failures to take swift and definitive action upon gaining knowledge of abuse. Ohio State’s president has been meeting with the trustees and a decision is expected by Sunday.

There are some patterns here — the question always boils down to the power of sports on campuses and who can throw whom under the bus first. How about just dealing with these issues when they first emerge? Hard though they may be to believe, one can never assume nor protect. “Doing all that you were supposed to do” is a duty on a higher level than just being a bystander.

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Spiral Notebooks in Argentina: The Car Wash/Cash Distribution Corruption Investigations

Authorities in Buenos Aires have arrested 16 people on corruption charges, government officials and business peopll. How did authorities nab so many in one fell swoop? Well, as it turns out, the driver who ferried the bags of cash over a decade kept 8 spiral notebooks of records on his deliveries. The driver wrote down the names of the businesspeople, the amount of cash, and the government official to whom the cash was delivered.

No Excel spreadsheets, no logs, just the spiral notebooks every child in the world now buys for the new school year. Called the “Car Wash Investigations” based on a similar case in Brazil, Argentines now discuss their own Car Wash Investigation. Most of the recipients are friends of President Nestor Kirchner and his wife and successor, Cristina Fernandez de Kirchner. Prosecutors describe them as the leaders of “a wide-ranging conspiracy.”

Truth percolates in odd way — the simple actions of a driver’s meticulous records caused the percolation in Argentina.

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In the Truth Percolates Category: Harvey Weinstein Has Some E-Mails?

Harvey Weinstein is charged with the rape of a woman at a Doubletree Hotel on Lexington Avenue in New York City. However, Mr. Weinstein’s lawyers released e-mail correspondence between Mr. Weinstein and the woman and their relationship appears to have been consensual. There are e-mails about having him meet her mother, about wanting more than a booty call, and offers some fairly friendly banter.

The jury is still out — indeed, it has not been selected as yet — but there are two sides to every story. And most of the time these days, the story shows up in texts and e-mails.

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What Will They Remember About Us?

Manuel Ycaza (1938-2018) a jockey, had 2,400 wins in a career that began in 1957. He was inducted into the National Museum of Racing and Hall of Fame in 1977. But, in a tribute in Sports Illustrated, the jockey was noted for what most remember about his career, and it was not the Hall of Fame or all those wins.

At the 1962 Preakness, Ycaza was in a dead heat near the finish line, ridin’ Ridan. John Rotz, riding Greek money won the head-to-head and crossed the finish line first. Ycaza then accused Rotz of impeding him and Ridan near the finish. When officials reviewed the film what they found was Ycaza trying to drive his elbow into Rotz’s chest. The officials suspended Ycaza for “frivolous claims.” Over the years, Ycaza had 376 suspension days. Some say he was a daring rider, some say he was reckless. But the story that made it into his obituary was one of dishonesty.

Time for reflection — is there a story about me I really would not like folks to remember? And if there were such a story, what have I done since then to change, to compensate, to make amends? How much better the tribute would have been had the words — “his only suspension in decades of racing” — been part of the story. RIP.

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Morgan Stanley’s New Incentive Plan

Investment advisers are usually rewarded under compensation plans under which they receive commissions for buying and selling securities. Those plans resulted in problems with churning and steering clients into Morgan Stanley investment vehicles, under which the commissions were higher. Now the focus will be on the amount of assets the advisers bring into the company as well as the clients’ use of Morgan Stanley banking and lending services. The theory is that being able to see the clients’ full financial picture (banking, lending, and investments),will give advisers a better views of needs and possibilities. A side benefit is that Morgan Stanley will have 3 potential streams of revenue from clients: banking fees to mortgage interest and a new focus on asset management and debt service for their clients.

Time will tell, but steering away from commissions may get at the root cause of some bad investment adviser behaviors.

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