The Ethical Barometer

News & Events

FIFA: Corruption As Big As, Well, the World Cup

Not being a sports fan, the Barometer thought the federal government had passed another wage tax — FICA, FUTA, and now, FIFA. However, turns out the organization responsible for futbol, football, soccer, that game with the black-and-white ball they bounce with their heads, has a little trouble with corruption. And the U.S. raided a luxury Swiss hotel in the early AM (Swiss time) a few days ago to round up the accused scoundrels.

Sepp Blatter, the head of FIFA, has been under pressure to resign. Nay, nay, says he for, “I know many people hold me ultimately responsible … (but) I cannot monitor everyone all the time. If people want to do wrong, they will also try to hide it.” Actually, Cato, that’s exactly what you are supposed to do. If something happens at your organization that has U.S. FBI agents hauling your executive out of their hotel beds whilst you are trying to hold your annual meeting, then it is your fault. Either you are complicit or you were asleep at the wheel. Either one does not bode well for further effective leadership.

Big-time sponsors, Coke, Nike, and Adidas, are monitoring the situation. One call from these companies and change will be forthcoming. There are criminal standards for proof of wrongdoing (and those will unfold), and then there is the sloppy and damaging effect of corruption. The former requires time and absolute proof. The latter requires swift action. Everyone seems to be kicking the ball down the road for now.

Political Party in Spain Is Unable to Keep Its Pledge to Not Run Indicted Candidates

How do you know when your country has reached the point of no return on corruption? Spain may have made it. The Popular Party made a pledge, drew a “red line,” as the leader of the Valencia Province phrased it, to refuse to allow any indicted official on the ballot. That’s telling them!

Valiant efforts aside, the pledge did not come to pass. The party could not find enough politicians who were not indicted. As a result, 50 indicted officials appeared on the Valencia ballot in Sunday’s election. Valencia is known as a corruption hot-spot, but a total of 467 mayors in Spain are under indictment, mostly for mishandling public money or kickbacks for awarding government contracts.

The party leaders said that although it did indeed end up with indicted candidates on the ballot, they had reviewed the candidates on a case-by-case basis. The screening standard used for being indicted but still allowed on the ballot was one of “shameful behavior.” That standard remains undefined, (more…)

Classic Quotes

“Money shufflers don’t come cheap.”

Warren Buffett in his annual shareholder letter. Mr. Buffett was referring to investment bankers.

“After 2008, nobody was prosecuted.”

L. Dennis Kozlowski, former Tyco CEO, recently free of prison, work-release programs, and probation, bemoaning his unfair prosecution. Yes, convictions for unauthorized loans from the company, conspiracy, sales tax evasion, and falsifying corporate records were all just part of a prosecutorial conspiracy to persecute and prosecute a man who spent $6,000 of Tyco funds on a shower curtain for his Manhattan apartment.

The Barometer agrees — his conviction was silly because a man so bright and given so much should not have squandered it all by being cheap. If he had not tried to evade the 8.25% sales tax on his art collection activities, the rest of his Tyco activities would have gone undetected. And those activities, from the $2 million birthday party for his second wife (at company expense) to a key employee loan program that did not require repayment of the loans, were the stuff of criminal charges. All cheap and silly decisions by a man who still cannot seem to admit that what he did was just plain wrong.

Ethical Dilemmas

“Get Yourself Fired — You’ll Make More Money!”

The Barometer was strolling through the home section of a major department store.  Tempted by  Christmas potholders at 50% off, the Barometer stopped and soon planted feet firm to continue listening as three employees of this fine establishment conversed about their futures.  The ring leader was explaining to the novice employees that after the new year begins, most of them would be going to part-time status because of slow sales, the economy, health care issues, etc.  The two employees seemed crestfallen.  But, their mentor would have none of it.  “Don’t do it!” said he.  “Get yourself fired because the money you make on unemployment will be better than part-time work here and you can get 99 weeks of unemployment.  Plus, you are eligible for medical care through the government because you are unemployed.  It’s a better deal. It is so not worth it to keep working.” This fine consigliore (more…)

Returning Slightly Used Shoes

Even the well seasoned Dillard’s manager was taken aback by this one. A customer brought in a pair of moderately expensive dress shoes, expressing a desire to return them because they just weren’t quite right. As the manager processed the order she checked inside the box to be sure that the shoes in the box were the shoes the matched the box – past experience dictated that follow-up on returns. The shoes were the correct ones for the box, but the customer had another issue. The shoes had masking tape on the bottom – masking tape that was dirty. When the manager returned to the customer (more…)

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