Oliver Schmidt, former general manager of engineering at VW, sentenced to 7 years

Mr. Schmidt explained at his sentencing, “A script or talking points, I was directed to follow for that meeting [with the California Air Resources Board] was approved by management level supervisors at VW, including a high-ranking in-house lawyer, Regrettably, I agreed to follow it.” He added that his loyalty to VW led him to be “misused by my own company.”

Pressure clouds judgment and makes bad decisions palatable. The Justice Department countered that Mr. Schmidt helped write the script.

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“Conyers’s Son Was Accused Of Stabbing His Girlfriend”

John Conyers, leaving the House for various reasons (all denied), endorsed his son, John Conyers III (just like Britain), to succeed him. Then, the above headline appeared in the New York Times.

John Conyers’s III (27) side of the story:”She says I stabbed her, which makes no sense. I didn’t do this. She and I had a verbal altercation and that escalated. She pulled the knife on me. She was chasing me. I tried to take it from her. There was a struggle. I pinned her to the wall. She kept swinging and she cut herself.”

Ah, the old self-inflicted wound in a domestic disturbance. The scuttlebutt is that John Conyers III is now out of the running for his father’s seat. Not sure why. From the reports emerging over the past few weeks about our Congress, sounds like he might fit right in.

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“I have never seen a case where there were so many bad things done like Uber has done in this case.”

Federal Judge William Alsup, presiding over the trial in the suit by Waymo against Uber for alleged theft of intellectual property, on learning of the existence of an employee whistleblower letter received by Uber regarding intellectual property issues at Uber. Uber also did not disclose that it had paid the now former employee whistleblower $4.5 million and his lawyer $3 million to settle his retaliation claims.

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A Conflict Is a Conflict Is a Conflict: Our Federal Government At Work on Ignoring Them

Ignoring party affiliations, a conflict is a conflict is a conflict. Since June, those conflicts have been cascading here and there in the federal government without much coverage, less outrage, and no action.

Mick Mulvaney is the new acting director of the Consumer Financial Protection Bureau (although not without a bizarre court battle in which a discombobulated federal judge had to ask a lawyer whether he had the authority to tell the president he could not appoint a government official because the departing director’s authority was autonomous, supreme, and over all the galaxy). The CFPB, as it is known, regulates consumer loans. Until his appointment (by President Trump without the court battle but certainly with the usual Senate battles) Mr. Mulvaney was a member of the House of Representatives. Mr. Mulvaney received $31,700 during the 2015-16 federal campaign cycle from payday lenders — the subprime, high interest, low tolerance lenders. Mr. Mulvaney was #9 in ranking for the most contributions from the paydays. Now, he is in a position to regulate (or not) those lenders. When asked if he saw a conflict he said, “I don’t think so because I am not in elected office anymore.” True enough, but that does not erase the conflict. A conflict exists when an individual’s interest are torn between competing loyalties. A conflict is not an evil thing; a conflict must be managed. You either disclose the conflict or you recuse yourself from one of the jobs that creates the conflict.

Payday lenders are playing a suit against the CFPB because of the issues of constitutionality of a one-person headed commission (all other federal agencies have 5 commissioners who make decisions). The fact that Mr. Mulvaney is the sole decision-maker for the CFPB makes the conflict more actor. Managing this conflict cannot be resolved by restructuring the agency quickly. That action would take congressional action, and glaciers move more quickly than that body, except, apparently, when pursuing staffers for purposes other than bill mark-ups. Mr. Mulvaney could recuse himself from any decisions related to consumer lending, but, then again, that is his job. Giving back the money seems to be the logical (and only) option.

Now, on the other side of the aisle is FBI agent Peter Strzok. Mr. Strozok was removed by Robert Mueller from the special counsel staff because the Office of the Inspector General, looking into the FBI’s handling of the Hillary Clinton e-mail investigation, found that Mr. Strzok was sending anti-Trump text messages to an FBI lawyer with whom he was having an affair. Some additional information about Mr. Strzok:

1. He worked on the Hillary Clinton e-mail investigation (or whatever Loretta Lynch told then-FBI director James Comey to call it).
2. He interviewed Mrs. Clinton’s top aides, Cheryl Mills and Huma Abedin, and was present for the interrogation of Hillary Clinton.
3. He helped to alter the Comey July 2016 exoneration of Mrs. Clinton by changing the original wording from “grossly negligent” behavior in managing her e-mails (which was the language of the federal statute that would have allowed prosecution) to “extremely careless.”
4. Mr. Strozok signed the documents that opened the FBI investigation into Russian election interference.
5. Mr. Strozok participated in the interview of Michael Flynn.
6. He has not appeared before congressional committees investigating all of this despite the requests of several committees.

Mr. Mueller was correct in managing these various conflicts. Mr. Strzok had to go, and he did in July 2017, but this information was not made public until the rumblings of the forthcoming OIG report hit the streets.

Yesterday, pursuant to a federal court order requiring the release of FBI documents, Judicial Watch, the group that made the Freedom of Information Act (FOIA) to the FBI found e-mail from Mr. Mueller’s deputy on the special counsel investigation, Andrew Weissmann. Mr. Weissmann sent a congratulatory e-mail to then-acting Attorney General Sally Yates for her refusal to enforce President Trump’s immigration order, “I am so proud. And in awe. Thank you so much. All my deepest respect.” A conflict is a conflict is a conflict, and there is evidence of impartiality here. There are two choices — manage the conflict (too late for that) or withdraw. No action yet. The clear political affiliations of two members of his staff should be addressed by Mr. Mueller.

Both sides of the aisle. No matter where you sit politically, the conflicts are real in both cases and in neither case was there solid management of those conflicts.

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The Harassment Settlements and Payments in Congress

The Congressional Office of Compliance has released the following data on its settlement of sexual harassment claims against members of Congress. Visit the site yourself: https://www.compliance.gov

Since 1997 (through 2017), there have been 264 settlements for a total of $17 million disbursed to pay claims.

The worst year? 2007, with 25 complaints settled for over $4 million in settlements, followed by 2002 with 10 complaints settlement for almost $4 million. 2017 is almost $1 million as of November 16.

Wait! There’s more!

If a staff member wishes to file a harassment complaint, he or she must first trot through an Office of Compliance process (from the office’s website):

“Counseling” is the name given to the OOC’s intake process. To file a claim of harassment (or any other violation of workplace rights under the 13 statutes incorporated by the CAA), you must request counseling within 180 days of the date of the alleged violation.
Although the OOC counselor does not provide you with advice about the strength or merits of your case, upon receipt of the counseling request, she considers the information that you provide and gives you information on your workplace rights and the administrative procedures under the CAA.

Wait! There’s more!

The whole process is secret. After counseling you go to mediation. Here are the rules on mediation:

At the beginning of the mediation process, all parties sign an agreement to keep confidential all communications, statements, and documents that are prepared for the mediation. Information obtained, exchanged, or imparted during mediation may not be disclosed by the mediator or any party to the mediation. This means that you can’t discuss what was said during mediation or share information you learned for the first time through mediation. The purpose of this limited confidentiality obligation is to encourage the parties to share information in order to seek resolution of the claim.
Wait! There’s more!

Here are the rules on settlement.

Whether and how to settle a claim are matters for the parties to decide. The OOC does not have any standardized language that parties are required to include in their settlement agreements, and it does not require parties to include nondisclosure provisions in those agreements. The contents of settlement agreements— including any provisions governing disclosure—are solely determined by the parties and their representatives. The only statutory requirement for settlement agreements in the CAA is that they be in writing.

Wait! There’s more!

No names or actions are revealed. You wlll never know which elected officials did what and when. Again, from the website:

Under current law, the OOC is not authorized to release information about individual awards and settlements.

Wait! The last straw!

Tax dollars paid for everything!

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Complicit: Word of the Year Per Dictionary.com

Yes, choosing to be involved in an illegal or questionable act, especially with others, is our word of the year. Here’s a list of the pockets of complicity. Their complicity was verified when post-revelation of a major figure they all said, “Everybody knew that!”

Hollywood: After Harvey Weinstein, Dustin Hoffman, Kevin Spacey, Louis C.K., and others too numerous to mention were revealed to be what is charitably referred to as “sexual harassers.”

Journalism: After Bill O’Reilly, Roger Ailes, Garrison Keilor, Matt Lauer, Charlie Rose, and others too numerous to mention or still just on administrative leave were revealed to be what is charitably referred to as “sexual harassers.”

Politics: After Al Franken, Roy Moore, John Conyers, and others too numerous to mention were revealed to be what is charitably referred to as “sexual harassers.”

Not to worry, though. Congress is on the case. They are going to require sexual harassment training. Funny, there was a time when we all understood that it was not okay to be in your underwear in the office. Sans training, common knowledge. But, George Constanza was not just a character in a sitcom. He lives, among the rich, the powerful, and the famous.

However, these harassers were able to pull their power and stunts (be in their underwear and such) because of complicity. The bystander effect lives on despite the lessons of Kitty Genovese. TSA has it right, “If you see something (whatever it is), say something.” Waiting 2 to 40 years serves no one well.

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Students in Massachusetts Who Were Paid For Correct Answers on Standardized Tests Had Higher Scores

The National Bureau of Economic Research has a paper that reflects a study by economists that concludes that paying students in the United States for correct answers on standardized tests nets higher scores than those of students who were not paid. Economist conducting the research conclude that the problem with U.S. students is not skills or knowledge but motivation.

The Barometer hardly knows what to say or where to start, except to say: How did we come to this?

The findings are more troubling because the study was also conducted in China and there the payments did not make a difference in score levels. Chinese students do their best on the test regardless of payments.

Finally, the study concludes that paying all U.S. students could lift the US ranking on test performance from 36th in the world to 19th. If we cannot teach our children well, we can bribe them into scoring better. Get ready for the federal budget allocations for test compensation, educational bribery, or competitive slush fund, whatever you want to call this.

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Wells Fargo and the Currency Traders: Another Incentive Plan Gone Amok

The Wall Street Journal has reported on yet another incentive mishap at Wells Fargo. This time, the bank, which had to let 5300 employees go for creating false or unauthorized accounts in order to earn incentives in the retail side, had a currency incentive plan that found the traders just making fees up. The higher the exchange fees earned, the higher the currency traders’ bonuses.Customers who questioned the size of their currency exchange fees were told of the “time fluctuation rate.” The “time fluctuation rate” was a rate that occurred only at the exact moment of the customer’s currency trade. It was the darnedest thing — the rates went up for customers only at the time they needed to make trades. Also, the rates were “fluctuating in time” even when the customers had signed agreements for their exchange rates.

The currency exchange customers of Wells were not involved in large trades and tended to not look closely at their transactions. When they did and complained, the bank made adjustments to quell rebellions. Restaurant Brands International, the owner of Burger King and other chains, received a $900,000 refund on its fees when it complained. The events became known as “the Burger King trade” within the bank.

The problem with the fees, like the problems with the fake accounts, went on for at least a decade at the bank. In the San Francisco currency exchange office, employees rang a big brass bell when a big trade went through. In one meeting, an employee expressed her concerns that the bell-ringing was not appropriate for celebrating high fees to customers. She was reprimanded, told that her conduct was offensive and unprofessional, forced to apologize to her managers, and demoted. She later left the bank. She was right to speak up and right to leave the bank.

The Wells currency exchange division has had extensive changes since October and employees there had to participate in compliance training. Internal and federal investigations are pending. If I were on the board or an executive at Wells, I would start looking at every bank operation. Start with incentive plans in every area and proceed from there.

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Pennsylvania Congressman Alleged to Have Paid Primary Opponent $90,000 to Get Out of Congressional Race

Robert A. Brady is the Congressman. Jimmie Moore was his rival in the 2012 primary contest. Mr. Moore is cooperating with the FBI, and court documents alleged that the money was funneled to him in exchange for polling services. Mr. Moore says that the idea came from a meeting that he had with Representative Brady, a meeting arranged by then Philadelphia mayor, Wilson Goode, Sr. Mr. Brady is also cooperating, explaining that the payments were legitimate, and, even if they were not, he knows nothing about them. Quite a story.

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It’s All in the Meaning of “Lost” Baggage Reports

Airlines are required to file reports with the U.S. Department of Transportation that disclose the number of lost baggage reports that their customers file. However, American Airlines rolled out a system that notifies passengers when their bags do not make a flight and ask the customers to provide “delivery information.” Because the customers are proactively engaged on their luggage losses, they do not file a written report about their lost bags.

The result of the proactive seizure of the issue by American is that the airline’s number of lost baggage reports is down to its lowest rate in years. Statistically, American looks terrific on paper. However, if you know that American’s system thwarts reports, you know that the DOT does not have a clear picture of whether bags are lost, mishandled, or destroyed by the airlines. The released stats make American look great. The truth is not so great.

The DOT is looking into the American system to determine whether the proactive approach complies with regulatory reporting requirements. United and Delta are about to adopt a similar proactive program.

We can always find a loophole in the law, in regulations, in accounting rules. And we can improve our numbers, how we look to the outside world. But, eventually the outside world and/or regulators catch on. You are then back to the hard work of business — customer satisfaction, improving processes, and all the dull work that makes a company improve. Looks like the airlines will be back to trying to find ways to stop losing luggage. Probably would have been good to start facing that reality before the regulators caught on.

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Another Day . . . Another Member of Congress, Hollywood’s Elite, the Media, Silicon Valley Bites the Dust

In 2015, Representative John Conyers, 88, settled a sexual harassment complaint by a former employee who said that she was fired because she would not submit to his sexual advances. At 88 years of age the ranking Democrat on the House Judiciary Committee is chasing staff members?

Pundits, senators, experts, toddlers, and several Jack Russell terriers in the DC area are opining that we need to have a “conversation” about this problem. No, we don’t. Here’s the extent of the conversation: Cut it out!

In this week of thanks, be grateful. All of these reports, whether true or false, will do for workplace behavior what “Fatal Attraction” did for marriages. Every married man in America settled down. Be afraid, be very afraid. The domino effect should be enough for anyone with three brain cells to just “cut it out.” Please fill in here your own obvious quip on the presence of three brain cells among members of the media, Congress, Hollywood elite, etc.

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The FIFA Trial: Defendants Making Throat-Slitting Gestures at Witnesses?

Soccer is a rugged game. Soccer fans are a rough sort. And defendants at soccer corruption trials, well, a U.S. federal district judge is about to hear testimony about the throat-slashing gestures one of the defendants is alleged to have made to a witness during his testimony.

Manuel Burga, one of many defendants in the alleged international web of FIFA corruption in the award of games and franchises, is a former Peruvian soccer official on trial for conspiracy and racketeering. Alejandro Burazco, a businessman from Argentina who entered a guilty plea in the FIFA corruption web, was testifying about the payments he made to Mr. Burga in cash because Mr. Burga was already under investigation in Peru on charges money laundering. When Mr. Burga first made the gesture, Mr. Burazco was just leaving the witness stand after his first day of testimony. During day four of his testimony, Mr. Burga made the throat-slitting gesture again. Mr. Burazco told a federal agent of the gesture as he left the stand on his final day of testimony, crying. Mr. Burga’s lawyer told the federal district judge that his client has a skin condition that causes him to itch his neck. Mr. Burga’s lawyer also said that his client was going to see a dermatologist about the skin condition.

However, the federal judge concluded that there was sufficient probable cause to hold a hearing on the possibility of witness tampering. The court will see videos of the court room as well as any incoming evidence from the defendant’s dermatologist. Only in soccer.

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Looks Like Menendez Will Walk: Jurors Can’t Bring Themselves to Convict

The creep factor has been out and about as often as Harvey Weinstein is in and out of whatever Arizona rehab facility banishes him for cell phone use as he seeks to recover from his addiction to starlets. Oddly missing from the news is coverage of the corruption trial of the senior Senator from New Jersey. The evidence in the trial of Robert Menendez reads like a Russian dossier. Senator Menendez was BFF with a wacky doctor who got involved in about $100 million in questionable Medicare billing. The two had good times together, sometimes with various forms of entertainment involved. And the doc made 6-figure donations to the senator.

But, the jury did not see things as criminal. Or some portion of them did not. Absent an evidentiary e-mail that read, “Say, Bob, how about I give you $700,000 to get these regulators off my back?” Without that level of proof, the jury saw no quids in the quos. Patterns, amounts, and frat-boy behavior did not tip the scales. The Barometer blames CSI, Law & Order viewing. Those prosecutors come up with tangible evidence so that there is no possibility of reasonable doubt. Absent the smoking gun, jurors will not employ the tools of logic and deduction. Prosecutors are on their own because jurors will not think through the complexities of timing on gifts, donations, and good times. Once again, elected officials who engage in unseemly behavior declare the most bizarre of victories – not being convicted. Could the bar be any lower for the behavioral standards of our elected officials?

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Tech Firms and the Baltimore County Public School System: Donations and Quid Pro Quo

Silicon Valley wants to sell computers to school systems. Get the young ‘uns using your computers at an early age and they are hooked for life. Apple built its market through the school systems. But, competition is now more fierce, so the tech firms are courting the school systems.

Courting includes donations to the system’s Education Foundation. In exchange the Foundation put-up banners with company names, a way to get the name of your computer or program into every school. In addition, the companies sponsor administrators in the system for trips to share their experiences in students using laptops. One administrator has enjoyed 65 out-of-state trips at the expense of vendors.

The Foundation has no policy on donors and members of the Foundation’s board include representatives from the tech firms. Sometimes board members are voting on proposals submitted to the Foundation by tech companies. The school system has a policy of not allowing employees to accept travel from vendors when they have proposals pending before the district. The rule allows for plenty of activity when the proposals are not pending.

If all of this sounds like quids for quos and conflicts, well, that would be because there are quids for quos and conflicts. Based on a New York Times article covering the close relationships and perks, Baltimore has begun an investigation. Good call.

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