The Ethical Barometer

We have known the answer to, “Would you sell your soul for a Louis Vuitton bag?” for some time.  Ongoing raids of luxury stores by looters seizing the luxury brands is not just the sale of a soul.  It’s a sale that ends up on TikTok, with great pride and no fear of prosecution.

But, the price of a soul is declining.  Dollar Tree reports that their gross margins have shrunk 30.5% so far this year due to theft.  Their usual shrinkage rate is 3.5%. Their level of sales is up but theft still takes them into negative category. Dollar Tree and Christian Dior look the same now.  There are security guards looming at the doors of both store chains.

Oh, dear prosecutors, where art thou?

The reason? “Violent incidents” resulting in stolen property. It’s gang looting, gang! Then the thieves post themselves on TikTok in the middle of the looting.  “A culture of impunity drives the market for retail theft.”  Indulging criminals is no way to run a country.  Because of that we are approaching a point of having no way to run a store.   Target is grappling with that sad reality.

The result?  Target closes stores in high-crime areas, leaving the residents there with no place to shop. The looters are eating their own.  It happens when the rule of law breaks down.

In 2006, a member of JPMorgan Chases’ bank’s risk department flagged the late Jeffrey Epstein’s cash withdrawals (up to $750,000 per year) two years before Mr. Epstein entered a guilty plea to solicitation of prostitution with a minor.

Still, the relationship continued. But staff members were onto him.  E-mails referred to the convicted sex offender as “Sugar Daddy.  In 2010, the bank’s compliance department flagged a loan to Mr. Epstein in relation to a modeling agency that had been charged with bringing underage girls into the United States.

Finally, after one meeting with Mr. Epstein, held in 2013, the head of asset and wealth management “fired” Mr. Epstein as a client. Way to muster some backbone.

We do not know the full extent of those who were involved, inextricably intertwined, or knew about Epstein.  As it unfolds, even our already too numb consciences are still shocked.

A mob took over a gas station food mart in Compton, California at 2:30 AM on Sunday, April 16. They took thousands in beer, condoms, and cigarettes.  Not exactly the same as Valjean stealing bread.

Meanwhile, across the country in Philadelphia, 10 men managed to steal $200,000 in dimes from a truck carrying $750,000 in dimes from Philadelphia to Florida. Must have been needed for the high stakes mahjong matches down there.

In the meantime, how will the dime thieves cash in the dimes?

Meta (nee Facebook) employees (who are left) are griping.  No more free laundry service.  Free dinner has been pushed way back on the clock to prevent employees from taking food home. Those “micro kitchens” at their headquarters do not have enough snack replenishments. Not to mention the losses they are experiencing with their options because Zuckerberg’s run in his authority-defying hoodie is over.

They were living their best lives at a company paying too much to too many and offering too many perks:  free food, clean clothes, and not many time demands at work.  Now the real world has hit Silicon Valley.  Welcome to the office, dear ones.  Bring some protein bars from home, grab some Tide pods, and swing by Whole Foods for dinner.  Welcome to Kansas. It’s a hard-knock life, this working for a living.

Sheera Frenkel and Mike Issac, “Mass Layoffs and Absentee Bosses Lead to a Moral Crisis at Meta,” New York Times, April 12, 2023, p. B1.

The Barometer noted that the Miami Heat had a fairly large branding error with their home base, i.e., the FTX Arena.  Then the mental recollection wheels began to turn.  Adelphia graced the home of the Tennessee Titans before the founder and several officers of that collapsed company ended up in the hoosegow for using the company as a piggy bank. The Philadelphia Flyers and 76ers have had their home graced by the brands of Wachovia, First Union, and still struggle through now with Wells Fargo, the home of 3.5 million fake accounts.

The poor Houston Astros had Enron Field. Enron executives went on to 9 months to 24 years in prison after that company’s overnight collapse. Perhaps there was a contagion because MLB concluded the Astros cheated, but let them keep their World Series title.  No harm, no foul.

The Nets has its arena in Brooklyn branded with Barclays.  The bank’s CEO’s connections with Jeffrey Epstein have been dogging the bank and CEO for several years.  MCI, nee WorldCom, graced the Washington Wizards’ and Capitals’ arena before WorldCom became the largest bankruptcy in history in 2002.

The Los Angeles Kings and Sparks had their facility named the HealthSouth Training Center until that $3 billion accounting fraud was uncovered. It is now the Toyota Training Center. HealthSouth spread its branding wealth around because, after all, it was specializing in sports injury and surgery rehabilitation — The San Antonio Spurs also had a HealthSouth Training Center.

There are ones to watch.  Comerica’s stock is down 38% and that means trouble might lie ahead for the Detroit Tigers. the Texas Legends, and Dallas Stars. In fact, those regional banks are big arena names around the country.  Watch for those names to fade. Crypto.com and the LA Clippers may not be a good brand affiliation post-FTX.

Sports writers call it the arena curse. The Barometer sees it as bad judgment.  How many Tigers fans switch to Comerica because they saw it at a baseball game?  And how many Nets fans take their banking dollars over to Barclays because they were intrigued at a basketball game?  These are expensive marketing ploys akin to vanity license plates.  Lots of people seem them, but to what end? The car owner feels good but the rest of us just shrug our shoulders and do just as well  keeping  the extra money as we accept, for no extra charge,  the state-issued plates. Save your marketing dollars.  For the teams — save your reputations.  For investors, if you see a sports field, facility, or arena named for a company, do not invest.  Run away.

For all the crypto currency fans out there who have been saying, “What could possibly go wrong?” in a financial industry no one can explain, and, as if FTX was not enough, we have this:

Samuel Lin, the compliance chief for Binance Holdings Ltd. from 2018-2022, has been sued by the U.S. Commodities Futures Trading Commission (CFTC) with willfully aiding and abetting his company in evading U.S. laws. Interpretation:  the compliance officer set up a system for evasion of his own compliance controls.

And, Binance has refused to provide the CFTC with Mr. Lim’s residential address in Singapore so that he can be served with an investigative subpoena.

The complaint alleges that Binance, despite its denials, has long been soliciting customers in the United States. Binance was soliciting U.S. customers through a complex structure to evade U.S. laws and regulations.  The company used personnel and vendors in the United States and actively cultivated VIP customers in the United States.  However, the complaint also alleges that once customers were hooked, Mr. Lim helped them evade compliance controls.  Mr. Lim  told customers to use VPNs to avoid Binance’s internet protocol address-based controls.  Off-shore companies were the recommended tool for evading Binance’s anti-money laundering controls.

The complaint in the suit provides lesson in the following axioms:

(a) If you are doing stuff that just might cross a line here and there, don’t brag about it in e-mail; and

(2) “Criminals are Stupid” — the title of the Barometer’s criminal law professor’s book about his experiences as a prosecutor.

Some gems from the complaint in Commodities Futures Trading Commission v.Changpeng Zhao, Binance Holdings Limited, Binance Holdings (IE) Limited, Binance (Services) Holdings Limited, and Samuel Lim https://www.cftc.gov/PressRoom/PressReleases/8682-2

Binance has been aware that its compliance controls have been ineffective. As Lim—at the time Binance’s CCO—recognized in an October 2020 chat with other Binance compliance personnel, Binance’s compliance environment has amounted to “email sending and no action . . . for media pickup . . . I guess you can say its ‘fo sho.’”

As part of an audit for a customer, the Binance employee who held the title of Money Laundering Reporting Officer (“MLRO”) lamented that she “need[ed] to write a fake annual MLRO report to Binance board of directors wtf.” Lim, who was aware that Binance did not have a board of directors, nevertheless assured her, “yea it’s fine I can get mgmt. to sign” off on the fake report. Around the same time as the referenced “half assed” compliance audit.”

In November 2020 the MLRO exclaimed to Lim in a chat, “I HAZ NO CONFIDENCE IN OUR GEOFENCING [screening out customers from certain countries, e.g., the U.S.].

in February 2019, after receiving information “regarding HAMAS transactions” on Binance, Lim explained to a colleague that terrorists usually send “small sums” as “large sums constitute money laundering.” Lim’s colleague replied: “can barely buy an AK47 with 600 bucks.”

And with regard to certain Binance customers, including customers from Russia, Lim acknowledged in a February 2020 chat: “Like come on. They are here for crime.”  Binance’s MLRO agreed that “we see the bad, but we close 2 eyes.”

Yes, indeed, it was a web of crime and Binance officers, such as they were, had their eyes wide shut.  Alleged crime, and alleged eyes shut that is.

We are still cleaning up bank messes from 7 years ago as we find ourselves in yet another.  It was 2016 when the news hit that all the new accounts Wells Fargo was boasting about were not real.  By the time the dust settled, regulators found 3.5 million fake accounts.  The Barometer would have gone into business if she had understood you can just make stuff up.

And the Wells scandal broke just 8 years after we lost Lehman and Wachovia and a host of other financial institutions in 2008.

Now, as banks were folding right and left over the past 10 days, Wells Fargo’s former head of community banking, Carrie Tolstedt, agreed to enter a guilty plea to obstructing regulators. The allegations were that Ms. Tolstedt knew of the Wells “fakery” as early as 2004, but kept it quiet. The regulators, ever slow on the uptake, were trying to figure out the fake account scandal.

Wells paid $3 billion to settle the charges of faking accounts.  Ms. Tolstedt could serve up to 16 months in prison.

Now we are facing Silicon Valley Bank, Signature Bank, First Republic Bank, and Credit Suisse, the banks on the brink. Despite clean audit opinions these banks somehow ran out of money.  Go figure.  No worries — we will sort through it all over the next seven years — about the time the next scandal breaks wide open.

Dave Michaels, “Ex-Wells Executive to Enter Guilty Plea,” Wall Street Journal, March 16 2023, p. B10.

The Barometer has noted the presence of a nearly instantaneous quality-of-service survey in her inbox seconds after Clear has “cleared” her through TSA airport security.  Except in Atlanta.  The Atlanta airport is a mess.  The Clear lines there serpentine in a Disney World manner and length.  You pay extra fees to Clear to avoid lines. In the case of Atlanta, however, Clear has managed to make its lines longer than the lines for those who just show upsand get in the short lines. Clear has high ratings if you can skew the data.

When the Barometer has her car serviced, there will be e-mails and calls of warning, “If you are not satisfied with your service experience, let me know so that I can fix it before you fill out a survey that is coming from the auto manufacturer.”  How will the manufacturer know what dealerships really do a good job if the dealership is hiding problems and cooking the customer surveys?

The survey madness was the focus of a book called “The Ultimate Question.”  That question (s) is “Are you likely to return to ________?” or “How likely are you to recommend ________?” Supposedly, good numbers on those questions translate to successful businesses. But not if you are fooling around with strategies pre-survey.

Airbnb owners are posting “Vacation Rental Rating Guides” to persuade guests to use the appropriate number of stars. Grade inflation in rental property evaluations.! Fours star actually means average as renters follow their instruction sheets.

The average score on Airbnb evaluations is 4.5.  So, you get an average rating that is recorded as excellent.   Then there are the guests who refuse to give a bad score, fearful of hurting the owner.  Hello renters! Airbnbers and other property rental firms just charged you $600 a night for a house that was cleaned by a 13-year-old neighbor.  A little negativity could help their business if they were willing to listen.

No one listens. No one speaks, at least truthfully  So, this odd world of surveys has brought us feedback of excellence without the disclosure of the baggage of gaming the system. Without Atlanta, Clear looks great. A car dealership gets fabulous service ratings, until you get there and experience the reality of manipulated data. With a ratings sheet posted on the refrigerator that tells customers what to put, all Airbnb properties are a slice of heaven. Owners achieve the highest ratings possible even when the floors are filthy.

The ultimate question has, ironically, fooled the customers.  Everyone is too busy gaming the system to be bothered by details about improving service and eliminating glitches.

When the story of the multibillion dollar collapse of FTX broke, the Barometer thought Dr. Jerry Robinson (Peter Bonerz), orthodontist office mate of Dr. Bob Hartley on The Bob Newhart Show had succumbed to financial temptations. You decide:

Dr. Jerry Robinson played a loyal friend in the series and went on to direct successful television shows (Murphy Brown).

Samuel Bankman-Fried has been thrown under the bus by his colleagues and friends. He’s the only one involved in the gigantic FTX fraud who has not entered a guilty plea.

MSG Entertainment, which owns and operates Madison Square Garden, Radio City Music Hall, other venues, and restaurants, took a bold step.  It sent a letter to 90 law firms that are in litigation with MSG stating, “Neither you, nor any other attorney employed at your firm, may enter the Company’s venues until final resolution of the litigation.”  The purpose of the ban was to prevent said lawyers from collecting evidence “outside proper litigation discovery channels.”

MSG then used facial recognition technology to turn the lawyers away. Lawyers then did what they are trained to do, they sued MSQ. Lawyers are not a protected class, yet.  So, anti-discrimination laws do not apply. The NBA does not prohibit the use of facial recognition.

So, the lawyers relied on a 1941 New York law that prohibits entertainment venues from denying admission unless the patron has become abusive. The law was drafted by an ACLU attorney for a theater critic who had been banished from 30 theaters.  Tough to pan a play when you haven’t seen it.

A court has granted a temporary injunction against MSG’s ban until things can be sorted out, well, in litigation over litigation. MSG has appealed. The lawyers are making the litigation about the dangers of using facial recognition technology.

Facial recognition is the tool for implementing the ban.  The issue is whether business owners can decide who gets to enter their establishments.  As the attorney for MSG pointed out to the judge in one of the cases, “Lawyers sometimes alienate people.”  He added that when he was a prosecutor cracking down on the mafia, “There are some Italian restaurants I couldn’t get a reservation at.  I didn’t sue them.”

It seems lawyers have hit an occupational hazard that affects their social lives. Hell hath no fury like a slip-and-fall lawyer banished from Knicks games and Phish concerts.

Kashmir Hill, “Arena Ban on Lawyers Fails to Stick,” New York Times, January 17, 2023, p. B1.

In October 2021 there was the memo that Attorney General Merrick Garland sent out to all offices about the need to crack down on those violent parents at school-board meetings. He could offer no examples or prior investigations before Congress when asked what prompted the memo.  Later we learned that it was at the urging of the National School Board Association and its contacts at the White House that brought AG Garland to his senses.  So, he offered a stern memo for all hands on deck to crack down on those rascally scalawag parents. It took our Caspar-Milquetoast-meets-Barnet-Fife AG only five days after that memo arrived in the White House to get out his memo. The Mr. Limpet of lawyering said it was time to call a “domestic terrorist” a “domestic terrorist.”  Let the tackling of the soccer moms and wresting of their minivans headed for school-board meetings begin.

The terrorists showed him.  They sued him (case dismissed) and then began ousting school board members right and left, although mostly left, from Miami to San Francisco.  Congress is still investigating, and the mild-mannered Merrick is still resisting answers and investigators.  He has referred questions to Karine Jean-Pierre at the White House.  Ms. Jean-Pierre has responded that she is referring all questions to the Justice Department except those about Southwest Airlines, the Supply Chain, FAA ground-stops, and stalled infrastructure to Secretary of Transportation, Mayor “Pete” Buttigieg.  Mr. Buttigieg is currently on permanent leave owing to being a parent of twins.  He does report for work for press appearances to explain his latest harshly worded letter to someone else responsible for all road, shipping, strike, and transportation debacles under his watch.

Since the U.S. Supreme Court tossed the abortion issue back to the states, Mr. Garland’s Justice Department has been busy suing those states for doing what the highest court in the land said they can and should be doing.

When desperate Doug Duce, then-governor of Arizona. erected a wall on the Arizona-Mexico border made up of shipping containers, the Justice Department filed suit for an order requiring their removal.  The containers were on federal land and were creating an environmental hazard.

You can find Merrick Garland and his merry band of Justice Department lawyers with their noses in just about anything that does or does not concern them.  After all, its name is self-descriptive.  All this has been done in the name of Justice, literally and figuratively.

However, with President Biden’s document debacle, the ongoing drama of the Justice Department is running short on strategies for remaining opaque even as it litigates, intimidates, and obfuscates.

The bottom line on the document debacle is as follows:

1. November 2, 2022 Mr. Biden’s lawyers report finding classified materials at the Biden Center for Some Kind of Mubo Jumbo Globalism for the Study of Pumping Funds to Some Biden from Somewhere Else.  No word on how Biden lawyers happened to be snooping around the Center or why they were engaged as clerical two-men-and-a-truck flunkies. The University of Pennsylvania, the home of the Biden Center issued a statement, “Who knew?” and adamantly denied that any funds from China went to the Center (more on that issue coming).
2. November 4, 2022 The classified materials from the Pumping Center somehow landed at the National Archives.  The National Archives Inspector General then contacted the Justice Department about the unauthorized possession, storage, transport, reading, or use of classified documents.
3. November 8, 2022 Federal elections are held.  Nary a word was heard on the Biden possession of classified documents. No discouraging word was uttered on the topics covered in those documents:  Ukraine and Iran.
4. November 10, 2022  The FBI commences an “assessment” to determine whether the documents had been mishandled in violation of federal law.  No word yet on why the FBI in no longer the Federal Bureau of Investigation and has become the FBA, Federal Bureau of Assessment.  Also, no word on why the FBI opted for no search warrants, raids, or searches of Dr. Jill’s underwear draws for nuclear secrets.
5. November 10, 2022  The FBA notifies Biden attorneys that it had begun its scary assessment  process but that it would keep in regular contact.  No word yet on why Biden attorneys were not left standing outside the National Archives, FBA headquarters, Biden homes in Delaware, or the Biden Corvette garage. “Let’s keep in touch,” is the new motto for the new FBA.
6. November 14, 2022 U.S. Attorney John Lausch is asked by Milquetoast Limpet to look into maybe whether or possibly a special counsel should be appointed by said Limpet. Mr. Lausch was at that time a U.S. Attorney in Illinois but is  headed out the door and  into private practice in February.
7. November 18, 2022 Caspar Fife appoints a special counsel to “investigate”  Mr. Trump’s possession of “sensitive documents” as well as his role in the January 6 attack on the Capitol. Jack Smith, said special counsel, is currently wrapping up a stint at the Hague prosecuting war criminals.  He pledged to handle the investigations in “the best traditions of the Justice Department.”  Uh-oh, that means trouble for Trump and a temporary reprieve for war criminals everywhere. He also added that he conducts “investigations” and not “assessments.”
8. December 20, 2022  Those happy-go-lucky Biden sortin’ and movin’ lawyers find more documents at the Biden home in Wilmington, Delaware.  This time the FBA swings into action and heads out to secure the documents. That Inspector General at the National Archives cannot be trusted to handle issues such as this.
9. December 21, 2022 The FBA takes possession of the classified  documents. The Wilmington home is not searched by the FBA. The FBA does not spread the documents on the carpet or issue any photos of the documents obtained.
10. January 5, 2023 John Lausch reports to Mr. Toast, “You gotta appoint a special counsel here, Caspar.” Mr. Lausch also resurrects that nasty term, “investigate.”
11. January 8, 2023 Representative James Comer announces on the Mark Levin program that he will be looking into the activities of the National Archives and possible politicization of that agency.
12. January 9, 2023 CBS breaks the news about the Biden Center documents.  Karine Jean-Pierre responds, “Who knew?” and refers all questions to Mayor Pete or the Justice Deaprtment.
13. January 10, 2023 Ironically, in a 60 Minutes prerecorded interview, President Joseph Robinette Biden addresses Mr. Trump’s handling of classified documents, noting, “How that could possibly happen, how one anyone [sic] could be that irresponsible?”
14. January 10, 2023 President Joseph Robinette Byden issues a statement on the documents of, “Who knew?”  He pledged cooperation and refers all questions to Karine Jean-Pierre.
15. January 11, 2023  Those movin’ and sortin’ Biden lawyers report finding more classified documents  at the Wilmington Biden home in the Biden garage. The lawyers stop their search and notify the FBA.  The FBA searches the Wilmington home as well as the Biden Rehobeth Beach home.  No additional documents were located.  No photos were issued by the FBA of the garage document, the Biden Corvette in that garage, or the bike lock on the Biden garage door.  Such a lock apparently qualified the Biden garage as a SCIF (sensitive compartmented information facility).
16. January 12, 2023  Apparently the promise that no further documents were found by the FBA at the Wilmington Biden home were not quite accurate. Mr. Limpet held a press conference and disclosed that more documents had been found in the home.
17. January 12, 2023 Those Biden lawyers (Keystone Kop-esque) head to the Wilmington to search the house again and found more documents in that SCIF garage (five more).  No word from the FBA on how they missed the documents in their assessment the day before.
18. January 12, 2023  Caspar Fife announces the appointment of a special counsel to investigate “the handling of classified documents.” No word on whether the FBA will return to investigative work or continue to rely on special counsel and simply stick to its knitting of “assessments.” Mr. Garland referred all questions to Karine Jean-Pierre and she referred reporters back to him.
19. January 17, 2023 The Wall Street Journal reports that FBA said that it considered monitoring Biden lawyer searches for additional documents but concluded it would not do so to avoid complicating “later stages of the investigation.” After all, when one is simply assessing, one cannot get involved in watching third-parties scoop up evidence. The FBA referred all questions to the Justice Department, to which one reported responded, “Aren’t you part of the Justice Department?”
20. January 21, 2023 — The White House Chief of Staff is leaving after the State of the Union address. He has referred all questions to Mayor Pete or Karine Jean-Pierre.
21. January 22, 2023 The FBA finds more documents in the Biden Wilmington home following a 13-hour search. No word on Dr. Jill’s drawers. Ms. Jean-Pierre reiterates that the White House continues to cooperate and will now begin a policy of distributing schedules for upcoming further document searches..

Regardless of how one feels politically, a simple timeline and a review of the Justice Department’s actions, inactions, and responses has brought it to that same point flailing sit-coms face and then attempt to regain former glory.  They resort to the unbelievable.

UPDATED January 23 2023.

Shankar Mishra, 34, until recently a VP at Wells Fargo, was on a flight from New York to Delhi, India. Mr. Mishra had been drinking on the flight and for some reason began urinating on a fellow passenger.  According to witnesses, Mr. Mishra did not stop his bathroom behavior until another passenger tapped him and told him to return to his seat.

When the flight landed, Mr. Mishra was charged with an “obscene act in a public place, assault or criminal force to woman with intent to outrage her modesty, word, gesture or act intended to insult the modesty of a woman, and misconduct in public by a drunken person.”  Quite the statute India has.

The crew is under investigation by Air India for its actions and inactions:

1. The pilot vetoed a request by the crew to have the female passenger moved to first class.
2. The crew forced Mr. Mishra to apologize.
3. The crew’s delay and in efficiencies in addressing the situation.

According to the female passenger, Mr. Mishra began crying and begging not to be taken into custody when the flight landed. Mr. Mishra’s father, Shyam, explained that the allegations in an interview on India Today TV are “totally false.”  He added that his son had not slept for 72 hours, had a drink, and is unable to recall anything that happened after that. Shyam Mishra added, “I don’t think he would have done this. The woman is 72 years old, she is like a mother to him.”  Ah, so age is the inborn restraint on abuse of fellow passengers.

Authorities from India called Wells Fargo about Mr. Mishra.  Wells Fargo then terminated Mr. Mishra immediately, noting in a Tweet, “Wells Fargo holds employees to the highest standards of professional and personal behavior and we find these allegations deeply disturbing,” it said, per ANI. “This individual has been terminated from Wells Fargo. We are cooperating with law enforcement and ask that any additional inquiries be directed to them.”

https://twitter.com/ANI/status/1611369632686051330?s=20&t=x3J2eIdx6HhzlenASlHTIg

Wells decided not to wait for the wheels of justice to turn in India.  Perhaps the bigger issue for Wells is: “How on earth did this man get to be a vice president?” Followed by, “Is tweeting the best way to address HR questions?”

For airlines, a follow-up issue is the return to serving spirits on flights. Perhaps a drink maximum?

For us, drunk or not, is anything left to civility?

Charmaine Patterson,  “Wells Fargo Fires Top Exec After He Allegedly Urinated on Elderly Woman During Flight to India,” People, January 7, 2023.

 https://people.com/crime/wells-fargo-fires-top-exec-after-he-allegedly-urinated-on-elderly-woman-during-flight-from-ny-to-india/