The Ethical Barometer

The Labor Department is now investigating Wells Fargo. The investigation centers on a push by the bank to have employees move their retirement funds form 401(k) plans (a low cost option for them) to individual IRA accounts (more expensive). The investigators are also focusing on whether in-house retirement plan services were pushing employees to buy in-house funds — something that generates revenue for the bank. The investigation comes one week after the bank agreed to pay $1 billion for claims of misconduct it its auto-loan and mortgage lending divisions.

The experiences of Wells Fargo and Chase and many other organizations that make the headlines for ethical and legal lapses illustrate an important principle. Once regulators find an area in which there has been unethical conduct, they and other regulators begin reviews. They generally find more stuff. When the ethical culture has gone south, there is never just one thing.

The Barometer always loves it when organizations that have had a bad spat of publicity put together highfalutin task forces to solve their problems. Of course, whatever the highfaluters come up with is entirely voluntary. So it is with the NCAA Commission on College Basketball, headed by Condoleeza Rice. The NCAA will have to vote on the recommendations of the Commission. Good luck with that.

When will we realize and accept that there is money in college sports for educational institutions, coaches, and players and that level of money drives perverse behaviors? From UNC to Syracuse to Louisville, college basketball is the stuff of limitless imaginations put to use to come up with ways to win big. Whether by cheating, bribery, or point-shaving, schools cross lines. The NCAA is shocked, shocked, and they muster up some penalties, maybe, after years of investigation and debate. And on the cheating in school, the Commission only admonished the NCAA to “clarify its role in addressing academic fraud.” That will get the knees shaking in the ivory tower.

The Commission made it far more complicated than it needs to be. The Commission only punted (wrong sport, but you get the idea). Here’s the rule: You cheat, you will hurt. The first part is inevitable (human nature). The second one is doubtful – the chest-pounding and sanction are imposed and lifted. This root cause was not addressed by the Commission and is unlikely to arise sua sponte at the NCAA meeting on the report. Until it is addressed, basketball and all its facade of student-athletes marches on.

Sunday’s New York Times “Ethicist” column had a dilemma from a nonprofit employee. The employee knows that a co-worker who works at home, by her own admission, is actually not working but running errands and taking care of her children. The co-worker has been granted an indefinite period of time to work from home following the end of her forthcoming maternity leave. The employee inquired as to whether she should speak up. Everyone shout your answer in unity here and add, “Why did you have to write to someone for an answer?”

Contrast this scenario with an obituary that appeared in the Wall Street Journal’s weekend edition about Scott Friestad, an SEC enforcement division attorney. Mr. Friestad worked from home, confined to his bed, because he was dying of cancer. A 23-year veteran of the agency, he was regarded as a mentor by many. He worked right up to his final days, providing mentoring and what his co-workers called “his good ideas about the way out of a problem.”

There is working from home and there is working from home. The contrast here is instructive and motivational. RIP, Mr. Friestad.

That time with the kids . . . repetitive, mind-numbing, and the word, “Again!” over and over, well, again. Some parents can’t take it, so, for example, they stack the decks in Candy Land to ensure that their children get to the magical candy capitol quickly. Let the kids win by holding the low cards up their sleeves or under the table. Wall Street Journal, April 19, 2018, p. A1.

The goals are noble. Time with the kids. Getting them away from iPhones and computer games is critical. Reliving our board-game childhoods. Who would have thought cheating was the cure for boredom.

44% of Americans say that popping bubble wrap is “their most oddly satisfying behavior.” The other 56% are not being truthful. Popping bubble wrap is great fun.

Thanks to Clorox for their work on this issue.

Nearly one in four single men lie about not having a date for Valentine’s Day.
Nearly one in six single women lie about not have a date for Valentine’s Day.

Conclude whatever you wish about the difference. Thanks to Dairy Queen and Toluna research for their work.

The captain of the Australian Cricket Team apologized, in tears, for the cheating plot he and two other team members concocted. Their plot involved sandpapering the cricket ball, something that makes the ball more difficult to control. The three were caught on video and removed from the team and banished from cricket for 9 months to one year.

The captain of the Australian Cricket Team is right up there in power rankings, second only to the prime minister. Australians take cricket seriously and fooling around with the cricket ball dishonors the team and Australia.

The young team captain seems like a sincere young man, and his remorse and regret are the marks of a mature individual. The old saw is that everybody cheats in sports. Perhaps so, but the difference lies in the response. Contrast this young man’s post-cheating scandal behavior with Tom Brady’s. Denials, refusing access to his cell phone, and going to court are the stuff of fooling around with football inflation. Or consider all the steroid athletes and their chutzpah in denials. And the team owners and the league saying, “Who knew?” One more difference, the coach for the Australian Cricket Team resigned. He was not implicated in the actions. He did so out of honor. We could use a little cricket in our sports.

Toll scofflaws are those who go through the No-Cash booths without an E-ZPass transporter on their cars. They are also the folks who do the same but do not have sufficient funds in their E-ZPass accounts to pay the toll. Then there are the clever scofflaws who enter through the cash lane and take a ticket but then exit through the E-ZPass lanes. What’s a few dollars here and there?

Well, thanks to the Wall Street Journal, the Barometer has the answer to that question. Herewith, some data from the most notorious scofflaws:

The top 100 toll dodgers in Pennsylvania have more than $21,000 in unpaid tolls.
Illinois publishes a list of scofflaws who owe at least $1,000. There are 469 names on the list (trucking firms are on the list) and the top scofflaw owes $890,000.

The states have various laws and remedies. In Florida, you cannot renew the vehicle registration if you owe tolls. Pennsylvania has taken to filing criminal complaints when the amount owed is more than $2,000. One of the first people charged was a woman with 1,645 violations who owes $92,000. She has paid $26,000 so far, and her lawyer is asking for the court’s understanding about her ability to pay. Amazing how it adds up and how the law catches up.

Jack Welch was a legendary leader — taking GE to soaring heights through the growth of GE Capital. But, GE Capital was doing everything from Thai auto loans to long-term care insurance policies to “floating-rate Polish residential mortgages . . . denominated in Swiss francs.” When 2008 hit, GE Capital was, literally and figuratively, in a world of hurt. Now that GE Capital is selling and shrinking, analysts are looking at GE and stunned at how little cash the business of GE generates, i.e., the turbines, the jet engines, and health care equipment.

The board says that it was “in some level of shock.” That would be because former CEO Jeffrey Immelt, who took over after Mr. Welch retired, told them, analysts, and the world that all was well in GE.

Now the SEC is investigating the company’s accounting on booking revenues for software sales to gas turbine customers. it looks as if GE tried to cram all those software sales into obeyer even though the contracts for them are performed over time.

There is nowhere to run and nowhere to hide. The accounting tomfoolery generally comes when the business model is failing. So it is and was with GE. A company of quality products may die of self-inflicted wounds. The irony is that during this long death march, Mr. Immelt, the board, and other officers spun yarns about their success. If you have bad news, get it out there and take your lumps. Then move the company forward. GE is still in cover-up mode. And no one seems to be sure which way to move forward.

Fifty inspectors from the federal government, aboard helicopters, got a bird’s eye view of the work habits and patterns on offshore oil rigs. They are concerned, and they will be issuing safety advisories based on what they saw. Nothing beats unplanned, unscheduled visits by those in charge for finding out what is really going one in the trenches. A wise practice in any industry or organization.

Why the outrage over Facebook? Folks were given a free site to post everything from the banal to items that cost many folks their jobs. With a billion folks here and there posting information, quite a bit of that information was bound to end up in places we did not anticipate. Facebook is, and always has been, a giant marketing firm. High tech, high schmech. They were using users to make money. That political folks tapped into the resource is no surprise. Discretion should have always been part of our online activity. And Mr. Zuckerberg et al, leaning in and otherwise, should have been more forthright about their intentions.

Dr. Ben Carson, throwing his wife under the bus, in explaining the $31,000 dining room set for his office.

The taxpayers funded quite a few trips for her honor and the head of her security detail, all alone and by themselves. Both are married to others. Both showed incredibly poor judgment. Her honor resigned. No word on the head of her security detail. How do these executives find the time for such activity? How come no one around them noticed? Where were the staff members processing travel? So many questions, so much not reported.

“Police perjury” or “blue lies,” have been described as an inevitable part of the justice system, so common that we now have a new verb of “testilying” to describe what some police officers do. The way we discover the false statements? Surveillance videos, body cameras, and sometimes cell phone footage. Prosecutors should be looking for the existence of these tangible evidentiary accounts before putting their officers on the stand. One can assume the integrity of most officers, but perceptions, sequence of events, and other inevitable phenomena in human recollection are worth a review before officers take the stand.