The Ethical Barometer

VW’s head of compliance, who was an outsider hired to help change the VW culture, has resigned after just reaching her one-year mark. The statement released by the company upon Christine Hohmann-Dennhardt’s departure indicated that her resignation was “due to differences in their understanding of responsibilities and future operating structures within the function she leads.” Ms. Hohmann-Dennhart is a former judge from Germany’s highest court and was brought in as an outsider to encourage change. To add to the drama, at the time of her resignation, German prosecutors announced that they had evidence that VW’s former CEO, Martin Winterkorn, took part in the company’s emissions fraud scandal. Mr. Winterkorn stated (as quoted in this blog) that he knw nothing about the emissions fraud until the story broke publicly. And VW has agreed to pay $20 billion to settle charges in the US related to the emissions falsification charges.

As one analyst put it, “the optics couldn’t be worse.”

Sergio Marchionne, CEO of Fiat Chrysler, following the EPA’s accusations that the company has pulled a VW (installing secret software that allowed its diesel vehicles to emit pollutants in excess of legal limits). One guesses that “in our view” is the operative phrase here.

Although the House came to its senses and scuttled its new structure for the Office of Congressional Ethics, a look-see at the proposed reforms is worth a chuckle. And, the reforms were a perfect list of how not to set up an ethics office (and in the words of the great Dave Barry: I am not making this up):

1. No investigation of anonymous complaints. Imagine here a corporation trying to claim mercy for a misstep if this were a tenet of its ethics and compliance program.
2. No review of potential criminal acts by members of Congress.
3. Cut the budget by 40%.
4. Give Congress the authority to shut down an investigation and take it over.
5. Limit authority to release information.

There you have it — what an ethics program!

The baseball writers are at it again. They who vote on admission to the Hall of Fame are easing down off their moral high horses and considering Barry Bonds and Roger Clemens for induction despite their being blackballed because of their use of steroids, and in some part, denials related to such use. Some high horses offer a fairly good perch, and staying there may be best for everyone.

The sport of baseball, grounded, as it were, in tradition and cards that find youth worshippers, has hung in there as the NFL and NBA allow their abusers, criminals, and host of ne’er-do-wells survive without sanctions. Granted, the crimes of the NFL and NBA players are not related to their skill, but it is a sorry state of affairs, as it were, for the young ‘guns to have role models who are as likely to be in jail as on the field.

Bob Nightnegale, of USA Today, has been down from the high horse since we went through this several years ago. Here is his brilliant analysis: It is “absurd to keep the finest hitter and pitcher of their generation out of the Hall of Fame because of their dalliances with performance-enhancing drugs.” January 3, 2017, p. 1C.

Right. Dalliances? Beyond the factual problems with his argument is its sheer weightlessness in reasoning. Keeping them out is “absurd.”

The commissioner will be interested to know that the effort expended on enforcing the sport’s own rules are, in the long run, “absurd.”

Honor, where art thou?

Navnoor Kang, the former manager of New York state’s $53-billion pension fund, was indicted on bribery charges. According to the indictment, Mr. Kang accepted a $17,400 watch, concert tickets, prostitutes, and cocaine from stock brokers in exchange for throwing pension fund trading business over to their firms. On of the stock broker has entered a guilty plea and is cooperating with prosecutors.

However, Mr. Kang did not just decide one day to take “stuff” in exchange for awarding pension-fund business. Turns out that the state of New York failed to check with Mr. Kang’s former employer, Guggenheim Partners. Mr. Kana was fired from his job there for swapping trading commissions for concert tickets and other gifts. Mr. Kang just went bigger at the New York state pension fund.

They start small and work their way up. They never do just one thing. Before you turn over Continue reading →

The Wall Street Journal (November 30, 2016) reports that the Chinese now rate citizens’ behavior as a means of determining who is entitled to what. For example, if you use your child’s subway card to avoid paying the adult fare, the consequences used to be just a $6 fine.  Now, the subway inspector can dock points from what is called the citizen’s “personal credit information system.” Lose enough points and you are in trouble because that personal information is now used to determine everything from your insurance premiums to scholarships to eligibility for government jobs. Why, get a bad enough score and you won’t be able to travel abroad.  Forget obtaining social services. And the piece de resistance you could lose?  Internet access.  So, behave! Continue reading →

Based on retesting of the 2008 and 2012 Summer Olympics, 75 athletes have been found guilty of doping.  Now comes the realignment of the medals.  For example, American high jumper Chaunte Lowe, who finished sixth in the 2008 Beijing Olympics, is now a bronze medal winner because the three women ahead of her were all disqualified for doping.  Now that’s an Olympic story.  And the most important part of the story is that the truth percolated up — it took 8 years, but the truth came out and the real winner emerged.  The total number of athletes disqualified so far is 75.  Watch out for more medals coming our way because most of the athletes who have been disqualified are from Russian and Eastern European countries.

E-mail exchange between former Philidor Rx Services CEO Andrew Davenport and former Valeant executive Gary Tanner, who have been indicted on charges of conspiracy, wire fraud, and money laundering for an alleged scheme to funnel money from Valeant through Philidor and then through their LLC to them. Prosecutors had to draw us a chart to tell the story. Like Butch and Sundance, the two were affable salespeople who are probably going down as Butch and the Kid did — in a battle in which they are outnumbered and outgunned. Their prosecutor is Preet Bharara, a U.S. Attorney who has secured insider trading convictions even when there was not insider trading. An alleged $40 million funneled off a deal so that the two could install a $50,000 wine cellar, buy a second home and other luxury items may not seem like such as good idea now. Listo! Punto! Fuego!

President Barack Obama in objecting to the FBI announcing the re-opening of the Clinton e-mail investigation. Except, of course, when you condemn Boston police officers for “acting stupidly” before the police report was written, let alone read. Or condemn George Zimmerman (who was subsequently acquitted) in the tragic death of Trayvon Martin.  Or state (incorrectly and with insult) that  former First Lady Nancy Reagan was “doing séances” in the White House.  “We” only operate on incomplete information when it suits us. Sauce for the goose and gander comes to mind, the ethical mind, that is.

Mylan had some steep price increases on its EpiPen treatment, an effective device for treatment of severe allergic reactions. Mylan settled a case with Medicaid for overcharging for the device by paying $465 million, an amount that is twice its pretax earnings for the first half of this year.  However, Mylan’s executives’ pay will not take a hit because the metrics used for awards and bonuses are “adjusted diluted earnings.”  That figure does not back out litigation, settlement, and regulatory fees. So, as far as the executives, it never happened.  Their compensation is not affected by what it costs the company to settle up for the pricing established by those executives.  Good pay structure, and no heavy lifting.

The Barometer became an independent years ago because there was not a dead-cat-swing’s worth of difference between the two political parties in the United States.  Lest animal rights readers take offense, the Barometer has never swung a cat, dead or alive — just speaking metaphorically, of course. The following comments address the various ethical issues that resulted when Mrs. Clinton’s dang e-mails clunked onto the political battlefield ONE MORE TIME with just 10 or 11 days, give or take a few hours, remaining until election day.

How did FBI Director Jim Comey became the bad guy in all of this?  This morning he was targeted in a New York Times editorial for violating the Hatch Act?? Continue reading →

Dr. Tali Sharot, a cognitive neuroscientist at the University College of London, as reported by Melissa Dahl in New York Magazine.

The Barometer would not know an amygdala from an insula, although if memory serves, there was an Amy Gdala back in high school. However, the good doctor and the astute Ms. Dahl are correct.  The first lie is the entry-way drug to the whoppers.

Former Pennsylvania Attorney General, Kathleen Kane at her sentencing hearing, asking the judge to consider her teenage sons.  Her 15-year-old son, Chris, testified on her behalf, “My mom is like my rock.  We just know we can’t lose our mom.”  She was sentenced to 10-23 months.  Sad, tragic moment and words.  Perhaps we should all pause and realize that a good test before we make a questionable decision is to ask, “How will my family be affected if I do this?” Ms. Kane was convicted of perjury to a grand jury in answering questions as to whether she leaked records from another grand jury in order to discredit a critic.  When we think of our families, the politics, the battles, and the power all seem trite.  For that realization, we owe Ms. Kane a debt of gratitude.  How many will learn from her experience and make changes?  A real head-turner quote.