The Ethical Barometer

Rohit Bansal, a former Goldman Sachs employee, entered a guilty plea to obtaining confidential (think secret) from the Federal Reserve Bank of New York and then using that info to further his career. Goldman fired Mr. Bansal, 30, after discovering the leak, and has altered its hiring practices for former government employees.

Billy Ray Valentine and Louis Winthorpe III (aka Dan Aykroyd) arranged to get the crops report in advance of marketing trading for the orange futures (aka OJ) market. They actually swiped the advance crop report from an operative hired by the corrupt Duke brothers. Intrigue, federal crimes, and other issues aside, Billy Ray and Louis retired with the Butler to sandy white beaches after bankrupting the Dukes. Goldman is alive and well and Mr. Bansal will be going elsewhere and will know on March 9, when his sentencing takes place.

Brandi Weaver-Gates was charged with theft for allegedly setting up an online fundraising scheme to raise money for her cancer treatment. The alleged scheme was elaborate. Ms. Weaver-Gates shaved her head and had her family sit in a hospital waiting area while she was undergoing treatment. But, when police investigated she could not name physicians and no hospital had a record of her having been treated. She raised $14,000, but lost her title.

Well, as Sheriff Andy Taylor used to say, “Don’t that beat all?” The attorneys general for the states of Pennsylvania and Texas were indicted this week. Pennsylvania Attorney General Kathleen Kane was indicted for leaking grand-jury (think confidential) information to political operatives in order to embarrass state prosecutors with whom she had bad blood. She then, allegedly, engaged in behaviors, including lying, to cover up the leaks. She is charged with obstruction, perjury, false swearing, conspiracy . . . . Meanwhile, deep in the heart of Texas, Ken Paxton, Texas Attorney General was indicted for securities fraud. The issues of potential securities fraud had trickled out during his campaign and now they are headlines in Texas.

Both deny the charges. Lanny Davis, of Clinton defense fame, issued a statement indicating that his client, Ms. Kane, has done nothing wrong. Ms. Kane has indicated Continue reading →

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.

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, Continue reading →

“This is the part I don’t get.” So spoke Diane Chambers (Shelley Long) in the series “Cheers,” as she was trying to understand the charm and drawing power of Carla Tortelli’s (Rhea Perlman) ex-husband, Nick Tortelli. Despite his “pond scum” nickname, infidelity, poor hygiene, and a host of other rascallion behaviors, Carla had trouble resisting him. So also did his new wife, Loretta (Jean Kasem). Regardless of what he did, they both kept going back to him.

There are many Nick Tortellis on Wall Street. Enter Jon Corzine and his new plans for a hedge fund. Mr. Corzine headed up MF Global Holdings, a firm that he bankrupted by positioning investments in PIGS (Portugal, Italy, Greece, and Spain). He was convinced these countries would recover and he doubled down on their Continue reading →