The Ethical Barometer

Cash is flowing out of Afghanistan – about $10 million per day (that’s $3.65 billion) – and it ends up in the hands of terrorist groups.  The irony is that a good portion of the cash comes from U.S. reconstruction efforts in the country.  There are currently 223 corruption investigation pending with 106 centering on bribery and conflicts of interests in the awarding of the contracts for reconstruction, 73 involving procurement fraud, and 35 involving theft.  Investigations are up, but so also in the outflow of cash.  Hospitals are not rebuilt, roads are not reconstructed, and a country that has been through 3 decades of war cannot get back on its feet.  If we could just get the money past the pilferers to the projects . . .   Corruption benefits the few at the expense of many.

Here’s some good news on the faith our elected representatives have in our markets:  Several members of congress and/or their spouses positioned themselves short in the market.  Their bets, by buying call options in 2008, were that the value of the stocks would go down.  They were correct, of course, and they made money as a result.  At least one of the representatives positioned himself short in a defense contractor and he sits on the Senate appropriations committee.  You can talk yourself blue explaining that financial advisers make these decisions, no laws were broken, . . . , but, somehow it just doesn’t seem right.

Over the past five years, 33 SEC employees viewed pornographic materials on either or both their desktop computers or laptops. Seventeen of the 33 were senior SEC employees who earned between $99,000 and $222,000 per year. The employees have been disciplined, including suspensions and terminations. One senior enforcement attorney was devoting a full 8 hours per day to viewing porn. Little wonder that a few Ponzi schemes passed them by. One accountant was denied access to a porn site 16,000 times by a government firewall.  Persistence is a virtue in many areas, but . . .