Tag Archives: fraud

Saturday Ethics Warm-Up, 7/21/18: Seven Questions For A Rainy Day: UPDATED!

Good afternoon!

1. What did you expect? Following close on the heels of Scott Pruitt’s firing from the EPA as a result of blatant ethics violations, Commerce Secretary Wilbur Ross said last week that he would sell all of his stock holdings to “maintain the public trust” after the Office of Government and Ethics pointed out that his financial transactions could get him into legal trouble.

“I have made inadvertent errors in completing the divestitures required by my ethics agreement,” Ross said in a statement. “To maintain the public trust, I have directed that all of my equity holdings be sold and the proceeds placed in U.S. Treasury securities.”

To maintain that public trust. Right.

The culture of CEOs and business executives is so alien to ethics that this kind of thing was assured as soon as Donald Trump was elected President. I wouldn’t say the business culture is necessarily more unethical than the political culture, it is juts unethical different ways. However, President Trump brought this brand of malfunctioning ethics alarms with him, and we shouldn’t expect it to abate until he leaves the White House.

Then we will get back to the good old-fashioned political versions of unethical conduct we’re become numb to. Ah, those were the days!

2. A question of degree. Professor Brian McNaughton, a former professor at Colorado State University, is facing a felony charge for fabricating an outside job offer to get a higher salary. This meets the technical definition of fraud. Apparently he presented the school with fabricated offer letter from the University of Minnesota. McNaughton resigned his position and apologized, and returned the fruits of the ill-gotten  raise,  about $4,000 per year over four years.

He also says that he was urged to use the tactic by other faculty members, who said it was a standard ploy. When does the “I have other job offers” gambit cross the ethics line into fraud? Clearly when you use a forged letter, but short of that, it’s just lying—unethical, but not criminal.

Writes one idealistic commentator:

…if an employee is performing a job and is good at it, that person should be compensated for it accordingly and in line with individuals within the same organization at an equivalent level professionally (ideally pay should be bench-marked against similar-sized institutions in states or parts of the country with comparable income ranges). Does a job offer and the suggestion that the employee is desirable to another organization change how well that person is performing? Promotions and rewards should be directly related to performance and an individual’s contribution to the organization and to science.

Well, yes, but competition and reality interferes with this nice, fair but overly simplistic and impractical theory. In fields where employees are not fungible, basic economic theory comes into play: you can’t deny the influence supply and demand. The fact that there is competition for an individual’s services does increase that individual’s value. Just saying “it shouldn’t be that way” doesn’t change reality. That’s what makes McNaughton’s lie fraudulent: he’s misrepresenting his value, and using false means to do it.

3. Would you fire Dan Coats for this?

Naturally the anti-Trump mob loved it, and that was the director of national intelligence’s intent: he was playing to the mob and virtue signaling to the detriment of his boss. Either than, or he’s thoroughly unprofessional and can’t be trusted to be on TV. Washington Post reporter Dan Baltz is either foolish, naive or dishonest when he writes: Continue reading

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Morning Ethics Warm-Up, 4/29/18: White House Correspondents Dinner Edition (And Other Things…)

 

Good Morning!

1 The RedState purge.  Salem Media, the conservative website RedState’s owner, froze the site and fired many of its most read and respected writers, all of whom were distinguished by one other common feature: they are all NeverTrumpers, conservatives who revile the current POTUS almost as vehemently as the Left’s mainstream media.

I view this decision as a declaration of war of sorts, or perhaps an assertion that a war is already going on. The Democrats, progressives, the news media and “the resistance” have been trying to unseat the President of the United States by “any means necessary,” a strategy that not only every conservative but every responsible citizen ought to oppose as the dangerous and undemocratic strategy it is. The dilemma is that NeverTrumpers’ anti-Trump bias not only makes them less than effective in opposing this unethical plot, it arguably makes them accessories to it.

Salem’s action is depressing but significant. It is one more indication that the news media, new and old, is dividing down rigid ideological lines while embracing political agendas rather than ethical journalism’s traditional mission. There is a place for fighting “the resistance,” but objective journalism shouldn’t have to censor dissent to play its part. Its part is to report the truth. Actions, however, have equal and opposite reactions, and as the media on the Left, which is to say most of the media, openly and  unapologetically indulges its Trump Hate, confident that its market will approve (thus making the abandonment of fairness and responsibility profitable), the polarization of whatever news media remains becomes inevitable.

This is not good for journalism, punditry, the nation or democracy, but I don’t know what can halt it now.

2. Terrible…but kind of funny, you have to admit. More than half the paintings owned by a small art museum in Elne, France, 82 of its 140 works, are fakes.  “It’s a catastrophe,”  said Yves Barniol, the mayor of Elne, near the Spanish border. Ya think? Over $170,000 was paid out by the museum for the phony artworks—not a lot by art museum standards, but when most of your collection are forgeries, there’s an open question why anyone would trust such a museum again.

Dishonesty and incompetence are a destructive combination. Continue reading

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Closing The Book On An Ethics Villain

Lance Armstrong is the worst sports ethics villain of all time, I believe—cycling’s Barry Bonds, but in a sport far more vulnerable to betrayal than baseball. Like Bonds, he cheated, many times and over a long period, taking victories away from more deserving athletes while enriching himself. While Bonds never had his public “I did not have sex with that woman” moment of brazen denial, Armstrong had many, all the while insulting and condemning his accusers. Bonds also never was a revered hero of children—Barry appeared to care about no one but Barry—while Armstrong deliberately made them part of his scam. When Armstrong’s elaborate schemes, lies and cover-ups were revealed, he made lifetime cynics of hundreds of thousands of young fans, and maybe more.

Armstrong, like Bonds, left his sport in disgrace but took with him great wealth, and, like Bonds, has never shown a smidgen of sincere regret or contrition—sociopaths are like that. Yesterday it was announced that Armstrong will pay $5 million to the federal government in settlement of a fraud lawsuit. The U.S. said that he owed $100 million to taxpayers for accepting sponsorship funds for his cycling team from the U.S. Postal Service while he was doping. Armstrong also agreed to pay $1.65 million to cover the legal costs of Floyd Landis, a former Armstrong teammate and the whistleblower in the case.

Eh, whatever. Lance can afford it. Despite various fines and settlements, he managed to escape his exposure with most of his ill-gotten gains safely salted away, spent or invested. Continue reading

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Morning Ethics Warm-Up, 2/6/18: Yes, It’s Another “Trying To Get The Warm-Up Written While Rushing Around To Get Ready For An Early Morning Ethics Presentation” Edition…

good morning…

1 Responsible parties nominate responsible candidates 1. In Chicago, a permanently Democratic district has  no serious Republican candidates, so Holocaust-denier Arthur Jones, a whack-job who has run in this district seven times, is poised to get the nomination. “To me the Holocaust is what I said it is: It’s an international extortion racket,” Jones told the Chicago Sun-Times. Nice. Anticipating the attacks on the Republican Party if he is its representative in the election this fall, Ann Althouse writes, “Should this be used against the Republican Party? Sure, if you’re into taking whatever comes your way and incorporating it into ruthless propaganda for your party. Ironically, that would be Naziish.”

Wrong. I don’t know where the idea came from that a political party organization is obligated to act like a potted plant, but it isn’t. A party’s obligation is to the public, democracy, and the ideals the party and the nation represents. It does not and should not allow a candidate who doesn’t meet minimal standards of competence and responsibility to use the party to achieve political power. Let such people run on their own, or start a Holocaust Denial Party, or National Nut Ball Party, or the Green Party (Kidding!), or something. . A responsible party vets its candidates, and tells those who don’t stand for basic American values or who are unqualified that they don’t get to use the party for their ends by default.

If you check back, this was the Ethics Alarms position on Donald Trump. The Republicans shouldn’t have allowed him to run for the nomination, and even after he did, his conduct in the debates and elsewhere justified its refusing to nominate him at the convention. They don’t deserve to be called Nazis for nominating him, but they don’t deserve an ethics pass, either. The fact that he won is irrelevant. Continue reading

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I LOVE IT When This Happens!

Two recent Ethics Alarms posts collided on Ann Althouse’s blog today. She wrote that she was listening to the audiobook “The Righteous Mind: Why Good People Are Divided by Politics and Religion,”by none other than Jonathan Haidt, who uttered the Ethics Quote Of The Month recently discussed here.

In his audiobook, Haidt said that this statement “captured the spirit and self-image of the modern American left”:

“I am a liberal, and liberalism is the politics of kindness. Liberals stand for tolerance, magnanimity, community spirit, the defense of the weak against the powerful, love of learning, freedom of belief, art and poetry, city life, the very things that make America worth dying for.”

Who authored this ringing declaration of liberal principles?

Garrison Keillor, that’s who. Continue reading

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Morning Ethics Warm-Up, 11/16/17: Keeping the Public Ignorant About Unethical Lawyers, Sugar Lies, And A Terrible Trump Tweet…

Good Morning, John!

Sing us into the first item, would you?

1 “Is anybody there? Does anybody care?” Everywhere I go, lawyers are talking about the David Boies scandal, which I wrote about here. I haven’t seen much media discussion about it at all. We have now seen one prominent hack lawyer, Lisa Bloom, and one prominent, skilled and respected lawyer, Boies, demonstrate high profile professional conduct that should receive serious sanctions from their profession, and it appears that most of the public and the media neither knows this nor cares.

Bloom is just a venal, incompetent, bad lawyer. The real crisis is when top lawyers blithely engage in wildly unethical conduct in a high profile case, but I doubt the public sees the difference. Very little commentary on Boies’s betrayal of the New York Times  focused on the throbbing black-letter ethics violation involved.  Today, a front page story in the New York Times about Black Cube, the sinister investigative crew hired by Boies to gather dirt on the Times before it blew the whistle on Harvey Weinstein completely missed this crucial element of the story. It also makes it near-certain that no one will read the report who need to know how poorly legal ethics are enforced.

Here’s the headline in the print edition: “Sleuths for Weinstein Push Tradecraft Limits.”  Tradecraft? Online: “Deception and Ruses Fill the Toolkit of Investigators Used by Weinstein.” Nowhere in the article are readers informed that lawyers are forbidden, without exception, from using any contractor that regularly uses deception.

Here is the kind of thing Black Cube specializes in, from the Times piece:

“Earlier this month, a former hedge fund employee was flown from Hong Kong to London for a job interview. Around the same time, a current employee of the same Toronto hedge fund was also flown to London for interviews. The company courting them was fake. Its website was fake. There were no jobs to be had, and the woman who set up the interviews was not a recruiter but an agent working for an Israeli private investigative firm.

This was not an episode of “Homeland” or the latest “Mission: Impossible” installment. Interviews and court papers show that these deceptions were part of a sophisticated and expensive investigative operation. The objective, according to one filing, was to gather proprietary information held by the hedge fund. The agent worked for Black Cube.”

Every single jurisdiction in the United States declares in its legal ethics rules, usually in the rule about misconduct, 8.4 (bolding mine):

It is professional misconduct for a lawyer to:

(a) Violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another;

(c) Engage in conduct involving dishonesty, fraud, deceit, or misrepresentation…

How much clearer can it be? It is unethical for a lawyer to employ someone or an organization that he or she knows routinely and reliably engages in “dishonesty, fraud, deceit, or misrepresentation.” Yet that’s the only reason anyone hires Black Cube. Conclusion: Boies breached a major ethics requirement, perhaps the most serious one there is. And why?  Because a client paid him to. Continue reading

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Morning Ethics Warm-Up: 8/24/17 [UPDATED]

GOOD MORNING!

1. I’m moving this to the top from its original placement at the end. I warned that the mania for retroactive statue-toppling and historical air-brushing was a deadly slippery slope to cultural chaos from the moment Dylan Roof’s rampage primed the Confederate flag banning push. I said that there was no clear stop on that slope, and that this was a massive ethical error that would quickly spin out of control.

I am accepting apologies and “You were right, I was wrong” messages at jamproethics@verizon.net. I will reply gracefully.

2. It’s a good thing, in some ways, that President Trump has no ethics alarms, or has them but doesn’t understand what all the ringing means, because if he did, he might realize that he has put himself in ethics zugswang in the matter of former sheriff Joe Arpaio, the anti-illegal immigration zealot who is facing up to six months in jail for defying a federal judge’s order to stop targeting Latinos based solely on the suspicion of their legal status. Trump has been urged to pardon Arpaio. Let’s see:

  • Arpaio did defy a judicial order. Should a law enforcement official be treated especially harshly when he does this?

Yes.

  • The judicial order related to Arpaio’s practice of assuming that individuals of Hispanic descent were more likely to be violating the immigration laws in his jurisdiction than other citizens. Since his jurisdiction was rife with Hispanic illegals, was this an unreasonable assumption on his part? No. Was it still discriminatory? Sure. Is the balance between profiling, which in such situations is a valuable law-enforcement tool, and the importance of equal treatment under the law a difficult one legally and ethically? Yes. Does a sheriff have the right and authority to ignore the way this balance is decided one legal authorities define it?

No.

  • Is the determination of this balance often polluted by ideological biases, in this case, against enforcement of immigration laws?

Yes.

  • Do Donald Trump, and his supporters, and those Americans who may not be his supporters but who agree that allowing foreign citizens to breach our borders at will without legal penalties is certifiably insane, believe that Arpaio’s position on illegal immigration is essentially correct and just?

Yes.

  • Nonetheless, did his ham-handed methods give ammunition to open-borders, pro-illegal immigration, race-baiting activists like the one who told the New York Times,

“Trump is delivering a slap in the face to dignified, hard-working people whose lives were ripped apart by Arpaio. Arpaio belongs in jail, getting a taste of his own medicine. Trump wants to put Arpaio above the law, showing they are both about white supremacy.”

  • Is sending Arpaio to jail a political imprisonment?

Yes, although he made it easy to justify on non-political grounds.

  • Are political prisoners the ideal objects of Presidential pardons?

Yes.

  • Would pardoning him send dangerous messages (it’s OK to violate judicial orders you think are wrong; the ends justifies the means; Presidents should meddle in local law enforcement, “extremism in defense of liberty is no vice”) as well as defensible ones ( judges and elected official enabling illegal immigration are a threat to the rule of law; Joe is an old man with a long record of public service who deserves mercy even though he was wrong…)

Yes.

  • Will such a pardon, especially as the news media is again spinning to make the case that Trump is sympathetic with xenophobes and white nationalists, further inflame an overly emotional debate that needs to be calmed, not exacerbated?

God, yes.

  • Is the most responsible course for Trump to stay out of this mess?

YES!

  • Will he?

Of course not. Continue reading

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