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BADM 2133 UNIT 9
- 1. Business Ethics: Casesand Selected Readings, 7th Ed. Marianne M. Jennings Unit 9 © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 2. The Earthquakes andthe Differences Haiti • 7.0 RS • 52 aftershocks • 230,000 deaths • 300,000 injured • 1,000,000 homeless • 250,000 residences destroyed • 30,000 commercial buildings destroyed Concepción, Chile • 8.8 RS • 130 aftershocks • 521 deaths • Limited injuries • 300,000 homeless • 370,000 homes damaged © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 328
- 3. Colorado and LouisianaMMS • Hotline report on “ethical issues in Colorado” • Report issued – no other divisions investigated their own employees’ behaviors © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 329
- 4. IG Report onColorado Minerals Management • Explored “opting out” of the Ethics in Government Act by policy or regulation • When confronted with evidence of sexual relationships with industry contacts, employees responded that “the relationships were arms- length.” “Sexual relationships with prohibited sources cannot, by definition, be arms-length.” Earl Devaney, DOI IG 330© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 5. DOI IG Reporton Minerals Management Division in Colorado • One-third of the staff accepted gifts and socialized with industry members • Two employees received gifts on 135 occasions from four oil and gas companies • Government employees shared bid proposals and qualification information with bidders • Accepted lodging from industry members after meetings at local hotels because they were too intoxicated to drive home • Employees had their own consulting firms that oil-and-gas companies hired for help with paperwork submitted to employees’ agencies 331© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 6. IG Report onMMS in Louisiana • The “red-jacket auctions” • Hunting and fishing trips with oil industry executives • Fluid transfer of employees from MMS to oil companies • Negotiating for employment with oil companies using government e-mail accounts • “Everybody does this. We are all dependent on each other.” 332© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 7. The Rationalizations atMMS • “That’s the way it has always been done.” • “Everybody does this.” • “Nobody is really harmed by this.” • “We are not influenced by these kinds of things.” • “We are doing a good job and making money – what’s the issue?” • “If I don’t do it, somebody else will.” 333© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 8. The Cultural Factorsat MMS • Tone at the Top problems • Iconic leaders who were powerful • Pervasive conflicts of interest • Numbers pressure and pressure to continue • Bad judgment on the part of leaders and employees • Perceived innovation 334© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 9. 335335 The Alleged SchemeFrom the Kodak Employee with the Assessor and Appraiser Based on the reductions Schwab made to Kodak Park's real property tax assessment, Nicolo and Camarata calculated the tax savings to Kodak over a fifteen-year period to be $31,527,168. They also calculated Nicolo's fee from Kodak to be $7,881,798.00, which was 25 percent of Kodak's projected tax savings. Prior to this scheme being uncovered in April 2005, Kodak had paid Nicolo the amount of $4,161,220 of the more than $7 million he would have been paid. From this amount, Nicolo paid Camarata the amount of $1,553,300 for his role in hiring Nicolo, and Schwab the amount of $1,052.100 for his role in reducing Kodak Park's real property tax assessment. © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 10. 336 Commodities, Conflicts, andClintons © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 11. The Governor andthe Senate Seat “This is not like a guy taking $500 for a zoning change. This is selling a U.S. Senate seat.” Chicago Alderman Brian Doherty Judy Keen, “Blagojevich case is a blot on Chicagoans’ pride,” USA Today, December 11, 2008, p. 5A © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 337
- 12. Stakeholders in Illinois •The public and the voters • Candidates and elected officials who comply with fundraising and donation laws and disclosures • The political parties • Contractors who will not “pay to play” • Economic system of Illinois because of inefficiencies such processes introduce 338© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 13. Stakeholders in Torture •Prisoners • Government officials • Citizens and their safety • Those who might be arrested in the future • The nation and its standing and reputation 339© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 14. 340 Wolfowitz on HisConflict of Interest “In the larger scheme of things, we have much more important work to do.” © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 15. Stakeholders for Joethe Plumber • Joe • His ex-wife and child • Other citizens because of chilling effect on their willingness to participate in elections • Other employees in the agency because of the conduct of their leader • Citizens’ perception of government and trust • Citizens’ loss of trust in family agencies 341© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 16. The OIG Findings Itis also our conclusion that the Deputy Director of Family Stability, Paul Fraunholtz and the Deputy Director of Unemployment Compensation, Judy Cicatiello played no direct role in the decision making process that led to the queries being run on Wurzelbacher. However, they are not without fault in this situation either—albeit to a lesser degree than Jones-Kelley. They oversee two of the confidential ODJFS database systems accessed to conduct queries on Wurzelbacher. We cannot accept as an excuse that they merely ran the query after receiving a request from senior management. They are responsible for ensuring that access to these databases is limited to the furtherance of the agency’s functions or purposes. In this case, Fraunholtz and Cicatiello both failed to exercise independent judgment expected of senior management. At the very least they should have inquired how the requests related to legitimate agency operations. 342© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 17. 343 Stanford and Everybody andBenchmarking Overhead funds from federal grants used for: – $3,000 cedar-lined closet for Kennedy’s home – $2,000 flowers – $2,500 grand piano refurbishing – $7,000 sheets – $4,000 wedding reception – $184,000 yacht depreciation © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 18. 344 The Language ofAn Ethical Breach December 18, 1990 “What was intended as government policy to build the capacity of universities through reimbursement of indirect costs leads to payments that are all too easily misunderstood. Therefore, we will be reexamining our policies in an effort to avoid any confusion that might result. At the same time, it is important to understand that the items currently questioned, taken together, have an insignificant impact on Stanford’s indirect-cost rate.” “Moreover, Stanford routinely charges the government less than our full indirect costs precisely to allow for errors and allowances.” © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 19. 345 The Language ofan Ethical Breach January 14, 1991 “I don’t care whether it’s flowers, or dinners and receptions, or whether it’s washing the table linen after it’s been used, or buying an antique here or there, or refinishing a piano when its finish gets crappy, or repairing a closet and refinishing it – all those are investments in a university facility that serves a whole array of functions.” From an interview with the Stanford Daily © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 20. 346 The Language ofAn Ethical Breach January 23, 1991 “Because acute public attention on these items threatens to overshadow the more important and fundamental issue of the support of federally sponsored research, Stanford is voluntarily withdrawing all general administration costs for operation of Hoover House claimed for the fiscal years since 1981.” University statement © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 21. 347 Evolutionary Progress February 19,1991 “I am troubled by costs that are perfectly appropriate as university expenditures and lawful under government rules but I believe ought not be charged to the taxpayer. I should have been more alert to this policy issue, and I should have insisted on more intensive review of these transactions.” Remarks to alumni © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 22. 348 More Progress March 23,1991 “Our obligation is not to do all the law permits, but to do what is right. Technical legality is not the guiding principle. Even in matters as arcane as government cost accounting, we must figure out what is appropriate and act accordingly. With respect to indirect-cost recovery, we pursued what was permissible under the rules, without applying our customary standard of what is proper . . .” Remarks to alumni © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 23. 349 Kennedy’s Demise July, 1991 “Itis very difficult for a person identified with a problem to be a spokesman for its solution.” Donald Kennedy Letter of Resignation © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
- 24. 350 The Attitude Survives Wetook a beating. It was sufficiently bad that after the hearings and during the summer of 1991, it became clear to me that there was so much faculty concern about the ruckus and whether Stanford would continue to be a target for this kind of thing that I decided that if you're part of a problem, you can't be part of a solution and so I resigned. I think that steadied things down considerably. It wasn't any fun to do that. It was not any fun to take a certain amount of newspaper abuse in connection with it. Stanford's recovered nicely. We're still not paid the indirect cost rate I think we are entitled to under articulated government policies, but the sequel to the whole furor, I think, made it plain to everybody that Stanford hadn't engaged in any wrongdoing. Donald Kennedy, Interview in 2000 © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.