August 2011 Archive

This is my third and last blog post about this deplorable affair.

Last week all criminal charges against Dominique Strauss-Kahn (DSK) were dropped. The ruling by Judge Michael Obus came after the Manhattan district attorney recommended that the charges be dismissed because of concerns about the credibility of the accuser.

Mr. Strauss Kahn’s behavior, as evidenced by DNA, was definitely not above reproach even if the encounter was consensual and fee for “service” based. He is a married man of considerable wealth and at that time, power. Ms. Diallo is a hotel employee and the lower echelon of the economic ladder. There is something wrong - immoral - with this picture. This was not a Maid in Manhattan love story.

Almost everyone lost in this scandal. DSK, whose future in French and international politics is compromised; Ms. Diallo, who may be deported, and the prosecutors, whose first handling of the case was strongly criticized. The only people who benefited directly from scandal are the attorneys and maybe the media with increased ratings.

What lessons from an ethical point of view can be learned from this sad story:

There are quite a few.

1.     Credibility counts.

If you lie repeatedly, even when you say the truth, people won’t believe you. Ms. Diallo was so convincing in her story about being gang-raped by soldiers in her home country that when she finally admitted that she had made up her story, the prosecutors could not believe anything she said then on.

2.     Reputation matters.

Mr. Kahn’s reputation in his less then honorable relationships with women played a role in the hasty public condemnation. It may also have influenced the prosecution in the early stage of the legal proceedings.

3.     Assumption is not knowledge.

There is a difference between assuming and knowing. Many assumed, particularly the media that Ms. Diallo had been raped by DSK but we did not know because we did not have the facts. We never have “all the facts” at best, we have some facts. The truth sometimes is illusive.

That is why we are not to judge others although we surely can condemn actions.

As Samuel Johnson once said:

“God Himself, sir, does not propose to judge a man until his life is over.

Why should you and I?”

Whistle blowing has been in the news lately.

The Securities and Exchange Commission (SEC), who just launched a new whistle blower program,  finds itself accused by Darcy Flynn, one of its own lawyers, of destroying thousands of documents related to investigations regarding suspicious activities of major banks and hedge funds.   Darcy Flynn wrote a letter to Sen. Chuck Grassley of Iowa saying that the SEC had destroyed more than 9,000 files related to “matter under investigation.” Senator Grassley said: “It does not make sense that an agency responsible for investigations would want to get rid of potential evidence.”

This week the movie Whistleblower was released in New York City. The movie is based on a true story of a UN peacekeeper who uncovered sex trafficking in Bosnia with members of the United Nations involved. Peter Rainier, a film critic for CSMonitor says that the movie serves a social good. The movie exposes the injustice of sexual slavery. Kathryn Bolkovac “blew the whistle” but lost her job in the process, although she did subsequently win a wrongful dismissal suit.

Judy Nadler and Miriam Schulman in an article published by the Markula Center for Applied Ethics entitled Whistle Blowing in the Public Sector believe that whistle blowing is an ethical issue because “it represents a person’s understanding, at a deep level, that an action his or her organization is taking is harmful - that it interferes with people’s right or is unfair or detracts from the common good.”

We are all (or should be) whistleblowers. We have a moral duty to report when harm is perpetrated.

The question is not if but when and very importantly to whom.

The Dodd-Frank Act encourages employees to report to the government rather than internally. The law signed by the President on July 21, 2010 increases the protection of whistleblowers against retaliation and termination as well as increased the potential monetary awards for whistleblowers up to 30% of collected monetary penalties.

Should the wrongdoing first be reported internally or should it be reported externally to the district attorney, the Grand Jury or the press? Obviously it all depends on the circumstances, the nature of the wrongdoing and the impact necessary to bring a stop to the practice.

Most corporations and ethics officers believe that it is preferable that a whistleblower first reports wrongdoing internally. This allows the management of a company to address the issue and hopefully “fix the problem.” However, if the whistleblower is not satisfied that the proper actions were taken following his or her reporting, then I believe, the reporting should be done to the proper authorities or the press.

Before we engage in whistle blowing we should first examine our motives to be sure that they are not self-serving or motivated by anger. We should also be very clear on what we are trying to accomplish.

We should always remember what Edmund Burke once said:

“All that is required for evil to prevail is for good men to do nothing.”

Earlier this month London and Birmingham were rocked by riots, arson and looting.

The events were sparked by the fatal shooting of Mark Duggan by the police. The circumstances of the shooting are not clear but are being investigated. In five days, from August 6 to 11, more than 1,000 policemen were injured, 2,275 people arrested and 1,000 charged. At least 5 deaths are attributed to the riots. The damaged caused by the riots is estimated at $250 M.

Such explosions of violence and looting should provoke some profound questions about the society we live in. The possibility of such violent lawlessness is what we should all worry about.

As British Rabbi Shaul Rosenblatt wrote in his column on aish.com

“Watching humans act in the most base and immoral of ways in the streets was a grim reminder of the potential violence that underlies our society. Clearly, the veneer of “civilization” in our society can peel away in the blink of an eye.”

Although the outbursts were apparently spontaneous, they were in fact years in the making. One does not turn to violence and stealing overnight.

Some of the looters were as young as 10 years old. Where were the parents? It would be interesting to find out how many of those kids-perpetrators had a functional home with loving and caring parents. I suspect, not many. It is first in the home that the concepts of authority and respect of others and of the law should be taught.

It is probably true that most of the looters were disenfranchised from society, many living on welfare, but it is never an excuse for criminal behavior. Ida Horner the founder of Ethnic Supplies Ltd., a social enterprise working with African women involved in handicrafts and textile production, does not believe that the riots had anything to do with systemic poverty. She says the system has in fact:

“Stripped authority away from parents, the teachers, the Police as well as the community at large. This same system has given children and young people generally too many rights so much so that those that are meant to guide them along the right path are instead afraid of them. These youths have failed to realize that with rights come responsibilities.” She then lists some of those responsibilities as being a “good neighbor, having respect for the law, the community, parents and fellow citizens and the importance of contributing to society in a meaningful way. ”

But what does this means to us individually and collectively?

Let me list a few ideas:

1.     We should be aware that it can happen here, wherever we are. It has and most likely it will.

2.     We all have a role to play in engaging the disenfranchised by inter-acting whether on a one-on-one level or by supporting with our money and /or our time civil societies that addressed those issues.

3.     We should use our voting power to pressure the government to take effective and preventive action in order to avoid such devastating events.

Mayor Bloomberg gave us a good example of what can be done. He announced on August 4^th a new program for troubled black and Latino men called “Young Men’s Initiative“. The cost of the program will be $127M which includes a $30M donation from the Bloomberg Foundation and $30M from George Soros’ Open Society Foundation.  The Mayor said at the launch of the program:

“When we look at poverty rates, graduation rates, crime rates, and employment rates, one thing stands out: blacks and Latinos are not fully sharing in the promise of American freedom and far too many are trapped in circumstances that are difficult to escape. Even though skin color in America no longer determines a child’s fate - sadly, it tells us more about a child’s future than it should. And so this morning, we are confronting these facts head-on, not to lament them, but to change them, and to ensure that ‘equal opportunity’ is not an abstract notion but an everyday reality, for all New Yorkers.”

We are all concerned about the issue of discontent that can lead to violence, therefore we are responsible to do what we think will bring change.

As William Pollard, the English clergyman and author once said:

“It is the responsibility of leadership to provide opportunity, and the responsibility of individuals to contribute.”

Last Friday’s decision by the Standard & Poor to downgrade U.S. debt from the top AAA to a AA+ was breaking news with global implications. Some fear that this decision will provoke havoc on the global stock markets today. By the time you read this blog post, we will know if that is true. I suspect it will.

In some respects, it seems that the decision was justified.   Does any government deserve the highest rating on its debt (which means the lowest risk for investors) when its debt is equal to its GDP and when the country is at risk, however slight, of defaulting on its debts.

Scott Redler, chief strategic officer of T3Live.com, a stock trading company said: “We deserved it, the way Washington handled the [debt-ceiling compromise] made the U.S. look horrendous on the world stage.”

On the other hand, was it the appropriate action and time do to so in view of the consequences of such downgrading? The downgrade may provoke a further downturn in the U.S. economy and increase the fragility of the financial markets worldwide and provoke massive unemployment with all its dire consequences.

U.S. Treasury Secretary, Timothy Geithner did not think the decision was appropriate. He said that the S&P had “showed terrible judgment” in lowering its rating of U.S. Government debt.

One would have to be an economist or a politician to answer the question of whether it was appropriate or not. However, the issue does pose and interesting ethical or moral dilemma.

Is a justified action always moral or wise?

I think not.

In some circumstances, the potential consequences of our conduct should guide us in assessing the morality of the action we are considering.

G.E.M. Anscombe, the British analytic philosopher considered by some as the “mother” of virtue ethics wrote in her essay “Modern Moral Philosophy (1958) that: “What is just in some circumstances, (can be) unjust in others; expected consequences can play a part in determining what is just.”

Norman Cousins once wrote:

“Wisdom consists of the anticipation of consequences.”

The past few months we have been exposed to much of the negotiations in Washington on the issue of raising the debt ceiling, maybe too much! Although it is a very important issue for the country and the world it seems to me that the media has hyped this crisis into a drama with too many “breaking news” stories that sometimes are not news at all, most likely to increase ratings.

The positive aspect of this overexposure is that it has made us, non economists, better educated in the complex issues of the economy such as “deficit reduction”, entitlements, balanced budget amendment, the frightening concept of national default and the mind blowing number of $14.3 trillion, the current borrowing limit.

Politics is the art of compromise and most often a compromise is reached after lengthy negotiations. These negotiations are intense because they oppose two different concepts of society. Capitalism vs. Socialism or Right vs. Left with all the possible nuances particular to the US.

In the introduction of their book, “Getting to Yes”, authors Roger Fisher and William Ury say that whether we like it or not, we are all negotiators because:

“Negotiation is a basic means of getting what you want from others. It is back-and-forth communication designed to reach an agreement when you and the other side have some interests that are shared and others that are opposed.”

Can one be truly ethical in negotiations?

Radu Ionescu , a Rumanian negotiation consultant, does not believe that morals and ethics are direct guidelines in negotiation because in negotiations we are motivated by our interests alone.

I disagree because I believe we should never exclude morals and ethics from any human activity.

What then are the particular values relevant in negotiations?

Steven P. Cohen, President of The Negotiation Skills Company, Inc. (www.negotiationskills.com) and author of Negotiating Skills for Managers believes that the ethics of negotiations should be based on the following understanding:

1. Reluctant partners make undependable partners so treating negotiation partners with respect and honesty simply makes common sense.
2. Negotiators need to recognize up front that the only reason to use negotiation to resolve a conflict, agree on a project, or conclude a sale is because other parties may be able to add value an individual or a single company cannot do acting alone.
3. Transparency in the negotiation process is far more likely to bring about buy-in than hidden agendas or tricky maneuvers
4. Other parties have feelings

The values that I believe are crucial in ethics in negotiation are:

Honesty: We should never misrepresent the facts

Transparency: We should not keep relevant information secret from our opponents

Respect: We should always treat others with the same respect as we would expect others to give us.

In ethics, the end rarely justifies the means.