April 2012 Archive

The New York Times, this Week-End, in front page article entitled Vast Mexico Bribery Case the Hushed Up by Walmart After Top-Level Struggle, revealed that back in 2005, Walmart officials in Mexico had paid more than $24 million dollars in bribes to Mexican officials to obtain building and occupancy permits for the opening of their stores in Mexico.

Furthermore, the article alleges that once alerted to these illegal payments, Walmart Mexico, concealed the information from Walmart’s US headquarters in Betonville. Sergio Cicero, a former executive who had helped organize the illegal payments said “dirty clothes are washed at home.”  The investigation was done internally and quickly concluded. A decision was also made not to inform either U.S. or Mexican authorities.

David Tovar, VP of Corporate Communication said, in response to the New York Times article:

“We take compliance with the U.S. Foreign Corrupt Practices Act (FCPA) very seriously and are committed to having a strong and effective global anti-corruption program in every country in which we operate. We will not tolerate noncompliance with FCPA anywhere or at any level of the company. Many of the alleged activities in The New York Times article are more than six years old. If these allegations are true, it is not a reflection of who we are or what we stand for. We are deeply concerned by these allegations and are working aggressively to determine what happened.”

Walmart is Mexico’s largest private company with more than 209,000 employees.  Wal-Mart is the world largest employer with more than 2 million employees and had sales of $421 billion in 2011.

This story may become a case study of what not to do when serious allegations of corruption are made by credible individuals.

Let me list a few things a company should do if it really wants to get into trouble. It should:

1.      Always remember that growth and profit are the only things that matter and that a company should do “everything it takes” to achieve those goals.

2.      Never take the allegations of corruption seriously.

3.      Never conduct an independent investigation but rather appoint someone directly involved with the bribery to investigate.

4.      Never inform senior management, because “the less people know the better.”

5.      Never inform the authorities.

Walmart’s actions and reaction will most likely cost the company some heavy fines and may send some of its directors to jail. It’s stock loss more than 7% of its value since the publication of the article. That translates into a loss of $10 billion to shareholders.

Rana Foroohar of Time magazine in her article entitled Walmart’s Discounted Ethics suggests that the company looks at the example of Siemens. The German company was involved back in 2006 in a $1 billion bribery and corruption scandal. The company collaborated fully with the authorities, paid the fines imposed and was rehabilitated. In fact today, according to Foroohar “its code of conduct has become a competitive selling point and is widely copied by other firms.”

As John D. Rockefeller once said:

“I always tried to turn every disaster into an opportunity.”

Let’s hope Walmart does the same.

It is quite refreshing to see the mayor of a major U.S. city on the front page of the newspapers not for some malfeasance or scandal but for doing something quite extraordinary.

Cory Booker, Mayor of Newark, NJ, risked his life in a successful attempt to rescue a neighbor from the flames of her home. He suffered smoke inhalation and second-degree burns.

He does not consider himself to be a hero but said: “There are firefighters who do this every day. I am a neighbor and I did what any neighbor would do.”

The Mayor’s decision to run into the home engulfed in fire and smoke contrary to the objection of his bodyguards was spontaneous. He did the “right thing” as if by reflex!

This is what we should all aspire to do should we be confronted with such life-threatening situations.

How do we know whether we will act morally or ethically in a crisis situation?

We can’t know for sure but if it does happen, it most likely will be because of a life-long experience in “doing the right thing.” It may take a lifetime to become a hero overnight.

The converse is true. One rarely becomes a scoundrel (or a hardcore criminal) overnight. I remember reading the story of a man who, when driving in the middle of the night on a desert road hit a pedestrian. He looked around and seeing that there were no witnesses, just took off. He later turned himself in, and did some jail time. Once released from jail, he went on speaking tours to high schools and universities to tell his story in an effort to help others not to make the same mistake. He reflected on the fact that when it happened, he had not hesitated even for a second before taking off. He said that it had taken years of sliding down the slippery slope of ethical breaches before he committed a crime.

Is it at all possible to develop an “ethics reflex?”

James Hughes, of the British Columbia Institute of Technology, John W. Dienhar, of Seattle University and Terry Thomas, an attorney, defined an ethics reflex as: “ethical action taken without extensive delay or analysis. At times nearly automatic, it is a characteristic of ethical leadership. Individuals and organizations that exhibit the ethical reflex very often do not engage in cost-benefit calculations and/or engage in lengthy consultations with lawyers about ways to avoid liability or “manage” the situation. They tend to do what feels right; they do it reflexively; and, they let the consequences fall where they may.”

Thomas Shanks, S.J., Executive Director of the Markkula Center for Applied Ethics sees the ethics reflex as “almost a second-nature ethical instinct that enables us to know the right thing to do well before the loss of business, reputation, or (self) respect that comes from making a moral mistake. We develop this reflex only by focusing on fundamentals.”

As the Young Adult novelist, Brodi Ashton, once said:

“Heroes are made by the paths they choose, not the powers they are graced with.”

I believe Cory Booker qualifies.

Last week the New York Times reported that video-game companies such as Microsoft, Sony, Warner Brothers, Disney and Apple agreed to close registered sex-offenders online accounts. This decision was made in agreement with New York State attorney general Eric Schneiderman.  This decision, according to the Attorney General will prevent sexual predators from establishing contacts with children they would never be able to establish in parks or playgrounds.

The ACLU-New York believe that the decision “trample on the right to free speech and expression” of more than 3,500 registered sex offenders in New York State.

Playing Internet games online seems to me to be a privilege, not a constitutional right. However, the protection of children from predators should be one of society’s the highest priorities.

The particular interest in those means of communications by sex predators is the cloak of anonymity they provide.

Anonymity can be used both for good and for evil. It is just a mean to an end. What really matters is the motivation for seeking anonymity and the end result it allows.

Terrell Ward Bynum points out in the article entitled Anonymity on the Internet and Ethical Accountability, when one is engaged in harmful activity that anonymity serves as “barriers to accountability” and without accountability there can be no assessment of blame, enforcement of law, prevention of repetition and no compensation.

However, anonymity can sometimes also be positive.

Giving anonymously is considered true altruism.

Sarah Hinchliff Pearson, a residential fellow at Stanford Law School writes: “The cloak of anonymity can protect people from retaliation for speaking out against injustice, or it can simply free people from social constraints, allowing them to be more open and honest. These goals are worthy of First Amendment protection, and the Supreme Court has recognized them as important constitutional values.”

If for some reason we decide to seek anonymity in a particular action we plan, a good question to ask ourselves would be:

Will I be able to justify my action to myself first and then to others should I lose my anonymity?

Asking ourselves honest questions and answering them just as honestly can prevent us from ethical lapses.

Remembering what Spencer Johnson wrote:

“Integrity is telling myself the truth. And honesty is telling the truth to other people.”

The shooting on February 26 in Florida of the unarmed 17-year old Trayvon Martin by self-imposed and volunteer security guard George Zimmerman was deeply saddening. The fact that George Zimmerman was not charged with any crime, claiming self-defense, provoked outraged throughout the country. A very good account of the shooting was published in the New York Times today in an article entitled “Race, Tragedy & Outrage Collide After Shot in Florida.”

There is still much that is unknown about what really happened. According to police reports, Trayvon attacked George Zimmerman, hitting his head on the pavement. Furthermore it has also being reported that the gun shot was at close range which would credit the theory of the self-defense scenario.  Many do not believe those reports. Hopefully a thorough and independent investigation will revealed what truly happened that day.

The fact remains that the life of a young man has been cut short and we should all grieve for him and his family.

President Obama, in a public appearance said, “If I had a son, he would have looked like Trayvon. I think [Trayvon's parents] are right to expect that all of us as Americans are going to take this with the seriousness it deserves, and we are going to get to the bottom of exactly what happened.”

Some have criticized his comments as an inappropriate interference in legal proceedings. I disagree with that criticism. As the President, he was speaking, even if symbolically, for all Americans. He expressed public empathy over the tragic and avoidable death of a young man.

Empathy is the right sentiment in such situations.

Empathy was expressed last month when a Moslem fanatic killed 3 young Jewish children and their father, a Rabbi, as well as three French soldiers in Toulouse, France. The reaction in France was one of shock and condemnation. Frederic Lefebvre, French Member of Parliament and of the French Government wrote in an email to French citizens living in the U.S. “Today I am Jewish.”

Oscar Schindler, who rescued hundreds of his Jewish forced labor “employees” during WWII, spoke of them as “my Jews.”

Collective or individual sympathy and empathy can have a very positive effect on society.

Bryan S. Turner, a sociologist from NYU in an article published by SAGE Journal entitled Outline of a Theory of Human Rights says that: “It is because of collective sympathy for the plight of others that moral communities are created which support the institution of rights.”

As William Fulbright once wrote:

“There are many respects in which America, if it can bring itself to act with the magnanimity and the empathy appropriate to its size and power, can be an intelligent example to the world.”