Last week it was made public that JPMorgan Chase had lost $2 billion of its own money in trading of derivatives. The bank is the largest assets and wealth management in the world and the largest U.S. bank with more than 270,000 employees and more than $ 1.4 trillion under management. Since the announcement, it lost 10% of its share value.  The Wall Street journal estimates that the real loss could possibly be of more than $ 4 billion. Jamie Dimon, the CEO said: “In hindsight, the new strategy was flawed, complex, poorly reviewed, poorly executed and poorly monitored.”

There have been a number of so-called “wake-up calls” for the financial industry these past few years. Let me mention just a few:

• The collapse of Lehman in 2008 that provoked a crisis that nearly toppled the U.S. economy and provoked the largest economic downturn in this country since the Great Depression.
• MF Global “lost $1.6 billion of customer’s money, 75 % of its share value, last year which led the company into bankruptcy.
• UBS suffered a trading loss of $2.3 billion dollars in 2011 as well.

The New York Times editorial dated Saturday May 12, 2012 entitled JPMorgan Chase’s $2 Billion Loss-The lesson is that the banks haven’t learned their lesson and neither have the politicians. The editorial calls for the adoption of the Volcker rule that would “curtail risky and speculative trading with a bank’s own capital.” and against a repeal or weakening of the Dodd-Frank Act.  It concludes by saying “Now politicians and regulators need to stand up to the banks.”

It seems to me that Wall Street has been engaged in continued reckless behavior apparently refusing to learn from past mistakes. (Although I would be surprised if those engaged with what we consider in hindsight reckless behavior thought of their actions as being reckless. The might have honestly believed that there were just risk-takers.)

Gretchen Morgenson, the New York Times Pulitzer Prize-winning columnist documented that behavior in her book Reckless Endangerment-How Outsized Ambition, Greed and Corruption led to Economic Armageddon published in 2011. In her article entitled JPMorgan’s Ghost of Dinner Parties Past, published last Saturday about the JPMorgan loss she wrote that “the hypocrisy is that our nation’s big financial institutions protected by implied taxpayer guarantees oppose regulation on the grounds that it would increase their costs and reduce their profit.” She quotes Mr. Greenberger a law professor at the University of Maryland and an expert on derivative. He said: “These regulations are not just protecting the United States taxpayers, they protect the bank themselves. The best friend of these banks would be laws that prevent them from shooting themselves in the foot. The fact is, they can’t do it themselves.” And Ms. Morgenson adds “as if we had to hear that lesson again.”   

Learning from our mistakes is not easy but can be vital. To learn from our mistakes we must first embrace them, own them; analyze them and then change behavior because there is always the risk of that fatal mistake you can never learn from.

Dale E. Turner, author of Words of Wisdom wrote: “It is the highest form of self-respect to admit our errors and mistakes and make amends for them. To make a mistake is only an error in judgment, but to adhere to it when it is discovered shows infirmity of character.”

I am afraid he just described Wall Street.

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.

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.

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.”

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.”

The article provoked consternation at Goldman Sachs. Shares fell 3.4% which represents a $2 billion paper loss for investors.

Lloyd C. Blankfein, the CEO and Gary Cohn, the president said in a letter to employees: “We are disappointed to read the assertions made by this individual that do not reflect our values, our culture and how the vast majority of people at Goldman Sachs think about the firm and the work it does on behalf of our clients.”

There are many lessons we can all learn from this story. Let me mention just two aspects that I find interesting from an ethical point of view.

1.      One can never rest on the laurels of a good reputation and an ethical culture. Mr. Smith says that the culture at Goldman Sachs until recently had been one of “teamwork, integrity, a spirit of humility and always doing right by our clients.” The temptation will always be there for any company or individual to lose one’s focus and vision by being distracted by the legitimate need to make money. Many people believe that the culture changed at Goldman Sachs when the company went public which resulted in increased pressure from stockholders for management to generate profit.

2.       How can we determine when it is the right time to resign from the company that employs us once we have determined that we can no longer participate or be associated with activities that we find reproachful?

That is a particularly difficult question to answer.  Below are two questions we may ask ourselves before making that critical decision.

1.      Can I reasonably assume that I can be an agent of positive change, (when change is needed,) in the company that employs me?

2.      Am I making a positive contribution, in terms of human values, in the work I do?

If the answer to both questions is a categorical “no” then resigning is probably the right thing to do. There is a saying among ethics officers, that we should always have our letter of resignation ready in our back pocket.

Some have criticized the very public way Mr. Smith explained the reasons of his resignation and his motivation. I tend to disagree with those critics. As one of his high school friend, Lex Bayer said: “He has always been an advocate for the firm, but he wanted Goldman to do things the right way. In his mind, this was the only way that he could change the culture of the firm.” I have a feeling by the very tone of the Op-Ed that was really his goal. One can sense a nostalgia for what Goldman Sachs used to be and a plea for a return to its former core values. Toward the end of the article he writes: “I hope this can be a wake-up call to the board of directors.” I share his hope.

As the American poet and filmmaker James Broughton once said:

“My major aim in writing is to set out flags and issue wake-up calls.”

The video, for those of you who have not seen it yet, was created by Jason Russell, the founder of a U.S. not-for profit organization called Invisible Children. It exposes Joseph Kony, the Ugandan head of the so-called Lord’s Resistance Army (LRA) and advocates for his arrest in 2012.

The campaign has been praised by the White House and endorsed by celebrities such as Oprah Winfrey, Bill Gates, Rhianna and Taylor Swift.

Joseph Kony has for the past 25 years has kidnapped children in Uganda and forced them into his “army.”   He has turned Ugandan girls into sex slaves and Ugandan young boys (some 30,000 of them) into brutal killers. The International Criminal Court has named him a war criminal. Yet he is still a fugitive now operating, with a much smaller army (a few hundred) in the region, possible in the Democratic Republic of Congo.

Invisible Children was founded by Jason Russell in 2006 to reveal to the world the suffering of Ugandan children.  Through his fundraising efforts Jason was able to create schools in Uganda. He also developed an early warning radio network to protect villages from attacks.

There have been some critics of the campaign which is accused of being too late, and of oversimplification of a 25-year old complex war and of exaggeration. Others have questioned the way Invisible Children spends the funds they raise.  Whether the criticism is justified or not changes nothing to the fact that Joseph Kony is a criminal that need to be stopped and brought to justice and that public awareness and pressure can only hasten his arrest.

Permile Ironside, a child protection advisor at UNICEF and an expert on the LRA says that ultimately the campaign is a good thing because Invisible Children “is distilling a very complicated 26-year war into something that’s consumerable and understandable by mass media.” Maria Burnett of Human Rights Watch told the Associated Press that the video has drawn attention to a problem they have been working on for years. She said: “We hope it will be helpful. What it leads to remains to be seen, but the goal to bring pressure on key leaders, to protect civilians and to apprehend LRA leadership is important, absolutely.”

The most encouraging aspect of the Kony 2012 campaign is that we, in very large numbers, can still be moved to reaction and action. We can still be awakened from the slumber of our comfort and most often from our indifference to social ills such as abuse, injustice wherever it happens.

I hope that Kony 2012 is the first of many such successful campaigns in the future.

As Anatole France, the French Novelist and Nobel laureate once said:

“I prefer the folly of enthusiasm to the indifference of wisdom.”

Jack Marshall in his Ethics Alarms blog entitled In The Catholic Institutions vs Obamacare Showdown, Law and Ethics Trump Morality…And Should sees this controversy as a “spectacular collision of law, morality and ethics.” For him the ethics is clear. “The free exercise of religion cannot include the right to ignore, disobey or be exempted from laws.”

That is true in a democratic and pluralistic society composed of more than one religion.

Michael P. Warsaw, the president and CEO of EWNT Global Catholic Network has a different opinion. He writes in an op-ed published by the New York Times on February 22, 2012 entitled “Contraception, Against Conscience,” that the compromise proposed by the Obama Administration to have the employer’s insurance carrier provide the coverage for contraception is unacceptable because, indirectly, the employer would be “facilitating access to drugs that go against our beliefs.” Furthermore, Mr. Warsaw contends that the fine that would be imposed on an institution for breaking the law is a form of coercion that that may run some institutions out of business. A lawsuit has been filed by the Becket Fund for Religious Liberty to overturn what Mr. Warsaw called an “illegal mandate.”

There can be circumstances in which some laws are contrary to one’s conscience or convictions whether they stem from a religious belief of not. In a democratic society, there are some legal alternatives in resolving a conflict between our conscience and a law that one considers unjust or wrong.

• Becoming a conscientious objector is one option if war is the issue.
• There is also the option of civil disobedience which of course imposes a penalty, possibly jail time.
• Evidently, the most effective and least taxing way is to use the power of the ballot box to vote for representatives that share your views and that will repeal laws that you believe are objectionable.
• There could also be some practical steps one can take to distance ourselves from activities that would inevitably lead us into a conflict between our conscience and the law, such as choosing a profession or an industry that is more attune to our core beliefs.

I believe that what we should all remember is that, whatever our beliefs, we should always make sure that in defending and promoting them, we do not use coercion to impose those beliefs on others.

As Friedrich August von Hayek, the Austrian economist and philosopher once wrote:

“If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion.”

Last month she decided to tell the world her dramatic story. Since the age of 10 she had been sexually abused and raped along with her 12-year old sister by her own father.  The abuse and rape went on for three years. The sisters had not confided in each other but when they finally did they decided to reach out to their mother who had remarried many years prior and lived in another city. The mother immediately called the authorities who arrested the father. He pleaded guilty and was sentenced to jail.

In the article she says:  “I can be an example. I am a survivor of child abuse, and I became strong and independent.”

According to Children’s Rights, a “national advocacy group working to reform failing child welfare systems on behalf of the hundreds of thousands of abused and neglected children who depend on them for protection and care,” there were 3.6 million reports of child maltreatment in the United States in 2009 involving more than six million children. (I am honored to serve on the board of that organization.)

Research performed by the US Government Accountability Office, in 2011, revealed that more than 5 children die every day of child abuse and 80% of them are under the age of 4. The estimated cost of child abuse in the U.S. is $124 billion a year.

G.R.A.C.E., an organization that fights the sex abuse of children in the Christian community says that studies have shown that 1 in 4 women and 1 in 10 men have been sexually abused as children. (I am on the board of that organization as well.)

The obvious question is how is it possible that for three years no one, not even their step-mother, found out what was happening to the two girls? How can we, as responsible individuals, if we have any suspicion of child abuse have the courage to report it?

Certain professions such as healthcare providers and lawyers are mandated by law to report abuse, most of us are not.  Why are we so reluctant to report crimes against children?

Let me list some of the possible reasons, although none are justified.

• We may be uncertain about whether there is abuse. Safe Horizon, the largest victims service agency in the U.S. says that we trust your instinct reminds us that suspected abuse is enough of a reason to contact the authorities, that we not need proof.
• We may be reluctant to meddle in other people’s lives but saving a life should surpass these considerations.
• We may be reluctant to “get involved” because of the fear of disruption in our already busy lives. Yet we don’t really have a choice if want to be “our brother’s (and sister’s) keeper.”

Quanitta created a foundation called “Living out the Dream.” She describes her dream below:

“One day, I’m going to have the kind of parents who take care of me and keep me safe.  One day, I will be able to sleep through the night without fear that the door knob will turn and the pain will begin.  One day, I’m going to be the “Queen of the Ring” and nobody will ever hurt me again.  One day, I won’t be 12 years old and feeling helpless; one day I’ll be strong and unstoppable.”

We can make such dreams possible for thousands of abused children by simply speaking up.

Let’s remember what Karen Adams once said:

“Child abuse does not go away but 90% of child abuse is preventable.”