The Ethical Barometer

In yet another example of how corporate boards cannot move decisively, after over a year of shoes dropping because of two crashes of the 737MAX, Boeing’s CEO has departed to spend more time with his family or whatever cover story given. That Boeing made a mistake in the design of the aircraft was a problem. However, the tin ear of now former CEO, Dennis A. Muilenburg, to the issues and scope of the crisis was stunning to watched as the clock ticked and the hits kept coming, financially and mistake-wise.

During the Q & A in a speech in May, a participant asked if Boeing’s CEO should be fired. The Barometer’s response, “I am mystified as to what the board [of Boeing] is thinking. He needs to go.”
Those who preside over the missteps at any company cannot buy credibility with customers or regulators. They were there. They are responsible, and they lack moral authority to assure. When a continuing CEO seems to exacerbate the problems as their idea of crisis management, they REALLY need to go.

Harvey Weinstein in an interview with the New York Post. Mr. Weinstein added, “I made more movies directed by women and about women than any filmmaker, and I’m talking about 30 years ago, I’m not talking about now when it’s vogue. I did it first, I pioneered it.” Mr. Weinstein used actress Gwyneth Paltrow as an example. Ms. Paltrow was paid $10 million for her 2003 movie, “View From the Top.” He said that she was the highest paid actor at that time in any independent film. “Higher than all the men,” Weinstein added.

Mr. Weinstein fails to understand that only alleged financial crimes are forgiven. Plenty of accused financial types are back in business. Their past record of performance counts. What you did for women counts little when you are charged for what you did to women.

Bernie Ebbers, the man at the helm when WorldCom, once the largest company in America (market cap) which turned out to be an $11-billion fraud. Mr. Ebbers was sentenced to 25 years, and had served about 13 years when a federal judge granted a release due to his frail health and what his daughter describes as dementia. WorldCom declared bankruptcy, which topped Enron at that time as the largest bankruptcy in U.S. history.

Testimony from former employees about being instructed to cook WorldCom’s books to reduce expenses in order to make WorldCom look profitable resulted in the Ebbers conviction. WorldCom’s CFO, Scott Sullivan, facing 25 years, sang like a canary, and got five years. After serving most of his sentence, he was released on home confinement and three years of probation in 2009. He lives in Boca Raton. Bankruptcy laws at the time provided homestead exemptions for many of the Enron-era execs for their Florida mansions. Mr. Ebbers will go home to Mississippi to live with family.

Spygate was in 2007 and involved allegations that the Patriots were stealing signs of rival teams. Then came Deflatgate in 2015 — an, as yet, unsolved mystery in the minds of Goddess, et al.,with the inflation levels of footballs used in NFL play when the Patriots are out and about. Now, 2019, we have someone, Belichick denies it was anyone associated with the Patriots, filming the Bengals. Kraft Sports Productions is responsible, as in Kraft, owner of the Patriots.

How is it that the Patriots are always in and around this stuff but never know anything? Beyond that presence is the bizarre fact that they were filming the Bengals with their mighty 1-12 record. It’s like the economists when they say it is not possible for one company to continually outperform all the other companies in an industry — it defies logic that they could be 50% better than the other companies as a means of explaining their 50% higher performance. Their advice? Look deeper on what exactly is going on with the accounting, the financial reporting, the sales practices, and their regulators. Talent and hard work explain some of the difference, but not consistent beyond-all-odds performance. So it is with the Patriots. Perhaps someone needs to really check what goes on as they “Do Their Jobs.”

Headline from today’s Wall Street Journal.” Could we have a current value comparison? And check back in a few years to see what has happened to the IPOs driving the numbers.

There is a diabolical side to some of the contestants in beauty pageants. For example, Andrea Piecuch, the Miss Universe of the U.S. Virgin Islands, was booed when she won that title. The locals said that Ms. Piecuch is a “pageant hopper,” or someone who moves from state to state competing until three possible end results: they win a big contest, age cuts them out, or they no longer have the funds to compete or even just get tired of the pageant circuit. In 2011, Ms. Piecuch competed in a Texas state pageant. In 2017, she was in a Florida pageant. In November 2018, Ms. Piecuch competed in the Miss Virginia pageant. In January 2019 she was a contestant in the Miss Utah USA pageant. The protests came when she competed in the U.S. Virgin Islands Ms. Universe pageant for that title in August 2019.

What are the rules? The U.S. Virgin Islands required only six-month residency status. Ms. Piecuch offered a lease as evidence of her residency to pageant officials, but declined to provide the lease to the Wall Street Journal reporter. Kris Frieswick, “‘Pageant Hopping’ Roils A Miss Universe Contest,” Wall Street Journal, December 9, 2019, p. A14. Some contestants provide university registration as proof of residency. One contestant provided class schedules from the University of Virgin Islands as her proof. However, the university could find that no such student ever enrolled there.

As one contestant who lost said, “Pageant hopping is wrong. It’s not illegal, but it’s wrong.” She deserves the crown in the Barometer’s mind.

Well, what with cameras and technology, the Astros were apparently able to see and decode the signs of their opponents. MLB has come down hard on this stuff. Cameras out of the dugouts now. At least this time the wrongdoing involves a team and not the whole league. As the league removes cameras, that juiced baseball controversy remains, well, a controversy. When MLB owns the company that makes the baseballs, one can understand the ethical issue. Maybe the signals discipline will atone for the juicy baseballs. Whatever happened to the simplest of joys in Mudville, to wit, “Play ball”? And do it without gaming, as it were, the system.

Those reviews placed by bots can be detected, and Fakespot, Inc. is the company that offers the service. Fakespot concludes that more than 1/3 of online reviews are fraudulent, meaning that bots placed them or they were made by folks being paid to do reviews. Apple has pulled all of its reviews in response (without explanation). Amazon, Walmart, and Sephora dispute that figure, but all three are taking new steps to crack down on review fakery. Fakespot says that it cannot evaluate Amazon reviews because it does not have access to Amazon’s proprietary data.
The Federal Trade Commission (FTC) is also cracking down on fake reviews. Sephora got nabbed already.

Without the analytics, one researcher offers a simple test: When you see a product with all favorable reviews, be skeptical. As he noted, “It’s impossible to have that many people happy.” Well said. Suzanne Kapner, “Giant Online Retailers Pressed To Curb Fake Five-Star Reviews,” Wall Street Journal, November 29, 2019, p. A1.

Can the reviews.

As if the ongoing troubles with the 737MAX are not enough of a challenge, Boeing now has a new plane – the 777X – the first new plane design since the 737MAX fatal crashes. And, there is intense regulatory scrutiny of the plane and Boeing. The lesson is that when there is a misstep by a company (and the 737MAX has been a huge misstep exacerbated by Boeing’s lack of transparency on all the issues involved), the regulatory microscope descends. What was once a relationship of trust is one of skepticism. Trust lost means delays, expenses, additional oversight, and losses. At the heart of trust is ethics. And at the heart of speed in transactions and regulatory approval is trust.

Now that’s not a headline one expects to read. Nonetheless, Pope Francis had a chat with the press on his jet and conceded that finances in the Vatican involve “things that do not seem clean,” and added, “What happened, happened: a scandal.” There is an ongoing investigation because Pope Francis added, “There is corruption, it’s clear, With the interrogation we will see if they are guilty or not. It is an ugly thing, it’s not nice for this to happen in the Vatican.” Your Holiness, it is not nice for it to happen anywhere. From FIFA to Ukraine to Baltimore, Chicago, and Detroit, there is corruption everywhere. Somewhere in that last sentence is the making of some kind of song. Bob Seger could do something with that line (Moline, Boston, Berkeley, Queens).

What we learn, however, is that human beings are human beings. Temptation is temptation. No one is immune. Pope Francis added that the investigation is going well. The Vatican Bank’s former chief and his 94-year-old lawyers have been charged with allegedly skimming the profits from property sales (50 million Euros worth). The Pope is also working on climate change, a world free of nuclear weapons, and corruption in Peru. That last one evokes a “Physician, heal thyself” moment (Luke 4:23).

The Barometer wrote too quickly — here is another texting tragedy.

A former Boston College student who broker up with her boyfriend sent him 47,000 texts in a two-month period. Her boyfriend, who apparently tried to respond, bringing the total texts between the two to 75,337 for the two-month period. Her texts included expletives and suggestions that he kill himself. He begged her to stop texting him. She did not. Sadly, her boyfriend jumped to his death from the roof of a parking garage. She is charged with involuntary manslaughter. Oh, that texting. It has become a tool of destruction in so many ways.

Three events over as many weeks have put the Barometer over the edge on the texting epidemic. Whilst traveling with family down from Arizona’s Rim Country to the magnificent Phoenix Valley of the Sun, all travelers in the car noticed a small gray car ahead at the stoplight in Payson. The gray car sat motionless during a green light. A honk to awaken the driver came too late. The light turned red. We pulled out from behind the gray car and alongside it in the right-hand lane. Its young female driver was busily texting. She managed to look up in time to awaken to the next green light. She took off like a bat in a scary movie when the heroine has entered the premises. We lagged behind, not wishing to be anywhere near the gray car.

We watched as she traveled in the left lane, swerving off the road three times, once so much so that she kicked up dirt because her car had strayed off the pavement. We pulled along side the gray and rolled down our windows with the hope of catching her attention. For her own safety and that of others, we were going to yell, “Stop texting.” Our plan was thwarted because she was so busy texting that she did not see our waving arms. We dropped back with sadness, offering a prayer that she might make it the 75 miles down to the Valley in safety. We kept our distance.

The following week in the Indianapolis airport, the Barometer was on the right side of the long walkway headed to her gate. However, considerable darting and weaving resulted as an approaching 30ish business man deep into texting was walking as if he were three sheets to the wind. The Barometer sensed a collision in the air. Finally, the Barometer had no place to weave to avert his weave to the wall. Here are the words offered to the distracted traveler, “I have nowhere else to go. You may have to look up from your phone.” He finally looked up and offered a meek, “Sorry.” Still, he went on his merry, albeit weaving way continuing to text, as other travelers did all sorts of dosey-does and/or river-dances to avoid the heads-down teeter.

Now this week. The close-call phenomena ended. Alexandra Mansonet, the CEO of a nonprofit, was texting whilst driving her black Mercedes-Benz to work. Her sister-in-law had texted her about choices for dinner, “Cuban, American, or Mexican. Pick one.” Ms. Manoset’s cell phone indicated that she had typed the letters “m” and “e.” At that point, as Ms. Mansonet testified, she looked up and saw a Toyota Corolla in front of her but could not stop in time because of her proximity and speed, the laws of physics still in effect even in New Jersey. Ms. Manoset hit the Toyota, which struck and killed Dr. Yuwen Wang, a young scientist out for a morning walk.

Ms. Mansonet was charged with reckless vehicular manslaughter. She testified that she had looked down to turn on her rear-window defogger, and then saw the Toyota. She did turn over her cell phone to police at the scene. Investigators found the text and her unsent response of “m” and “e.” Ms. Mansonet testified that she was not texting at the time of the accident because she decided that it was best to just call her sister-in-law later because she was not sure what she wanted for dinner. The jury was not persuaded, and she was convicted of reckless vehicular manslaughter.

After the verdict, Dr. Wang’s stoic husband said, “I hope more people could realize the consequences of texting while driving.”

What more need be said? The life of a young scientist who had just celebrated her sixth wedding anniversary with her husband the night before was ended.

Texting is a self-absorbed and self-absorbing activity. Apart from that shallowness is its dangers to others. There is a world out there of living, breathing, walking (or attempting to do so) human beings. For their sakes and your own, all you textures: STOP!

In June, the Barometer expressed concern about then-Baltimore-mayor Catherine Pugh because of her book sales. “Her former Honor has a series of books, known as the Healthy Holly series (children’s books), that help children learn about healthy living. The books are self-published, leaving out that pesky step of editors, reviews, distribution, etc. No need for all that rigmarole, Her Honor also found bulk purchasers for her books. The also former state senator served on a number of nonprofit boards, and the organizations would purchase large numbers of Healthy Holly books. The University of Maryland Medical System was one of of the book purchasers ($500,000 for 100,000 books), and the then-Senator Pugh went on to sponsor legislation that would have benefited the System (had it passed). In fairness to Mayor Pugh, there were 9 board members of the System that had contracts with the System. However, when Mayor Pugh took office (and let us not forget that Mayor Pugh was elected to replace the former Baltimore mayor who was convicted of embezzlement in 2010) contracts with the city were closely timed to book sales.Kaiser Permanente purchased $100,000 in books, and then received a $48 million contract from the city. Whoa, Nellie, that Baltimore/Maryland area is treacherous ethical territory.”

It is also treacherous legal territory. Ms. Pugh was indicted on federal charges of wire-fraud and, of course, the inevitable tax problems that go hand-in-hand. The indictment alleges the book sales brought in $500,000 even though many of the books were not delivered or were double-sold. The tax charge indicates that Ms. Pugh reported $31,020 in income in 2016 and the indictment alleges actual income was $322,365. Heck of a difference, and a heck of a lot of detail. The Feds must have had cooperation from those who purchased the book.

Professor Bruce Bagley was charged with money laundering as part of a network used to get money from bribery and corruption in Venezuela laundered and all fresh for use in the USA. The total amount laundered was $2.5 million and the professor’s take is alleged to be 10%. Commission, you know, for bribery and corruption assistance.

Professor Bagley, University of Miami, edited a 2015 book, “Drug Trafficking, Organized Crime, and Violence in the Americas Today.” Another book on organized crime and interrelationships among countries was released in May 2019. His biography lists consulting clients as the United Nations, the FBI, DEA, and several Latin American countries (one presumes Venezuela).

Those who can do, and those who can’t teach. Maybe not. Maybe it is possible to do both.