Perfection, Praise, and Those Who Are Human

In between the editorials and reports on Steve Jobs walking away from Apple on water, there was another story that caught the Barometer’s eye, a story that shares a common thread with the all-Apple, all-the-time coverage. Only Irene has enjoyed more coverage than Steve.

The second story dealt with some controversy at the UCLA Law School over its acceptance of a $10-million gift from Lowell Milken, younger brother of Michael Milken, he of 1980’s junk-bond fame. Michael Milken served 22 months in federal prison and paid a $600-million fine. The criminal charges against Lowell Milken were dropped after Michael Milken entered his guilty plea. The brothers Milken were banished for life from the securities industry as part of their civil settlement with the SEC.

There are two schools of thought within the UCLA Law School on the gift: (1) outrage and (2) “we need the money.” Professor Lynn Stout wrote to UCLA’s chancellor, “The creation of a Lowell Milken Institute for Business Law and Policy will damage my personal and professional reputation, as I have devoted my career to arguing for investor protection and honest and ethical behavior in business.” Professor Stephen Bainbridge, he of the “we need the money” school, explained, “We’re staring down the barrel of another round of cuts in California and relying on alumni (Mr. Milken is an alum) giving is essential for us to be able to provide a quality education.”

The responses from the Milken family and the law school have been swift and legalistic, if not a tad catty. From the Milken Foundation, “Basic fairness requires that individuals be evaluated solely on the basis of their own conduct and Lowell Milken’s life of accomplishment and service speaks for itself. [UCLA] understands that in the United States of America, its citizens are presumed innocent until proven otherwise.” Professor Bainbridge also notes that the junk-bond issues were 25 years ago and that Lowell Milken has no criminal conviction. From the law school, “Only one member of the business law faculty has expressed anything less than gratitude – and that concern was surprising, given that this professor was involved early in the process, has been a beneficiary of the donor’s philanthropy, and did not raise objections until quite recently.” (These quotes are from Jack Ewing’s and Judy Dempsey’s piece in the New York Times, August 23, 2011, p. B1, “Milken Gift Stirs Dispute At U.C.L.A.”)

Oh, how the law school, Bainbridge, and the Foundation are missing the point. You can’t talk your way out of something your conduct got you into. Banishment for life from the securities industry is a fairly stiff civil sanction. Yet, UCLA has agreed to allow the Milken name to grace its institute that will focus on what folks should be doing in business – policy is a might different from legal standards. Sophisticated analysis cannot change perception, and perception is that the Milken name associated with business law and policy cannot help but bring a smile to the face and this unspoken observation, “Now isn’t that rich?”
The Barometer does not doubt that Lowell Milken is a changed man. By all accounts, he is a generous man. This is a country that has some grounding, when so permitted by the courts who flog religious references with the First Amendment, in redemption. Mr. Milken’s generosity and current demeanor are not really relevant to the issues that have resulted in the hoopla over a business policy center named for him. The hard truth is that there are some mistakes in our lives that preclude future opportunities, a preemptive effect that springs not from legal standards but from the simple observation, “It ain’t right. It just ain’t right.”(This quote comes from Mammie in “Gone With the Wind,” as she chastised Mr. Rhett and Miss Scarlett for marrying a bit too soon after the death of Miss Scarlett’s second husband. What the two did was certainly legal in terms a valid marriage, but how society did frown upon their lack of restraint.) Perhaps the Lowell Milken Institute for Business History would have gone down easier. We do conquer temptations through the study of history. Lowell Milken is a significant part of business history and studying what he did or did not do vis-à-vis junk bonds does not result in the ironic disconnect that comes with “policy,” “business,” and Milken in the same name.

The UCLA hoopla brings the Barometer back to Mr. Jobs. His health struggles have been tragic and challenging. The message in his sudden resignation is that his mortal days are coming to an end. “Mortal” is the operative word. Students of business should study Apple and Mr. Jobs and learn how both did what they did. Anyone who is not mildly curious about a company sitting on more cash than the U.S. government has no business being in business. However, when they study Mr. Jobs and Apple, they should remember to take a look at the not-so-flattering accounts of Mr. Jobs’ initial denial of paternity for one of his children, his alienating style in his youthful management years, the sacrificial lambs in the stock-options scandal, and his response of, “Well, don’t hold your iPhone that way,” to customer complaints about flaws in one of the many iterations of the iPhone. We cannot disregard the negative and the past when evaluating the measure of man or woman.

Read all glowing reports on individual business people with a healthy dose of skepticism. Read the negative reports with a singular question, “Have they changed?” Like all good legal cases, the truth about individuals’ lives, successes, and characters rests somewhere between the glowing and pond-scum characterizations. Ethics demands a fair portrayal, something that cannot ignore the past in determining present suitability and praise.