Gordon Grigg…scheduled for release 9/29/2014.
Lance Armstrong’s Collapse of Ethics (part one – NEED) – An indepth review by Chuck Gallagher ethics expert and author of the Human Side of EthicsJanuary 18, 2013
Illusions collapse! The collapse under their own weight governed by the law of gravity. If you pile too much bullsh*t on less than a solid foundation you will find yourself one day in a stinky pile of dung. That, today, is where Lance Armstrong finds himself. And the reality is – once you’re in it, it’s hard to dig your way out and ever get rid of the stench!
Heralded as a true American hero, Lance Armstrong was revered as an icon – a man who beat cancer, was at the top of his athletic career and a pay-it-forward guy with his non-profit foundation Livestrong. Today Armstrong’s past successes are dwarfed by his admission that he was a liar and bully. But is Armstrong’s story any different that those of lesser know folks who find themselves in a Collapse of Ethics? The patterns are the same only the names and circumstances change.
The following was reported by CNN:
Appearing tense, Armstrong told Winfrey it was a happy day for him to be there with her.
He described his years of denial as “one big lie that I repeated a lot of times.” He had races to win and a fairy tale image to keep up.
Armstrong reminisced on his storied past of being a hero who overcame cancer, winning the Tour repeatedly, having a happy marriage, children. “It’s just this mythic, perfect story, and it isn’t true,” he said.
It was impossible to live up to it, he said, and it fell apart.
What Lance stated is common – not easy – but common for those of us who build a house of cards only to watch it collapse under the weight of unethical choices that were compounded by lies and more lies. The question is – what are the patterns that can creep into our lives that allow someone who knows better to make unethical choices?
There is a pattern – a clear pattern of behavior – that is not specific to a person, but rather specific to unethical behavior and it starts with NEED. And, while the word – NEED – is wide open to interpretation, the emotion connected with it is rather simple. Defined as a physiological or psychological requirement for the well-being of an organism, NEED is that elusive thing driven by an internal desire connected with an emotion that drives behavior. To be clear…I’m no psychologist, but there is no doubt that there was an internal emotional desire that went unfulfilled that contributed to the choices that Lance Armstrong took.
Below is a partial transcript of Oprah’s interview with Lance Armstrong:
Oprah Winfrey: Did you ever take banned substances to enhance your cycling performance?
Lance Armstrong: “Yes.”
OW: Was one of those banned substances EPO?
OW: Did you ever blood dope or use blood transfusions to enhance your cycling performance?
OW: Did you ever use any other banned substances such as testosterone, cortisone or Human Growth Hormone?
OW: In all seven of your Tour de France victories, did you ever take banned substances or blood dope?
OW: Was it humanly possible to win the Tour de France without doping, seven times?
LA: “Not in my opinion. That generation. I didn’t invent the culture, but I didn’t try to stop the culture.”
Notice…while admitting guilt a key factor emerges…Lance believed that he could not win without acting unethically in his sport of choice. In fact, he acknowledged that while he “didn’t invest the culture” he “didn’t try to stop the culture.” In other words, Armstrong, like many others who act out unethically, took the approach that it was alright to take illegal or unethical actions (or both) as long as it was the norm!
But back to NEED. For Armstrong to win he believed that he NEEDED to use performance enhancing drugs! Winning was important and winning the old fashioned way didn’t seem to be an option.
There is an illusory truth that most of us miss when we are in the midst of making life changing choices…and that is – if the actions of others are common place we assume that similar actions that we might make are alright. Rarely do we challenge the common actions around us and ask the hard questions about ethics. Armstrong, in his answers to Oprah’s questions, demonstrates that. See the transcript below:
OW: You said to me earlier you don’t think it was possible to win without doping?
LA: “Not in that generation, and I’m not here to talk about others in that generation. It’s been well-documented. I didn’t invent the culture, but I didn’t try to stop the culture, and that’s my mistake, and that’s what I have to be sorry for, and that’s what something and the sport is now paying the price because of that. So I am sorry for that. I didn’t have access to anything else that nobody else did.”
OW: Usada issued a 164-page report. CEO Travis Tygart said you and US Postal team pulled off the most sophisticated, professional and successful doping programme sport has ever seen. Was it?
LA: “No. It definitely was professional, and it was definitely smart, if you can call it that, but it was very conservative, very risk-averse, very aware of what mattered. One race mattered for me. But to say that that program was bigger than the East German doping program in the ’70s and ’80s? That’s not true.”
OW: What was the culture? Can you explain the culture to us?
LA: “I don’t want to accuse anybody else. I don’t want to talk about anybody else. I made my decisions. They are my mistakes, and I am sitting here today to acknowledge that and to say I’m sorry for that. The culture was what it was.”
OW: Was everybody doing it? That’s what we’ve heard. Was everybody doing it?
LA: “I didn’t know everybody. I didn’t live and train with everybody. I didn’t race with everybody. I can’t say that. There will be people that say that. There will be people that say, ‘OK, there are 200 guys on the tour, I can tell you five guys that didn’t, and those are the five heroes’, and they’re right.”
What was Lance’s NEED? Well he says it best in one of his comment to Oprah!
“My ruthless desire to win at all costs served me well on the bike but the level it went to, for whatever reason, is a flaw. That desire, that attitude, that arrogance.”
Lance Armstrong’s Collapse of Ethics will continue…
Meanwhile – YOUR COMMENTS ARE WELCOME!
KPMG India Fraud Survey – Patterns of Crime – Comments by Business Ethics and Fraud Prevention Expert Chuck GallagherDecember 9, 2012
White Collar Crime up? Is that any surprise considering the vast changes in the world economy over the past four years? With high profile cases like Bernie Madoff and a host of others, I have been asked multiple times if we reached a point where “White Collar Crime” may be on the decline. My response is “heaven’s no!” In fact, there are three components of an ethical lapse and the proliferation of “White Collar Crime” and NEED is at the top of the list!
When the Economy stinks NEED IS HIGH…
To my left is a graph from a KPMG India Fraud Survey – the entire report is found HERE. In their report KPMG states that “White-collar crime in corporate India has witnessed a ‘substantial increase’ over the last two years.”
The graph shows the areas where respondents indicated that fraud had taken place. Interestingly enough, according to the report the incidents of fraud had increased by 10% from 2010 to the same survey in 2012.
According to the KPMG Survey:
Cracking down on fraud is critical for a country that needs investment.
“India is a fast-growing economy. The problem is a level of low confidence in international investors, which stems from corruption,” Rohit Mahajan, partner and co-head, forensic services, KPMG India, said at a press briefing in New Delhi. “Besides international investors, this has also impacted entrepreneurial spirit in India.”
The infringements are of various kinds, with bribery and corruption making up 83% of cases. A large part of the frauds also relate to cyber crime (71%) and diversion of assets (65%). The sectors most affected are financial services (33%) and information and entertainment (17%), according to the survey.
Most frauds (85%) are investigated internally and very little of the money is actually recovered, the survey said. The most effective methods for detecting frauds are whistleblowers, internal audits and data analytics.
The challenge represented by this report is not limited to India. Other data suggests that similar patterns of fraud and white collar crime exist in all developed economies especially those whose development has been spurned by rapid economic growth. India and China for example. The challenge becomes how to stop the proliferation of white collar crime? Policies alone will not be the most significant deterrent. We must stem the gap between ethical policies and practical behavior.
Often misconduct either never gets reported or when reported is somehow never escalated beyond direct managers. This silo of data prohibits effective solutions when combating white collar crime. For purposes of this post however the primary value is to observe the patterns of white collar crime so organizations will have an intelligent methodology to target abuse and curb unethical and potentially illegal practices.
YOUR COMMENTS ARE WELCOME!
As the founder of the Ethics Resource Group, I work with Companies, Associations and Universities bring awareness of Ethical Choices and how to help Employee and Members stay within the ethical boundaries. For more information contact me at firstname.lastname@example.org or visit chuckgallagher.com
Christopher Olivera, former GameStop VP of corporate communications and public affairs plead guilty to embezzlementNovember 5, 2012
Why do good people, well educated people, make unethical choices – in many cases choices that are illegal – knowing that “Every Choice has a Consequence” and the consequences that follow unethical illegal choices are never pleasant?
Frank Christopher Olivera, former GameStop VP of corporate communications and public affairs plead guilty Thursday to one count of mail fraud for embezzling $1,965,900 from the company.
More information is provide on my White Collar Crime Speaker blog. You can read the full post here.
YOUR COMMENTS ARE WELCOME
Whatever Happened to the Criminal Justice System in the USA? Dan Frishberg’s Biz Radio Folly goes Unpunished and Dan’s still on the Radio… Go Figure!July 20, 2012
It’s been a while…a long while since I turned my attention to Daniel ( Dan ) Frishberg – the radio personality who, with his partner Al Kaleta, caused many an investor to lose substantial funds in the failed Biz Radio debacle. I received an email today from a defrocked investor in Dan Frishberg’s failed scheme asking “Whatever happened to the criminal justice system in the USA? Dandy question, cause it seems that Dan Frishberg has effectively walked away with no criminal consequence to his very public investor fraud. If you want to see background go to these wordpress posts on “The Money Man“.
The key is to hold the right assets for enough time so that the investment can reap its full reward. It takes a lot confidence for an investor to believe that the company will not only be in business years from now but will continue to create an increasing amount of value several business cycles into the future. Successful investors are only able to hold on to stocks for the long term if they are able to create conviction with the proper due diligence, generate income, and protect their capital during uncertain times.
Hum…I read the words written and wonder! You state, “It takes a lot confidence for an investor to believe that the company will not only be in business years from now but will continue to create an increasing amount of value several business cycles into the future.” Yet, I wonder how the folks feel that listened to your advice on Biz Radio and your podcasts and YouTube and believed that you had a sustainable business model that would create an increasing amount of value to sustain them into the future. Seems from all accounts that you and your cronies led folks into investing into nothing more than a Ponzi scheme and today they have lost. But have you?
“Successful investors are only able to hold on to stocks for the long term if they are able to create conviction with the proper due diligence, generate income, and protect their capital during uncertain times.” Dan those are your words. Yet, you solicited investments that did not protect capital, generate income and were void of due diligence. Shame on you…! You survived, but what about those who trusted you?
I believe in Second Chances – in fact I wrote a book about it! I know with every fiber of my being how you operate as (sadly) I was you at one time. But there is one BIG DIFFERENCE. I acknowledged my unethical actions, made restitution and changed my choices. Seems accepting responsibility – which is the first step to recovery – is something that continues to allude you. Isn’t it time – Dan Frishberg – to face the truth of your lies and deceptions – take responsibility – make restitution and then move forward with your life in an honest and ethical way.
You – Dan Frishberg – could be a leader in ethical business practice, sharing the truth of your folly and how unethical practice can be turned into societal good. Sadly, Dan, it seems that you only know one thing – how to be a talking head on the radio. Every choice has a consequence and the consequences of your choices are not over…cause karma’s a bitch.
If you have been defrauded by Dan Frishberg and Al Kaleta – feel free to share your experience so others can at least be warned!
ETHICS AND WHITE COLLAR CRIME NEWS RELEASE:
Edward Louis Molz, III, aka “Frank Sullivan,” 29, of Plano, Texas, was sentenced by U.S. District Judge Sam A. Lindsay to 96 months in federal prison and ordered to pay $1,074,725 in restitution following his guilty plea in January to one count of wire fraud in connection with a fraudulent advance fee scheme he ran.
In addition, according to the plea agreement, Molz will be ordered to forfeit property that was derived from proceeds traceable to his offense, including funds seized on September 7, 2010, from the 3rd Street Financial LLC account at JPMorgan Chase, as well as a 2007 BMW 650, a 2005 Maserati and real estate located on Cartwright Street in Irving, Texas.
Molz was arrested in September 2010 at his home by FBI agents on wire fraud and mail fraud charges outlined in a federal criminal complaint, and was released on a personal recognizance bond. A federal grand jury returned a six-count indictment the following month charging Molz with four counts of wire fraud and two counts of mail fraud. In March 2011, Molz’s bond was revoked.
According to the factual resume filed in the case, from November 2009 through May 2010, Molz ran a scheme in which he induced small business owners, who were seeking alternative means of financing, to pay a fee to purchase an “aged” corporations. These “aged” corporations purportedly had access to lines of credit that were available to the purchaser.
To carry out his scheme, Molz established 3rd Street Financial, LLC, and, using the assumed name of “Frank Sullivan,” held himself out as its chief financial officer. He marketed 3rd Street Financial through a website and a loose association of financial brokers. He represented to potential purchasers that he had established and maintained a number of “aged” corporations which had been in existence for four to five years and had access to lines of credit between $250,000 and $400,000. For a $3250 acquisition fee, a purchaser could acquire a “Tier 1″ corporation with a minimum line of credit of $150,000. However, for a $6500 acquisition fee, a purchaser could acquire a “Tier 2″ corporation with a $250,000 minimum line of credit.
Molz represented that upon payment of the fees, he could deliver the aged corporation to a purchaser within nine to 12 weeks. He also represented that each “aged” corporation had additional benefits, including established “business trade lines,” a complete financial and business plan, a Dun & Bradstreet listing and three years of valid tax returns. He furnished potential purchasers with false and fictitious documents, including service agreements, testimonials from satisfied purchasers and letters from financial institutions confirming the issuance of lines of credit.
During the time frame mentioned above, approximately 247 individuals mailed or wired money to Molz and he deposited those funds into JPMorgan Chase and Compass Bank accounts. Molz did not deliver any “aged” corporations as promised. Instead, he used the money almost exclusively for his personal benefit, including the acquisition of personal assets and real estate.
YOUR COMMENTS ARE WELCOME