Ex-Virginia Lawmaker’s Unethical behavior earns Phillip A. Hamilton a 9 1/2 year prison sentence.

August 15, 2011

Ex-Lawmaker to Go to Prison in Old Dominion U. Case

August 12, 2011, 2:58 pm

Phillip A. Hamilton, a former state lawmaker in Virginia, was sentenced today in federal court to serve 9½ years in prison for arranging money to start a teaching center at Old Dominion University in 2007 and then becoming director of the center, the Richmond Times-Dispatch reported. Mr. Hamilton was convicted in May on federal charges of bribery and extortion. He is to remain free until September 19, when he must report to prison authorities.

The above story reported in the Chronicle of Higher Education shows an interesting abuse of power for an elected official and a clear breach of ethics.  The Richmond Times-Dispatch reports as follows:

Phillip Hamilton, 59, a Newport News Republican who was once vice chairman of the House Appropriations Committee, was found guilty of bribery and extortion by a federal jury in May for arranging funding for a center at Old Dominion University in 2007.

In exchange for obtaining the $500,000 appropriation to start the Center for Teacher Quality and Educational Leadership, Hamilton, a career educator, was hired as its director and paid $80,000 over two years.

Choices and consequences.  An unethical use of power resulting in an $80,000 a year job equals 9.5 years in prison.  What a powerful price to pay for such a poor reward.  It goes to show that rarely if ever does the reward justify the consequence.

Hudson said reaching his decision on a sentence for Hamilton was the hardest he has had to make in 13 years as a judge. He said he took into account Hamilton’s clean record, his good works as an educator and legislator.

But he told Hamilton he had betrayed the public trust, “as well as put a stain on the great deliberative body you were elected to serve in.”

Hamilton’s arrangement with ODU was exposed by news reports in 2009. He was defeated for re-election later that year, ending more than two decades in the Virginia general Assembly.

The loss of public trust cost Hamilton his elected position, job and now earns him 9.5 years in prison.  Again, a clear indication that often the consequences of choices are far greater than the short term gain enjoyed by unethical actions.

If you know Hamilton – feel free to comment on his motives behind the actions reported above.


University Ethics Presentations – A Report from the University of Florida on Business Ethics Speaker Chuck Gallagher

January 14, 2010

I must admit, as a speaking professional, I enjoy presentations to University students.  First, they are open to exploring ideas and generally eager to explore what is put before them.  Their questions are wide open and that makes the presentation fun.  But, more important, from my perspective, if a life can be changed early in a young career, then I will have paid it forward.  That inspires me!

I was privileged to speak to business students at the University of Florida and no long there after a young student wrote the following in the Greenback University blog.  His article (printed below) is a reflection of the presentation I made the reaction from the perspective of a student participant.

“I learned a lot of things in prison,” said motivation speaker Chuck Gallagher as he crossed the stage. “I found out what it meant to be Chuck Gallagher.”

Gallagher’s words to UF students rang true as he discussed the turbulence of his life in the past ten years.

Formerly a successful CPA and instructor, Gallagher was sentenced to federal prison for embezzling over $254,000 in a Ponzi scheme that later he reflected was a life-changing experience.

How might he be this week’s success profile? Simple. Gallagher’s story reflects a momentous ability to turn the tables after a horrific downfall.

On October 2, 1995, Gallagher took what he calls his “twenty-three steps” to federal prison, losing his CPA license, his relationship with his wife, and his colleagues’ trust.

“I’d absolutely considered myself an ethical person and an honest person at the time,” Gallagher said. “In the mind of a fraudster, I was always going to be able to pay it back.”

Gallagher’s life before his arrest for embezzlement can be said to be a success, built on the motivation to become educated and rise from the lower class.

“My dad died when I was two. My mother didn’t have a high school education,” Gallagher said, explaining his mother’s persistent pressure on him: “She would always say, ‘you can be somebody. Do not be concerned about your circumstances.’”

He took that lesson to heart, becoming the youngest tax partner in a CPA firm at age twenty-six.

One day while Gallagher was teaching a tax course in Boise, he noticed a note on his door from his partner asking him to call the office. During the break in between lectures, he called back. One of the clients had had an emergency. “I need the money,” his partner said.

Gallagher was quiet on stage, expressing the silent hysteria he felt in that moment almost twenty years ago.

“God and I knew the truth,” he said. “I had stolen the money.”

For months following the revealing of his Ponzi scheme, Gallagher considered suicide. “I picked up the telephone and started calling people.” Gallagher received six answering machines before reaching someone, whose immortal words lived on in Gallagher’s conscience: “You have made a terrible mistake, but you are not a mistake. The choices you make today will define your wife and children.”

Gallagher knew then that suicide would not be an option. “I had to admit to everyone, to my wife and children, that I was a liar and a thief.”

Gallagher stressed how simple it was for him to lose sight of ethics. “Everything I had created was an illusion,” he said. “I didn’t recognize it until it was too late.”

Prison is often said to turn a person’s life perspective around, and Gallagher was no exception. “After five years of a normal life, I was sent to an eight by eight holding cell made of cinder block with a toilet and a bench.”

Gallagher went on to explain his experiences in prison and his interactions and friendships with the other inmates. “I was paid twelve cents an hour. I would get up at 6:00 and clean toilets and urinals,” he explained.

When Gallagher was released after sixteen months, he had to start from the bare beginnings. “I worked for a company before prison. They hired me as a sales associate. I went door to door selling cemetery spots.”

Gallagher claims he was only able to move up because of his ability to outperform everyone else. “When you perform, you will get other people’s attention. When you get out of school, your degree will help you get that first job, but after that, it doesn’t matter. It’s all about performance.”

Gallagher is now the senior sales executive for the company, and lectures across the US not only on business ethics but on sales and marketing as well. He lives by the moral guidelines instilled in him from his experience as a white collar convict. “I learned that every choice has a consequence. If you are 100% truthful, you’ve got nothing to lose, but if you break someone’s trust either in business or in a relationship, that relationship will not survive.”

I appreciate the report, but more importantly I am thankful for the opportunity I have to share with students in both the US and Canada.  It’s funny, but in a presentation at another University a professor asked me, “What theory of ‘ethics’ do you follow?”  I pondered the question for a moment and then replied.  “I follow the theory of ethical choices that keeps you out of prison.”  Somehow that response seemed to stiffle the professor, but was incredibly well received by the students.  I guess when you get down to it, my job is to influence the students!

Here’s the link to the Greenback University blog.


University of Louisville Education Dean – Robert Felner – pleads Guilty to Financial Fraud

January 8, 2010

Robert Felner, hailed as a grant rainmaker, found himself drowning in a sea of his own doing.  Last week, through his Attorney, Robert Felner pled guilty in a case in which he and a colleague are accused of defrauding University of Louisville and another university out of $2.3 million.

Hailed at the outset by University administrators as a change agent, citing him as the driving force behind a spike in grant money at the school. School officials now know that Felner is, not only a thief, but was directly responsible for only a fraction of that windfall.

A federal grand jury in Louisville indicted Felner and his co-defendant, Thomas Schroeder of Port Byron, Ill., in October 2008, charging Felner with 10 counts of mail fraud, conspiracy to commit money laundering and income tax evasion. Schroeder was charged with conspiracy to commit money laundering, mail fraud and conspiracy to defraud the Internal Revenue Service.

Government prosecutors allege that over a seven-year period the men used the Illinois-based National Center for Public Education and Prevention Inc. they created to defraud University of Louisville and the University of Rhode Island, where Felner was involved in another research center he helped create.

The government alleges the men used the Illinois center, which lists Schroeder as president, to divert funds owed to the two universities, siphoning $2.3 million.

The money was deposited in several bank accounts, including one that Felner told federal officials he set up in Louisville in the Illinois center’s name.


While Colleges and Universities across the nation are working to make sure that “ethics” becomes a fundamental core part of a business education, it seems that on every turn headlines are showing the frailties of the human condition and that even well educated folks can succumb to temptation and do unethical things.  Unfortunately, this will be yet another example of ethics gone awry.

Every presentation I make to university students, from the University of Florida to University of South Dakota, to Long Island University to Baylor, I begin with the following statement:  EVERY CHOICE HAS A CONSEQUENCE.

Felner and Schroeder are now living the consequences of their choices.  If there is a bright spot, hopefully the students at these universities will gain a better perspective on the effect of choices and consequences.  Perhaps, just perhaps, the students, being exposed to the media attention, will connect the dots and take the ethical high road when exposed to temptation.


Montreat College takes the Ethical High Road! Business Ethics Speaker Chuck Gallagher explains

January 7, 2010

Administrators at Montreat College, according to The Asheville Citizen-Times, said this week that they would help cover student loans taken out by more than 50 master’s-degree students at the North Carolina institution who were told by outside recruiters that the federal government would forgive their loan debt up to $17,500 each.

Many of the students whom the recruiters said would be eligible for loan forgiveness were in fact ineligible because they were neither secondary-school mathematics and science teachers nor special-education teachers at elementary and secondary schools. The recruiters, who worked for a private company hired to recruit for the college’s adult-education programs, had told the students that they would receive government help if they pursued an M.A. in education at Montreat.

President Dan Struble, Montreats leader, met with teachers Monday night telling them the college would aid them with the costs they’ve incurred in the program.  “Clearly, this is a challenge to our reputation,” Struble said. “We want to be who we say we are and that means meeting every student’s situation.”

According to the Asheville report:

Montreat contracted with Arizona-based Institute for Professional Development in 1994 to build its adult education program.

IPD recruiters representing Montreat have visited numerous schools in Western North Carolina in recent years advertising a masters program in K-6 education.

Many teachers who enrolled said recruiters told them they were eligible for loan forgivenes because they were highly qualified math, science or special education teachers at Title I schools.

Neither Struble nor officials at IPD’s parent company, the Apollo Group, have said why recruiters distributed material suggesting students in the K-6 program qualified for loan forgiveness.Sara Jones, a spokeswoman for the Phoenix-based Apollo Group, said her company would work to resolve the students’ complaints and review the recruitment issues.

While the final loan forgiveness assistance help is not fully finalized, positive moves are being put in place to hear the students concerns and take appropriate action.  This is ethics in action…and as a business ethics speaker to colleges and universities I find joy in reporting on positive applications of ethics vs. reporting on ethical breaches.