Dr. Lillian Glass vs Marsha Petrie Sue – Does being found liable of “Copyright Infringement” equal an NSA Ethics Violation? Part 1 of 2

Have you ever had one of those issues that seem to stare you right in the face – an issue that forces you to look in the mirror and ask yourself – “What am I going to do with this one?”  This issue is one of those defining questions that forced me to think carefully and evaluate “ethically” what I should do.  Do I ignore a major ethics question and issue within my profession, leave it alone, sweep it under the rug (so to speak), or do I discuss what, to many, is a subject that should see the light of day for the benefit of the profession?   I suspect that many will doubt the choice that I am making, but I have to say that “transparency” and “truth” for me prevails, as I ask the tough questions related to a major legal and ethics issue.

In the middle of December, 2010 – major news outlets from USA today to Businessweek to CNBC were reporting on the unanimous jury verdict in the trial of Dr. Lillian Glass in her copyright infringement trial against Marsha Petrie Sue – an NSA member and CSP (Certified Speaking Professional).  The decision was handed down in a Federal Court – 2:09- cv-08570-RGKL-SH, U.S. District Court, Central District of California (Los Angeles).

According to a news release that followed: “Dr. Glass had alleged that Petrie Sue’s 2007 book “Toxic People” had wrongfully copied from two lists in Dr. Glass’ 1992 book “He Says, She Says.” The jury of eight agreed and Bloomberg reported that, “According to a December 9 court filing, the jury awarded her $31,000 for the unauthorized use of content from her work.”

In communication with Dr. Glass she said she discovered Petrie Sue’s word for word copying of her materials after doing an Amazon search for her own book called “Toxic People.”  Surprised to see another book with the same main “Toxic People” title, Dr. Glass ordered Petrie Sue’s 2007 book and was even more surprised to find similarities in stories and examples.

So what happens – ethically that is – when someone is found guilty of what would appear to be a violation of one of the eight specifically listed Code of Ethics Standards established by the National Speakers Association?  Note, I said, “appears” because as of this writing there is no active ethics complaint or investigation underway with the National Speakers Association.

The NSA Ethics Standards are listed below:

Article 1 – Representation

The NSA member has an obligation to oneself and to NSA to represent oneself truthfully, professionally and in a non-misleading manner. The NSA member shall be honest and accurate in presenting qualifications and experience in the member’s communication with others.

Article 2 – Professionalism

The NSA member shall act, operate his/her business, and speak in a most professional and ethical manner so as neither to offend nor bring discredit to oneself, the speaking profession or one’s fellow NSA members.

Article 3 – Research

The NSA member shall exert efforts to understand each client’s organization, approaches, goals and culture in advance of a presentation, in order to professionally apply one’s expertise to meet each client’s needs.

Article 4 – Intellectual Property

The NSA member shall avoid using – either orally or in writing – materials, titles or thematic creations originated by others unless approved in writing by the originator.

Article 5 – Respect & Collegiality

The NSA member shall maintain a collegial relationship with fellow members that is based on respect, professional courtesy, dignity and the highest ethical standards.

Article 6 – Confidentiality

The NSA member shall maintain and respect the confidentiality of business or personal affairs of clients, agents and other speakers.

Article 7 – Business Practices

The NSA member is obligated to maintain a high level of ethical standards and practices in order to assist in protecting the public against fraud or any unfair practice in the speaking profession and shall attempt to eliminate from the profession all practices that could bring discredit to the speaking profession.

Article 8 – Diversity

The NSA member shall not participate in any agreement or activity that would limit or deny access to the marketplace to any other speaker, to a client, or to the public. This includes, but not limited to, economic factors, race, ethnicity, creed, color, sex, age, sexual orientation, disability, religion, or country of national origin of any party.

SIGNIFICANT QUESTIONS:

Just the other day, being interviewed as a business ethics speaker and author on a radio show, I was asked about the definition of “ethics”.  While many would think the answer would be simple – the reality is – ethics and ethical choices are those choices that are “right” based on the facts and circumstances of the situation at the time they are made.  Beyond ethics – right and wrong choices that have a moral fiber running through them – is the question of legal.  Sometimes what may be unethical may nevertheless be legal.  Many would say that actions that our financial institutions took with sub-prime mortgages were unethical – yet, they were legal.

Some might question whether raising the question (as an NSA member) is a violation of Ethics Article 5 – Respect & Collegiality. I hope that those who read understand that discussing or opening a forum for dialogue about ethics within our profession is not, in and of itself, disrespectful.  Likewise, for clarity, I have interviewed, in one form or another, both Dr. Lillian Glass and Marsha Petrie Sue – seeking their input first as this forum is opened.

But what if a choice made is illegal?  Does that make it also unethical?  That seems to be the issue that likely will be facing an NSA colleague – Marsha Petrie Sue.  As a speaker in leadership and a leader herself in NSA, having earned the coveted CSP (Certified Speaking Professional) designation, the likelihood is that an ethics investigation resulting from her conviction will happen sometime in 2011.  According to a conversation I had with Stacy Tetschner, CAE and Executive Vice-President of NSA, an ethics investigation will only happen if a formal complaint is filed with NSA.

Beyond the specific Ethics Standards, NSA has clear guidelines related to “Intellectual Property Guidelines” when it comes to presenters and presenting at NSA Conferences.  The guidelines are listed below:

1. Understand the definition of intellectual property. Intellectual property is broadly defined as the original expression of ideas, as well as symbols and words that represent the products or services of a company or person.
2. Respect the intellectual property of others. Below is a partial list of items considered to be intellectual property: cartoons, speeches, photographs, written material, overheads, signature stories, videos, logos/trademarks, movie/TV clips, drawings, audio-taped artwork, interviews, and other proprietary music materials.
3. Comply with the law and the code of ethics. If you utilize any type of intellectual property that is not your own, get permission from the owner. Either obtain a formal license or obtain written permission to use the material. Please note that in some cases, the creator of the property is not the owner.
4. Share with the audience that you have that permission. Include a simple, brief statement such as, “These photos are used with the permission of….” Sometimes the owner may require you to use a more formal notice, including for example, a copyright notice.
5. If you use handouts that duplicate intellectual property with permission, be sure to add the phrase, “Used with permission of….” Your handouts might also explain that you have permission to use other materials (cartoons, photos, music, etc.) in your presentation. For example: “All of the materials presented in this presentation are either original, licensed or used with permission.”
6. Know that NSA has obtained some limited rights to music. NSA has secured certain performance rights for your presentation from leading performing rights organizations. This will allow you to sing or play certain music during your presentation. This allows you to play certain prerecorded music as well. However, if you wish to synchronize your music to another media (sound on slide, video, etc.), then you must obtain a separate synchronization license. This is your responsibility, not that of NSA. In other words, NSA has obtained licenses for you to sing or play a CD of many (but not all) of the latest hit songs. As soon as you play it in conjunction with a slide show, you are breaking the law, unless you have obtained the further necessary permissions yourself.
7. Notify NSA’s recording partner, Content Management Corporation, if you intend to use music. Then they can (at their option) either secure a mechanical license to duplicate the music or else they will need to edit out the musical selections from the tape of your program. Because it is unlawful to duplicate intellectual property without permission, you should also help CMC obtain the permissions necessary to fulfill their legal responsibility. In other words, you can sing songs NSA has obtained a license for. Should CMC duplicate/ distribute your performance, however, without a mechanical license, they might be breaking the law. For video-taped programs, the same notification is required for any visual media that would be reproduced, such as photos or cartoons.
8. Tell the audience when you have created or commissioned your own intellectual property. If you have gone to the expense of creating and/or commissioning your own intellectual property, the NSA audience needs to know. You might use a brief phrase such as: “I had these cartoons especially created for my seminars.”
9. Remember, as an NSA presenter, you represent the standard of ethical behavior.

Since NSA has gone to the trouble of listing specific guidelines with respect to the use of intellectual property, it would seem logical that being found liable in Federal Court of copyright infringement (violating intellectual property) would create quite a stir.

COULD IT BE ETHICAL BUT ILLEGAL?

Some might say I’m grasping at straws here, but is it possible that something could be found liablous (by a jury in a court of law) and not be found to be an ethics violation?  In communication with Dr. Lillian Glass – she says, in her opinion, no.  But what does Marsha Petrie Sue have to say?  In the interest of fairness, I raised a number of questions directly with Marsha Petrie Sue which, (in the interest of space), will appear in Part Two of this business ethics article.  For now, what is clear is that there are significant unanswered questions.

WHAT’S NEXT?

Whether there is an NSA ethics challenge is a function of whether a formal complaint is filed.  Assuming one is filed – the ethics committee will review the relevant material and make their determination based on the facts and circumstances.  Their findings will be published in the Speaker magazine and could include the following: (1) no action (assuming no violation is found); (2) letter of censure either public or private; (3) NSA CSP designation be revoked; and/or (4) NSA membership be revoked or suspended.  Likely, any action taken would be any of the above or a variation on the theme based on what NSA feels it appropriate.  Certainly, the negative publicity is, in and of itself, significant.

YOUR COMMENTS ARE WELCOME… (see Part Two for the Marsha Petrie Sue Interview and comments)

This is just NUN sense…A Sister arrested for stealing $1.2 million. Isn’t that like a Biblical no no Sister Marie E. Thornton?

Sometimes the choices we make just don’t add up.   Take the case of Sister Marie E. Thornton, a former vice president of finance for Iona College and a nun.  Sister Thornton was recently arrested on charges of embezzling more than $1.2-million from the Roman Catholic college over the course of 10 years.

What?  Yep…that’s right.  Arrested for embezzlement.  According to published reports, Federal prosecutors collaborated with the Department of Education in bringing the charges, which were announced by the U.S. Attorney’s Office in Manhattan in a news release.

According to the news release, Sister Thornton allegedly diverted college funds for her own use by turning in false vendor invoices for reimbursement and submitting credit-card bills for personal expenses to the college.

Iona College, in a statement, disputed the size of the theft, calling the $1.2-million figure “significantly inaccurate.”  Sorry, but I have to ask, is this just another attempt at a cover up by the Catholic organization?  In my personal experience, rarely have I seen the US Attorney’s office dramatically inflate the size of a crime.  But this might just be a bunch of nun sense anyway…

The college, located in New Rochelle, N.Y., had previously disclosed that it had fired an unidentified employee for misappropriating approximately $80,000 a year over a decade. Another employee thought to have been involved in covering up the fraud was also fired.

Iona said that it had taken immediate action after discovering a year and a half ago that an employee had misappropriated funds, and that it had conducted a follow-up investigation and put preventive procedures in place. The college also said it had recovered most of the missing money but declined to comment further.

Sister Thornton served as Iona’s vice president for finance and administration for roughly a decade, and she previously was assistant to the president for five years, according to the college’s financial documents. She holds a doctorate in educational administration from Fordham University and previously spent time as a teacher, a principal, and a deputy school superintendent.

BEHAVIOR QUESTION

With credentials out the wazoo…what do you suppose would motivate Sister Thornton to take such actions?  And, how do you suppose she was able to rationalize her behavior?

If you know Sister Thornton – please comment and lets establish a dialogue related to my questions above.

YOUR COMMENTS ARE WELCOME!

Biz Radio and Rehan Siddiqi – When the dust clears will Siddiqi be a Victim or a Victor?

It’s Friday…and the drama seems to continue to churn around BizRadio.  The Houston Chronicle today has another article on the, now, infamous Daniel Frishberg and his radio business antics.  With media attention like this, I wouldn’t be surprised if the SEC doesn’t decide to take a closer look at what’s really going on…cause there sure appears to be something behind the scene that is taking place.  In a communication I had with one investor, he stated:

As for the quote, “I don’t have to sell any advertising for three years”, feel free to use that one as well as another quote Frishberg typically used when meeting clients, “I’m a multi millionaire”.  It certainly paints the picture of corruption within BizRadio from the very beginning.

If Frishberg used investor funds obtained from Kaleta under less than truthful pretenses and funded the BizRadio – (the sound of your money GOING!) to advance his investment career (i.e., obtain new investors in Daniel Frishberg Financial Services) then perhaps all is not as it seems and Frishberg would be the subject of an investigation.  (At this time I have no information that such an investigation is underway).  What I do know is that this has been a pattern by others for, what has been found to be, criminal activity.  Example: Investment advisor Gordon Grigg, from Tennessee (featured on Fox) who is now in prison for running a ponzi scheme.  Grigg and Madoff are two examples of the concept that all is not as it seems.  Although fairly, Frishberg is reputed to be brilliant when it comes to the funds under his control.

Read the “new” Houston Chronicle article here.

Not sure there is a lot new that has not been reported on here in the blog, but Steffy has been on this longer than I and it seems we both think there is more than meets the eye.

For the moment, Rehan Siddiqi is odd man out financially at the hand of Daniel Frishberg who appears to have taken the low road when it comes to saving his sinking ship radio station who, reportedly is behind in its payments and losing money on a regular basis.

But something here is “FRISHY”!  Here’s an excerpt from the Houston Chronicle article:

Frishberg claims Crider was never BizRadio’s co-CEO, that he was never even an employee and that he had no authorization to enter into a lease with Siddiqi. In court, Crider produced a business card and e-mails listing his title as CEO.

Siddiqi’s lease on 1110 AM included a purchase option, and Frishberg said Crider conspired with Siddiqi to nab BizRadio’s station at a depressed price and resell it for a profit.

“The guy was not an officer of our company,” Frishberg told me this week. “Everything he did, it was to try to run us out of money. All the contracts he entered into were completely wrong.”

DANIEL really?  Sure took you a long time to figure that out.  Let’s see you took Rehan’s money…moved to 1180…and then, miraculously, when you were kicked off the air by 1180 for failing to pay or provide a letter of credit, figured out that this was all wrong…  Bulls..t!  If that were true, then why didn’t you take action sooner – like when Ron Crider’s email went out in January.  Here it is again, just in case you haven’t seen it yet.

Now, I have talked with several investors who have stated that they attended meetings where Frishberg introduced Ron Crider as the CEO who was going to move BizRadio forward.  And, fairly, for their sake I hope BizRadio does survive, but something smells “Frishy” too men.  Again, the Houston Chronicle supports my claim evidenced below:

And what of Frishberg’s claim that he didn’t know Crider was passing himself off as CEO? Late last year, Frishberg introduced Crider to an investor group as BizRadio’s co-CEO, said Melinda Campbell, a BizRadio investor who attended the meeting.

“He was going to turn everything around,” she said.

I don’t know where this all is going, but at the heart of mess is one man – Daniel Frishberg – who seems to be demonstrating that he is either incompetent to run a radio station or a scam artist to investors in BizRadio.  And when the dust settles…I can’t yet tell whether Siddiqi will be a Victim or a Victor…

More to come!

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

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.

UNFORTUNATE FALLOUT

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.

YOUR COMMENTS ARE WELCOME

Jimmy Choo shoes and Million Dollar Home – Chad Read and Emily Read now sentenced to Federal Prison!

From California to Lubbock, Texas – Chad and Emily Read lived a modest life.  Then Emily began working for Reaction Fitness Clubs (a modest health club chain) – and things changed.

From living with Emily’s mother to owning a series of large homes and a condo in Dallas, the Reads had a dramatic change in lifestyle.  From a $1.2 million home, to expensive cars, to a recreational vehicle, to designer clothes and Jimmy Choo shoes – the Reads enjoyed life in a way few experience.  But where did the money come from?  According to the Reads their new found wealth came from a trust fund her father left to her.  Reality…well there was no trust fund only embezzlement or theft!

Seems that Emily worked as a bookeeper for the fitness clubs referred to as the Reaction Fitness Clubs.  During that time she wrote a large number of checks from the club and either would cash the checks or deposit them into their personal accounts.  Likewise, they used funds from the club accounts to pay for their personal credit cards and purchase other luxury items.

EVERY CHOICE HAS A CONSEQUENCE!

Emily J. Read – now Chad Read’s ex-wife – was sentenced in September 2009 to 41 months in federal prison and ordered to pay more than $670,000 in restitution.

Chad Read was sentenced in December 2009 to 18 months in federal prison and ordered to pay restitution remaining of $15,000.

WHAT HAPPENED?

Obviously, both husband and wife were convicted and sentenced.  But, since Chad received a substantially lower sentence (in terms of time spent in prison), was it possible that he was not fully aware of the crime being committed by his (now) ex-wife?  And, what motivated Emily to change her former lifestyle and enter into an obvious life of crime?  Lastly, how was she so easily able to effect the crime?

There are three components of a white collar crime – NEED – OPPORTUNITY and RATIONALIZATION.  In this case, it is clear that Reaction Fitness Clubs did not have sufficient internal controls opening the door to “opportunity”.  Seems that Read had free reign and, management must have been asleep at the wheel in order for a fraud of this magnitude to have gone undetected for so long.

LESSON

To avoid fraud you either have to have someone so strong in their ethical beliefs or foundation that they won’t cross the line or you have to eliminate one of the three components – and in this case the easiest way to have avoided this disastrous consequence would have been the elimination of opportunity.  Any good CPA or business owner knows that internal controls are there to protect the business assets and preclude the likelihood of succumbing to temptation.

I can’t address the Read’s need or rationalization, but had sufficient controls been put in place, Emily would not have easily had the opportunity to effect her massive life changing fraud.

Your comments are welcome!

Tiger Woods – The Consequences of Choice – AT&T Ends Sponsorship

Having attended several major golf tournaments, I must say that watching Tiger Woods play golf was like poetry in motion.  He was (is) awesome as a professional golfer.  Most thought he was sweaky clean as well…which is why so many major companies selected Tiger as their spokesperson.  But, as I say in every presentation I make on ethics, EVERY CHOICE HAS A CONSEQUENCE.

As the end of the year and decade draw to a close, AT&T announced that they are ending their business relationship with Tiger Woods.  This announcement adds to a growing list of sponsors who are dropping Woods after his announcement of infidelity and the media storm that has followed.

AT&T has not used Woods’ image extensively in advertising, but its logo appeared on his golf bag. The original sponsorship agreement was billed as a “multi-year” agreement when it was signed early in 2009. Woods has also been the host of the AT&T National PGA Tour event since it started in 2007 and AT&T has said it will continue to sponsor the event.

Accenture, the consulting firm, dropped Tiger several weeks ago, saying he was “no longer the right representative” of the company’s values.  Likewise, Gillette said it won’t air ads for its razors that include Woods or include him in public appearances.  Swiss watch maker Tag Heuer, who initially said they stood by Tiger, eventually stated that they would “downscale” its use of golfer Tiger Woods’ image in its advertising campaigns for the foreseeable future.

CHOICES AND CONSEQUENCES – It is said often that you reap what you sow.  Whether we like that comment reality is – it is a fact.  Tiger Woods is now facing what for him is likely the greatest challenge of his life.  No longer will he be defined by the extraordinary talent on the golf course that he has, but he is now challenged with personal life issues that will define a large part of his legacy.

While I am not proud of my past (details here), when the “card” so to speak was pulled from the “house of cards” I had created and I knew that my hidden past was soon to be brought to light – a wise man shared the following with me.  He said, “You have made a terrible mistake, but YOU are not a mistake!  The choices you make today will define the life you create in the future and the legacy you leave for your two children.  MAKE THOSE CHOICES WISELY.”

While Tiger Woods will continue to experience the consequences from the choices he has made, he has the opportunity to make different – more empowering choices – and from them he can rise from the ashes and become more than just a great golfer.

QUESTION: What advice would you give Tiger today that could help him?

Tag Heuer joins Accenture, Gilette in dropping Tiger Woods: Every choice has a consequence

Every choice has a consequence. That’s a statement I make in every presentation. How true! Tiger Woods, celebrity spokesperson and golf avatar, is now experiencing what that statement means in reality. Accenture recently severed its six-year relationship with the sports star. Now Tag Heuer has removed Woods from its advertising campaigns. Not to mention AT&T, Gilette, and Pepsico.

There is little doubt that each of these companies’ general counsel reviewed its contract with Tiger Woods as regards to his personal behavior — otherwise known as “the morals clause.” The interesting ethical question now is: How could Woods execute the endorsement contracts, knowing there was a morals clause but living a less-than-ethical life off the green?

Now there’s question that Woods’ indiscretions may not just be personal. The other day, news broke that the FBI is investigating one of Woods’ doctors, Dr. Anthony Galea, who was found with human growth hormone in his bag at the U.S.-Canada border in late October. Let’s hope those reports don’t link Woods to further indiscretion.

Whatever happens, certainly, time will heal the open wounds that Woods is now experiencing. And sports enthusiasts will want to see him play golf once again. But I predict his remaining contracts (Nike and Electronic Arts) will either be canceled or lapse over time. The big paydays are likely over.

Every choice has a consequence. For Woods — for all of us. I sure wish Woods had elected a more ethical route. For now, the best I can say is, the choices that Woods makes from this day forward will define the legacy he leaves the golf world and, more importantly, his children.  Tiger, make those choices wisely.

Do you think sponsors were right to drop Tiger Woods? Share your comments here.