Frankly I’m Stunned! Do Convicted Rod Blagojevich’s comments reflect on his state of mind?

July 4, 2011

A federal jury convicted Rod Blagojevich of sweeping corruption, ending the  political drama that brought another popular politician!  Blagojevich’s response, “Frankly, I’m stunned!”  Blagojevich then stated, “There’s not much left to say other than we want to get home to our little girls and talk to them and explain things to them and try to sort things out.”

In its 10th day of deliberations, the jury convicted Blagojevich of several shakedown attempts, including allegations that he brazenly tried to sellPresidentBarack Obama’s oldU.S. Senate seat.  The decisive verdict came less than a year after the first jury to hear the case found him guilty of one criminal charge but deadlocked on the rest.  It appears the prosecution learned from the first trial as they concluded with a prosecution win on the second.

Facing a lengthy prison term, Blagojevich will now have to face reality in a new world.  But, what do you make of his comment, “Frankly, I’m stunned?”  How can one be so caught up in the illusion of innocence when the facts or guilt seem so obvious?

A news report stated: “Likewise, there was an oddly schizophrenic nature to the Blagojevich defense, both the one he waged in court and the one he waged with vocal and strident indignation in the media. Almost in the same breath, the Blagojevich narrative portrayed him as a paragon of ethics and a wheeling-dealing practitioner of politics as usual in a system he frequently decried as corrupt.”

Is it possible that Blagojevich lacked the capacity to understand ethics?  Is it possible that, in a twisted way, Blagojevich felt, like many, that business as usual was ethical and quite acceptable?

The Media report went on to say related to the sentence as it was read:

He eventually mouthed the words “I love you” toward his wife, who was in the first row crying and leaning on her brother. Moments after the jury left the room, Blagojevich embraced her and cradled her head, telling her it would be all right.

The trial exhibited multiple Blagojevich personalities, the manic and almost desperate-sounding schemer heard on wiretaps; the strident and outraged everyman fighting the system that came out in multiple media appearances following his arrest; and the humble, polite and modest presence on the witness stand before jurors.


Ethics Mr. Weiner? My What a Tangled Web We Weave when we Tweet our wiener and then Deceive!

June 7, 2011

There are times when actions taken defy explanations!  This is the case with “the talented Mr. Weiner” – oops…that should read “the lying Mr. Weiner!”  First you tweet a picture of your wiener (covered up of course) and then you try to cover it up?  What?  This is beyond a Comedy Central South Park script.  Only in real life can  you find something this bizarre!

From the movie Porkys (with minor modification): “I can identify that wiener,” yet early on Mr. Weiner was challenged with clearly recognizing who’s wiener was in the tweeted picture.

Sensational?  Yes!  Worthy of this blog – well only in a few ways.

It is not my intention to tear someone down when they have been foolish in their choices.  As an ethics speaker, my opening line is – “Every Choice Has A Consequence!”  That is true and like Representative Weiner, I, too, have had to face the consequences of my choices.  Perhaps they were not a embarrassing as his, but the consequences were every bit as great.

Now called upon to resign, embattled and embarrassed Anthony Weiner is just now beginning to experience the consequences of his Tweet!  “The chairman of the Republican Party said Tuesday that Rep. Anthony Weiner should resign after admitting to sexually charged online relationships with several women and lying about his misdeeds.”  Beyond calls for his resignation, in a Washington Post article the following was stated:

House Minority Leader Nancy Pelosi (D-Calif.) has written to the chairman and ranking Democrat on the House Ethics Committee formally requesting an investigation into whether Rep. Anthony Weiner broke House rules, after the New York Democrat admitted that he had repeatedly liedto cover up his inappropriate communications with several women online.

“On June 6, 2011, Representative Anthony Weiner disclosed conduct which he described as inappropriate,” Pelosi wrote in the letter, which she sent Tuesday to Ethics Committee Chairman Jo Bonner (R-Ala.) and Rep. Linda Sanchez (Calif.). “An investigation by the Ethics Committee to determine whether the Rules of the House of Representatives have been violated is warranted.”


The issue for me isn’t what the consequence should be.  I am not the judge nor jury…that is for others to decide.  Rather, for me the entire conversation centers around choices and consequences!  To put this into perspective, I was talking today with a client for whom I’ll be speaking soon.  Folks with the Florida Association of Counties have asked me to come and speak at their annual meeting on ETHICS.  They, like many around the nation, have seen the devastating impact that unethical choices have on elected officials, government employees and all connected with them including their families.  In fact, this article was sent to me today that outlines the serious impact of our ethical or UNETHICAL choices.

Over a ten year period over 800 public officials were convicted on charges and that number does not reflect the much larger number of folks that did not face prosecution due to challenges with cases or circumstances where the violation could be resolved without public prosecution.

But in a time when things move more quickly than ever before, the actions we take today may very well make the headlines tomorrow.  The Washington Post describes Weiners actions as follow: ”

Here is what we’ve been dealing with: We’ve been dealing with four sad, grainy photos of Rep. Anthony Weiner (D-N.Y.) in various states of undress, looking pathetic in the pathetic way exclusive to men who are trying their best to look sexy. He sat shirtless at his desk. He sat shirted on his couch. In one particularly artful photo, he sat next to a picture of a dog in a sweater and held up a piece of paper with an arrow pointing to his own face. It said, “Me.” He apparently sent these photos to a single mom named Meagan Broussard, who responded with her own grainy pouts. He also texted with several other women.

He was guilty, but of what?

Here is what we are dealing with: We are dealing with the gray space where fidelity meets Facebook and with the boundary between our “real” lives and our online lives, which is constantly being pushed, and never where you expect it.”

Weiner contends that his actions were private and personal.  He used his own computer and it had nothing to do with his role as a United States Representative.  All that may be true, but it doesn’t change the action(s) he took and the judgment surrounding them.  The problem is two fold: (1) the choices we make do have direct and profound consequences (I know as I’ve experienced them in federal prison) and (2) in this day and age, the speed at which we make our choices and receive our consequences makes taking the time to think about them much more profound.

Again, best stated in the Washington Post article:

But 20 years ago, Weiner would have had to load his Nikon with film before pointing it at his crotch. He would have had to take this film to the Fotomat, wait 24 hours before picking it up, find an envelope, lick a stamp. In every preceding era, there were built-in checkpoints, moments in which one could ask oneself, “Is this a good idea? Does she want to see my dog in a sweater? Am I a congressman? Should that influence my decision?”

There was, in fact, a literal red flag: the one you flicked up on the mailbox to signal to your postal carrier that your correspondence was ready for the world.


Well, for Representative Anthony Weiner – I don’t know, but I suspect that he’s soon be out of office.  This is far to public and too political for it to die a quiet and quick death.

From my end, as I prepare to speak at the Florida Association of Counties meeting, I am confident that many in the room will identify with choices and consequences and perhaps, when faced with someone who has been there and done that, perhaps they will think (that’s the operative word – THINK) before they go off half cocked and do something stupid like tweeting one’s wiener!


Don Hill who claimed his innocence – Found guilty faces 18 years in Federal Prison! Government Corruption doesn’t pay…

February 28, 2010

Restitution of $112,500 and 18 years in prison.  That’s $6,250 per year.  Was it worth it?  Clearly this is a message and with that length of time in federal prison Hill will clearly get the picture that life inside the hallowed halls of a prison make a lasting impression and are life changing.  Wonder, as he was “wheeling and dealing” if he ever thought that the outcome would be this dramatic?

Former Mayor Pro Tem Don Hill, 57, was sentenced to18 years in federal prison and ordered to pay $112,500 in restitution. He must surrender to the Bureau of Prisons on April 27, 2010, to begin serving his sentence. Hill, who was on the witness stand for nearly six days during the June – October 2009 trial, was convicted on seven of nine counts charged, including one count of conspiracy to commit bribery concerning a local government receiving federal benefits; two counts of bribery concerning a local government receiving federal benefits; one count of conspiracy to commit extortion; one count of extortion by a public official; and one count of conspiracy to commit money laundering.

“The sentences imposed today on Mr. Hill, his wife and his plan commission appointee hopefully will serve as a powerful reminder to all public officials and those who work with them, that seeking to personally profit by abusing the power given them by the voters can and will result in a long prison sentence,” said U.S. Attorney Jacks. “Public corruption is one of the most insidious crimes confronting our communities today. It contributes to the cynicism we are seeing today from the public who feel as though all politicians are corrupt and the government does not serve the needs of those citizens who can’t pay for access to their elected officials.”

Jacks continued, “The investigation into the actions of these defendants was lengthy and complicated. Many questioned why the investigation was taking so long. Hopefully, the verdict and the sentences handed down today and in the future, will serve as proof of the quality of the work done by the FBI, the IRS and the prosecutors assigned to this case. Throughout the investigation, amid all the questions and criticism, they remained focused on their mission, to thoroughly examine the evidence and to present their findings in a court of law before an impartial jury. The jury’s verdict demonstrates that the facts as revealed by their investigation conclusively showed the guilt of the defendants and was not a matter of interpretation or misunderstanding or selective prosecution. When corrupt politicians are exposed and punished, the entire community reaps the benefits.”

Hill’s wife, Sheila D. Farrington, 45, was sentenced to nine years in prison and ordered to surrender to the Bureau of Prisons on the same day as her husband, April 27, 2010. Farrington was convicted at trial on five of six counts charged, including one count of conspiracy to commit bribery concerning a local government receiving federal benefits; one count of aiding and abetting bribery concerning a local government receiving federal benefits; one count of aiding and abetting extortion by public officials; and one count of conspiracy to commit money laundering.

D’Angelo Lee, 43, Hill’s Plan Commission Appointee, was sentenced to 14 years in prison and ordered to pay $112,800 in restitution; he is currently in federal custody. Lee was convicted at trial on all seven of seven counts charged, including one count of conspiracy to commit bribery concerning a local government receiving federal benefits; two counts of bribery concerning a local government receiving federal benefits; one count of conspiracy to commit extortion; one count of extortion by public officials; and one count of conspiracy to commit money laundering.

Robert E. Casey, Jr., Special in Charge, Dallas FBI, said, “Communities have a right to expect that their elected leaders are ethical, trustworthy, and responsible, only representing the best interests of their constituents. Two of today’s defendants betrayed the trust bestowed on them as public officials. The sentences imposed reflect the gravity of their crimes. The FBI, its law enforcement partners, and the U.S. Attorney’s Office will continue to root out such graft in order to ensure that the citizens of Dallas receive honest representation by their elected officials.”

Two other defendants were convicted at trial, Darren L. Reagan, 50, and Rickey Robertson, 43. Both are scheduled to be sentenced by Judge Lynn on March 1, 2010. Reagan, described as a community activist, and the chairman and CEO of the Black State Employees Association, was convicted on two of four counts charged, including one count of conspiracy to commit extortion and one count of aiding and abetting in extortion by public officials.  Robertson, a local businessman/car dealer was convicted on two of three counts charged, including conspiracy to commit extortion. Robertson was also a principal of RA-MILL.

At that trial, the government presented evidence that beginning in 2004, Hill and his co-defendants entered into an association in which thousands of dollars in bribes were paid by co-defendants Brian L. Potashnik and his wife, Cheryl L. Potashnik, owners of Southwest Housing Development Company, Inc., through sham business contracts to the defendants. The government also presented evidence that Hill and Lee were involved in corrupt solicitation from developers in an effort to gain financial benefit. Brian and Cheryl Potashnik pleaded guilty prior to trial; Brian Potashnik pleaded guilty to one count of conspiracy to commit bribery concerning a local government receiving federal benefits and Cheryl Potashnik pleaded guilty to one count of bribery concerning a state government receiving federal benefits. Both are scheduled to be sentenced by Judge Lynn on May 7, 2010.

Other sentencing dates are as follows:

On March 19, 2010, Allen McGill, who pleaded guilty in April 2008 to one count of conspiracy to commit extortion; Andrea Spencer who also pleaded guilty in April 2008 to the same offense; Kevin J. Dean, who pleaded guilty in June 2009 to the same offense; and John J. Lewis, who pleaded guilty in March 2009 to the same offense, are scheduled to be sentenced.

On April 2, 2010, Terri Hodge, who pleaded guilty on February 3, 2010, to fraud and false statements on an income tax return, is scheduled to be sentenced.

On May 7, 2010, Jibreel A. Rashad, a.k.a. Vernon Cooks, Jr., who was convicted on February 10, 2010, following a one-week trial, of conspiracy to commit extortion, is scheduled to be sentenced.

A trial date has not been set for the charges pending against Ronald W. Slovacek. Last week the government filed a motion requesting that some of the counts be dismissed and indicating its intention to proceed to trial on only three counts: one count of conspiracy to commit bribery concerning a local government receiving federal benefits; one count of bribery concerning a local government receiving federal benefits; and one count of conspiracy to commit money laundering.

Cuomo sues Lewis of Bank of America… Did Lewis act unethically or is Cuomo grandstanding?

February 9, 2010

Reported on in Bloomberg…(see the full article here).

The former Chief Executive Officer of Bank of America, Kenneth Lewis was sued by New York Attorney General Andrew Cuomo for supposedly defrauding investors and the government when buying Merrill Lynch & Co.  Recently, the bank agreed to pay $150 million to settle a related lawsuit by U.S. regulators which is being considered by U.S. District Court Judge Jed Rakoff.  Last year, Rakoff called the SEC’s initial settlement neither fair nor reasonable and questioned why the bank’s executives and lawyers weren’t sued. The agency said it lacked evidence to bring claims against specific individuals.

Cuomo also sued the bank’s former chief financial officer Joe Price and the bank itself for not disclosing about $16 billion in losses Merrill had incurred before it was bought by Bank of America in an effort to get the merger approved.  Afterward, Lewis demanded government bailout funds, Cuomo said.

“We believe the bank management understated the Merrill Lynch losses to shareholders, then they overstated their ability to terminate their agreement to secure $20 billion of TARP money, and that is just a fraud,” Cuomo said yesterday during a telephone press conference. “Bank of America and its officials defrauded the government and the taxpayers at a very difficult time.”

Interestingly enough, Cuomo is pursuing individuals at the bank while the SEC has declined to do so. The suit is being filed under the Martin Act, a New York securities law that permits both civil and criminal penalties.

Cuomo said he coordinated efforts with the SEC. “Our case will bring individuals to justice and will make a point to people that this is a very serious matter,” he said yesterday. “When you settle a case the way the SEC is settling today, the upside is you implement immediate regulatory reforms.”

Last month, the SEC expanded its claims against the bank, accusing it of failing to disclose Merrill Lynch’s mounting losses before holding a shareholder vote on the acquisition.

The proposed fine would be distributed back to harmed shareholders, the SEC said yesterday.

The SEC settlement “addresses the judge’s concerns of penalizing shareholders so it’s likely to pass muster,” said Peter Henning, a law professor at Wayne State University in Detroit. “At the same time, it’s hard to show any monetary damage to shareholders at this point because the Merrill deal has turned out to be a good acquisition for the bank.”

The conduct of Brian Moynihan, the bank’s current chief executive, is not under investigation, said David Markowitz, Cuomo’s special deputy attorney general for investor protection. Moynihan, who became general counsel in the middle of events, was candid with Cuomo’s office in the probe, Markowitz said.

According to the complaint, Lewis and his lieutenants Moynihan and Price calculated that if they threatened “to get out of the deal, the federal government would counter with more taxpayer funds out of a concern for the greater economy.”

The U.S. injected $45 billion into Bank of America through the purchase of preferred shares, including $20 billion approved after the acquisition in January 2009 to keep the deal from collapsing. The bank redeemed the shares in December.

“We find it regrettable and are disappointed that the NYAG has chosen to file these charges, which we believe are totally without merit,” the bank said in a statement. “In fact, the SEC had access to the same evidence as the NYAG and concluded that there was no basis to enter either a charge of fraud or to charge individuals. The company and these executives will vigorously defend ourselves.”

Lawyers for Lewis and Price denied wrongdoing. “The allegation that Mr. Price deliberately caused Bank of America to withhold from shareholders information they were entitled to know is utterly false,” said William H. Jeffress Jr. and Julia E. Guttman of Baker Botts LLP in Washington, in a statement.


Is the decision to sue Mr. Lewis and other Bank of America Executives by Mr. Cuomo a political move that has more to do with advancing political aspirations than bringing justice?  Or, is Mr. Cuomo the only person to have the fortitude to bring justice to an unethical action by BofA executives?

“The decision by Mr. Cuomo to sue Bank of America, Mr. Lewis and other executives in connection with BofA’s acquisition of Merrill Lynch is a badly misguided decision without support in the facts or the law,” said Mary Jo White of Debevoise & Plimpton LLP in New York, who represents Lewis. “There is not a shred of objective evidence to support the allegations by the Attorney General.”

Bank of America agreed to buy Merrill on Sept. 15, 2008, after just 25 hours of due diligence, according to the suit. When the board of directors met that day to approve the transaction, they thought they were going to buy Lehman Brothers Holdings Inc., the suit says.

WOW…is that true?  If so, and it is proven, then one would have to wonder about not only Mr. Lewis actions, but the actions of the Board of Directors. Who makes a decision like this with only 25 hours of due diligence?

Cuomo said Bank of America scheduled a shareholder vote to approve its plan to buy Merrill on Dec. 5, 2008. By that date, Merrill incurred losses of more than $16 billion, Cuomo said. Bank of America’s management, including Lewis and Price, knew of the losses and knew that more were coming, Cuomo said.

After the merger was approved, Lewis told federal regulators the bank couldn’t complete the deal without a taxpayer bailout because of accelerated losses from Merrill, Cuomo said. However, between the time the shareholders approved the deal and the time Lewis sought the bailout, Merrill’s losses only increased by $1.4 billion, Cuomo said.

Greed, Hubris

“The conduct of Bank of America, through its top management, was motivated by self-interest, greed, hubris, and a palpable sense that the normal rules of fair play did not apply to them,” Cuomo said in the lawsuit. “Bank of America’s management thought of itself as too big to play by the rules and, just as disturbingly, too big to tell the truth.”

But wait…is Bank of America the only culprit in this grand scheme?  We (the taxpayers) lost substantially more with AIG, so where is Mr. Cuomo when it comes to that grand deception?  I respect the grandstanding claiming “greed and hubris” but I’m not sure why the BofA – Merrill merger is being focused on when there seems to be much bigger fish to fry.  Any help here?

The suit claims Bank of America received more than $20 billion in taxpayer aid as a result of their misleading efforts. Cuomo’s statement said the bank can’t explain why they didn’t disclose the losses to shareholders though the merger “would have threatened the bank’s very existence if there had been no taxpayer bailout.”

Cuomo also claims management failed to disclose to shareholders it was allowing Merrill to pay $3.57 billion in bonuses. Nor did the bank’s management tell the bank’s lawyers about the extent of Merrill’s losses before the shareholder vote.

Here’s what appears to be the sad truth…  Lewis will be defended by attorney’s for Bank of America.  BofA received bailout money.  Merrill is now part of BofA.  And, even if found guilty, more than likely any fines assessed will be paid from BofA’s insurance.  Perhaps…this is all posturing for something else.  Bank of America likely was wrong, but I’m not sure that Attorney General Cuomo is truly motivated by bringing justice…

But then again…I could be wrong.  YOUR THOUGHTS?

Ethics and Political Leadership can they co-exist? – An Open Letter to President Obama

January 30, 2010

President Obama,

As I pen this letter, I do so with all but a faint amount of hope that perhaps some truth can be found in its contents and you could, through your actions, demonstrate what many thought might happen when they voted for you.  Then again, the word ‘politics’ seems to be out of place with the other words – ‘ethics’ and ‘leadership’.

You campaigned on ‘change.’  In your State of the Union address you stated,

I campaigned on the promise of change, change we can believe in, the slogan went. And right now, I know there are many Americans who aren’t sure if they still believe we can change, or that I can deliver it.

Now, Mr. President is the time for that change to be seen and not heard from you as our leader.  Your actions will show that your campaign promises were not just rhetoric to get you elected, but true heart felt feelings of what America could be.  You further stated,

But what frustrates the American people is a Washington where every day is Election Day. We can’t wage a perpetual campaign where the only goal is to see who can get the most embarrassing headlines about the other side, a belief that if you lose, I win.

You are 100% right about that statement.  American people are becoming so disillusioned about politicians and Washington insiders that they are becoming angry and believe that none of you can be trusted.  You are more concerned with being elected than you are with helping Americans.  That is not why you were sent and therefore, lacks integrity.

You addressed both parties in your State of the Union address and rightly you should have because few of those elected to public office in Washington have demonstrated by their actions that they care more about those who elected them than they care about their re-election.

ETHICS are defined as actions motivated based on ideas of right and wrong.  Mr. President, the next question I ask will surely define you and your potential Presidency.  Do you believe it is ethical to act on ideas that are right for the people even if they are wrong for your re-election?

If your answer is YES…then read on, if not…we’re wasting our time.

A LEADER is a person who rules or guides or inspires others.  You have, through your election, certainly inspired a demographic of voters to become engaged and active – to elect you on the promise of change.  Therefore Mr. President may I challenge you step up and show your LEADERSHIP.

Mr. President – ETHICAL LEADERSHIP now calls for dramatic unprecedented action.  It requires something that has not been done before and that will show more than just words, but true meaning behind your beliefs.

Mr. President – make the following commitment to the American people and I think you can guarantee your place in history – you will show something that has never been seen before.  You will show that the promise and idea of change is more powerful than just campaign words.  Mr. President do the following…

OVER THE COURSE OF 2010 – DO NOT CAMPAIGN FOR ANY CANDIDATE FOR ELECTED OFFICE IN WASHINGTON OR ANY STATE.  Show that you are more interested in results than campaigns.  Separate yourself from politics and become the ‘change leader’ that many Americans expected you to be. That means you should remain politically neutral.  Who cares what the party is if you’re getting the job done! Require both Democrats and Republicans to sit with each other in order to craft legislation that benefits the needs of Americans and publically call out any Senator or Representative who elects to bicker in partisan politics rather than work to represent those for whom they serve.  Do what you promised, make the process transparent and then Americans will gain what is so lacking in Washington – TRUST. Forget party and focus on how you can lead.

The American people do not need you to be the ‘same ole – same ole’ that they have seen for years.  Rather, it’s time to change how we do what we do and that change starts with you. If you want less partisanship then be less partisan.

I was told as a boy and then later in life – “A fish rots from the head down.”   As a kid I didn’t know what that meant…but I do now.  You’re the fish, Mr. President so, perhaps put better, “The buck stops with you.”  Guess the tone of Washington firmly rests with your decisions.  The choice is yours and, as I say speaking to groups on Ethics – EVERY CHOICE HAS A CONSEQUENCE.


Chuck Gallagher – American, Small Business Owner, Ethics Speaker and Author

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Does Scott Brown’s Win mean Health Care Reform should be Scrapped?

January 19, 2010

With a decisive win in MA, Scott Brown has taken a Senate seat that was held by Ted Kennedy for decades.  Kennedy, of course, is known as the primary supporter and author of the Health Care Reform bill that is currently before Congress.

Now, President Barack Obama and the Democrats, which held the the 60-vote Senate majority that they’ve relied on to push a historic health care overhaul to the verge of enactment, find that they may see Health Care Reform derailed before enactment.

According to MSNBC – Democrats splintered on how to salvage the president’s top domestic initiative even before the results were official. Republicans said don’t bother: The election of state senator Scott Brown sent a message that the health care bill should be scrapped.

Democrats don’t appear to have enough time to resolve differences between the House and Senate bills — and get cost and coverage estimates back from the Congressional Budget Office — before Brown is sworn in. That leaves House Democrats with the unpalatable option of passing a Senate bill that many of them profoundly disagree with.

“There is only one guarantee — that if we don’t pass something the notion of trying to put Humpty Dumpty together again is a real long shot,” said Rep. Patrick Kennedy, D-R.I., son of the late senator. “If you understand the legislative process, it’s a lot easier to pass something and fix it later.”

So as the days unfold several questions arise:

  1. Should Health Care Reform be scrapped?
  2. Should Health Care Reform be revisited and move forward more slowly, but with the intention of passing something?
  3. Is Brown’s election a broader measure of Obama’s political support?


Scott Brown Wins Massachusetts Senate Race – But Ethical Deicsion now – Does US House Push through Legislation before Brown is seated?

January 19, 2010

With 89% of the results counted, Republican Scott Brown won a major upset victory in Tuesday’s special election for the U.S. Senate seat formerly held by liberal Democrat Ted Kennedy.   The irony is that Kennedy was known for his strong support of Health Care Reform and Brown’s campaign was focused on being the 1 vote that could derail the proposal before the conference committee of the House and Senate.


It is now reported that the House may be considering passing an unamended Senate health care measure.  If that were to take place then President Obama could sign the bill into law without considering to Brown’s vote.  A CNN article is here.

House Speaker Nancy Pelosi added, “Whatever happens in Massachusetts, we will have quality, affordable health care for all Americans, and it will be soon.”

Several Democratic congressional sources tell CNN that having the House approve the Senate bill is probably the best of a series of bad options to pass health care reform in the event of a Brown victory.


As an ethics speaker and author…I must admit that I am amazed.  If Brown’s election is a representation of something larger than just a local Senate election (and with all the coverage – it is bigger), then how could our elected officials ignore the legislative process and deny Brown his opportunity to represent the people of MA.  It would appear that, should the House pass the Senate version, then it would be clear that “Change from politics as usual” that many people felt they were voting for was just a misguided belief.

What we see happen in the next few days will define our nation.  We are either a democracy that respects the will of the people or we have become so consumed with power, agenda and greed that we will have a much harder battle to restore respect and ethics to our government.

I hope that folks (regardless of your political persuasion), or better stated, government elected officials, will allow the legislative process to continue without making the unethical decision to force and agenda.


Sen. Jim Webb of Virginia said in a statement Tuesday after Brown defeated Democrat Martha Coakley in the special election for the late Sen. Edward Kennedy’s seat.

“It is vital that we restore the respect of the American people in our system of government and in our leaders. To that end, I believe it would only be fair and prudent that we suspend further votes on health care legislation until Senator-elect Brown is seated.”


Guest Blog: It Depends On What You Mean By “Transparency”

January 8, 2010

As a business ethics speaker, I, from time to time, am pleased to have guest blogs featured on my site.  Ethics, by definition, are actions whose motivation is based on ideas of right and wrong.  In politics we hear, when someone is seeking election, a litany of ideas who have a fundamental ethics base.  Yet, when push comes to shove, it seems that ethics flies out the window and the politician is face with reality of accomplishing their agenda or operating ethically.  Guest blogger – Rick Krug – shares this in his piece entitled:  IT DEPENDS ON WHAT YOU MEAN BY “TRANSPARENCY” featured below:

As the Obama Administration continues to “duck and cover” over the attempted Christmas Day Boxer Bomber, it now finds itself searching for that Cloak of Invisibility regarding the health care debate. Having successfully locked out any Republican opposition by sheer numbers alone, the White House and both chambers of Congress have decided to have “informal” discussions on just how to craft the final health care overhaul. Now, when you read “informal”; this word is roughly translated “secret.”

For months before the 2008 election, candidate Obama was demanding the entire health care debate would be broadcast over C-Span, the cable station dedicated to all things US Government. By now, we have all seen the 8-10 video clips of Obama making this same promise to various rallies across America. When Nancy Pelosi was chosen as Speaker of the House in 2006, she stated, “This will be the most open and transparent government in history.”

Today, on CNN, John Cafferty essentially called Obama and the Democratic leadership liars as he pointed out the American public would not get to see the final outcome of the health care takeover until the secret meetings were over. In case you missed it, read the first sentence of this paragraph again: I said CNN made that charge – I know, you were thinking I said Fox News, right?

In fact, what was supposed to be the crowning glory for Obama and certain to place his face on Mount Rushmore, is now becoming the unmasking of what seems to be nothing more than a Chicago-style thug politician. Seriously, when Obama said the whole heath care debate would be on C-Span, I thought to myself, “wow, how would MCCain ever top that!” For starters, he might have simply kept his word. Is it just me, or does anyone else think the White House and Congress simply don’t care what Americans think….about anything?

So, just what am I missing about the word “Transparency?” I swear I thought it had something to do with being able to witness things in real time. Silly me.

I suppose I should have been suspicious when the 500 page starter yeast of the health care bill bloomed into a 1000 page bill, which, it seems, all those who were to vote on this thing admitted they had not even read. There probably should have been a couple of alarms going off in my head when the Senate version of this takeover sterioded out to over 2000 pages and nearly a trillion dollars. But it took this latest failure of truth to really get my attention. To be sure, there will be enough pork in the final healthcare package to make even Oscar Meyer jealous. But I can guarantee that there will be no Senator nor House member who will have ever read the final version.

We all know that health care is the main focus to the Obama agenda, while, it seems, national security is a minor annoyance, but come on, what in the world does the Pelosi, Reid, Obama product have to hide? Look, when you have a network who, second only to NBC, was as much as throwing palm branches down while the Messiah rode in on the back of Biden, begin questioning the integrity of the man’s promises, now you have a news story. To be fair, CNN could use a boost in the ratings, but Cafferty was no happy camper. Nor should he be, nor should any American be.

We all know campaign promises are usually only hopeful suggestions – “Read my lips, no new taxes” – but this outright lie is in fact an outright lie. One legitimately wonders if Obama ever planned on telecasting anything on C-Span. Then Pelosi said, “This is the most open process ever…” with a straight face. So I ask again, do these folks care even a little about what the American people think? Are we that stupid to them? This issue has carried elitism even farther than Hollywood could imagine.

I suspect the real reason the final debate on the health care plan remains secret is summed up in one word: truth. The Obama administration, the leader of the Senate, and the Speaker of the House simply do not want America to know the truth. They want it secret and they do not care.

All the while, Democrat after Democrat is running for the tall grass – shifting their registration to an ‘R”, or somehow coming to the conclusion it is time to retire. I believe this is the first time I have seen the rats leave the ship before the ship even left the harbor.

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Eliot Spitzer’s Harvard ethics lecture: Too soon for him to speak?

November 20, 2009

F. Scott Fitzgerald once said there were no second acts in America. He hadn’t met Eliot Spitzer. Recently, the former New York governor was invited to deliver a lecture on ethics at Harvard University’s Edmond J. Safra Foundation Center for Ethics.

Before I get to the ethics of this matter, let me just say: I have no interest in attacking Spitzer. Nor do I hold any personal judgment against the man for the events that forced him from office in March 2008. But I do think if you’re going to speak about ethics, you had better be willing to take a long, hard look at your own actions. Instead, Spitzer stuck to a script: “From Ayn Rand to Ken Feinberg — How Quickly the Paradigm Shifts.”

Yes, I’m sure Spitzer had lots of interesting things to say about policing Wall Street. But can you imagine how much more valuable an ethics talk would have been if he’d answered the question: “How does someone — in this case a savvy prosecutor — fall into the trap of things he once railed against?”

Maybe Spitzer is still trying to figure that out. I can sympathize. Soon after my release from federal prison in the mid-90s, I spoke about ethics before a few rotary clubs. Regardless of what I had to say, my audience had a preset skepticism about whether I had a valid message to offer.

Ten years later, it’s a different story. When I speak at universities, people now understand that enough time has passed for me not to have replicated the poor choices of year’s past. I don’t sweep that past under the rug, either. I am open about the choices I made that led to incarceration. That candor provides the greatest opportunity for learning. Because you can talk about theory all day long. What matters most are lessons you can share on how others can avoid the same mistakes.

So, here’s a question worth asking: What is the appropriate lag time before someone can step out again into the public sphere and talk about ethics? Is it too soon for Spitzer? Does he need to spend a little time in anonymity — five years, ten years? — before he can speak? You tell me.

Bruce Karatz, former CEO of KB Homes – Indicited! Were His Choices Ethical?

March 9, 2009

Having begun a formal probe by the SEC in 2007, a federal grand jury has indicted Bruce Karatz.  The 20-count indictment included seven counts of mail fraud, five counts of wire fraud, three counts of securities fraud, four counts of lying in statements to the U.S. Securities and Exchange Commission and one count of lying to KB Home’s accountants.

Well…with all those indictments, if found guilty on all charges, Mr. Karatz could face up to 415 years in prison.  Seems like the alleged frauds are getting larger as are the potential sentences.

Reported by the Dallas Business Journal:

Los Angeles-based KB Home was the 21st-largest home builder in North Texas in 2008, with 239 housing starts, according to DBJ research. bruce-karatz_454168742The company started 513 North Texas homes in 2007, and 1,216 in 2006.

Karatz, 63, is alleged to have backdated stock options over seven years, awarding himself and others millions in stock-based compensation. Karatz resigned from KB Home (NYSE: KBH) in November 2006 under pressure in the wake of an options inquiry. Other top KB executives forced out were Richard B. Hirst, executive vice president and chief legal officer, and Gary A. Ray, the head of human resources.

The Los Angeles Times reports: “Karatz, 63, served as chairman and chief executive of Westwood-based KB Home from 1986 to 2006, when he resigned under fire. Over a three-year period ending in 2005, Karatz garnered more than $232 million in compensation.”

The Times further reports:

The indictment does not say exactly how much Karatz gained as a result, but KB Home required Karatz to pay back $13 million in backdating gains when he left the company in 2006. And the SEC agreed to a settlement of $7.2 million with Karatz in 2008 to cover what it reckoned were his gains.

Karatz has long been a target of shareholder activists and labor unions, who accused him of taking more than his fair share of company profit. In 2005, the year before he stepped down, Karatz had take-home pay of $6.3 million, but he received an additional $150 million, mostly from exercising stock options.

As a business ethics speaker, it is clear that transparency is the order of the day.  Long gone are the days (or at least they should be gone) when corporate compensation is a behind closed door discussion.  I am certainly open to executive compensation that is fair and rewards those in leadership for outstanding performance.  However, any person in executive leadership in a public company must be alert to the consequences of the choices they make.

Every choice has a conseqence.  Bruce Karatz has been dealing with the consequences of his leadership at KB Home for the past several years.  It would appear that, if convicted, he will have many years ahead to review his leadership choices.

If you worked for KB Homes and have an opinion on Mr. Karatz’s leadership feel free to comment!