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.

YOUR COMMENTS ARE WELCOME! Or to comment directly you can find Rick Krug on Facebook at: http://www.facebook.com/RickKrug


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!


The Ethics of Change – A Letter To President Elect Barack Obama

November 5, 2008

Today – the day after the election – we, as Americans, have seen yet another historic moment in a life that has seen many. Those of us with some age have seen the end of wars and the beginning of others; we have seen space travel and a man on the moon; we have seen technology change everything about our daily lives; and we have seen a man rise up and break barriers that once were thought to be iron clad. Mr. President Elect – your election may be historic for African-Americans, but, more important, it is historic for all Americans as we see through you a change of attitude and focus – we see hope in your eyes.

With the above said, Mr. President Elect, I must caution, in the midst of celebration, that we not lose sight ofbarack-obama-smiling what got you there and what your task at hand is. President Elect Obama – we must restore a sense of ethics to this great nation and make choices – tough choices at times – based on sound ethical and moral principles that have guided us for so long.

I, of all people, have no right to lecture you on ethics or change – after all, you are our new President elect. But, like you, I know a thing or two about adversity and obstacles. As a former convicted felon (not something I am proud of) now professional speaker, I have risen above my poor choices from the past and become a voice for CHOICE and ETHICS. Regardless of the choices made, we can moving forward make better choices that will bring about positive results.

You said, “it’s been a long time coming, but tonight, because of what we did on this date in this election at this defining moment change has come to America.” Your statement is true…we have turned for too long away from choices that empower people to achieve greatness and focused on what’s wrong and how we exercise our muscle to the detriment of others.

You, Mr. President Elect, are aware of the challenges ahead. Your words reveal it, “For even as we celebrate tonight, we know the challenges that tomorrow will bring are the greatest of our lifetime — two wars, a planet in peril, the worst financial crisis in a century.” You know, as do we all, that the only way to succeed is to do so by making choices founded on the ethical foundation of our forefathers as they founded this great Nation.

I speak on ethics today, founded on the lessons I learned from not living an ethical life. Perhaps, as a Nation, we have not made the best choices – or even ethical choices. The challenges ahead are significant and you, yes you – Mr. President Elect – will be tempted beyond belief, after all you are the most powerful man in the world. Don’t lose your sense of ethics, sir. Remember your promise! “But I will always be honest with you about the challenges we face. I will listen to you, especially when we disagree. And, above all, I will ask you to join in the work of remaking this nation, the only way it’s been done in America for 221 years — block by block, brick by brick, calloused hand by calloused hand.”

Regardless of who authored these next comments you delivered – and delivered well – they form a promise of an ethical foundation for your Presidency.

“So let us summon a new spirit of patriotism, of responsibility, where each of us resolves to pitch in and work harder and look after not only ourselves but each other.

Let us remember that, if this financial crisis taught us anything, it’s that we cannot have a thriving Wall Street while Main Street suffers.

In this country, we rise or fall as one nation, as one people. Let’s resist the temptation to fall back on the same partisanship and pettiness and immaturity that has poisoned our politics for so long.”

Mr. President Elect – we need that foundation that you have stated so well – a foundation of hope and promise and belief that as American’s we can be proud of who we are and what we stand for – that we can be proud to call ourselves American’s here and around the world. You have given us that hope and for that we say – Thank you!

Regardless of political belief, I think we are witnessing the dawn of an new age for America. We will succeed or fail based on the choices we make moving forward. If our choices are based on fear, ego and power, we may find that we will be no better than we have been and perhaps even worse. Those choices and not based on sound ethical principles. On the other hand, if we make choices that foster freedom, opportunity and a spirit of selfless cooperation we might see the dawn of the “Age of Aquarius.”

Let me end with your words…

“America, we have come so far. We have seen so much. But there is so much more to do. So tonight, let us ask ourselves — if our children should live to see the next century; if my daughters should be so lucky to live as long as Ann Nixon Cooper, what change will they see? What progress will we have made?

This is our chance to answer that call. This is our moment.”

Read the rest of this entry »


Lying = Prison! Detroit Mayor Kwame Kilpatrick Sentenced to Prison

October 28, 2008

Dethroned – that’s what I’d call it when you go from the top of the city’s food chain to serving time in prison.  Judgemental?  I think not.  I’ve been there and I know.  Every choice has a consequence and lying is a choice that brings nothing but pain.  I served time in federal prison for theft and lying.  Martha Stewart served time in federal prison for lying.  Now it seems that Kwame Kilpatrick will, too, serve time for his role in covering up an affair.

Calling him “arrogant and defiant,” a Wayne County Circuit Judge on Tuesday sentenced former Detroit Mayor Kwame Kilpatrick to four months in jail with no early release under the terms of a plea deal.  This reported by CNN.

From my former blog – Detroit Mayor Kwame Kilpatrick and his chief of staff, Christine Beatty five years ago were having an affair. The lies and deception that followed cost the City of Detroit more than $9 million dollars, and cost former police officers their career.

artmayor.jpg

Now the two are accused of lying under oath – Perjury, Obstruction of Justice and Misconduct in Office. If you recall, perjury is what Martha Stewart was convicted of and served time in prison for. Now these two are facing the same issue.

According to CNN –

Kilpatrick pleaded guilty last month to two felony obstruction of justice charges stemming from his efforts to cover up an extramarital affair. He also pleaded no contest to charges of assaulting a police officer attempting to serve a subpoena on a Kilpatrick friend in that case.

Kilpatrick resigned from office last month after pleading guilty to charges resulting from a sex scandal.

He was accused of blocking a criminal investigation into his office and firing a police deputy to cover up an extramarital affair and other possible illicit activities.

How did this all come about? It appears that the allegations of the affair were made public in a whistle blower trial for two former officers of the city. While “perjury” is generally used in a criminal case, this may be the first time that the Wayne County prosecutor’s office has used perjury from statements made in a civil case.

“In January, the Free Press reported that in an analysis of nearly 14,000 text messages on Beatty’s city-issued pager it found some from 2002 and 2003 that indicated she and the mayor were having an affair.”

Prompted by the judge to recount his wrongdoing last month, Kilpatrick admitted, “I lied under oath in the case of Gary Brown and Harold Nelthrope versus the city of Detroit. … I did so with the intent to mislead the court and the jury and to impede and obstruct the fair administration of justice.”

Kilpatrick had faced eight felony counts. As part of a plea agreement, six counts related to misconduct in office were dropped, and a perjury count was changed to a second obstruction of justice charge.

But, every choice has a consequence. As a business ethics speaker (www.chuckgallagher.com), I share that sentiment with audiences nation wide. You can run but you cannot hide – from the truth. It is said that you reap what you sow. Most of the people who find themselves facing consequences they did not anticipate – assume that if they are not caught or can cover up the truth – what is hidden will stay that way forever. That is further from the truth. Funny, but “truth” has a way of sneaking to the surface.

In this case the truth will either set you free or be the catalyst for a prison sentence – Kilpatrick has found the later to be the case.

YOUR COMMENTS ARE WELCOME!


McCain – Obama Dance Off…Business Ethics? – NO… Campaign Fun? – YES!

October 27, 2008

As a 51 year old business ethics speaker, I must say…this presidential election has been interesting.  Not only is it historic but the level of creativity has been over the top.

For the younger generation – history has been made as the first black man in history has won the nomination of his party and is a viable candidate for president of the United States.  And, had it not been Obama chosen, then history would still have been made as the nomination of her party would have been a female.  Either way, this is an historic election.

Likewise, the selection of Sarah Palin as a VP candidate has been attention getting in and of itself.  Should McCain win – many will credit his victory to Sarah’s down home charm.  Should he lose – there is not doubt she will be blamed.  Either way the governor of Alaska has received national attention.

So…with a race that some say is not so close…what can we do to bring some excitement to this race.  Well…here’s a solution.  Click on this next link – give it time to download and enjoy.  As I said, the creativity that has come from all sectors is rather amazing.

Dance off


Politics, Religion and Ethics – Obama’s Presidential Campaign and Messages from the Pulpit!

October 27, 2008

Let me begin by saying, this writing is 100% about law, ethics and the application of the law.  I am in no way, taking a political stand through the content of this entry.  Rather, I am amazed as what I believe is the flagrant violation of the law when it comes to influencing votes in this presidential campaign.

According to Merriam-Webster the definition of ethics is the discipline dealing with what is good and bad and with moral duty and obligation.  Now, that definition is broad and clearly subject to interpretation.  However, good and bad must also be judged in accordance with the law.  One might judge a particular action to be good and ethical, but that same action might be against the law.  Hence, regardless of opinion, the action is unethical.

So, what does this have to do with the election?  Well…it is generally presumed to be against the law for a non-profit religious organization to use their pulpit (I use that term loosly) to influence public opinion for election results or outcome.   Non-profit religious organization can lose their non-profit status if they openly work to endorse a political candidate.  This loss could be costly indeed.

So how would one know if such a thing is happening?  Funny you should ask.  But today I received information about the link I am providing.  It was sent to me raising a question as to what my opinion was related to ethics, politics and the law.  What I saw was amazing – a flagrant disregard for the law and the non-profit status at stake.

PLEASE NOTE:  The following, should you decide to watch, is anti-Obama.  The message is clear.  What is more serious is that someone would knowingly and publically risk the non-profit status with such a clear political message.

Judge for yourself.  Here’s the link.  The message is from ATLAH World Ministries and it’s steamy.  Again, I express no opinion other than the amazement as to the message and risk inherent in its delivery.

WHAT ARE OTHERS SAYING:

Americans United for Separation of Church and State has asked the IRS to investigate the Roman Catholic Diocese of Paterson, N.J. and Rock Christian Fellowship in Espanola, New Mexico.

According to AU’s letter to the IRS, Roman Catholic Bishop Arthur J. Serratelli has published a letter on Catholic Diocese of Paterson, N.J.’s website and newspaper attacking Barack Obama.”

The letter criticizes Obama for his pro-choice stance and encourages parishioners not to vote for Obama.

AU also wants the IRS to investigate Rock Christian Fellowship in Espanola, New Mexico for posting a large display that encourages voters to support republican candidates over democratic candidates.

In my opinion, what the above mentioned organizations have done is small change in contract to the ATLAH video.

An NPR article states the following:

On Sunday, 33 ministers will take part in a nationwide effort to violate the 54-year-old ban on political preaching and endorse or oppose a candidate from the pulpit. The effort is called the Pulpit Initiative.

Two weeks ago, more than 100 pastors squeezed into a hotel meeting room in Washington, D.C., to learn about the Pulpit Initiative, a brain child of the conservative legal group, Alliance Defense Fund. Attorney Erik Stanley walked them through it.

“If the IRS chooses to come after these churches, we will sue the IRS in federal court,” Stanley said.

Stanley says pastors are fed up. In the past four years, the IRS has stepped up its investigations of clergy. It sent letters to 47 churches, including some liberal ones — not just for explicit endorsements, but also for using code words like pro-choice or pro-life in relation to candidates.

“What’s been happening is that the government has been able to go into the pulpits of America, look over the pastor’s shoulder, and parse the content of their sermon. And that’s unconstitutional,” Stanley said. “No government official should entangle itself with religion in that way.”

HERE’S THE QUESTION FOR YOU – THE READER:  Which is ethical – (1) for the church to follow the dictates of the law and avoid endorsing or disparaging a politicial candidate or (2) to make a “good” decision based on a moral duty and obligation (in the face of the law)?

If you watch the ATLAH video…come back to this site and share your opinion.  Otherwise, your comments welcome on the ethics of religion and politics.