A Quiet Departure Please! Conan take your $40 million and shut up…

January 18, 2010

According to the Wall Street Journal…Conan’s exit from his dream job at NBC is almost done.  He’s reported to get $40 million to stop trashing NBC brass and get lost.  He can start working again within a year.

Conan O’Brien is close to signing a nearly $40 million agreement to walk away from his dream job hosting NBC’s “The Tonight Show,” bringing down the curtain on one of the entertainment industry’s biggest programming debacles.

The comedian’s exit, expected to be finalized as early as Monday evening, agreement prohibits Mr. O’Brien from bad-mouthing his former NBC bosses, according to people familiar with the matter, but paves the way for him to land another TV gig within a year.

Guess that’s not a bad payday – considering the damage to his career.  Some would say he’s toast.  Doubt that’s the case, but the photo was priceless.

The Wall Street Journal report is here.

By the way…here’s Conan’s statement (good beginning for a negotiation)

People of Earth:

In the last few days, I’ve been getting a lot of sympathy calls, and I want to start by making it clear that no one should waste a second feeling sorry for me.  For 17 years, I’ve been getting paid to do what I love most and, in a world with real problems, I’ve been absurdly lucky.  That said, I’ve been suddenly put in a very public predicament and my bosses are demanding an immediate decision.

Six years ago, I signed a contract with NBC to take over The Tonight Show in June of 2009.  Like a lot of us, I grew up watching Johnny Carson every night and the chance to one day sit in that chair has meant everything to me.  I worked long and hard to get that opportunity, passed up far more lucrative offers, and since 2004 I have spent literally hundreds of hours thinking of ways to extend the franchise long into the future.   It was my mistaken belief that, like my predecessor, I would have the benefit of some time and, just as important, some degree of ratings support from the prime-time schedule.  Building a lasting audience at 11:30 is impossible without both.

But sadly, we were never given that chance.  After only seven months, with my Tonight Show in its infancy, NBC has decided to react to their terrible difficulties in prime-time by making a change in their long-established late night schedule.

Last Thursday, NBC executives told me they intended to move the Tonight Show to 12:05 to accommodate the Jay Leno Show at 11:35.  For 60 years the Tonight Show has aired immediately following the late local news.  I sincerely believe that delaying the Tonight Show into the next day to accommodate another comedy program will seriously damage what I consider to be the greatest franchise in the history of broadcasting.  The Tonight Show at 12:05 simply isn’t the Tonight Show.  Also, if I accept this move I will be knocking the Late Night show, which I inherited from David Letterman and passed on to Jimmy Fallon, out of its long-held time slot.  That would hurt the other NBC franchise that I love, and it would be unfair to Jimmy.

So it has come to this:  I cannot express in words how much I enjoy hosting this program and what an enormous personal disappointment it is for me to consider losing it.  My staff and I have worked unbelievably hard and we are very proud of our contribution to the legacy of The Tonight Show. But I cannot participate in what I honestly believe is its destruction.  Some people will make the argument that with DVRs and the Internet a time slot doesn’t matter.  But with the Tonight Show, I believe nothing could matter more.

There has been speculation about my going to another network but, to set the record straight, I currently have no other offer and honestly have no idea what happens next.  My hope is that NBC and I can resolve this quickly so that my staff, crew, and I can do a show we can be proud of, for a company that values our work.

Have a great day and, for the record, I am truly sorry about my hair; it’s always been that way.



Business Ethics Daily Roundup – January 15, 2010 – Chuck Gallagher Business Ethics Speaker

January 16, 2010

An interesting article appeared in the Wall Street Journal related to how business schools teach ethics and the impact of their teaching on the current state of affairs.  The article appears here:

Stop Bashing the Business Schools

Nice article on the difference between law and business ethics.  And, in my many presentations I find often that folks really didn’t know the difference at times between what the law requires and how ethics interplays.  The article is here:

The difference between law and business ethics – four flavors of the month

Across the world attention has been focused on Google and their stand with respect to operating in China.  Some question whether it’s a money grab and others suggest (and I agree) that it’s an ethics stand.  This article from India shows how others around the globe feel.  The article is here:

Premium on Business Ethics

Lastly, the Ethics Resource Center issued a new report on the state of businesses and business ethics.  With a downturn in the economy and incredible media attention, it’s not surprising that (at least on the surface) business is operating at a higher ethical level.  The article is here:

Ring in the Year with Good Business Ethics – The Innovators

It’s unfortunate but many consider business ethics a boring topic.  It reality it’s far from that.  Today – January 15th, 2010, I spoke to the International Factoring Association on business ethics.  The presentation was unique (most of mine are) and when I was at the airport, I recorded a brief video blog.  You can see it here.  We discussed the three components that move someone from ethical behavior to unethical activities.  One of the participants stated that, “If my employees knew this, I think it might cause them to think before taking an unethical action.”

Robert Allen Stanford – Stanford International Bank and Stanford Capital Management – Fraud In the News! What Motivates Fraud?

February 22, 2009

It seems that the flood gates are open with no hope of shutting – at least any time soon – with investigations and indictments of fraud!  Madoff, Dryer, Grigg and now Stanford.  Every where you turn there is another fraud or investment scam being reported.  I’ve seen a lot over the years as a business ethics and fraud prevention speaker, but this is a profound season for fraud discovery.  So the question – what motivates fraud?  robert-allen-stanford

To address a question like that you need to look at the scope and magitude of the frauds being reported.  And, make no mistake in this economic climate this is the tip of the iceberg.  As I write this, no doubt, there are frauds taking place that will be discovered in years to come.  Not a great comfort.  And, in this environment, the time is ripe for people to be scammed or victimized.

Before, however, look at the motivation, let’s examine what Stanford is being accused of.  According to the Dallas Business Journal:

A Houston-based broker-dealer and investment advisory firm with an office in Dallas has been charged in an $8 billion investment scheme that centers around a CD program and involves false promises to investors.

The Securities and Exchange Commission out of its Fort Worth Regional office alleges in a lawsuit filed in Dallas that Robert Allen Stanford through three of his companies — Antiguan-based Stanford International Bank, Houston-based Stanford Group Co. and Stanford Capital Management — were involved in orchestrating a fraudulent investor scenario where the parties made false promises to investors and fabricated return data on investments, the SEC stated.

“As we allege in our complaint, Stanford and the close circle of family and friends with whom he runs his businesses perpetrated a massive fraud based on false promises and fabricated historical return data to prey on investors,” said Linda Chatman Thomsen, director of the SEC’s Division of Enforcement. “We are moving quickly and decisively in this enforcement action to stop this fraudulent conduct and preserve assets for investors.”

Rose Romero, regional director of the SEC’s Fort Worth office, called the scheme “a fraud of shocking magnitude that has spread its tentacles throughout the world.”

This was originally reported on February 17, 2009.  Since that time there has been a massive ripple effect related to Stanford’s SEC investigation. Investors have found that their assets have been frozen as Stanford’s assets were frozen to protect investors.  This fraud expands far beyond the boundaries of the US.

The Jamaica Observer states: His is a household name in the tiny Eastern Caribbean island of Antigua & Barbuda.

Likewise, the New York Times reports: Having seized control of Robert Allen Stanford’s two banks in recent days, Antiguan government officials are now pledging to work closely with American regulators to investigate their banking system, long suspected by federal officials of being a center for laundering money from around the region.

Now…as the Stanford saga unfolds so does the mystery.  Keep in mind, fraud – to be successful – has to be based on illusion.  And, as we have seen, the grander the illusion the more plausible the fraud – Bernie Madoff – master illusionist.  So in Stanford’s case the illusion is mystified by a story of an “undisclosed island.”

Again, the New York Times reported on February 20, 2009 – In an October 2008 article, Mr. Stanford told Forbes that he was planning to build an elite resort on what the magazine described as an “undisclosed island in the Caribbean.” At the time, Mr. Stanford said that he was working with 17 architectural and engineering firms to build 30 mansions for a development to be called the Islands Club.

Scheduled to open in 2011, it would have featured the largest private aviation complex in the world, Forbes said, with enough room to park 100 private jets as well as a jumbo marina with enough dock space for 30 massive yachts. The super-exclusive resort would require members to shell out a $50 million deposit, which would be refunded if they left the development. That was on top of the $15 million annual membership fee.

The foundation of a scam is based on three components:  Promises – something that people want and most can’t get; Illusion – the grand scheme that allows people to believe in something unseen as truth; and Trust – the belief that all is right, that somehow the government is overseeing the illusion and that if others do it – well then so should I.


That’s a good question and one that is not easy to answer.  However, one thing is true – a fraud usually has three distinct components: (1) Need; (2) Opportunity; and (3) Rationalization.  While I am not qualified to speak at this time as to each of these critical components, I can safely say that his NEED was driven by emotion (likely first) and (direct need perhaps second).

Note the following reported by chron.com:  With a net worth north of $2 billion, he owns glitzy homes in and around Miami, the Virgin Islands and Antigua, and in them he has entertained powerful American politicians from both sides of the aisle.

He has an estranged wife, a girlfriend, former girlfriends and at least six children by four women. The monthly tab to support them all runs upward of $200,000, according to court records.

He loves to flash cash and to flaunt the toys that immense wealth can bring, be it yachts, private jets and helicopters, his own professional cricket team or a string of top-shelf pro golfers whom he pays to wear his logo.

An outstanding article appeared in the Wall Street Journal – a link to that article is here.

The flamboyant life style required money to fund the illusion, but more than that the emotional need to be larger than life is likely the key trigger to what and why this whole fraud began.


The story will no doubt unravel.  So consider the following:

  1. If you were an investor who was defrauded, consider making contact with me as I am doing research into how the fraud was carried out.  Your comments might help others avoid your plight.
  2. What do you think should be Stanford’s consequence for the massive fraud he’s accused of?
  3. If you did invest – did it cross your mind that the returns (far better than what the market provided) might be – well – shady?


Facebook, Social Networking and Bill Gates – Is it Worth It? Gates Says ‘No’!

February 12, 2008

In the business technology section of the Wall Street Journal blog, Ben Worthen posted a blog about Bill Gates – Microsoft’s Chairman – stopping his use of his Facebook account. The question is – what message does that send? The WSJ Blog is linked here.


Review: Beyond the obvious issue, receiving a lot of press, related to teens – children and predators – the larger question is adult usage and consequences that might follow. Computerworld posted a great article on The Pitfalls of Social Networking.

The summary is listed below:

  • Too much Bandwidth usage. Downloading and storing these files can cripple your infrastructure and make capacity planning virtually impossible.
  • Potential Legal Liability. Should employees use corporate IT resources for purposes of posting dissatisfaction with others, the company could be held responsible in any ensuing litigation.
  • Exposure to Malware. These networks are potential vehicles for introducing viruses, worms and spyware.
  • Decreased Employee Productivity. Even when networking is used for business purposes, corporations may want to limit the number of networks employees use. Monitoring many networks can become incredibly time-consuming. Moreover, interfaces among current networks don’t support robust information-sharing.
  • Disclosure of Personal Information. Companies regularly search MySpace, Classmates.com, LinkedIn and other social networking sites to glean information about potential hires and competitors.
  • Risk of Leaking Corporate Secrets. Companies often sanction social networking for the purpose of exchanging professional information. But take great care to protect corporate secrets. Definitions of secret may vary or be misunderstood, and critical information may inadvertently be revealed.
  • Limited Executive Use. Executive use of social networking is not widespread, however. Many executives already have substantial personal networks and rely less on new technological platforms for interaction.

According the WSJ blog – “Workers who created profiles on Facebook are horrified to find out they can’t be erased, the New York Times reports. Even if you deactivate your account, Facebook still keeps a copy of all the information you ever posted. And, the Times reports, it’s still possible to contact people through deleted Facebook pages.”

So What’s the Bill Gates Angle? According an article in The Sun:

The computer mogul got so hooked on the social networking site that he splashed out £120million on a 1.6 per cent stake in it last year.

Bill, 52, spent 30 minutes daily catching up with pals.

But he signed off after getting more than 8,000 friend requests a DAY, and spotted weird fan sites about him.

A colleague said: “Sadly the attention does mean Bill has had to close the account which got him so hooked in the first place.”

As a business ethics and teen ethics speaker, (www.chuckgallagher.com), I routinely talk with parents about the pitfalls and dangers of social networking through MySpace – Facebook, etc. While I think social networking is the way of the future, especially among young people, it is important for parents to understand the dynamic change when it comes to child – teen safety. Likewise, it is critical for business people to better understand the issues that come with security and corporate ethics and responsibility.

Have you had an experience with social networking that you’d want to share?

Should parents know more about MySpace and Facebook?

What pitfalls do you see for employees involved in Facebook or MySpace?

Comments are welcome!

Guilty of Failure to File Tax Return – Similar to the Wesley Snipes Verdict? Comments by White Collar Crime Speaker Chuck Gallagher

February 5, 2008

As reported in the Wall Street Journal Law Blog, John J. P. Howley, a former partner in the law firm of Kaye Scholer, plead guilty of failing to file a state personal income tax return for 2004. According to the report:

He admitted yesterday that although he earned “substantial New York income” as a lawyer, “I knowingly failed to file my 2004 New York nonresident personal income tax return.”

Unlike the Wesley Snipes case where he contended ignorance of the tax laws, Howley couldn’t contend he didn’t know the tax laws.

He was sentenced to a conditional discharge, which means the misdemeanor charge will be dismissed if he pays the fine and the taxes he owes and does not get arrested again within the next year.

The DA’s office said his plea deal was conditioned on his filing returns for 1997 through 2006 and paying nonresident personal income taxes, interest and penalties totaling about $150,000.

As tax season begins in full, I expect to see more information about litigation relating to tax evasion and fraud. While many were surprised with the verdict, Wesley Snipes escaped a guilty plea for tax fraud or conspiracy, claiming ignorance of the law. However, he was convicted, much like Howley, for failure to file returns.


The question is – in the Snipes case – will Snipes be given an active prison sentence or will he be given a similar sentence to Howley – being required to file returns and pay taxes?

Comments welcome!

For now, business ethics speaker (www.chuckgallagher.com) – Chuck Gallagher – signing off.

Ethics – Do They Change Based On Generations? – Sidebar Update!

December 31, 2007


In the Wall Street Journal Law Blog and interesting post appeared this morning by Peter Lattman relating to “file sharing” copyright infringement and the University of Oregon.


It seems that when the Recording Industry Association of America subpoenaed the school for records of students who were uploading songs on a file-sharing network, the school fought back saying that the request was violating the student’s privacy rights.

The blog is shared (?) as follows:

Today’s NYT Sidebar column spotlights the University of Oregon and its legal battle against the music industry. Go Ducks!

The Recording Industry Association of America subpoenaed the school in September, asking it to identify 17 students who were uploading songs onto a file-sharing network. The school, represented by state AG Hardy Myers, fought back, moving to quash the subpoena. It said the RIAA was violating its student’s privacy rights and engaging in questionable investigative practices.

The music industry has sued thousands of illegal file sharers, and most of them settle for a few grand rather than engage in a lengthy court battle. And its litigation crusade is expanding, says the Times. The RIAA gets most schools to identify alleged file sharers and pass along “prelitigation letters” to them. It told the NYT it has provided some 150 schools about 4,000 letters which offer students the chance to settle for $3,000 by punching in a credit card number at http://www.p2plawsuits.com.

“Certainly it is appropriate for victims of copyright infringement to lawfully pursue statutory remedies,” the AG reportedly wrote in his motion. “However, that pursuit must be tempered by basic notions of privacy and due process.” He added: “The larger issue is whether plaintiffs’ investigative and litigation strategies are appropriate.”

While Adam Liptak reports that the Oregon AG’s legal argument has little chance of success and says no one should feel too badly for music stealers, he writes “it is nonetheless heartening to see a university decline to become the industry’s police officer and instead to defend the privacy of its students.” He concludes: “All the university is saying, after all, is that the record industry must make its case in court before the university will point a finger at one of its own.”

So the ethical question that seems to be moving front and center is which protection has greater value – privacy or copyright protection. As previously mentioned, the ethical standards are becoming much more grey as technology changes the medium of distribution.

Texas Motivational Speaker, Chuck Gallagher

As an Ethics Speaker, I often get the opportunity to speak to young people and their choices and the consequences that follow. http://www.chuckgallagher.com A teen ethics survey is being planned for 2008 in the North Dallas area sponsored by the Choices Foundation. Do you think that teens have a strong foundation for making ethical choices?

Your thoughts on the ethics of file sharing and teen values changing.

Mortgage Fraud Prevention Tips From The FBI – Comments by Business Ethics Speaker Chuck Gallagher (Post 2 of 6)

December 24, 2007

Texas Motivational Speaker, Chuck Gallagher

This is the second in the Mortgage Fraud prevention tip series. The series has been established to help folks know how to avoid the trappings of mortgage fraud. Since mortgage fraud is rapidly becoming one of the most significant areas of interest for law enforcement – local as well as federal. The FBI issued an information to their web site related to mortgage fraud.

Mortgage Fraud Avoidance Tips (from the FBI web site):

  • Get referrals for real estate and mortgage professionals. Check the licenses of the industry professionals with state, county, or city regulatory agencies.
  • Be suspicious of outrageous promises of extraordinary profit in a short period of time.
  • Be wary of strangers and unsolicited contacts, as well as high-pressure sales techniques.
  • Look at written information to include recent comparable sales in the area and other documents such as tax assessments to verify the value of the property.

Tip One: Get referrals from industry professionals seems to be common sense. However, over time I’ve seen many folks who were mortgage brokers who (with the down turn) failed to make a living in the industry and couldn’t pass a background test for subsequent career opportunities in sales. Any person representing themselves as mortgage professionals should be willing, if not delightet to show you their license or other identifying information designating them a professional.

Tip Two: Beware of extraordinary profit or profit in a short period of time. A South Carolina man was sentenced to over 5 years in prison for a scheme that involved others promised profits. Information from the mortgage fraud blog is presented here: “Wimmer (man sentenced for mortgage fraud) recruited investors to purchase distressed houses that he promised would be fixed up and rented. He then inflated investors’ financial information to make them appear more creditworthy than they really were, in an effort to qualify them for mortgage loans from banks to purchase the investment properties.”

Tip Three: Very little needs to be said about this tip as it is common sense and straight forward. Mortgage professionals, much like CPA’s, should not have to resort to high pressure sales tactics as their past performance and industry recommendations should provide a solid foundation for new business. More times than not, high pressure sales techniques indicate a commission based compensation program that has a high turn over rate for mortgage sales personnel. One question might be how long has the person been involved in the mortgage industry – especially with the company they are representing?

Tip Four: Key issue – get the highest appraisal possible so that the mortgage loan can finance as much as possible of the purchase. Great idea, but what happens if the appraisal is way off from the realistic valuation. While the prospective mortgagee may not be a specialist in appraisals some practical characteristics can be considered: (1) there are on-line programs that do “quickie” appraisals based on other local sales; (2) look at sales of other properties in the same market place – divide the sales price by the property square footage and then multiply the average by the square footage of the property being purchased for an estimated value; or (3) consider the property tax on the property in question and assume that it should generally be around 80% of the true fair value of the property (or whatever the percentage should be in the area in question). Either of these should give a non professional appraiser a reasonable guess as to the properties prospective value.

As a business ethics speaker – a person who speaks to groups about choices and consequences – it is evident that people need to take responsibility for their involvement with there property lending choices. While the great majority of mortgage loans are fine, with free flowing money in our recent past, mortgage fraud has become a big business and has led to many issues that have caused financial ruin.

If you have been a victim of mortgage fraud – feel free to comment as those comments may be helpful to others when considering their lending and mortgage choices.