Business Ethics Training – “The Office” – What Not To Do!

October 20, 2008

Business ethics training!  Across the nation I can hear people saying, “Yea, those people on Wall Street and in Washington need a good dose of that.”  Or, more than likely, in many companies, I hear a big “yawn.”

People, especially now, are sensitive to the need for ethical action.  However, ethical belief and action does not generally mean a commitment to teaching ethics.  In fact, in a national survey, most companies (there are notable exceptions) do very little to teach and promote ethics.  So often, as a business ethics speaker, I hear people recite the statement, “There is no such thing as business ethics, only ethical people.”   Well, that statement is all fine and good, but the reality is – businesses do have a culture and if ethics are not a core value, then unethical behavior is likely.

So what’s this “what not to do” stuff?  Simple answer…but first you need to watch this episode of “The Office” on NBC.  A link is provided.

The Office – Business Ethics

So here’s the skinny:

(1) They have a Business Ethics seminar because “there’s been some misconduct at corporate.”  All too often I find that the business ethics speaker/trainer is called because there is already a problem.  Not that fixing a problem isn’t a good thing to do, but wouldn’t it be better to avoid the problem in the first place.

(2) As soon as the “seminar” started, there was doubt that the company had a true commitment to ethical behavior.  If you were to truly ask the rank and file of your company if they would keep a highly productive but unethical sales person, what do you think they would say?  Their answer might give you a clue as to whether there is a culture of ethics (or right choices) within your company.

(3) How exciting – they first review the survey results.  Now, honestly, how often do you feel that company employees truly express their feelings or opinions on a company survey.  More times than not when I am consulting with a company I find that employees distrust the company and are more apt to tell then (the company) what they think they want to hear.

(4) The training centers around office supplies, excessive breaks, and other issues that do not, in my opinion, get to the heart of an ethics culture.  Banks making loans to people who could ill afford to make the payments is unethical – the heck with the paperclips.

Now…from here I move away from the show – although quite amusing.

When you look up the word “ethics” the following is the first definition:  the discipline dealing with what is good and bad and with moral duty and obligation.  All too often ethics training deals with the “good and bad” and ignors the larger question of moral duty and obligation.  Developing an ethical culture is centered around creating a moral duty and obligation – taking actions that are in line with that duty.

EXAMPLE:  The other day I heard a well known economist say that the actions taken over the past seven years were logical and appropriate.  I could not disagree more.  It was unethical for financial institutions to loan money to people when there had reason to believe that they may not be able to repay the debt.  These financial institutions ignored their “moral duty and obligation” in the name of short-term quarterly profits.  For a time they were rewarded by Wall Street…but as we have seen – all of that value has diminished.  The lack of an ethical foundation in their business decisions provide short-term gain and huge long term loss.  They made choices that lacked fundamental ethics.

I guess in the end…you need to determine if the definition fits your company.  If you need something better than what the folks in “The Office” elected…give me a call.

Otherwise in the words of “The Office” – “What’s right, what is wrong, who’s to say in the end…because it is unknowable!”


Palin – Biden Showdown! Will Tonight’s Debate Decide the Election?

October 2, 2008

In the heartland of our country the east will take on the west, the experienced Washington insider take on the Alaskan outsider to inside belt line politics and the outcome could be a deciding factor in this hotly contested presidential race.

Palin is articulate (something that as a speaker I like), a self proclaimed outsider and someone who has shown that she is not in full command of what is going on politically. Now, by no means am I saying that she is dumb or incapable of serving as Vice-President, but she is earning her stripes as a political newcomer and outsider by some of the comments and answers she gives. Yet, with all of her missteps, she is gutsy and has infused energy into the McCain campaign – something it desperately needed. The question is – will Sarah Palin step up to the plate and hit a home-run for the team or strike out leaving her team flat.

According to CNN:

Palin’s interview gave the vice presidential candidate a chance to showcase elements of her life story and demonstrate some of the folksiness that’s been central to her political success.

It’s exactly the kind of interview that voters can expect to see from the governor in the coming weeks, according to a Palin adviser, who recognized that there is hunger in Republican circles and among the public at large to see a less-scripted, more authentic candidate.

Biden, on the other hand, has years of experience inside the belt line and, most would say, ignoring political choices, would come across Presidential due to his age, experience and understanding of how Washington works. Those attributes could be Biden’s assets, but too many they are substantial liabilities. CNN states in an article:

For the Democrats, Biden has served in the Senate for 35 years. His biggest challenge will be to stick to the script. He’s known for making off-the-cuff remarks, including some gaffes.

Either way, the debate tonight should be noteworthy. It’s odd to observe, but Obama (a newcomer to the political scene) selected an experienced insider as his running mate. On the other hand, McCain (an experienced Washington insider) selected a new comer as his running mate. It seems both candidates are playing a balancing act that has significant ramifications. I’m sure that both candidates are a bit nervous about how the person in their court will do.

With the economy in the tank and more negative publicity floating in the media than one can keep up with, it would appear that Obama has the potential for taking the lead. Perhaps tonight will give American’s more information with which to make this all important decision.

QUESTION: If you read this before the debate – (1) who do you think will win? If you read this after the debate (2) share your opinions on what you observed.


Tax Fraud – Two Men Sentenced to Prison for Deducting Personal Expenses on Their Tax Returns – Ethics Speaker Chuck Gallagher Comments

February 21, 2008

Paul and Paul, both from Washington state, were sentenced to federal prison for making and subscribing to false income tax returns. Paul Austin, age 58, and Paul Werlink, age 61, were told at sentencing that “Our tax system will not work if people don’t comply with it and understand that it is for the betterment of the entire country.”

When the men pleaded guilty on October 25, 2007, they admitted that during the calendar years 1998 through 2003, PAUL AUSTIN, who was formerly the president, and a fifty percent owner of, The Safety Team, Inc. and PAUL WERLINK, who was formerly the corporate secretary, and the other fifty percent owner, directed that certain of their personal expenses be paid by the corporation. Their failure to report these payments as income caused a material understatement of their personal income and the income tax due and owing for each of these calendar years. AUSTIN has since paid $320,000 in back taxes, civil penalties and interest. WERLINK has paid $90,000 in back taxes, civil penalties and interest.

Now, just to make this clear, both men paid the government what was due – including penalties and interest. That means that whatever benefit they thought they were getting in the short run, was eliminated and perhaps the cost of restitution to the government was more than the benefit they received.

The Safety Team, Inc, is a business located at 670 South Lucile Street in Seattle, Washington, which specialized in the installation of fire extinguishing systems, the sales of fire prevention equipment, and consulting on fire safety. For each year in question, the aggregate amount of these payments for personal expenses was omitted from PAUL AUSTIN’s and PAUL WERLINK’s personal income tax returns, but was included as a corporate expense on the corporate income tax return of The Safety Team, Inc. In addition to understating their personal income, PAUL AUSTIN’s and PAUL WERLINK’s actions also caused a material overstatement of business expenses and a material understatement of the corporate income tax due and owing on the corporate returns for these same years. PAUL V. AUSTIN and PAUL WERLINK later sold their interests in The Safety Team, Inc., and are no longer involved as owners of the business.

Sure enough – Every choice has a consequence. For those who read my blogs regularly, you know that statement will resonate. You can make choices that you think have no consequence, but the reality is – you do reap what you sow.

At AUSTIN’s sentencing Assistant United States Attorney Robert Westinghouse told the court, “for more than ten years Mr. Austin systematically cheated on his taxes. He made a knowing decision to shirk his duty as a taxpayer…. The message should be ‘when you cheat on your taxes you are going to go to jail,’ and that is a message that will resonate with the public.”

As the gavel was dropped and the sentence handed down, Judge Martinez agreed with the prosecutor by telling the men, “Every time you used the corporate credit card to pay your personal expenses you cheated the rest of the taxpayers.”

TAKE NOTE: As a business ethics and white collar crime speaker, (www.chuckgallagher.com) I know first hand the effect of the choices you can make. Be honest with the government. Pay your taxes. Don’t take risks in this area. The price is too great. Federal prison is not fun!


Which Cities Top The List For Corporate Crime? Business Ethics Speaker Chuck Gallagher Comments

December 4, 2007

The Corporate Crime Reporter, a print weekly legal newsletter based in Washington, D.C., released a report on November 27th, 2007 naming Washington, New York, Los Angeles, Philadelphia, Boston and Newark are the corporate crime capitals of the United States.

“Every year, the FBI releases its Crime in the United States report,” said Russell Mokhiber, editor of Corporate Crime Reporter. “This report is misnamed. It is actually a report on street crime in the United States. It ignores corporate crime. So, while the Crime in the United States report documents rape, robbery, murder, robbery and assault – it ignores health care fraud, bribery, environmental crimes, and other major corporate crime prosecutions.”

“We believe that America deserves to know not only where most of the street crime is – but also where most of the corporate crime is being prosecuted,” Mokhiber said.

The Corporate Crime Reporter conducted a survey of 2006 prosecutions, settlements and sentences and the results identified the top six corporate crime capitals of the US.

“These are the cities where most of the corporate crimes are being prosecuted,” Mokhiber said. “New York is an obvious hub – that’s where Wall Street is and that’s where the money is. Washington is also an obvious contender – corporations rip off the government and government prosecutors act to recover the defrauded funds.”

“Federal prosecutors in Boston have developed perhaps the premiere health care fraud prosecution team in the country – outside of Washington,” Mokhiber said. “The U.S. Attorneys’ offices in Los Angeles and Philadelphia have both developed white collar and corporate crime expertise.”

Several interesting facts arose from the study. What is most obvious is that corporate crime is centered in our largest cities and money hubs. It would be no surprise that New York, Los Angeles and Washington are there based on their sheer size and the consolidation of business and power. What I don’t see is a relationship between number of cases (prosecuted or settled) and size of the location. It would be interesting to see the top areas as a percentage not just by number.

Another issue is location and interest of federal prosecutors. As stated in the report, Mokhiber acknowledges that Boston and Washington focus on health care fraud while L.A. and Philly have developed white collar expertise. Again, is crime in these cities higher or is it that the prosecution effort is more focused?

Chuck Gallagher - The Ethics Expert

As a business ethics speaker, I know, from presentations nationwide, that issues with ethics breeches and crime don’t seem to be strongly centered in one geographic region or another. I fully recognize that larger metropolitan areas have more, just by the sheer numbers, but where people are gathered, when the components for crime exist (need, opportunity and rationalization) – there will be crime.

Do you believe that crime is centered in these cities (predominately) or do you think that corporate crime is alive and well where you are. Feel free to respond with your thoughts.


Ethics In The Fast Lane – Dummy!

December 3, 2007

O.K.  I admit most of my posts are serious in nature and hopefully, for those who read, have a profound meaning.  I state often – Every Choice Has A Consequence!

Sometimes, however, our choices provide some fun for those delivering the consequence!  Take for instance this dummy, driving down the road in Washington State in the HOV lane.  I know what he was thinking…get there with less traffic…get there a bit quicker.  Yep, let me take the HOV lane.  Of course, to do that it requires “High Occupancy” hence the name HOV lane.  Two people at least right?

Right – two people. 

dummy.jpg

Well, some folks are creative in their choices.  Like this man who was riding with a dummy.  No, not an unintelligent person, but a real mannequin (dummy) stuffed in a sweatshirt and wearing a hat.  Even the head had been painted beige to give it a more realistic appearance.

The driver was cited for an HOV violation after being reminded by the officer that the requirement to drive in the HOV lane is at least two humans inside a vehicle.  Get it…two humans – “dummy!”

Oh well, every choice has a consequence.  His consequence for riding with a dummy – a ticket.  Hum…maybe he was the dummy?