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Jim Selman


It's Criminal, not Ethical

Posted: 08/12/2012 7:15 pm

Not a day goes by that we don't read about yet another 'violation' of some law or regulatory apparatus by some large business organization.

Most recently, we learn that Barclays Bank and JPMorgan have been playing games with the statistic that affect the interest rates we pay on our variable rate mortgages and other debts. Fudging this number even a tiny bit can cost consumers billions. Add the emerging realization that JPMorgan was underwriting the rigged price of electricity to consumers which is what Enron was doing before their 'unethical' behavior brought down the house at the expense of its investors including a lot of pension funds and other 'little guys' like you and me.

Barclays pays a $3 billion fine that will be passed back to and paid by their customers and JPMorgan gets their hand slapped for $73 million.

Can anybody tell me the difference between what Bernie Madoff did and what Barclays and JPMorgan have been doing? Why is Madoff in jail and these corporate criminals get their hand slapped? The answer is that a 'corporation' is protected by laws that limit the responsibility of a corporation and shield the people who make decisions (and their Boards of Directors) from the consequences of wrong doing in most cases. The practical difficulties of prosecution of real people for real crimes makes it easier to just take some money and run.

I once defined morals, ethics and values as follows:

  • Morals are 'God's' rules
  • Ethics are the rules of the community
  • Values are the rules of the individual

Leaving the 'morality' of what's happening in businesses aside, a lot of people are making decisions that are illegal, but in the context of their world are perfectly ethical and consistent with their values. In the financial world for example, the 'game' is to make as much money as possible and if one can conceive of schemes to bundle bad debt and sell it as valuable, then that is just 'clever' and the innovators reap rewards and praise from their colleagues. No doubt the same ethics would apply if someone in the Mafia came up with a new scam or way of robbing a bank.

It is time to stop tolerating and rationalizing that 'white collar crime' is somehow different or less offensive in a civil society than domestic violence, drug dealing or armed robbery. If we presume to be a society living under the 'rule of law' then we need our laws to be consistent and enforced uniformly. We need to strip corporate leaders of any 'shield' to their responsibility to follow both the letter and the intent of the law.

This isn't going to happen unless each of us takes a stand and begin communicating with our 'lawmakers', get rid of those who are in cahoots with corporate criminals and at a minimum stop doing business with organizations who tolerate unethical and illegal behavior.