List Headline Image
Updated by Stan Phelps on Jul 13, 2023
Headline for White Goldfish Project
Stan Phelps Stan Phelps
202 items   1 followers   0 votes   835 views

White Goldfish Project

The 12th color in the Goldfish Series is called White Goldfish. Coauthored with Chuck Gallagher, the Project will support our book about ethics in business.


Colin Kaepernick and Consequences

Colin Kaepernick and Consequences

We have come to live in an age of political correctness, deep racial and political divisions and right – or wrong – the power of celebrity. This is true when you think of Nike, Colin Kaepernick and sneakers.

Colin KaepernickAs a testament to the sometimes craziness of these times, let me start by saying the price of the Nike Air Max 1 sneaker, originally intended to sell for $120.00, is presently considered a collector’s item and is currently selling at $2,501.00. Incredibly, 66 pairs have already been surreptitiously sold on a sneaker reselling site (yes, there is such a thing).

The sneaker does absolutely nothing special, and doesn’t even look all that special save for one decoration: a 13-star Betsy Ross flag is stitched on the heel.

Back to 2016

It was the 2016-2017 season when San Francisco 49er quarterback Colin Kaepernick began kneeling for the national anthem. He started in the preseason and ignited a firestorm.

Colin Kaepernick began to create a major divide between the NFL players, team owners, and fan base. His kneeling was way too much for millions of Americans.

I am not an evaluator of football talent. From what I understand, he was a decent quarterback who lasted a total of seven seasons with a 60 percent pass completion record. His production started to fall off and the 49ers ostensibly let him go for lack of production.

Many felt he was relegated to the bench not because of his playing ability but because of his political stance. This difference of opinion resulted in a national blow-up. No other team would take a chance on him and while all of the team owners denied it, he was a man without a job, a national controversy and as reviled as much as he was loved.

In 2018, the Nike Corporation, never an organization to shy away from taking a position, hired Colin Kaepernick to be a national spokesperson. To the dismay of many “patriots,” Nike sales shot up in support of the unemployed QB, and while their sales have slowed a bit since then, they still remain a healthy company.

In June 2019, Nike announced it was going to introduce to produce a shoe featuring the Nike Air Max 1 sneaker with the Betsy Ross American flag embroidered on the heel. The multi-billion-dollar company has just canceled those plans. Why? Because Colin Kaepernick told Nike executives that the symbol is offensive.

Colin Kaepernick – A Lot of Power for a Position

Bending to Colin Kaepernick’s will, Nike’s marketing backbone caved because the ex-football player told them so. Why Betsy Ross’ flag was offensive to him was not elucidated, only that he associated it with racism.

The choice to withdraw the sneaker from the market led to Arizona Governor Doug Ducey. Nike was planning a 500-employee manufacturing facility in the Phoenix area. As such, Arizona was about to give the multi-billion-dollar company waived construction fees and tax breaks.

The governor, so offended by Nike bowing to Kaepernick made a countermove.

Said Ducey, “It is a shameful retreat for the company. American businesses should be proud of our country’s history, not abandoning it. Nike has made its decision, and now we’re making ours. I’ve ordered the Arizona Commerce Authority to withdraw all financial incentive dollars under their discretion that the State was providing for the company to locate here.”

The power play between Colin Kaepernick, Nike, and Arizona have at least resulted in 500 potential employees not getting jobs. The hourly and low wage workers are pawns. Nike remains a multi-billion-dollar company with an alienated set of customers as well as a loyal set of customers, and Colin Kaepernick is still a multi-millionaire.

A Mess of Consequences

Like him or not, Colin Kaepernick is the end result of choices as well as the purveyor of consequences. He chose to kneel and most probably received the wrath of the NFL and its ownership. While he had a legitimate point of view and the right to express it, it resulted in his never throwing an NFL pass again.

Nike chose to bring on Kaepernick as a spokesperson. It was their right. They thought it would be an edgy and gutsy move, and for a while sales spiked. However, the ex-football player is now exerting his power of public opinion in preventing a product’s launch. Within the Nike inner circle, it is impossible to not wonder what executives think of Kaepernick’s latest influence on the corporation. More importantly, they might wonder, where will all of these choices lead?


The Real Power of Amazon, Google, Facebook and Other Players

As I have looked into the incredible power of the major online retailers and social media giants, I cannot help but wonder how they affected the ethics of America, and by extension, the rest of the world. While I understand that lobbying has gone on “forever,” it has never been to the extent it is now. Some might argue that Amazon lobbying favors a political viewpoint. I Amazondisagree; it favors Amazon’s viewpoint.

In 2018 alone, Amazon lobbied Washington to the tune of more than $14 million. Google spent about $21 million. Combined with nine other tech social media companies, Amazon filled political coffers to $77 million. Since 2012, Amazon has increased its lobbying budget by about 450 percent, using 28 in-house lobbyists. Why would they spend so much and employ so many people to get their point across? Because Amazon, with its political and financial might, has been steamrolling over a smaller player and they are hiring political mouthpieces to make them look good amid the dissenters and critics.

Amazon’s lobbying of Washington sets as a major priority going after the government’s cloud computing business valued at $10 billion for procurement of goods. They have already outspent Microsoft, IBM, and Oracle in lobbying efforts.

Amazon’s influence might have already swayed Congress had there not been alleged improprieties stemming from conflict of interests between Amazon and a former Pentagon employee. There were even mysterious documents that surfaced of the impropriety.

Other established government vendors have also complained of Amazon’s wanting to dominate the purchasing portal. These vendors include retail giants Walmart Inc. and Staples Inc.

Amazon and others – Complaints are Not New
When companies in an industry trade group first started to complain that the government was about to explore a single cloud deal and e-commerce portal that would potentially favor Amazon, the government said no such thing was happening (after Amazon tried to stop complaint letters from being sent to members of Congress). Though Amazon failed in its efforts at that time, they decided to form a competing trade group of its own favoring a goal to move data more quickly to the commercial cloud and encourage the government to adopt emerging technologies.

Amazon has since expanded its trade “group” by adding nearly 20 other companies who were basically Amazon businesses.

In 2018, the FTC started to look into tech company practices. This was in response to social media giant Facebook acquiring Instagram which many feels should have never been allowed. The government has turned its sights on Amazon to make sure that several recent acquisitions by Amazon are in the best interests of consumers.

To counter the government’s efforts, Amazon has been hiring several law firms with close ties to the government. It is also probably no accident that Amazon’s new corporate offices are within a stone’s throw of Washington, D.C.

Ethically, the activities of Amazon and other hi-tech giants in influencing activities in Washington, D.C. are quite troubling. They clearly have the opportunity to influence government policy and the need to expand their profitability, but what of the smaller competitors who don’t have their clout?

How a company the size of Amazon can rationalize its greed is a tough sell. They are crushing the competition because they seemingly can. In the private sector, I suppose competition is inevitable however in the government sector, where the needs of a broader public need to be served is another matter. Our government needs to step-up.

The Sexual Harassment Victim, as Victim – Twice - Chuck Gallagher

When Karen Ward accused her company of sexual harassment, Ernst & Young seemed to do everything in their power to deny it. Her boss commented on her body, inappropriately touched her and then propositioned her.

Sexual Harassment ClaimIn this #MeToo era, where the training of all executives in regard to sexual harassment should be absolutely mandatory, Karen Ward was failed. That the lack of awareness on the part of a multi-billion-dollar company failed her goes beyond the incredulous. Karen Ward was a partner, fairly high up on the organizational chart. I can’t imagine what more junior women must potentially go through.
Bringing the case forward

Ms. Ward had more than enough of the harassment and so, properly, she brought the situation to the attention of HR. She was soon retaliated against and not long after she was fired. At this juncture, the company finally acquiesced to arbitration. Here is where a whole new – and unethical set of circumstances kicked in.

Private arbitration, rather than a court case is not “free.” Organizations such as E&Y know this. To date, Ms. Ward has had to pay out $185,000 of her own savings to have a panel of arbitrators hear her complaints against the company.

If this sounds unfair, it is. She is being punished a second time for complaining of sexual harassment. Why is she spending so much money? Because by contract to the accounting firm she must submit to arbitration. The accounting firm makes employees sign this to keep the proceedings from going public. It has been estimated that if she could have filed this claim publicly, the whole deal would have cost her $450.

Her contention in filing an additional lawsuit against arbitration is that under most circumstances, no lower-level employee could remotely pay such fees. According to her lawyers,

“Ms. Ward is pursuing her claims because of her firm belief that discrimination and retaliation of any form are wrong and cannot go unaddressed. EY knows this [forced arbitration] will cause other women to never bring these kinds of claims. They know how they’ll be treated.”
Advantage, Unethical Companies

Forcing employees into arbitration is a common practice. I would not want to give the impression that E&Y is alone in this. Arbitration almost always favors the company as the high cost prohibits the complainant from really doing the necessary research. Even if the panel rules in favor of a sexual harassment complaint, arbitration cases usually result in lower awards.

As amazing as it sounds, for a case of this magnitude, the nearly $200,000 it will eventually cost Karen Ward isn’t considered exorbitant. The good news is that lately, major companies such as Microsoft, Uber, and Google have stopped forcing employees into arbitration due to the negative publicity this action could potentially bring.
Sexual Harassment and Arbitration

As this case has gained notoriety not just for the sexual harassment but far more for forced arbitration. As this has begun to fascinate the media, all kinds of emails and letters have been uncovered where Ward tried to present her case and was shut down at every turn.

Not surprising, when Ward wrote to E&Y (the CEO, no less) to allow her to walk away from arbitration and take the case to the courts they went silent. Instead of doing the ethical thing, they walked away. The executive committee and E&Y Board obviously were behind the decision.

The executives in this case undoubtedly felt they had the opportunity to wait it out until Ward’s funds gave out. The need to do this was obvious. E&Y does accounting services for massive companies with thousands of female employees. They felt they couldn’t afford the negative publicity had the case gone public.

Now, despite their efforts, the case has gone public. What they face in negative publicity far outweighs any settlement they could have reached before it all blew up in their faces.

As to ethics training, who can say? Maybe the rank and file are forced to listen to droning lectures but it’s a safe guess that management was asleep at the wheel.

What Does Siri Know, and What is “She” Doing with It? - Chuck Gallagher

The more prurient of the reports tell of iPhones listening in on couples having intercourse; whether advertent or inadvertent is not clear. However, it appears to be true that contract workers at Apple, Inc. have been given carte blanche to listen to us via Siri. Siri is that you

Conversations picked up by Siri also include private conversations between physicians and patients, (presumably) illegal activities and more general conversations. We are told the eavesdropping helps Apple maintain “quality control” of the artificial intelligence software. And I suppose that I understand the rationalization, it’s gotta learn somehow.
Siri – Did I Give You Permission?

The British newspaper, The Guardian, first broke this story and approached one of the contractors monitoring thousands of private conversations.

“A small portion of Siri requests are analyzed to improve Siri and dictation,” they answered. “User requests are not associated with the user’s Apple ID. Siri responses are analyzed in secure facilities and all reviewers are under the obligation to adhere to Apple’s strict confidentiality requirements.”

The contractor said that their quality control monitored less than 1 percent of the daily Siri usage. Back in 2015, when AI was in its relative infancy, Siri was estimated to receive about a billion requests per month. Therefore, contractors have access to about 833 million per month. Obviously, it has increased so it is not unreasonable to project the contractors can go through 10 million a month.

An Apple whistleblower for one of the contractors told The Guardian “There have been countless instances of recordings featuring private discussions between doctors and patients, business deals, seemingly criminal dealings, sexual encounters and so on. These recordings are accompanied by user data showing location, contact details, and app data.”

Therefore, the confidentiality alluded to by the contractors appears to be erroneous. They know exactly who the parties are on both ends of the phone. Apparently, no provisions were in place to protect highly confidential information. As no one gave permission to permit Apple to eavesdrop this sets up quite an ethical quandary.
‘Worse’ than Alexa?

A few months ago, it was discovered that the Amazon listening device was indeed capable of listening in on our conversations. The privacy we imagined of the device “turning off” immediately after we asked a specific question, was not quite as private as we imagined. The device was indeed capable of listening in simply because “it wanted.”

The difference here may well be in its specificity. “Alexa” is not aware of who is talking, only that someone is asking a question.

However, Apple contractors have a very good idea of who is asking a question. In addition, they know whom the party is talking to at any given time. The chances for abuse can boggle the mind. While those fixated on the relatively benign sexual confidentiality aspects might find such conversations interesting, it may not be as damaging as medical, financial, marketing, market research, political or other information that could potentially be bundled.

Given the sophistication of voice recognition software and the ability to lock in on keywords or phrases, any number of information collection devices could be utilized to get a profile of the user up to, and including employment desirability, medical status, legal status and information illegal to ask in a number of situations.

Apple, of course, had a clear-cut choice. To ask us for permission to record us – or not. They chose to not tell us. This lack of oversite is highly troubling. While their need to collect this data may be with noble intention, I am curious as to who monitors those who monitor? Obviously, if they had asked, I believe most of us would have said, “No thank you!”

They might rationalize the harmlessness in the act of recording our Siri data, so why not tell us? Artificial intelligence as it may turn out is not the great culprit here, but those with human intelligence and no ethical purpose. - A Business Ethics Nightmare - Chuck Gallagher

Sheila Lirio Marcelo is stepping down as the CEO of an organization that supplies caregivers to patients in need. What has happened here is an example of a business ethics nightmare. The publicly-traded organization, with revenues in the $50 million range, has been rapidly growing as the demand for caregivers has exploded especially with Baby Boomers who are electing to “age in place” rather than march off to independent care facilities. Obviously, there is still a significant population of octogenarians and nonagenarians who need more intensive levels of caregiving.

A Business Ethics Nightmare

Recently, I have written about investigations at elder and memory care facilities that were found guilty of absolutely horrid conditions and unimaginable patient abuse. It every “child’s” worst nightmare; to believe that while they thought they were doing the right thing in fact; the outcome was just the opposite. Part of the problem with our broken system is that there is a paucity of healthcare workers. While there appears to be more than enough money for pharmaceuticals and expensive procedures and equipment, pay for skilled and semi-skilled care providers is lacking at best. As a result, agencies have traditionally had far greater success finding foreign born help than U.S. help but when the number of qualified candidates from other countries began to fade, other (more cost-cutting) solutions had to be found. This is the trap that Marcelo’s organization would resort to in hiring candidates.

Upon investigation, it was revealed that failed to conduct background checks on newly hired and prospective caregivers. In fact, some of those caregivers had police records and sadly, some of the workers committed crimes against those they were caring for. What for an organization can be a worse business ethics nightmare. Once these revelations were revealed, Sheila Lirio Marcelo was asked to step down as CEO. The organization is currently seeking a new CEO and strangely, Marcelo is transitioning to an “executive chairwoman.”

In a statement from Marcelo, she will instead “focus her efforts on advocating for improvements and innovations in the country’s care infrastructure to better enable families to find quality care and caregivers to find meaningful work.” She also said she was “excited to be able to focus on broader policy and advocacy issues, while being available to advise and support our new leadership on the next phase of growth and innovation.”

Mixed Ethical Messages

As CEO, the executive who was just asked to step down to help search for a replacement knowingly hired caregivers with police records or minimally, failed to do background checks. It was a dartboard, random chance and luck to find well-qualified people. Her statements, most probably written by investor relations account executives, imply of someone with the lofty ambition of “advocacy,” “better searches for families in need,” and “supporting the new leadership.”

Ethically, it is mystifying. To begin, her well-crafted statement does not once mention ethics, oversite or even the corporation’s rationale for keeping her on staff. Any person (and I have indeed and unfortunately known some) who have had crimes from petty theft to outright neglect and abuse committed against elderly parents or friends most probably would wonder at why a person who admitted to bypassing the background check process would still be employed. It’s all a business ethics nightmare.

I would agree that the system is broken. Rates paid for presumably quality care by insurance or Medicare are woefully inadequate. In addition, companies who are hiring the healthcare workers, whether aides, CMA’s or higher, are taking huge chunks out of their caregiver paychecks. So even if a quality person is hired there are few incentives for them to continue in the profession. It is a profit mill for the companies of the healthcare world, but ethically, it is a shame we have all gotten to this point.

Accounting Ethics - When the CPA Loses Neutrality, It’s Called Fraud - Chuck Gallagher

The certifications and the training to become a Certified Public Accountant ( CPA ), have always been taken as a highly serious matter. This is especially so when the accountant or the accounting firm is responsible for conducting audits of organizations that handle public funds.

There is possibly no profession that undergoes more ethical training and ethical awareness than does a CPA. This sense of ethical awareness was expanded even more in the early 2000’s when several major accounting firms collapsed under the weight of their ethical misadventures and fraud.

While the points I’ve made above are certainly well-known even to non-accountants, apparently Vazquez & Company, a Los Angeles-based CPA firm and auditor did not get the memo.

Los Angeles County has recently filed suit against Vazquez & Company. It alleges that the CPA firm “failed to detect embezzlement of $9 million” by the firm’s client. The client in this case was the Chicana Service Action Center (CSAC). The even bigger problem was that it was much than an oversight. It seems to have been intentional.

CPA – Auditor of Record?

The Chicana Service Action Center uses public funding (tax dollars) to pay for needed social services for domestic violence victims, the homeless and the jobless. From 2009 to 2012, Vazquez & Co. was retained to audit CSAC books.

The understanding is that when a firm is charged with performing audits that they are completely neutral. While they are hired by the client to satisfy the rules of good accounting practices they are not beholden to the client to be their “best friend, pal or co-conspirator.” The job of the auditor does not include deception.

The County of Los Angeles recently sued Vazquez & Co. because it did not find an embezzlement of millions of dollars in public funds. The penalties placed on the accounting firm were actually higher than the initial crime itself — and it should have been.

In 2015, key executives of the Chicana Service Action Center were charged with misappropriating $8.5 million in public funds. The City and County of Los Angeles wondered how it could be that the misappropriation was not detected by the auditor for more than three years. After all the county relies on the auditor to fairly state the financial condition of the organization to make certain taxpayer dollars are being well-spent.

Upon digging deeper, the city found some disturbing transactions. For example, CSAC used its public funding to pay for the auditor’s managing partner Gilbert Vasquez to take an $8,500 yacht trip along with other gifts. Digging even deeper, the county discovered that the auditing firm knew that CSAC’s director had used the taxpayer dollars to pay rent on two properties in San Marino, buy two Jaguar convertibles, plus nearly 40,000 in “miscellaneous expenses” including season tickets to the Los Angeles Dodgers and the Los Angeles Clippers.

Though the auditing firm found these irregularities they did not report it in the audit and instead they said they accepted explanations of the directors of CSAC at face value without any further inquiry. The CSAC director wasn’t alone in the misuse of funds other colleagues used public money to buy personal automobiles, meals and to pay child support.

The amount stolen at CSAC was $8.5 million, and the auditors saw it and were bribed to conveniently look the other way. Because of that, the county is demanding $9 million from the auditing firm for fraud and deceit and for negligent misrepresentation.

Ethical Breakdown

Certainly, the expected consequences will come down on the necks of the auditing firm. Licenses may be lifted, fines imposed and a loss in the ability of the firm (even if it somehow survives) to work for firms receiving public funding. They saw an opportunity to commit fraud – we don’t yet know the full extent of what they got out of this, and both the auditing firm and CSAC itself rationalized their actions because “it’s just tax money, no one got hurt.”

Obviously, the taxpayers get hurt, not to mention the poorest of the poor, the very people who need the money the most. Neither the executives of CSAC or the auditing firm had any compunction about stealing from the poor.

While the accounting profession is very concerned about ethical behavior, apparently the choices and consequences of unethical behavior are not being reinforced. I’ve no doubt if a smaller auditing firm in Los Angeles is failing to get the right message, that it is happening in many places across the nation. How many auditing firms are “violating neutrality” as we speak? It is impossible to say. An even more difficult question could be this: how many innocent people are being affected by unethical auditors? It is disturbing to think about.

Herbalife and The Ethics of Multi-Level Marketing - Chuck Gallagher

Are you one of the “lucky ones?” The Federal Trade Commission (FTC) is in the process of sending out something like 350,000 checks to people who were fleeced by the Herbalife and the Vemma Nutrition companies.

The great giveaway comes as a result of a $200 million government settlement where Herbalife agreed to restructure its business and clean up its unethical act. According to the FTC the partial refund checks generally range between $100 and $500 with a few checks in the thousands of dollars sprinkled into the equation.

Herbalife and its Vemma subsidiary are “businesses” that people run based on what they buy from the company. After the settlement, Herbalife has been forced to end its pyramid scheme practices where money was made when “business owners” attracted new “business owners,” who in turn attracted more. Except cleverly, they weren’t called business owners so much as independent distributors. The majority of the money a distributor made had nothing to do with distribution. Indeed, little of the revenues a distributor made had anything to do with sales to friends, relatives and other unsuspecting people. The money was made when another new distributor was roped into the process. It was a business built on a house of cards.

The Herbalife company made their “MLM” scheme appear so attractive due to their advertising. They pictured distributors living opulent lifestyles. The executives at the very top of the pyramid might have lived that way, but the vast majority of their distributors never came remotely close.

For the most part, Herbalife relied on desperation. They targeted poor college students and young people who were out of work. I can well understand the need to make more money, but that is not what the company cared about. The company wanted more and more and more distributors to be added to their pyramid. Each distributor was forced to buy products (an “inventory”) and each purchase got kicked up the ladder.

What they have in common

Virtually all MLM organizations make big promises and show “big images” of successful salespeople at poolside or on yachts or simply enjoying the good life. They don’t explain to anyone how they can get there.

The legitimate supplement business, for example, is extremely competitive, very high volume and requires great sales and marketing expenses to be successful. I will share that I have friends in the natural and herbal supplement business and virtually all “health claims” are now scrupulously reviewed by the FDA (and they should be). Most of the supplements are identical.

My point in stating this is that Herbalife’s convincing new distributors that their supplements would virtually sell themselves was highly suspect. Beyond that, under the old way of their doing business, no one cared how many bottles of “supplements” they sold, so long as they kept finding new people to be “supplement” distributors.

Though I admire the recipients of those 350,000 checks for trying, they could have made infinitely more money working part time in a hardware store, or being barista’s or putting away books in the public library.

The company was unethical in the greatest sense for failing to advise their new distributors that their chances of making even minimum wage were almost non-existent. They would never admit to that, of course, but it would have been much closer to the truth. In business, as in life, there are no shortcuts. You can’t go from a part-time job, working out of your dorm room, to owning a villa on the French Riviera. The executives of Herbalife, who undoubtedly own villas, knew it what they were doing from day one.

Nuedexta - The Strange Ethics of The Red Pill - Chuck Gallagher

It is called Nuedexta and it was originally compounded for patients who has a disease that caused uncontrollable laughing or crying, a symptom associated with multiple sclerosis (MS) or ALS, also known as Lou Gehrig’s disease. Only about 1% of Americans suffer from those terrible maladies, and even less from the laughing and crying fits.

However, in 2012 aggressive sales people from Avanir Pharmaceuticals began to approach facilities that treat the elderly and any patients who suffer from dementia and Alzheimer’s disease. It was an “off the label” use, but Avanir created a network of advocacy by enlisting the help of doctors who were bribed with payments. In doing so, sales of Nuedexta have risen to 14 million pills in just four years, an increase of 400% making the company almost $300 million in 2016 alone.

The experiment

Here is the bottom-line ethical problem: Nuedexta has not been extensively studied on elderly patients. It is an experiment. One study was done and it was found that elderly patients with Alzheimer’s disease were twice as likely to fall after taking Nuedexta as patients who were not given the pharmaceutical.

The company has been taken to task for its claims as to what the pharmaceutical can do for Alzheimer’s patients. The claims that it can help those afflicted with dementia have been disputed. The “claims” were largely the results that were reported on questionnaires given to physicians who were paid by the company.

The condition Nuedexta was approved by the Food and Drug Administration (FDA) to treat is called PBA. As stated above it is a rare condition, especially when used for in patients with dementia but only after a specific diagnosis. Some physicians have been “accused” of using Nuedexta to treat patients whose agitation and make them difficult to manage.

In other words, they are simply using the drug to manage people and shut them up. I apologize for the non-technical terminology, but that is what they are doing. Who pays for this “experiment?” Ultimately, we do through Medicare and to the tune of hundreds of millions of dollars. Because “off the label” treatments are not covered, it is the goal of the Avanir drug reps to find physicians who will write the prescriptions to make it appear as though the patients are suffering from the uncontrollable laughing or crying from MS or ALS.

In research done by CNN for a major study (October 17, 2017) it was found:

“Thousands of the doctors prescribing Nuedexta have received money, or at least a meal, from its maker — a legal but controversial practice in the industry. Between 2013 and 2016, Avanir and its parent company, Otsuka, paid doctors nearly $14 million for Nuedexta-related consulting, promotional speaking and other services, according to government data. The companies also spent $4.6 million on travel and dining costs, both for speakers and for doctors being targeted by salespeople.”

Not surprisingly, the drug has become Avanir’s biggest moneymaker. It has gained attention with television commercials. The sales force is still expanding its use in elder-care facilities, but the problem is that the research behind its use in such facilities is just not there. It has been reported that there has been intense pressure on salespeople to keep pushing that unauthorized use by doing deals with physicians. It is a gray area, which means it is unethical.

Where does it stop?

The use of Avanir for conditions for which there has been little or no research has been conducted may be unethical, but we can concede that sometimes physicians may be impressed with the potential of its efficacy in certain situations.

The use of a salesforce to effectively bribe physicians to use the drug simply to increase revenues has no place in healthcare. Yet, the practice is happening with increasing frequency. Why is this happening? How has fraud become so well-established with patient care? Putting it another way, do you know what your elderly relative in nursing care is actually receiving in terms of their medications?

Obviously, there is little in the way of ethical review at any step of the process. There are no ethical checks and balances and meanwhile, at least in this case, the pharmaceutical company, its drug reps, the prescribing physicians and the nursing home facilities, are charging Medicare without consequences.

When will these practices stop? When good ethics are as valued as greed, and when patients and their families are regarded as people and not profit centers.

What is Privacy Worth? To Aetna, Not Much - Chuck Gallagher

Not all that long ago, I walked into my internists office for a routine check-up. It is a large, active office with several physicians and physician assistants and with many examination rooms. I am sure you are in a similar situation where you go as well. I suppose the doctors were quite busy that day. For I was sitting in the exam room for quite a while. Of course the physician’s group dealt with multiple insurance carriers such as Aetna, Blue Cross/Blue Shield, United Healthcare and more.

The room had a computer screen (don’t they all?) and I glanced at it to notice the screen was open to a list of about 25 patients. Next to each patient’s name was a “chief complaint.” I really didn’t react and as I didn’t know any of them I went back to thumbing through a magazine that must have been 20 years old!

The physician’s assistant walked-in and immediately saw the computer.

“Was this on since this morning?” she asked.

“Beats me,” I said.

“This is in violation of all the HIPPA laws,” she said.

I’m thinking, “What do you want from me? I didn’t turn it on!”

The Aetna HIV Letter

I thought about the office experience as I was reviewing a recent news item in regard to a letter sent to patients by Aetna health insurance. On July 28, 2017, the company sent out a mailing to patients. The enveloped had a large window in the front. It showed the patients’ name, address, their personal claim number and worst of all, the options they had to fill their HIV medication prescriptions!

While I am sure it was accidental, like opening a computer screen and walking away, once the information was revealed, it was too late. In fact, more than 12,000 letters were sent out to HIV and AIDS patients.

Officials at Aetna said: “This type of mistake is unacceptable. We sincerely apologize to those affected by a mailing issue that inadvertently exposed the personal health information of some Aetna members.”

It is all well and good, but if 12,000 letters were mailed it means thousands of employers, HR departments, co-workers and other parties were also made aware of patient HIV status. I can’t help but wonder at the rumor mill activity, the behind doors discussions and for all I know, the terminations (for other reasons, of course) that resulted from this breach of privacy.

It is not “just a mistake,” it is another case where underlying ethical problems in regard to privacy laws are blatantly disregarded. It happens in doctor’s offices, in mailings, ambulances and operating room theaters. The question is “why?”

Losing Touch

In part, the answer to the question can be found in the open computer screen; the point at which once sensitive information is now shared and shared again. It is not just the sharing, but how it is shared, in a never-ending cycle back and forth between agencies, the insurers and the insured. It is an overwhelming case load in response to low reimbursements and underpaid and overworked staff. It is what I call an ethical callousness to the needs of the patients.

In short, the patient is often a field on a screen, a symptom, a disease and almost an obstacle rather than a focus. Do I think Aetna was intentional in its sending out 12,000 pieces of mail disclosing an intimate health detail? No, I do not. In fact, I don’t believe anyone in the organization had the slightest thought about it at all. That, in and of itself, is a head scratcher. No one thought. In fact, no one had an ethical thought. It is quite sad.

Obviously, if the president of Aetna had a son or daughter, niece or nephew with HIV and the letter came to their workplace, there would have been heck to pay. Maybe that is key to the discussion. We have taken most anything personal, most anything human out of healthcare. There is a solution; it is ethical training. It is a realization of “the other,” of the concept that the field on a computer screen is a person. That a letter being sent to a patient should be guarded by privacy laws and that there is an ethical responsibility to protect the patient as we would want to be protected ourselves.

Some might call it The Golden Rule. It is currently missing in healthcare. Ethical training can help to restore it.

Mark Zuckerberg - VR and Hurricane Maria - Chuck Gallagher

There is no doubt that Facebook CEO Mark Zuckerberg is a wealthy and highly intelligent man. Whether you like him, or dislike him, you cannot deny his success. He has amazingly intelligent people working for him as well for example, his Virtual Reality Chief Rachel Franklin.

Facebook is not just about their original platform. As a publicly-traded company with millions in advertising revenues, they are constantly seeking ways to expand their business. They are also very involved in VR or virtual reality.

Facebook has a new virtual reality platform. On this VR platform which employs the live streaming Facebook Live video app that is called “Spaces,” you (and several friends) can insert a cartoon likeness of yourself and tour about a place. It is a cute technology, intended to bring people together, to network them to a place they might not normally visit. So if you want to have a virtual beach tour in the Bahamas with 50 of your closest Facebook friends and their cartoon likenesses, you can do so.

Welcome to Hurricane Maria

Not long ago Zuckerberg and Rachel Franklin decided to demonstrate the Spaces app by giving the Facebook minions a virtual tour of the devastated island of Puerto Rico. Each high-powered executive was “romping” about the devastated scene. Zuckerberg’s avatar was grinning and pointing out how “magical” their technology was, and in another scene the two avatars were giving each other the “high five” while standing in front of a flooded neighborhood. When they were bored with Puerto Rico, the Zuckerberg avatar asked the Franklin avatar where they wanted to go next, and they were off to California.

Social media blasted them for “high fiving” in front of the devastated neighborhood. The company quickly arranged a $1.5 million gift to hurricane relief organizations. It was not enough. The complaints kept coming. Several of the complaints alluded to the fact that Silicon Valley is in a giant bubble. It is an interesting point to ethically discuss.

I might start with the current tragedy that is occurring in California wine country. Wild fires have devastated the area, with loss of life and untold millions of dollars’ worth of damage. Will Zuckerberg and Franklin take their show to wine country now? I doubt it. Silicon Valley executives are “heavily invested” in the area. They travel there, swill wine there, know people there. I doubt Zuckerberg would use the death and destruction relatively close to his home base as a demonstration platform for his high fives and jokes. He knows better.

I might also point something out at this juncture which might raise the ire of many in Zuckerberg’s crowd: he is 33. He has seen little of death or destruction or heartache. Much of his journey has been in a bubble. Yes, he is a genius and he is extremely wealthy, what I question is his sense of ethics.

Expanding the scenario

I would be wrong to laser focus on Mark Zuckerberg or Rachel Franklin. They are merely figureheads, and representative of a much larger ethical debate in regard to technology. As an ethics speaker I get to see, on practically an everyday basis, executives across all spectrums of for profit, publicly-traded and nonprofit organizations who lack any ethical sensitivity to important issues. It is particularly true of those who over-rely, or (dare I say) are addicted to heavy social media use.

Despite all of the talk of the interconnectedness of society, we have become horribly disconnected behind “hashtags” and instant messaging. Issues are glossed over and virtually every important event is jumbled together with recipes, celebrity gossip, sports news and political rants.

Where does it lead? It leads to masters of technology more excited about the technology than the events such technology might be attempting to record, or help, or impact. This will become, in my opinion, a huge problem in the future where empathy is traded for money.

Mark Zuckerberg only saw his “audience.” His opportunity was to use the devastation of Puerto Rico as a backdrop for a virtual reality app. His need was to extoll the virtue of a new product, and thus to impact his product. His rationalization for doing so was the fact he was somehow advancing the cause of his product.

The setting for the demonstration along with the high five numbness was incidental. Puerto Rico is all the way “down there.” He would not have chosen to be “virtual” in the midst of a burnt-out vineyard only “miles away.” He still knows who butters his bread.

Far, far better the next hire for Facebook to be a Chief Ethics Officer. He or she should be over 60 and have a few wrinkles and life experiences.

Insys - Don’t Like Research Results? Make-up Fake Patients! - Chuck Gallagher

There is a pharmaceutical marketed under the tradename of Subsys, that was approved for sale by the U.S. Food and Drug Administration (FDA) about five years ago. The drug has inherent problems as it contains fentanyl which is a powerful opioid and are under close scrutiny. Its use is for patients who are dealing with serious illnesses such as cancers where chronic pain markedly affects quality of life. It is manufactured by Insys Therapeutics.

The Insys product is meant as a sublingual product, it is sprayed under the tongue. The opioid is quickly taken up by the body and helps to alleviate pain. Insys felt that when it was being developed that it would be a very popular pain-killing medication. It failed to live up to its sales potential, so Insys devised a scheme.

Insys – The shell game

When a sales rep walks into an office, a typical question asked of the rep might be, “How many patients are using the drug?” The more patients using a pharmaceutical such as Subsys, the more likely it is to gain the attention of a physician. So the company in its infinite “unethical wisdom” decided to produce (on paper) “fake” cancer patients. In order to create the scam Insys recruited three physicians to develop a “marketing plan.”

The Arizona Attorney General Mark Brnovich claimed the scheme was emblematic of “the unethical and greedy behavior in the pharmaceutical industry that is fueling the opioid crisis in our state.”

The senate committee investigating the Insys scheme as part of a national investigation into opioids said their investigation revealed that the company had been pressuring its employees to increase use of the drug. Under most circumstances the drug was used when the patients who were prescribed had active cancers with chronic pain that could not be controlled with milder pharmaceuticals. The reps provided kickbacks to doctors to prescribe the drug, to fake medical records and lie to insurance companies. The kickbacks were covered up as marketing costs and payments to doctors as speaker’s fees.

In December 2016, six former Insys executives including the former CEO had been indicted.

The doctors who received kickbacks were guilty in their own way as well. What was worse, is that they knew better in terms of their medical, ethical training. For example, the so-called speaking engagements were nothing more than fancy dinners Insys sales reps bought for their families and friends where money was exchanged “under the table.”
Insys – Faking it

When the “cancer community” caught wind of what Insys had done, they were logically outraged. Cancer patients are in a life and death struggle, there are no gray areas. However, when a company like Insys is caught it underscores the complex world fueled by a profit motive between patients, oncologists, researchers, and various organizations. It is often all gray and it erodes trust. It is very difficult (and understandably so) for patients to trust pharmaceutical companies.

While pharmaceutical companies, especially those in the “cancer space” now claim that they are behaving within the highest ethical standards, it is difficult for the community of cancer patients to accept. Even Insys, which has new management and an almost completely revamped sales force is doing all it can do to convince us that they are working to within the highest ethical standards.

Here’s the problem: no one really knows what those standards mean. If a pharmaceutical manufacturer claims that they are adhering to high standards, are they saying that they have an on-going, third party, ethical training process? Who is administering those programs, who is measuring the success of those programs and most importantly, what are the measurable expectations from the ethics training?

It would be wrong to look simply at “Big Pharma” as being culprits. There are oncologists and other medical specialties all too willing to stick out their greedy hands and accept “marketing payments,” for altering patient records and prescribing unnecessary drugs. Then again, they must have had a sense that the payments are one of many causative factors to raise the ever, upwardly spiraling healthcare costs.

We are taught that physicians are trained to adhere to the highest ethical standards, but again, who teaches them those standards and how are they measured? The questions outweigh the answers, but one thing is certain: the teaching of ethical standards to pharmaceutical companies and physicians has failed the patient.

Healthcare Fraud at a Hospice Company - Chuck Gallagher

When it comes to healthcare fraud, there is nothing sacred. Unethical people have a need, they see an opportunity, they make bad choices and ultimately those choices have consequences. In Frisco, Texas the co-owners of a hospice company that runs Novus Health Services and Optim Health Services plus 14 others including five registered nurses and five physicians, were indicted in a Medicare fraud scheme. They are accused of fraud amounting to in excess of $60 million.

As I write this, I want to say that “nothing is sacred anymore,” when a hospice operation, of all things, fleeces the government for end-of-life services. However, I am not naïve when it comes to medical fraud. It can run rampant when ethical individuals turn their backs on unethical behaviors.

The attorneys for Samuel D. Anderson and Amy Harris, his wife are “reviewing the charges.” This is different than categorically denying the charges, but for now, that is their right given our legal system.

Need Hospice Care, or not?

Among the many other charges against the hospice operations are that a small group of physicians, in synchrony with Novus Health Services, certified that some of their patients needed continuous, end-of-life hospice care when they did not. I will forego talking about the psychological ethics issues to the patients and their families and instead focus on the financial issues.

When patients who may not have needed continuous hospice care were referred into what I shall call this “continuous care hospice protocol” rather than routine hospice care or even no hospice care, Medicare paid a higher daily rate to the facilities. As the case goes back to 2013 we will talk in terms of 2013 dollars.

It is a bit confusing due to terminology, but some terminal patients essentially need routine care and comfort, while other terminal patients need continuous care. According to quoted pricing data, in 2013, hospice patients just needing only routine care potentially brought in $153 per day to Novus in Medicare payments, while continuous hospice rates brought in from $303 to $895 per day.

Here is where this unethical scam turned really ugly. In order to mask their lack of ethics, nurses at the hospices were giving patients drugs such as morphine whether the patients needed it or not. Here is the more horrible result, if that is possible: some of the patients who didn’t need drugs died as the result of drug overdoses. One U.S. Attorney called it “depravity,” while I might use the term “pure evil.”

The scam operated from July 2012 to September 2015. In total, they billed the government more than $60 million for fraudulent hospice services. The government paid Novus more than $35 million of those claims.

Among the Charges

There are many charges filed against the clinics. In addition to the false claims discussed above it was found that the referring physicians received kickbacks and that documents attesting to the fact that the hospice patients needed continuous care were intentionally destroyed!

Not only were the physicians offered under the table payments from Novus, once the referrals were made the physicians essentially gave up all responsibility and turned it over to nurses at the facility. Now for the icing on this horrid cake: it was a CPA who determined the extent of treatment. How or why this was allowed to happen is a further example of extremely poor choices.

The physicians are now trying to cover their tracks. They claim they personally met with patients face-to-face to make certain they were certified for continuous hospice care. That is all well and good, but on the dates they were supposed to have signed the forms, some of them were allegedly away or on vacation.

In text messages between referring physicians who had never seen the patients and the nurses who gave drugs, there were very angry exchanges. Ultimately, the physicians realized how badly they lost control. I believe this was the beginning of the end. The physicians and registered nurses would have been fools to not see what was coming and to realize where their choices had led them.

As the result of the numerous violations of medical ethics, the FBI, the U.S. Department of Health and Human Services and the Texas attorney general’s Medicaid Fraud Control Unit are investigating this case, especially the husband and wife team at the top.

In addition to the agencies above, I would imagine the state medical and nursing societies and possibly, even the agency responsible for CPA licensing will become involved. Ultimately, patients died. Human life was lost because greed was allowed to triumph over ethical responsibility.

AIG and Accounting Fraud: No Admissions, Big Fines, Bad Ethics - Chuck Gallagher

The former Chief Executive Officer of AIG, Maurice Greenberg and his co-defendant, A.I.G.’s former chief financial officer, reached a settlement with the State of New York in a case of accounting fraud.

The case, which took more than 10 years to adjudicate ended with the two executives agreeing to fork over $9.9 million in performance bonuses. It sounds impressive until we understand that the state had sought more than $50 million and the executives refused to admit to fraud.

The executives were accused of participating in deals aimed at fooling investors into investing in the AIG company, one of the world’s leading insurance leaders. At the settlement, the State of New York stated:

“Today’s agreement settles the indisputable fact that Mr. Greenberg has denied for 12 years: that Mr. Greenberg orchestrated two transactions that fundamentally misrepresented A.I.G.’s finances.”

AIG – Deny to the end

A lawyer for Greenberg characterized the settlement as a “nuisance settlement,” and that they settled so he could keep working in the securities industry. While the battle between AIG and the State of New York has been bitter from the start, it was made even more contentious as the State forced Greenberg’s son from a large insurance brokerage claiming it was rigging bids and getting kickback payments.

Greenberg’s defense took the tactic that he had intended to comply with the rules of accounting but that he left the details of that compliance to his subordinates. In other words, his underlings were at fault.

AIG itself nearly went bankrupt in 2008. The DA’s who brought the case came and went, the trial dragged on, and ten years later the very wealthy executives walked away without little admission of guilt and relatively little in penalties.

Though we would like to say that this case is a victory for “ethics,” it is anything but that conclusion. The executives, extremely wealthy people of privilege paid a pittance in penalties (about 80 percent less than the Feds had expected). The trial took so long, that after a while the prosecution was worn down to the point that they seemed to be willing to settle. Worst of all, the defendants maintained that while minor irregularities were committed, they had done nothing wrong.

Of course, they were wrong, they intentionally duped investors into believing the company was in better financial shape than it was. They manipulated the books and in doing so reaped even greater bonuses and rewards.

Where are the ethical screens?

We are in a digital age where financial performance and analytical data seem to take precedence over honesty and ethical behavior. The surprise in this case might have been that the accounting fraud was discovered. It is impossible to know how much manipulation in how many publicly traded companies occurs as a matter of routine. This is not a victimless crime nor is it minor in its intent.

Millions, if not billions of dollars were invested here and while a handful of insiders gained and profited, potentially thousands of investors stood to lose large sums of money because AIG had inflated their performance.

The question that remains is could good ethics have prevented this fraud? The answer is, “possibly.” Had an ethical screen been violated, it could have led to executives to be immediately terminated from their positions. It could have paved the way for a more rapid outcome in the court’s decision as well.

As the CEO and CFO did not have any ethical expectations of them, greed ruled the day and the executives “escaped” with only minor consequences. The need for ethics, from the smallest to largest organizations is apparent. It is up to investors to determine if in the absence of ethics they are willing to take the risks.

The Strange Ethics of Airline Security - Chuck Gallagher

It has happened yet again. Airline security has been breached, and it had nothing to do with the passengers. The latest case of airline security breakdown has occurred overseas to an airline called JetStar.

The airline worker was caught on video as he was opening passenger bags in the luggage holds of an airliner that was about to depart. He was stealing the contents. The airline upon seeing the video vowed a full investigation. A spokesperson said in part:

“We have launched an immediate investigation and will work with Airports of Thailand, our ground handler BAGS and our local security company to ensure the security of our customers’ property on-board our flights,” the statement continued.

For those of you who might not know, many airlines use subcontractors to provide services. BAGS is one such company. They provide the baggage services for numerous airlines in several airports around the world including the United States. As I watched the video of the employee stealing, it occurred to me that he could almost as easily be putting something into a bag. Breaches of Airline Security is serious and not to be taken lightly.

Airline Security – Subcontractor Era

Many airlines not only subcontract for baggage handling services, but certainly for cleaning, aircraft repair, food and beverage services, security and other functions. It is understandable. Airlines want to be in the transportation business, they long ago abandoned the concept of being vertically integrated. It is not rare for jet engine maintenance to be done “off-shore.” It is erroneous to believe that airlines are responsible for all of their own repairs.

For the most part, it all works very smoothly, including airline security.

We passengers buy our tickets in various ways, go through airport security, board our aircraft and reach our destinations. We assume (maybe even block out) that everything behind the scenes hums along with precision. We fail to recognize – and what the airlines don’t always want to admit – is that the clock like precision of multiple subcontractors doesn’t always work. In this case, an airline subcontractor, providing airline security or not, stealing from luggage. Is this an isolated incident, or do we fail to believe people when they tell us that something was missing from their luggage.

In order for fraud to exist, there must be an opportunity, need and rationalization. This three-legged “problem” is as true of a baggage handler as it is for the CEO of a major airline. In this case, the baggage handler spotted an opportunity to open bags and steal valuables, his need might have been the need to make money or to get a piece of equipment he couldn’t normally afford, and his rationalization was quite simple; he could get away with it.

After all, once your bag makes it onto the belt behind the counter do you have any idea who sees it or where it goes? I don’t.

The ethical part in all of this is the ethical bond not so much between the airline and its passengers (ethics doesn’t normally come up in commercials!), but between the airline and its various subcontractors including those providing airline security.

We may be told that a theft like this is a very rare occurrence. In truth, we just don’t know. Asking around, several of my fellow travelers have at times felt as though things went missing from their baggage, or that the contents were rearranged. It seems as though we need a code of ethics and it has not been forthcoming.

Why are ethics a frightening concept?

Ethics training among airline employees, airline subcontractors and airline executives have not been mentioned to any great extent. It seems, almost, to evoke fear. “Customer Service” is always played up, played up until the cows come home, but what there really needs to be is more of an emphasis on “Airline Ethics,” and high ethical standards.

I understand the need for TSA and I understand the tight security. I travel way too much to find fault with it. I hope the technology improves to make it faster, but it is essential. I do not hold the airlines accountable for security lines or pat-downs of 95-year-old passengers.

However, I do find great fault with a system of subcontractors that do not seem to hold any great allegiance to the ultimate customer, you or me. I call upon all airlines, domestic or foreign to give as much attention to ethics as they spout about service.

Seattle Saying Good-bye to Wells Fargo - Chuck Gallagher

Like it or not, the collective impact of the social media and viral news stories will be having a major effect on the ethical reputation of major companies. Take, for example, what is about to happen to the Wells Fargo corporation in the city of Seattle’s.

It is no secret that Wells Fargo has been severely censured – and found guilty in a nationwide banking scandal. Among numerous other charges, the bank turned its retail and commercial banking operation into a “boiler room,” whereby hundreds of thousands of accounts were opened without the consent of banking clients.

These fictitious accounts were created as the result of pressure that the bank heaped upon its employees to produce more revenues, even if the tactics were completely unethical. The City of Seattle is not only cutting ties with Wells Fargo over their highly unethical sales tactics, but also on the basis of their environmental policies in regard to the Dakota Access Pipeline

The city could end all business relationships with Wells Fargo in 2019.

Every banking choice

Possibly, had the bank disavowed its environmental policies in regard to the pipeline, the City of Seattle might have been willing to work with Wells Fargo to maintain its contract. However, given the highly unethical behavior of the bank toward its employees and banking customers, the city could no longer support the organization. As is true of many other cases of bad ethics in all sorts of industries and organizations, every choice has a consequence.

When Wells Fargo started to push its employees to behave unethically they made a specific choice. When that choice was discovered by the media – and specifically, the social media – the choice turned into a major negative consequence. The collective voice of users of Facebook, Twitter and other sites created an unethical firestorm that is raging to this day despite the fact that the scandal broke more than a year ago. Though the executives who were identified as being the most culpable were terminated from the company, the negative ethical perceptions of Wells Fargo have not dissipated.

This is an important lesson in ethics for every organization, whether in the financial arena or not. If the choice is to be unethical, given all of the types of new social media and inter-connectedness, the consequences of unethical behavior will not only go viral but will not go away. The decision making that occurred within the Wells Fargo Corporation is as fresh today as it was a year ago. I would not be at all surprised if other cities took a page from Seattle.

In the boardroom

There was undoubtedly a time when unethical decisions, made in boardrooms behind closed doors, were discussed and implemented. Even though the unethical behavior might have been noted by a few newspapers, the damage to the corporation in other parts of the country may have been minimal to nonexistent.

Even though Wells Fargo is based in San Francisco, its unethical behavior affected the financial board members of the City of Seattle who voted down furthering their relationship with the bank by a unanimous vote.

The choices and consequences of Wells Fargo in this instance should serve as warning to any organization considering a sales or marketing tactic outside the realm of good ethics. My feeling at this point is that Wells Fargo has not heard the last of its unethical decision making policies on its business. This is a prime reason why the executives of any organization should receive effective ethical training, not just check off the box compliance meetings.

Return of the ThighMaster for Kids? The Ethics of Health Marketing - Chuck Gallagher

Several years ago, there was a device launched on the market called the “ThighMaster.” It was marketed by a sexy actress who was popular at the time (I’ll bet you know who it was!) and millions of units were sold. It turns out that the device did elevate heart rates for a second or two, but it was more due to the clingy leotard the actress wore as she demonstrated the device than the calories it burned. In fact, after numerous complaints by customers to the Feds, the ThighMaster people were forced to cut down on their rhetoric. The ThighMaster is now part of a “toning” regimen along with (and I am not kidding) a second product they call the ButtBuster.

You see, squeezing a spring between your legs won’t do very much to improve your health, reduce your thighs or give you that slim and sexy look. I suppose if you used the device 17 hours a day for a year you might drop a pound or two, but far better to walk the dog around the park twice a day. And that’s for free.

Was it ethical to market the ThighMaster as a thigh reducer? Well, no. Many a ThighMaster now rests in landfills or collects dust in attics. They will make for a lovely item to go on display if there is a museum that specializes in the early 1990s.

ThighMaster – Think & Learn Smart Cycle

Your toddler’s very own ThighMaster could be the Think & Learn Smart Cycle. Before I go any further, I need to get serious.

Childhood obesity continues to skyrocket. It starts as young as two. The statistics are frightening. More children are dangerously over weight than ever before, and children who are already considered clinically obese are getting even fatter. Childhood obesity is leading to diabetes, high blood pressure and heart disease.

The Fischer Price Company has come out with a toy for children 3 to 6 years old. It is an exercise bike with a tablet holder. It is being billed as “a clever solution for parents looking to give toddlers guilt-free screen time.”

For $150, and about $25 worth of apps, kids can study math, science and social studies. According to the company, “They’re learning and mastering content as they pedal, fast or slow, forwards or backwards.” The toy will be available in the next few months.

This toy is part of a growing number of toys that combine “exercise” with “learning.” My first question is if these toys are so great, how come childhood obesity continues to rise?

Parents, well-meaning, are rightly spurred on by words such as “childhood obesity.” No parent would intentionally want their child to be morbidly overweight, I’m sure. Companies like Fischer Price know that. Most parents would like their kids to succeed in school and in life, and I’m sure of that too. So Fischer Price combines two, but is it ethical?

The company is trumpeting how much kids can potentially learn. They have yet to prove it. More seriously, they are proud that kids can have guilt-free screen time. Why guilt free? Apparently because they can master content as they pedal, “fast or slow, forwards or backwards,” while mom and dad are on Facebook.

So how slow is slow?

Maybe I am being an old curmudgeon, but what will burn more calories: a half hour of fun outdoor play time or two hours slow-pedaling or no pedaling in front of a screen? About that “guilt free” stuff. If a child is three or four or five, is it biologically possible that the child has already grown to 6’5” and carries 300 pounds of pure muscle? My point is that the parents can easily control screen time and encourage children to exercise by saying, “Enough.” If the child is eating cookies and staring at a tablet for hours at a time, whose fault is that?

The ethical question, and it’s not meant to be funny, is: what is the difference between the ThighMaster and the Think & Learn? From my vantage point, not much. Far better a child plays hard for an hour or two and then quietly learns than to get baby-sat by a gimmick.

Hidden Fraud That Adds Up - Chuck Gallagher

In the business section of a cable news station, I came across an article about a new, and very sophisticated software that claims it can detect employee fraud. The software works on an “AI” or artificial intelligence platform. In order to function, of course, it will need to be put onto a modern computer network that will be maintained by IT professionals.

While it could very well work for large scale accounting entries with multi-million, or billion-dollar enterprises, the software can’t necessarily detect unethical behavior. It is also of little use at the tens of millions of smaller scale organizations where fraud can live with relative ease.

Who is Kathy Nelson?

For nearly nine years, Kathy Nelson, an employee of OSCO, the Okaloosa County’s Water and Sewer Department in Florida’s panhandle, was happily engaging in low level fraud. She has been charged with grand theft and other crimes for taking cash payments from builders in exchange for falsifying documents. She was able to divert funds that should have gone to Okaloosa County’s coffers of more than $223,000. There was a separate “arrangement” of about $107,000 in diverted funds she committed as well. In exchange for this “diversion,” Nelson received cash kickbacks.

Whenever there is new construction, builders have to pay municipalities for water taps or “taps.” Obviously, a new building will increase water demand and several new homes or a factory complex will expand water usage even more.

However, something proved to be strange during an initial in-house audit. It seemed as though Nelson had failed to collect close to $60,000. in water and sewer capacity expansion charges, commonly referred to as “taps.” Not only were fees missing, but evidence was found of fictitious entries, invalid receipts, and altered documents in the customer service database.

The records were faked to make it appear the proper charges were paid. In fact, when the auditors got more in-depth with their audit, they found billing irregularities in 83 accounts linked to the same three building contractors. Naturally, the contractors were complicit in the scam.

For not billing the contractors for the taps, the contractors paid her in cash-filled envelopes. As the fraud widened, it was discovered that more than $330,000 in fees were avoided.

Kathy Nelson does not have the look of a hardened criminal. She is a middle-aged woman nearing 58 years of age. She started to participate in the fraud because she saw the opportunity to do so. There was little in the way of oversight or in checks and balances. She was “bought off” for several years, quite content to fake documents for nice cash payments.

Fraud Multiplied

Is this case of fraud so terribly unusual? Unfortunately, I tend to doubt it. There are many municipalities that have the equivalent mission of OSCO. Year in, and year out, they do their important albeit somewhat predictable work. They are bureaucracies where there is usual low-risk and low-reward.

Employees not motivated to find satisfaction within the framework of the job, may find other ways to manifest their senses of under-appreciation and gratification. Sometimes these “ways” include unethical behavior. OSCO, of course, owed Kathy Nelson nothing. She was given a stable administrative job with stable pay and benefits and in exchange she had to perform a predictable job. There were many ways she could have chosen to fulfill her need to make more money but instead she chose fraud.

How the fraud started is anyone’s guess. How she was approached, or how she approached the contractors has not yet been fully determined. Someone “tested the waters,” and someone accepted. A fee was named, and money was exchanged. Over time, the administrator with the predictable job, was making a more than decent salary.

As to ethical training for all of OSCO’s employees, we have no evidence. My guess is that the training, if it occurred at all, was cursory and not reinforced. I do not doubt for one minute that somewhere, right this minute, a similar type of fraud is occurring in several organizations across the country.

Ethical training is inexpensive. Fraud is costly. There can – and will be – all kinds of software created in the future to try and detect fraud, but it will not be able to gauge the degree of ethics in the human heart.

Wall Street Financial Services Executive Andrew W.W. Caspersen Guilty of Fraud - Chuck Gallagher

In a breaking voice, former Wall Street executive Andrew W.W. Caspersen admitted he bilked millions of dollars from relatives, friends and his former employer in a Ponzi-like scheme, all to feed a powerful gambling urge.

As a result, the 39-year-old former Park Hill Group partner faces the likelihood of more than a decade in prison, along with fines and restitution his defense attorney said he lacks the means to pay.

“I told family members and friends that a private equity firm had given me an allocation in a practically riskless debt instrument,” Caspersen said as he pleaded guilty to securities fraud and wire fraud before U.S. District Court Judge Jed Rakoff. “There was no real investment opportunity; it was just a way for me to get money to feed a gambling addition that was all consuming at the time.”

“The people I harmed were people I cared for the most,” added Caspersen. “I could not be more sorry or ashamed for my crimes.”

Under federal sentencing guidelines, the disgraced executive could face up to 40 years in prison and tens of millions of dollars in fines and restitution. However, federal prosecutors and Caspersen’s defense lawyer stipulated to an agreement that could subject him to roughly 12 1/2 years to 15 1/2 years behind bars.

The stipulation also calls for Caspersen to forfeit nearly $45.2 million, including proceeds from the sale of a six-bedroom family home in Bronxville, N.Y., an upscale New York City suburb, and rights to a co-operative apartment on Manhattan’s Upper East Side.

PJT’s Caspersen accused in $95M fraud scheme

The sentencing decision lies with Rakoff, who said he was “not particularly affected by guideline calculations,” and declared his view that they “border on the irrational.” The judge scheduled a Nov. 2 sentencing date.

Caspersen’s decision to withdraw an earlier not-guilty plea and admit his crimes marked the latest development in the downfall of a businessman who grew up in a wealthy family and graduated from Princeton University and Harvard University’s law school before following in his father’s footsteps to a career in the financial world.

Manhattan U.S. Attorney Preet Bharara said in a statement that plea change “closes a sad chapter in a tale of deception and betrayal.”

“Parlaying his privileged background, Caspersen concocted a wild fraud scheme that involved made-up private equity ventures, fake email addresses, and fictional financiers. Through a litany of lies, Caspersen took millions from unwitting investors, including some of his own family and friends,” said Bharara.

A criminal complaint filed in March alleged that Caspersen carried out the alleged scheme from July 2015 through March 2016 after leaving Park Hill Group, a global advisory and placement agent that has raised more than $260 billion for private equity firms, real estate funds, and hedge funds. He allegedly schemed to bilk investors of nearly $150 million, according to a subsequent criminal information federal prosecutors filed in June.

The father of two allegedly claimed investors’ funds would be used to make secured loans to private equity funds, and would earn a 15% to 20% annual rate of return.

Pedigreed Wall Streeter accused of $95M fraud

In all, Caspersen allegedly received approximately $38.5 million from more than 10 individuals and entities. The investors included a nearly $25 million stake from a charity backed by Moore Capital founder Louis Bacon.

Instead of investing the funds as promised, Caspersen used the money for personal options trades based on the performance of the Standard & Poor’s 500 Index, the criminal information charged. He also used money from the investors to repay more than $8 million he’d previously diverted from the Park Hill Group, also for gambling.

As of Feb. 11, one of Caspersen’s brokerage accounts held roughly $112.8 million in cash, which a prosecution filing said “would have been more than sufficient” for him to repay all of his investors. By March 9, however, his losing options trades allegedly had lost approximately $108.2 million of the money in the trading account.

The prosecution filing also alleged that Caspersen used some investors’ funds to make periodic interest payments to earlier investors, one hallmark of a Ponzi scheme.

Caspersen’s father, Finn M.W. Caspersen, was a respected financier who for decades ran consumer-finance company Beneficial Corp. He committed suicide in 2009 while battling cancer.

Federal investigators suspected the elder Caspersen was among the wealthy Americans who kept funds and income in secret offshore accounts in a bid to avoid U.S. taxes, The New York Times reported in 2009.

The younger Caspersen battles personal problems of his own. He told Rakoff he was hospitalized for approximately 16 days, primarily for mental health treatment, after he was arrested and charged in March. Caspersen said he’s currently undergoing psychiatric and drug treatment for the gambling addiction, depression and mental health issues.

After a court hearing in June, defense attorney Paul Shechtman told reporters Caspersen had “pathological gambling problem,” The Wall Street Journal reported. After Wednesday’s hearing, Shechtman called his client’s downfall “very sad.”

Is Nirmal Mulye Confusing Morality with Ethical Behavior? - Chuck Gallagher

It is an interesting case of arrogance, where an executive’s “moral requirement” to raise the price of a pharmaceutical 400% has enraged the director of the FDA, and medical professionals everywhere. Is it possible that Nirmal Mulye is confusing morality with ethical behavior?

Nostrum Pharmaceuticals

Nostrum Pharmaceuticals founder and president is Nirmal Mulye, and he has recently distinguished himself by two things: raising the price of an antibiotic from $500 per bottle to $2,300 per bottle, and defending pharmaceutical company head Martin Shkreli (now in jail) for gouging the price of an AIDS drug by more than 5,000%

Of the first point, Mulye is quoted as saying:

“I think it is a moral requirement to make money when you can, and to sell the product for the highest price.”

In terms of Martin Shkreli, Mulye said:

“I agree with Martin Shkreli that when he raised the price of his drug he was within his rights because he had to reward his shareholders.”

The statement is what prompted FDA Commissioner Dr. Scott Gottlieb to say: “there’s no moral imperative to price gouge and take advantage of patients. The FDA will continue to promote competition so speculators and those with no regard to public health consequences can’t take advantage of patients who need medicine”

To be fair, Mulye fired back to Gottlieb’s statement and said:

“The word morality was used in the conversation, but not in the context of price increases. I said I have to raise prices when I can — how to get the best prices for my products, so that I can survive. It is about the survival of the business. It has nothing to do with morality.”

However, he went on to clarify his clarification:

“Is it moral for me to lose money?” If I don’t make money, then I can’t create those jobs. And where does the money go when I make it? It goes back into research and hiring new people right here in the US.”

He then turned around and blamed the FDA for its stifling regulations. In an email to Gottlieb, Mulye stated:

“Basically, I said in a nutshell that he (Gottlieb) does not have the necessary competence to comment on the morality of drug price increases, which is a complex subject…Gottlieb should stay away from tweet (Twitter), and he needs to stay in his office and listen to people like me and reform the agency.”

Mulye feels he is being “vilified” and that the FDA doesn’t understand how drug pricing works. At one point, Mulye likened his role to that of a fine art dealer who sells Van Gogh or a Rembrandt at the highest possible price.

All of a sudden, drug pricing has left the arena of research, development and marketing costs and entered the realm of ethics.

If the FDA and pharmaceutical companies are at loggerheads, there may be some very good reasons for it. The people in the middle, you and me, suffer as the result of their finger-pointing and indignation.

No Fine Art

We can start this discussion with an observation about Mulye’s comments: a Van Gogh original may sell for $50 million or more. I am sure there are many art critics and art dealers who are able to offer an explanation as to why. Then again, you can probably go to any number of online or brick and mortar locations and buy a decent, framed reproduction of the same painting for $250. For most of us, the $250 version is just fine, thank you. The aesthetics of it all, the appreciation for the skill of the artist will still reflect itself in the copy.

The “original pharmaceutical” may have cost millions to research and develop, and there is no doubt that Big Pharma will spend millions to promote it (legally and sometimes, under the table), but how much is it really worth once it goes generic?

In Mr. Mulye’s world, it seems as though his comments on morality versus profitability is still the same argument. At what point is his “profitability” argument an immoral argument? While a Van Gogh original hung in a museum or a copy tacked above our desk can stir the soul and make the moments we look at it turn to joy or happiness, if we are sick, it will not save us, cure us, heal us or relieve us. A pharmaceutical will.

No one argues that an art dealer can command a high price for an original oil. We should however, argue when a drug that can be replicated over and over again, experiences a 1000% increase based on an executive’s perception of a moral imperative to stockholders. At what point do drug prices hold patients and insurance company’s hostage?

If the copies of the Van Gogh were to go from $250 to $100,000, my guess would be that most people couldn’t afford them. Because Big Pharma understands that most patients have little choice, they seize an opportunity for profit.

The FDA has regulations in place for a reason. I understand they have a lot of red tape that drives Mr. Mulye apoplectic, and maybe the regulations need to be streamlined. Still, when Shkreli imposed 5,000% increases or Mulye, his 400% it is an ethical, rather than a moral argumen

Brokerage Fraud: A $40 Million Scam - Chuck Gallagher

It is important to begin this post on brokerage fraud with just a touch of education. “Variable Annuity Products” offer investors a cross between annuities from insurance and security investment.

As the stock market goes up and down, the returns of the variable annuity product goes up and down. Over the long term, these products should pay a much higher yield than a regular annuity. Most of these products are tax deferred. Variable Annuity Products have higher annual fees.

In short, these are good investments for people who have lots of time, don’t mind the higher fees and who may not have IRA’s. They are terrible investments for those who might need money in the short term. They make little sense for people with IRA’s (already tax deferred) and are not all that simple to understand.

The SEC has charged four stock brokers with committing fraud on retirement age investors. The investors may have lost up to $40 million.

Brokerage Fraud – Reading the Small Print

The four brokers decided to intentionally mislead investors by persuading them to roll over their retirement accounts into high-fee, long-term variable annuity products. Not only is this the worst possible product for a retirement age individual, they make no sense. Before we go further into the mechanics of the scam, let me just say that stockbrokers adhere to a strict code of ethics along with their firms. The ethical standards are, when followed, supposed to prohibit brokerage fraud.

The SEC makes certain that in the daily practice of brokerage firms, in the curriculum of brokerage training and in every area of enforcement, the commitment to ethics is uppermost in expected practice. It is why insider trading is so very serious a violation. I must admit that I have known unethical brokers; they always feel as though they’re the brightest bulbs in the room. They are not. They are “flimflam men (and women).”

Invariably, an unethical broker chooses to take that route because he or she sees an opportunity to take advantage of a vulnerable, unsuspecting investor. The “opportunity” might also be interpreted as greed. The need of a crooked stockbroker may be money, that is true, but it may also be a need for power; to take advantage of someone and to secretly feel good about hurting someone.

In this case, there were four brokers based in Atlanta who were broker employed by an official sounding company: Federal Employee Benefits Counselors. Whether, they conspired as a group (most probably) or saw the opportunity to individually commit brokerage fraud (unlikely) they decided to go after federal employees who were nearing 60 years of age.

Thrift Savings Plans

There is a contribution plan for U.S. civil service employees called the Thrift Saving Plan. It is a nest egg that of course is vital to a more comfortable retirement. There are a host of short term investments a civil service employee can potentially make to increase earnings, a bit. Most of these investments a low-fee. However, the stock brokers saw those nest eggs as the “Golden Goose” for their own pockets.

The brokers did a hard sales job on the civil service employees with the Thrift Saving Plan. They lied about the fees and they lied about the returns. To make matters worse, they convinced the investors that the variable annuity products were approved by the government. In other words, they obscured important details. The SEC even alleged that when the brokers sent out information on the investment, sometimes they excluded the words “variable annuity.”

The civil service employees, believing that the brokers were being honest and ethical, “gave over” their money to the brokers, up to $40 million worth. Until the entire mess gets straightened out, the civil service employees have their money tied up in various investment plans, and they are actually earning less because of the high fees.

The brokers will undoubtedly lose their licenses and will be subjected to fines and other penalties.

There remains one key component we need to explore: “Rationalization.” The four stockbrokers knew what they were doing. In their twisted and unethical world, they probably rationalized their behavior on the basis that the civil servants had plenty of money, that they wouldn’t miss it, and some day, perhaps when they were very old and feeble, the investors would get their investments back.

This again underscores the need for all of us to do our due-diligence. Be extremely wary of any broker who “cold calls.” Hang up the telephone once the hard sell begins! The federal government does not authorize or endorse investments. It should have been a red flag.

However, the biggest red flag of all is that the current type of ethics training is not working. The ethics training for the brokerage community has become way too rote and predictable. I can imagine the four brokers who committed this scam laughing in the back of the room during a normal ethics training. They will not be laughing as the bars of the jail cells slam in their faces.

Advertising Ethics: Los Angeles City Attorney Sues JC Penney, Kohl's, Macy's and Sears - Chuck Gallagher

It may not be such a happy holiday season for four of the major retailers who serve the Los Angeles area. If the case expands nationally, this could signal a whole new era in “Truth in Advertising.” Are advertising ethics in play?

Mike Feuer, the Los Angeles city attorney is suing four major retailers over claims that they deliberately inflated the original price on some items. The chains include JC Penney, Kohl’s, Macy’s and Sears. The claim is that they misled customers into believing that they were getting a better deal. That, for most, would be considered an accounting ethics violation.

“Customers have the right to be told the truth about the prices they’re paying — and to know if a bargain is really a bargain,” said Mike Feuer.

The lawsuits are essentially alleging that that the stores, raising the prices on items and are playing a game of false advertising. The companies are allegedly doing this on thousands of products. In essence, customers are not saving much on anything advertised as being on sales.

In one aspect of the lawsuit, Sears is charged with advertising a front-load washer claiming an original price of $1,179.99, that is sharply reduced for a huge sale. However the city attorney’s office has apparently discovered that the item was never offered for more than $999.99! Similar horror stories are given for the other chains as well.
Advertising Ethics – California Laws Violated?

In California, retailers are forbidden from advertising a sale price of an item unless it’s been on the market at a set price for at least three months. There may be a penalty of up to $2,500 for each violation. There are potentially hundreds of violations for each store, so it could be rather costly. Every choice has a consequence and advertising ethics are real and important.

Obviously, if customers are given false prices on items it will create an untruthful awareness of the true value of those items. It is a misleading practice that not only deceives customers, but it also destroys competitors. Obviously if a store has legitimate competition who offer the same products at fair prices, falsely advertised products at inflated prices then “sharply marked-down,” are seen as being more attractive. Then too, the larger stores who manipulate prices in this manner generally have bigger advertising budgets and are able to reach more customers through print, electronic and online media efforts than the smaller stores.

This is a situation which is not so much about pricing but about poor ethics. In the competitive world of retailing, a lack of oversite generally leads to these behaviors. While government intervention is usually not a positive thing in these types of matters, in this case it is a good thing that at least some entity is looking out for the customer – and for fair competitors.

The challenge is “how much regulation is enough?” I believe that it comes down to a type of ethical education program targeted at major merchandisers and retailers. While it is going to be impossible to change all negative aspects of the free enterprise system, it is a matter of choices and consequences.

Minimally, major retailers must be aware that it they choose to unethically deceive customers in a given market, there will be stiff penalties imposed and there will be an announcement of those penalties.

While no one is suggesting dictating to retailers what profits they can make from a given sale, there can be guidelines for artificially inflating prices and then deeply discounting those inflated prices. The laws are seemingly in place. What is not in place are the consequences for unethical behavior. Perhaps it is well overdue to force good ethics when ethical behavior has been abandoned.

Medical Ethics - Should the Sins of the Father Be Visited on the Toddler? - Chuck Gallagher

This is the case of an important ethical dilemma, especially as modern-day medicine clearly has the ability to do something about it. Let’s visit this medical ethics question.

Anthony Dickerson Jr. is a two-year old toddler. He is perfect, and perfectly beautiful except for one problem. He has a rare condition in that he was born without either kidney. We cannot live long without kidneys or without routine medical intervention. Sadly, last month Anthony Dickerson Jr. reportedly suffered a stroke and he must now be continuously monitored.

The situation is maddening, as his father is the perfect match and his father is perfectly willing to give his kidney to his son, so it should be a simple and straightforward procedure. However, there is a wrinkle. Anthony Dickerson Sr. is behind bars.
Medical Ethics: Choices and Consequences

In 2011, Anthony Dickerson Sr. was arrested for theft and forgery, then in September 2017 he was arrested again for violating probation. He made the choice to be in the possession of a firearm. It was a necessary consequence for making an incredibly stupid choice. While in jail, he wanted to at least attempt to make some amends by asking the courts to allow him to proceed with the operation. He wanted nothing for himself, only to help his little boy. This seems like a medical ethics no brainer.

He talked to the hospital, and the hospital wrote to the courts on his behalf requesting he be allowed to go to Emory Hospital for blood work and testing to allow the operation to proceed. The blood work and pre-operation testing was completed. At that point, Dickerson had been released and was back on probation.

It came as a complete surprise when the toddler’s mother received a follow-up letter from the hospital that informed her the surgery would be delayed until Dickerson had complied with his parole officer following three months of additional probation. The hospital said they would re-evaluate the situation in January 2018 after they received all of the documentation that said Dickerson had completed his three months.

According to the hospital spokesperson:

“Guidelines for organ transplantation are designed to maximize the chance of success for organ recipients and minimize risk for living donors. Because of privacy regulations and respect for patient confidentiality, we cannot share specific information about our patients.”

Who is Being Punished?

The hospital guidelines are written as bureaucratic necessities, and they are, I am sure, for the most part understandable. Medical professionals strive to reduce risk. As a patient I too would desire the least possible risk with any procedure.

However, this situation involving Anthony Dickerson Sr. and his two-year old son is the reverse situation. Presumably, the longer the hospital waits the more serious the little boy’s situation might become. If the hospital wants to reduce risk, why not perform the surgery sooner rather than later? Could it be that other factors are in play?

Dickerson, a felon, was rearrested following the discovery of a gun in his possession. No one can deny it was a stupid, unnecessary consequence. What he was doing with the weapon – or why he felt the need to carry it, is a matter for the criminal justice system. That, in part, is the point. The hospital is playing an intermediary role it should not be playing. The hospital is neither judge nor jury. The hospital should be more interested in healing a patient. To me that’s what logical medical ethics would dictate.

If the parole officer is saying that it is fine with the father to donate a kidney to his son, why is the hospital denying procedure? Perhaps there is righteous indignation that the father should be penalized for his mistake. I understand such attitudes but the father is ultimately not the one who will possibly suffer with a delay, it is the toddler.

I might add that donating a kidney is not the same thing as winning an all-expense paid vacation to Cozumel. The procedure is not without its pain and as with any surgery, it is not without its risks. The father will be laid up in bed, and he will have to learn how to care for himself with having one kidney. He will not be partying.

The hospital has taken the position of visiting the sins of the father on the son. It is a risky decision medically, and more seriously, in an ethical sense. The father paid for his crimes. Why should the son pay for those crimes as well?

Medical Ethics - When Body Art Turns Life and Death - Chuck Gallagher

Not long ago the emergency room staff at Miami’s Jackson Memorial Hospital encountered one of the most ethical predicaments they had ever witnessed. So from a Medical Ethics perspective what would you do?

A 70-year-old man was brought into the facility unconscious and rapidly failing. Even in a perfect world, and as a “healthy individual” he would have had a slim chance. However, this man was an alcoholic who had abused his body “on the street” for many years. He was a diabetic and had heart disease. Without intervention it was certain this patient would die.

Physicians and nurses, doing what they were trained to do, rushed to save him. However, when they removed his shirt, there was a tattoo across his chest with the words “Do Not Resuscitate.” There was nothing fancy about the art, it was printed in simple straightforward text, and in fact, the text “Not” was underlined. Enter the issue of Medical Ethics.

He had no friends or relatives. The physicians gathered, uncertain as to what to do. The “body art” was not art, but was it an end-of-life directive?

Medical Ethics – When is a Joke Real Life?

True story: I recall that many years ago a good acquaintance at college, tired of receiving junk mail for various donations, wrote a letter in the alumni office (in the third person!) saying that he had passed away. The announcement of the death appeared in the college newspaper.

This disturbed many of us, of course, as a class reunion was being arranged and frankly we fondly recalled our friendships with him and were sorry to hear of his passing. It was not until many years later that he surfaced on Facebook! I wrote to him and told him we all thought he had died. He laughed it off. He said he was “tired of getting crap” from the college. I thought at the time how hurtful and self-centered his actions had been, how he did not care what effect his selfishness would have on others. However, his behavior paled in comparison to the unconscious patient with the tattooed do not resuscitate, (DNR).

The tattoo made the dilemma of the physicians more confused than clear. Did the man get the tattoo as a joke? Was it a stupid tattoo made on a bet or dare? Or was it a sincere wish made by an alcoholic who no longer wished to live, and who had made peace with himself? The staff was able to learn that the patient had a long history of heart and lung problems in addition to everything else. He apparently lived in a nursing home for a while, but preferred the streets.

As the man’s body began to fail him, a medical ethicist was called in who was asked to resolve the case. Unfortunately, the man never regained consciousness. They tried to buy the man time. The gave him life-sustaining support including oxygen, but they did not put him on a respirator that would breath for him. They were making a Medical Ethics decision.

No one had ever seen such a tattoo but in the end the medical ethicist and the emergency room doctors presumed the tattoo reflected the patient’s wishes. According to the case study that appeared in the New England Journal of Medicine (December 1, 2017):

“After reviewing the patient’s case, the ethics consultants advised us to honor the patient’s do not resuscitate (DNR) tattoo. They suggested that it was most reasonable to infer that the tattoo expressed an authentic preference, that what might be seen as caution could also be seen as standing on ceremony, and that the law is sometimes not nimble enough to support patient-centered care and respect for patients’ best interests.”

Medical Ethics: The Quandary

The patient lasted only the night. They let the patient die even though there were no legal documents permitting non-intervention. While medical ethicists tell us it is always better to do something, suppose the man realizing he was alone and in his mind realizing he was, “beyond help,” wanted to go on his own terms?

Modern medical science is not set up to these kinds of end-of- life decisions. In most situations, physicians will do what they can to save someone’s life. It is safer for the patient and certainly less risky for the hospital.

Suppose it wasn’t a 70-year-old man, but a 17-year-old-college freshman who had gotten a tattoo on a night when she felt depressed? What then?

These types of ethical medical issues will only increase in the future as issues of Medical Ethics become front and center for many.

I often think of my college acquaintance who rejected so many friends because he did not want to get junk mail. He had lost out on so much because he did something on a whim.

Whatever body art represents to the individual in getting the tattoo, it may well be time to revisit the ethics of such personal statements and the effects it has on others. Once a pendulum is set in motion, it may be impossible to stop.

The Enablement of Larry Nassar - Chuck Gallagher

In a Wall Street Journal article in February 1, 2018 entitled: “Olympics Officials Didn’t Act on Gymnasts’ Abuse Allegations in 2015,” we have yet again the opportunity to view what happens when ethics are put on hold. According to the article:

“The U.S. Olympic Committee didn’t intervene in USA Gymnastics’ handling of sexual-abuse allegations against longtime national-team doctor Larry Nassar in 2015, even after USA Gymnastics’ then-president told two top USOC executives that an internal investigation had uncovered possible criminal behavior by the doctor against Olympic athletes.”

The article goes on to ask why officials at the United States Olympic Committee (USOC), which knew of potential problems at USA Gymnastics didn’t reach out to athletes, law enforcement or Dr. Nassar’s other employers.” Nassar continued his abuse for more than a year after the complaints were known. Naturally, the USOC is declining requests for comment which is surprising no one, and after all, none of their children suffered abuse!

However, the USOC has announced just this past week (the last week of January 2018), that an independent investigation “to determine what complaints were made, when, to whom, and what was done in response,” is about to be launched. This is rather a strange time to launch such an investigation given that the USOC was well aware in the summer of 2015 that something was very wrong. In the summer of 2015, “USA Gymnastics indicated they were in the process of contacting the appropriate law enforcement agencies.”

Frankly, I would be curious to know just how much time it takes to “dial” a telephone number and report a problem? What we do know is that about two years later (summer 2017), “USA Gymnastics’ leaders expressed their ‘deepest regrets’ to athletes…and the organization’s entire board of directors resigned (as) part of an overhaul of the group prompted by the Nassar scandal.”

As the investigation has unfolded is has become patently clear that the “adults” were wringing their hands and dragging their feet while Dr. Nassar’s “treatments” were carried out on young girls. USA Gymnastics mentioned Dr. Nassar by name back in 2015, but the USOC stated that “nobody at the organization knew Dr. Nassar was the alleged abuser until media reports in September 2016.”

What if the Fraud Happens from the Inside? - Chuck Gallagher

DCF is Florida’s Department for Children and Families. It employs roughly 12,000 people. As the name of the agency implies, it is out to do good and not harm by giving the vulnerable the aid they need. However, despite the best of intentions some of DCF’s employees in and around the tragedy of Hurricane Irma decided to scam the agency for all it could. Hurricane Irma was tragic. From August 30, 2017 to September 13, 2017, in addition to tragic loss of life and injuries, it inflicted more than $65 billion in damages.

As Irma hit, officials at DCF, believing something was amiss started an internal investigation and they were able to stem a case involving $14 million in disaster aid fraud. They had satisfied themselves that everything was fine However, in the spring of 2018, DCF investigators uncovered food stamp fraud committed by cheaters on its own payroll!

The DCF began to run an audit on its Office of Public Benefits Integrity in May 2018. It revealed that 31 DCF workers cheated on applications to collect aid. At this time, all 31 state workers have been terminated or soon will soon be fired. The offenders will be turned over to law enforcement for prosecution.

After the Hurricane did its massive damage, the agency was inundated with 1.2 million applications for disaster relief.

  • Stan Phelps is a Forbes Contributor, IBM Futurist, and TEDx Speaker. His keynotes and workshops offered at focus on how to create meaningful differentiation to win the hearts of both employees and customers. He’s the best-selling author of: Purple Goldfish -12 Ways to Win Customers and Influence Word of Mouth, Green Goldfish - Beyond Dollars: 15 Ways to Drive Employee Engagement, Golden Goldfish - The Vital Few, Blue Goldfish - Using Technology, Data, and Analytics to Drive Both Profits and Prophets, Purple Goldfish Service Edition - The 12 Ways Hotels, Restaurants and Airlines Win the Right Customers, and Red Goldfish - Motivating Sales & Loyalty With Shared Passion and Purpose. Connect with me at or +1.919.360.4702.

  • Tagged With

  • Tools