Wilson Abney, Former Chief Counsel to the US Senate Ethics Committee and Senior Counsel in the establishment of the Consumer Financial Protection Bureau
Wilson Abney has been an attorney working in public service ethics for more than forty years. He served as Counsel, Chief Counsel, and Staff Director to the United States Senate Ethics Committee from 1980-1982. During that time he was also selected to serve as counsel to the Senate Impeachment Trial Committee for the trial of Federal District Judge Harry Claiborne. He authored the “fact book” used by the Trial Committee and the full Senate in debating whether Judge Claiborne should be removed from office. After leaving the Ethics Committee he served as Ethics Counsel for President Clinton’s transition team. He joined the Commerce Department in 1994 as an advisor in the Department’s Ethics Division. From 1996 to 2009 he consulted with public and private organizations on ethics issues and wrote on the need to reform the Congressional ethics process. In 2009 he rejoined the government as Ethics Counsel to the Congressional Oversight Panel, a legislative commission established to oversee the bail-out of the financial sector. In 2011 he was asked by the Panel’s Chair, Elizabeth Warren, to assist in the establishment of the Consumer Financial Protection Bureau. He served as Senior Counsel in the Bureau’s Office of General Counsel, retiring in 2012. Mr. Abney continues to demonstrate his life-long passion for public and private sector ethics by studying, writing and consulting on the subject.
- What is the most important ethical lesson you have learned (either personally or professionally)?
In personal, professional, and business relationships, success and sustainability require trust. Inherent in that principle is that actions have consequences. When an individual or organization engages in conduct that causes you to conclude you cannot trust them, your loss of trust will inevitably result in termination of the relationship or the establishment of measures to provide protection. The violation of trust always has a cost. In business, such measures are likely to make the relationship less efficient and less profitable.
My professional life has primarily focused on the principles and practice of public service ethics in the United States. In American public service, elected officials are obliged by our Constitution to strive to “establish justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity…”
The American governmental system operates as intended when those who hold public office demonstrate through the performance of official duties their understanding that the essence of ethical service in government consists in considering offices as public trusts bestowed for the good of the country, and not for the benefit of an individual, special interest group, or political party. The principle, “public office is a public trust,” is at the heart of the laws and rules applicable to those who serve in public office. Federal institutions have restated that principle throughout their history in the codes of ethics applicable to their officers and employees.
If you ask a government official in the United States whether he or she believes that “a public office is a public trust,” they will undoubtedly answer in the affirmative. Unfortunately, if you ask those officials what is required of them as a trustee of the public interest, you may have to wait a long time for an answer.
In some cases where a public official uses his or her office for private gain there are criminal laws and penalties applicable to their conduct. For instance, federal law prohibits officials from accepting a bribe to take an official action. Each branch of the Federal government has adopted rules precluding the acceptance of gifts from certain types of donors. These rules guard against the perception that such gifts would influence the governmental process. In public service ethics, the most important question is not whether an elected public official has violated a law or rule. The most important question is whether the official has engaged in conduct that causes their constituents to conclude they are not using their public offices to achieve the public interest (as perceived by those constituents). Failure to maintain this standard is likely to cause those officials to lose the trust of the voters and the offices to which they have been elected.
The importance of trust in all human relations, and particularly in the relationship between government officials and the people, reminds me of a passage from Shakespeare’s Henry IV Part I.In that scene, two politicians are debating, each asserting that he is the more powerful. As the ambitious rivals embellish their stature and abilities, eventually one boasts that he “can call spirits from the vasty deep.” After a moment of reflection, the other responds: “Why, so can I, or so can any man; But will they come when you do call for them?”
Throughout our national history, public officials have called on the American people to put aside the pursuit of their individual interests to protect the national interest and achieve the common good. All too often, the conduct of those officials has compromised their ability to lead and the willingness of the people to follow.
In my view, the principles applicable to public officials and organizations are equally applicable to the private sector. It is appropriate that we acknowledge and applaud the many private sector organizations that treat their employees, suppliers, customers, shareholders, and communities with respect. It is also important to understand the practices and processes those organizations have inculcated in their culture and determine how those traits can be adapted for other organizations and situations. An organization’s ability to generate and sustain both the reality and the perception that it behaves honourably with respect for its customers, employees, shareholders and community, is critical to its ability to survive and thrive over time. Unfortunately, too often corporate leaders are more concerned with the daily price of their company’s stock rather than long-term sustainability.
We must also recognize that some businesses deny employees the right to organize and are willing to take any steps they deem necessary to increase their profits—even at society’s expense. Frequently the leaders of these businesses follow the ethical constructs enunciated in Milton Friedman’s 1962 book Capitalism and Freedom. There Friedman describes as “subversive” the principle of corporate responsibility to society and the public interest. He noted, “Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible.”
Over the last 40 years, Friedman’s views on the limits on corporate accountability have come to dominate many corporate boardrooms and CEO offices around the world. They have also provided the intellectual basis for the economic policies adopted by many of those in governmental roles in the United States, other nations, and international organizations like the World Bank and the International Monetary Fund.
To accomplish their goal of maximizing profits some businesses are willing to use their financial resources to manipulate the governmental system to convince government officials to establish public policies that increase private profit at the public expense. They attempt to extract tax breaks and threaten to take jobs out of the community, state, or nation if the governmental entity does not comply with their demands. As one common example, some professional athletic teams have threatened to leave communities unless the local government provides incentives including the reduction or elimination of taxes on their very profitable franchises. Often the costs incurred in providing these incentives exceed any benefit generated by the team’s presence in the community. The loss of revenue from taxes on the profits generated by the team may either require the community to place a higher burden on taxpayers to provide essential services (such as public education and safety) or reduce funding for those public services.
We have seen in the United States that the largest corporations have often convinced Congressmen and Senators to enact tax breaks and subsidies resulting in their avoiding paying any taxes on their profits. Too often, we have seen businesses that are garnering huge profits pay their employees so little in wages that society as a whole ends up providing food stamps and medical care needed to enable the corporation’s employees and their families to survive. Often, even as these businesses engage in such practices, they attempt to buy credibility as “good citizens” of the community by contributing to local programs such as symphonies or operas or donating to institutions supported by favoured public officials.
Too often, our government officials have put in place public policies to benefit those who can provide financial support for their election to positions where they wield power ostensibly in the public interest. Government officials have embraced these policies have internalized and promoted a vision of the world in which benefitting the donor class will ultimately result in more freedom and a better life for all. On the other hand, maybe they just did it for the money.
The eighteenth century economist and philosopher Adam Smith noted, “The interest of [businessmen] is always in some respects different from, and even opposite to, that of the public …. The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.”
Since the historical data indicate that governmental or private sector policies that result in the concentration of income and wealth in the hands of the few increase neither the aggregate amount of freedom nor wealth in a society, one must question whether Public officials who have “suspended their disbelief” to further the interests of their benefactors in the private sector have (pardon the pun) misplaced their trust.
- What is the most shocking corporate ethics matter you have seen in the news recently? Non-profit sector? Why?
So many potential answers; so little time.
One ethics matter, which has caused me great concern, occurs at the nexus of the private sector and public sector: corporate money, the electoral process, and public policy. Most would not consider this example to be the “most shocking,” but it certainly represents great peril for America’s future as a republic intended to function for the common good and in pursuit of the public interest.
Over the last few years, the United States Supreme Court has ruled on several cases related to the financing of political campaigns, Citizens United v. F.E.C., American Tradition Partnership v. Attorney General of Montana, and McCutcheon v. FEC. In these rulings the majority of the Supreme Court, over the strenuous objection of the minority, has, determined that the American people have no reason to be concerned that public officials and the governmental process are improperly affected by politically related expenditures. According to the majority of the Court, public policy is not improperly influenced by political expenditures benefitting a candidate or party unless the expenditures are part of a quid pro quo arrangement. Such an arrangement only occurs when a potential benefactor says to a hopeful beneficiary, “I’m willing to give this money to help get you elected but I’m only going to do so if you agree to perform a certain act in your official capacity that will benefit me.”
Such a quid pro quo standard requires a criminal bribe before Congress can limit political donations and expenditures to protect the public interest against the financial interests of the donor class. Such a requirement is incompatible with American constitutional theory and history, and the experience of the United States House and Senate. Both institutions have addressed a number of non-quid pro quo situations that have caused the American people to question the integrity of public officials and whether the governmental process has been diverted to serve the special interests of the “donor class” to the detriment of the common good and the public interest. Each has adopted Codes of Conduct that include rules prohibiting the acceptance of gifts. The purpose of the rule is to protect the public’s faith in the integrity of the legislative process. These rules do not require a quid pro quo agreement between the donor and the recipient. In the report submitted at the conclusion of its investigation into the Senators known as the “Keating Five,” the Senate Ethics Committee specifically found that conduct may be unethical or improper even if it does not constitute illegal behaviour. The Committee declared, “Because Senators occupy a position of public trust, every Senator must always endeavour to avoid the appearance that the Senator, the Senate, or the governmental process may be influenced by campaign contributions or other benefits provided by those with significant legislative or governmental interests.”
Americans have often seen corporations exert an improper influence on policy decisions of public officials. As an example, prior to our Declaration of Independence, British colonists on the western shores of the Atlantic were angered by Parliament’s “bailout” of the British East India Company; an entity it concluded was “too big to fail.” The Tea Act, passed by Parliament in 1773, granted the Company a monopoly on tea sales in the American colonies.
In the early days of our republic, Thomas Jefferson noted and lamented the power accumulated by the private sector to the disadvantage of the American government, which, in his view, represented the will of the people. He argued, “I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country.” Jefferson, no friend of the financial elites, noted in his last letter, “the palpable truth, that the mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately, by the grace of God.”
President Abraham Lincoln, in his Gettysburg Address delivered in late 1863, noted that America was founded on “the proposition that all men are created equal.” He declared that our government was intended to be of, by and for the people. Twenty-three years later, in 1886, former Republican President Rutherford B. Hayes lamented in his diary: “This is a government of the people, by the people and for the people no longer. It is a government by the corporations, of the corporations, and for the corporations.”
From late 1787 through 1788, the people in the various states debated whether to ratify the Constitution proposed to replace the Articles of Confederation. James Madison was one of the most influential voices in the Constitutional convention and in the debates leading to ratification. In Federalist #57 he wrote “The aim of every political Constitution is or ought to be first to obtain for rulers, men who possess most wisdom to discern, and most virtue to pursue the common good of the society; and in the next place to take the most effectual precautions for keeping them virtuous whilst they continue to hold their public trust.”
After reading the decisions in Citizens United, American Tradition Partnership, and McCutcheon, one must ask whether these decisions are consistent with Madison’s admonitions on one the fundamental purposes of a constitution: taking “the most effectual precautions for keeping” public servants “virtuous” while they serve in public office. How do we recognize “virtue”In the context of republican government under the Constitution? In my opinion, “virtue” refers to public officials maintaining their commitment to holding their offices as public trusts used in the pursuit of the public interest and the common good rather than the creation of public policies that benefit special interest groups to the detriment of the public interest.
The press has recently reported that polling in the United States found an overwhelming majority of voters would support sweeping reforms to the Supreme Court because trust and confidence in that institution has deteriorated. According to the polls, a significant majority disagree with the Court rulings that have undone a century of campaign finance law and tilted the rules in favour of the extremely wealthy and major corporations. Eighty percent of respondents opposed The Citizens United ruling. A 51 percent majority disagreed with the Court’s McCutcheon ruling, which lifted caps on total campaign giving. The majority of respondents believed that the decision was likely to create more corruption in governmental decision-making.
By 60 to 36 percent, those surveyed said that Supreme Court justices were more likely to be carrying out a personal or political agenda than working to render a fair and impartial judgment. It appears that the American people understand what the Supreme Court refuses to recognize, that the governmental process can be corrupted even when there is no specific quid pro quo.
As professor Zephyr Teachout of Fordham University recently declared in a Washington Post opinion piece, “The Supreme Court was wrong …. Its decision in McCutcheon v. FEC showed a weak understanding of the history of corruption laws and political culture.”
Today, the majority of the Supreme Court equates money with free speech, and for more than a century, it has equated corporations with persons. The Supreme Court’s recent campaign finance decisions fail to recognize the ethical principles inherent in the Constitution adopted by America’s founding generation. They have the potential to alter America’s character, changing a nation that has struggled to be a democratic republic committed to the idea that all are men are created equal into a plutocratic republic and turning public offices into tools of private wealth and power. Reading the majority opinions in these cases, one might be inclined to think of Rome just before Caesar crossed the Rubicon.
- What do you see as the opportunities for the corporate sector and non-profit sector to collaborate in raising the bar in ethical matters?
When I served as Senior Counsel in the Consumer Financial Protection Bureau’s Office of General Counsel, I encouraged the Bureau to enter into a continuing conversation with ethics officials in the financial sector organizations within its jurisdiction.
As you know, few people anywhere in the world believe that financial sector institutions have high ethical standards. The practices of the financial sector that led to the global economic collapse of 2008 and the subsequent behaviour of many in that sector demonstrate that recognizing and addressing ethical issues remains a challenge. Nonetheless, their long term survival depends upon the willingness of people, businesses, and governments to use their services. Some of those institutions may bet that they are the only game in town and that they can continue to buy government policy to protect their survival and their profits. If I were in their shoes, that is a bet I would not make. The more rational course for protecting their sustainability is to recognize that their long-term ability to survive requires that they work to gain and maintain the public trust. No easy task.
It is important to understand that the purpose of the discussions I proposed while at the Consumer Financial Protection Bureau was neither to “capture” the corporate ethics officials nor to allow the financial sector to “capture” the Bureau. Rather, the goal was to
- enable corporate ethics officials to understand the ethical standards and principles to which the Bureau expected their institutions to adhere,
- provide the Bureau with insight into how the corporate ethics officials identified and addressed ethical issues in their organizations, and
- empower ethics officers in the financial sector to assert a “civilizing” influence over the organizations in which they served.
Private organizations like the Ethics Resource Center in Washington, D.C. and public institutions, such as the United States Executive Branch Office of Government Ethics, have also been looking for ways to support continuing conversations among Government and private ethics officers. The fundamental premise for these conversations is that those who serve as ethics or compliance officers in either the private or public sectors should share a common commitment to principles and practices that enhance the ability of society to function efficiently. In this context, “functioning efficiently” requires, among other things,
- maintaining the ability of the public to believe correctly in the honesty of those in the private sector,
- the private sector’s acceptance of a responsibility to act as good citizens complying with fundamental principles of integrity and fair dealing as well as regulatory obligations established by public sector agencies, and
- the public sector’s commitment to carry out the responsibilities vested in them by The Constitution and the people in ways intended to provide fair treatment to all in the pursuit of the public interest.
4. What are the most effective strategies for mitigating risk of unethical behaviour in your organization?
Act as if your success as a leader and the success of your organization depend upon the public believing that you treat your employees, customers, suppliers, stockholders and competitors honourably. It does.
It is also essential to understand that ethical conduct requires more than finding a lawyer or accountant willing to advise you that an action is not prohibited by some provision of law, regulation, or rule. Officers and employees in both the public and private sectors need to recognize that avoiding a legal violation does not mean that you are acting ethically.
A number of years ago Senate rules allowed Members to accept up to $2,000 from a private sector audience to make a speech on matters of public policy. Senators could also earn in honoraria each year an amount equal to no more than 30% of the salary paid by the public for their Senate service. I served as the Senate Ethics Committee’s Chief Counsel during that era. I once had to investigate a situation in which an attorney advised his Senate client that if the Senator published a book of his speeches (written by his Senate staff), payments received by the Senator for the “book promotion appearance” would not be considered honoraria and therefore would not be subject to the honoraria limits. When I asked the attorney to explain the difference between a speech the Senator would make for an honorarium and comments he would make at a “book promotion appearance” the attorney replied that “it’s a blue suit, blue light, green suit, green light sort of thing.” To say the least I was somewhat confused and asked the attorney for further clarification. He described how a tailor could take a suit, and holding it under a blue light it would become a blue suit, and holding it under a green light would make it a green suit.
The willingness of this attorney to make such artificial distinctions and the willingness of the Senator to accept the attorney’s advice because it allowed him to do what he wanted (make more money) was both unbelievable and disheartening. Sitting across the table from that attorney, I asked myself how a graduate of a reputable law school could be willing to advise his client to practice this form of legal alchemy.
This particular experience is from the public sector. Coupled with numerous examples from the private sector I understand why renowned scholar Francis Fukuyama would conclude in his book Trust that the United States was moving from a high trust society to a low trust society.
As a leader, at a minimum, you need to:
- Seek to understand the ethical principles as well as the law, regulations, and procedures applicable to your role and the role of the institution in which you work.
- Recognize that any issue on which you have to make a decision is likely to have within it an ethical component. Look for ethical issues in every decision you make.
- Be humble. You can’t see or know everything so find out whether others have had to deal with a similar issue and, if so, learn from how they resolved it.
- Ask for the perspective of others.
- Establish an internal process that encourages everyone in your organization to ask questions so that potential problems can be addressed before they occur.
- If you or your organization makes a mistake, find out why. Explain why the mistake was made, what you will do to correct it, and the process you will put in place to avoid making similar mistakes in the future.
When I worked with the United States Senate Ethics Committee, we met with newly elected members as part of their orientation. We explained the specific, often technical, ethics rules. We also made certain that, while obeying the rules were important, the rules were only the tip of the iceberg. The rules are derived from the principle that public officials have a duty to carry out their responsibilities as trustees of the public interest. We made sure the new Senators understood that, like the Titanic, by the time your bow hits the top of the iceberg, it is likely that you have already violated the ethical principle beneath the rule and torn open the hull. You may survive, but you had better have sufficient lifeboats and it is likely you will have to do a lot of explaining.
Societies have norms they assert that they honour, norms they enact into laws, norms they not only enact but which they actually enforce, and norms that are so fundamental to the society that they need not be enacted as laws in order for society to compel adherence. In law school, one of my professors asked whether a law represents the lowest or highest common denominator. I believe it is both.
A bill passed by Congress is the lowest common denominator because you only need a simple majority in each chamber to pass the bill. And yet, it is also the highest because it is the only standard, which can gain majority approval. In fact, in the current Senate, passage of a bill often requires 60 votes to end debate because the minority party has concluded that it derives a partisan advantage from denying the majority an up or down vote.
Nonetheless, the law is a common denominator neither a “best practice” nor the highest ethical standard.
Martin Luther King Jr. said, “The arc of the moral universe is long, but it bends towards justice.” President John F. Kennedy exhorted us to “go forth to lead the land we love, asking His blessing and His help, but knowing that here on earth God’s work must truly be our own.” I believe that if, as Dr. King declared, the arc bends toward justice it is because there are those willing to put their shoulders to that arc to ensure that it does. Always remember there will be those who are pushing from the other side.
5. What are your strategies for ensuring ethical policies and standards flow down through all levels of the organizing and to all stakeholders?
Whether in the private or public sector, the best way to help leaders ensure that ethical standards and practices permeate their organizations is to make sure those leaders behave in ways others recognize as ethical. Leaders cannot get by just talking about the need for ethics in their organizations. They must be able to walk the walk. Leaders and organizations must also be able to learn. They must constantly seek information in the form of feedback from all stakeholders. Moreover, they need to create ways to insure that those serving at all levels are proud to work in an ethical organization rather than an “ethics free zone.” All stakeholders should understand that addressing concerns and acting ethically is a core value of the organization.
It is also important to remember that, if there is something we really want to do, we can always find a way to justify it. Where that is the case, we must be certain that we have individuals around us who can and will point out that the course of action we would like to follow is ethically perilous. Additionally, many of the people who work for you or buy your products and services do not know you personally. They may watch or listen to your ads. They may infer from the way you position your company, products, or services in the marketplace that you will provide a good product or service at a fair cost. Ultimately, they will base their decisions on whether they will trust you and whether they will continue to do business with you on their impression of you and your organization. Considering yourself ethical is a nice place to start. But it is not enough. For optimal functioning, whether in the public or private sector, you must understand your constituents’ perspectives.
6. Are there areas you think regulation should be more extensive in regulating corporate ethics? Non-profit sector ethics?
In my experience, regulations are necessary but not sufficient to insure ethical conduct. Laws and regulations, if consistently enforced, may cause individuals and organizations to consider the consequences of their actions and change the course of their conduct. Nonetheless, until corporations reject the idea that they have no responsibility other than to maximize profit for their shareholders, the need for extensive regulation, oversight and enforcement is clear.
In the public sector, I have proposed two changes to the current Congressional ethics system: a new oath of office for Members and the establishment of independent nonpartisan Offices of Public Integrity in both the House and Senate.
As I wrote in an op-ed piece in the Capitol Hill newspaper Roll Call,
The new oath: “I will faithfully execute the responsibilities of the office to which I have been elected without regard to personal gain or partisan advantage. I will uphold the Constitution of the United States and make decisions and take actions based only on what I believe to be in the public interest, the pursuit of justice, and the common good.” This oath will focus the Member’s attention on the responsibilities of his or her office; reinforce the fundamental principle of public service ethics; and provide a clear statement of the standard of conduct against which the American people have always judged their public officials.
The new independent nonpartisan Offices of Public Integrity would assume the authority and responsibilities of the current ethics committees. The head of each office would be nonpartisan and would hold the position for a fixed term. Additionally, the offices would be responsible for executing subpoenas or search warrants such as that pursuant to which the FBI entered Rep. William Jefferson’s (D-La.) Capitol Hill office.
In furtherance of that responsibility, the appropriate office would secure relevant materials, segregating those protected under the Constitution’s Speech or Debate Clause from discovery by an entity outside the legislative branch. Because the Speech or Debate Clause protects the legislative process from an overreaching executive by protecting individual legislators, the Member whose actions are under scrutiny would have both the right to review any material the office decides to make available outside the institution and the ability to file with the courts a motion to enjoin the office from turning over any contested documents.
Because the offices would be part of the legislative branch, information suggesting illegal or unethical conduct, but protected by the Speech or Debate Clause from use by an entity outside the legislative branch, could still be used in any inquiry undertaken by the office. The offices also would have subpoena power as well as authority to hold hearings and take testimony.
Although the independent, nonpartisan Offices of Public Integrity would investigate allegations of improper conduct, the Constitution requires that only the full House or Senate may discipline Members. Thus, at the conclusion of its inquiry, the office would submit a written report and recommendations to the House or Senate for institutional action.
If the offices fulfill their obligations, they eventually will overcome the significant damage caused by the ethics committees. These proposals will eliminate unconstitutional executive branch invasions of Congressional offices, remind Members of their responsibilities as trustees of the public interest, and encourage the American people to have faith that Congressional ethics is no longer an oxymoron.
7. Should culture be an important contextual element in ethics analysis? What is unique about the ethical culture and environment in your country that should be taken into consideration?
Regardless of where we were born, most of us agree that there are fundamental principles of right and wrong. Most of us agree on what many those principles are, even if we do not always follow them. Some argue that the idea we should treat others as we would like to be treated is a “best practice” in any relationship. Unfortunately, in much of the world, this practice, sometimes referred to as “The Golden Rule” too often means that he who has the gold makes the rules. My experience has taught me the need for rules and regulations. It has also taught me to try to encourage the understanding that following rules and regulations is not enough to keep an individual or organization ethical. That can only be accomplished when those subject to the rules and regulations recognize that those rules and regulations serve as a necessary and visible reminder of underlying ethical principles.
- Do you think globally applicable ethics principles and practices are possible? Desirable?
We live in a world organized into nation states that make public policy decisions on behalf of their people. We also live in a world in which transnational corporations exist as part of the economic marketplace. The lack of internationally accepted regulations and ethical norms has often resulted in “forum shopping” by corporations for business friendly political jurisdictions. These corporations have successfully imposed their wishes on many political establishments. Given the opportunity, they attempt to maximize profits even if it means decimating the environment or putting in jeopardy the lives, wages, and health of workers. Their successes have led to a number of ethical scandals including the Libor rate-rigging scheme and the Bangladesh garment factory tragedies.
For businesses that have adopted the maximization of profits as their single ethical standard, paying off politicians becomes just one more cost to be passed on to consumers or taken from the pockets of workers. In trying to regulate the behaviour of global corporations, nation states, regardless of the size of their armies, navies, or gross domestic products are at a disadvantage. Transnational businesses organizations have the power of their financial resources to shape the political landscape in ways that favour politicians willing to exchange the authority of their political positions for a very small piece of the profits. One might go so far to say that in the contest between national governments and global business it’s really no contest.
Government ethics officials, international organizations, and private sector ethics officers from all over the world have begun to establish organizations dedicated to the formulation of ethical standards and, through formal and informal forums, exchange information and ideas on the development and implementation of such standards. Let us hope (and let us work) to insure that the arc of the future bends towards justice and ethics.
Sir Robin Butler, then Secretary of the Cabinet and Head of the Home Civil Service of the United Kingdom wrote in the Foreword to Teaching Ethics Volume One: Government Ethics “It is true that I have never believed, in any sphere, that we can crudely lift administrative processes and arrangements from one country and transplant them to another. Different plants grow in different soils. But what we can and should do is to learn from each other and contribute to the development of a broader debate on public sector ethics in the democratic world. Problems arise at different times and demand different responses, depending on the country and system, but there will always be lessons to be learned in the diversity of responses in different places at different times.”
- What is the biggest mistake people make in making decisions around ethical issues?
Americans have often neglected the study of ethics. In too many cases, we learn by experience, often the most unpleasant way to learn. I have found that it is much better if you can learn from the experience of others so you do not find yourself saying, “Well, I didn’t see that coming.”
In educating the “best and brightest,” several professors have described how in law school and Bar exams students are quick to focus on what on its surface presents as a property, tort, or criminal law question. The students write for some time trying to address the legal issues they were expecting to find and only later realize that, at its core, the question was really about ethics. They never saw it.
When I went to work in Congress, I had taken a course on ethics in philosophy as an undergraduate and a course in legal ethics in law school. Neither prepared me for the practice of public service ethics.
My first experience dealing with the Gordian Knots of American public service ethics came in late 1973. Our Constitution states that an Executive Branch official can be impeached by the House of Representatives and removed from office after a trial in the Senate if the official had engaged in “Treason, Bribery or other high Crime and Misdemeanors.” When my employer, Congressman Jack Brooks (D-TX), a senior member of the Judiciary Committee in United States House of Representatives asked me to provide to him a memorandum on what constituted a “high crime or misdemeanour,” for his review in preparing for the investigation into President Nixon’s conduct, I was hooked.
The first encounter in which I recognized the potential for personal ethical damnation in the conduct of public service arrived unexpectedly (as they most often do) when I met with a group of the Congressman’s constituents to discuss legislative issues that affected them. It was a lunch arranged by a group of executives from one of the largest employers in the Congressman’s district. After describing the legislative matter about which their company was concerned, the leader of the group, a person I had known and respected since I was 12 years old, presented me with a list of company officials who had contributed to the Congressman’s re-election campaign. The unstated implication, we helped the Congressman, now we expect the Congressman to help us. Fortunately, a giant red neon sign seemed to be flashing in my brain. I asked myself, “Do these guys really expect the Congressman to vote for the legislative provision they were supporting because of the donations their corporate officers and employees had given?” My immediate concern was how to get out of the meeting without offending them? They were, after all, people who lived and worked in the Congressman’s district. Their views and concerns deserved to be heard. I thanked them for explaining their position on the legislation, noted that I was sure that the Congressman would look carefully at the issue and would make a decision on the course he would take based on what he thought was the right thing to do. I added that I was sure the Congressman appreciated the support that those working for the company had provided to his campaign.
When I returned to the office, I went in to see the Congressman’s Chief of Staff. I explained what had happened at the meeting. She received the information stoically, told me she would let the Congressman know, and she sent me on my way. About 2 minutes later the Congressman’s office door banged open. Not using his “inside voice” he shouted, “Wilson, get in here.” With some trepidation, I entered the sanctum sanctorum (his office). He asked me to confirm the information the Chief of Staff had conveyed to him. I did. He then, in a not very calm voice said, “Well I hope they enjoyed their meeting with you. That’s the last thing they will ever get from me.”
When I met with that group of corporate executives, I thought I was there to listen to substantive reasons that would lead me to conclude that I should advise the Congressman to support their position on an issue of public policy because it was the right thing to do. What they wanted was to be sure the Congressman knew not only that they had a particular position on that issue, but that they expected him to support their position because of the campaign donations their officers and employees had given.
In American public service, because government ethics officers generally brief on the specific provisions of “ethics” rules and rarely take the opportunity to brief Federal officials on principles, many ethics issues go unrecognized until it is too late. If officials worked from the premise that ethics rules are based on principles, and that honouring those principles in their official conduct is critical to both how they carry out their duties and their ability to maintain the public trust, they would be much more likely to see and be prepared to address the ethical challenges that come along every day. In addition, with government officials, it is not just a question of maintaining the public’s faith in one’s own integrity but also maintaining the ability of the public to believe that the governmental process is working to achieve the common good and public interest, not to benefit special interests and the wealthy. When the people believe their government is no longer serving the public interest then, as John Locke noted in his Second Treatise on Civil Government, they are likely to change it. The American and French Revolutions of the late 18th century provide examples.
In the private sector, we are confronted by conflicting ethical paradigms. Milton Friedman’s acolytes promote the idea that the only ethical standard applicable to corporations is that it maximizes profits for its shareholders. On the other side is the idea of “stakeholder capitalism” in which corporate leaders balance the needs and interests of all stakeholders in the “corporate family,” stockholders, employees, customers and the public. If maximizing profit is the sole criterion for determining whether an organization is acting ethically, there is little cause to look at the how the organization profit making efforts affect society. What can one not justify if the only ethical standard is the maximization of profit?
Discussions of how corporations can bend public officials’ perception of reality (at least long enough to allow those corporations to make huge profits) can be found in Naomi Klein’s The Shock Doctrine the Rise and Fall of Disaster Capitalism, Who Stole the American Dream by Hedrick Smith, and Confessions of an Economic Hit Man by John Perkins.
© Copyright 2014 Susan Liautaud & Associates Limited. All rights reserved.
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