Published CommPro.biz 2014.02.20

A Bribe Is A Bribe Is A Bribe

A recent (2/09) New York Times story detailed the hiring of a young woman at the behest of a family friend. A job was created for her at JP Morgan Chase. Her family friend just happens to hold a powerful position in a Chinese agency that oversees insurers. The bank was looking to snag business deals with a number of the insurers that her benefactor holds sway over. There is nothing unusual about arrangements of this nature. What makes this one stand out is, that the “ask” was in the ear of Jamie Dimon, top dog at Chase. The young woman was not only in the room, she was serving as the official’s translator.

First off, the young woman was an outstanding candidate; Chase was lucky to get her. And Dimon was careful to distance himself from the hire. However, Chase did get a bunch of deals right quick from companies under the regulator’s gaze. It seems clear that in addition to getting a first rate employee, Chase made a ton of money from her family friend’s ”contacts”. Because a government official is at the center of this arrangement, a case might be made that hiring the young woman at his behest constitutes a bribe. That’s a big “No-No” under United States law.

This is not an isolated case. Chase has a history of jobs for deals as do most all of the monster banks; Goldman Sachs, Citi, and all the usual suspects. Legally they are likely inside the safe zone; ethically they are not even close. While Dimon was careful to give himself cover on this hire, it doesn’t change the underlying truth. These deals –especially in light of their frequency– indicate that they are part of the culture of these banks. The culture of any organization reflects the ethical and moral compass of its leader; in this case Jamie Dimon.

These monster banks slithering around making backroom deals to gain the favor of business or government officials are ethically pathetic. A good business leader knows to back away from any deal that is not a good deal for everyone involved. Cash under the table or hiring somebody’s kid, either way it’s a bad deal for the buyer and the seller. It’s an admission by the seller that what they’re selling isn’t worth the price, and/or it means the buyer didn’t get the best deal for their bucks.

These banks are too-big-to-fail and way too-big-to-manage. They’ve created a greed driven culture that does anything to keep the bucks rolling. They’ve trampled the real bankers in our community banks, using ill gotten profits gained by gambling with their depositors’ funds; all insured by the FDIC (that’s us). The solution is to break these monsters up before they trigger another crash. We did it in the 1930s  and set up rules that kept us safe for the better part of a century. Lesson learned? It’s time to repeat; break up the too-big-to-fail banks before they fail again. How hard is that to understand?

"Am I wrong?"--"Am I Nuts?"

"What do you think?"--"Do you agree?"

British Tabloid Culture

British Tabloid Culture

There’s a celebrity “A” list from Hugh Grant to JK Rowling parading before Lord Justice Leveson in London. The ongoing Leveson Inquiry is investigating media ethics in Britain centered on the Murdoch phone hacking mess. The celebs, along with lesser known folk, are laying out the damages the phone hacking, celebrity stalking, tabloid press has inflicted on them. Yes, it’s not just the Murdoch papers that employ these pond scum techniques. Nor is the damage limited to the crimp that it puts in the lifestyles of the rich and famous. Much sadder are the tales of everyday folk, most notably the family of murdered schoolgirl Milly Dowler. 

In an effort to keep the headlines coming Murdoch’s minions repeatedly emptied the voicemails from Milly’s mobile phone, leading her parents (and the police) to believe that she was alive and picking up the messages. Actually the 13-year-old had been lured into the hands of "predatory" nightclub bouncer Levi Bellfield on her way home from school and lay dead in a field at the end of that day. Bellfield was subsequently charged with the murder of two more young women. Witnesses are laying out stories of inconvenience, embarrassment, and tragedy before Lord Justice Leveson, all brought on by the telephone hacking, police bribing, peeping Tom, high speed chase stalking style of journalism favored by the British tabloids.

The lurid stories gained by these methods dim in shock value to the testimony of one former Murdoch editor, Paul McMullan, once a deputy features editor at The News Of The World. According to published reports, McMullan admitted that all these "worthy tools'” as he called them, were not only routinely used at the paper, they were aggressively urged upon him and his colleagues by their bosses.

McMullan even called out two former Murdoch executives, Andy Coulson and Rebekah Brooks. Coulson was the chief spokesperson for Prime Minister David Cameron by the time the firestorm hit, while Ms. Brooks headed all the Murdock newspaper holdings in Britain. McMullan said they could have been the “heroes” of journalism; instead they became the “scum,” apparently for their failure to take responsibility for the use of the worthy tools at The News Of The World.  He also calls Ms. Brooks an “arch-criminal.”

McMullan’s testimony was particularly hard to swallow when he described a culture that not only used these “tools” but believes they are “worthy tools.” He hotly defended a wide range of behaviors that we find ethically repulsive. When asked to define public interest, McMullan replied, “If the public is interested,” adding that if they don’t approve they could stop reading these stories. This culture seems pervasive among British tabloids and within the Murdoch Empire. Unlike McMullan we do not see these “tools” as “worthy,” we see them as disgustingly shameful.

Pharma, Where Ethics is a No-Brainer

It would be hard to imagine any element of our business community where ethical behavior is more important than healthcare. We aren’t surprised when some smarmy little guy is caught conning folks with some medical scam. What we should not be seeing are the big guys engaging in off-the-chart ethical no-nos. Last week’s announcement that Pharma giant, AstraZeneca would split a half billion dollar fine between Medicare and Medicaid was a stunner.

The company issued the usual “Without admitting any wrongdoing” settlement statement. Right! They are going to cough up that kind of money just for kicks. They were charged with “aggressively” pushing a psychiatric drug, Seroquel, that was FDA approved for schizophrenia and bi-polar disease. A class of drugs with a history of dramatic side effects.

AstraZeneca turned this drug into a cure-all for a host of diseases for old folks, veterans, and even kids. They played down the added weight and diabetes that showed up. Actually they acknowledged these problems to Japanese doctors in 2002, years before they stopped dismissing the same potentially deadly side effects in North America.

It turns out that this half billion is only half of the story. Last fall –October 2009– AstraZeneca paid out a half billion to settle two federal investigations and two whistle-blower lawsuits. That’s a billion dollars in less than a year. And there’s going to be more, there are close to 20,000 lawsuits lined up from folks who took Seroquel and believe they were harmed.

Makes one wonder how they can afford those kinds of payouts – until you look at the sales numbers. Worldwide sales of Seroquel are astronomical; it is the best selling psychiatric drug in the United States. How did AstraZeneca build this blockbuster? Well that’s reason AstraZeneca is in this mess. Basically they talked a lot of docs into prescribing Seroquel for all kinds of stuff that it wasn’t intended to treat. They took advantage of a loophole. Once a drug is approved by the FDA, doctors can prescribe it for anything they wish. Or in this case, anything the drug company can talk them into.

All drug companies push their products on the docs. Anyone who has ever spent time in a doctor’s waiting room has seen the Pharma sales folks. They come breezing in and too often head right back to the doc’s inner sanctum, the place you’ve been waiting hours to access. They are young, very well dressed, and as smart as they are attractive. They have a case full of goodies, samples, literature, pens, notepads - whatever pleases.

However, what AstraZeneca did went way beyond that. Even way beyond their sales people pushing docs to use Seroquel for conditions that it certainly wasn’t intended to treat. Some docs who slid into that rabbit hole were paid to give speeches at posh soirées urging their colleagues to do likewise. These thinly disguised bribes are at the heart of the government’s AstraZeneca settlement.

The whole thing reeks of unethical behavior; unethical behavior on the part of AstraZeneca, unethical behavior on the part of the docs who took the bucks, and unethical behavior on the part of the docs who wrote Seroquel scripts for conditions that it simply was not suited. AstraZeneca should never have allowed it to rise to a legal issue. And by the way, who is looking at the docs who played along.