Published 2013.02.22 in CommPRO.biz

3,800 to Zero
 
Following the Savings & Loan Crisis a couple decades ago, roughly 3,800 bank executives were jailed. The more severe crisis we are slogging though, has for all intents and purposes, produced zero convictions, no jail time for the Wall Street executives who triggered it. You may have heard that one of three financial rating agencies that awarded AAA ratings to the toxic mortgage packages the big banks referred to as “Crap,” Standard & Poor’s, faces $5 billion in Securities Exchange Commission (SEC) fines. However, not one S&P executive faces prosecution.

The appalling failure of federal and state entities to hold responsible those who threw us into the most damaging recession in seven decades is shameful. In reviewing the litany of excuses offered for this travesty, this much is clear: it is difficult to prove fraud. And, George W. Bush’s Treasury Secretary Hank Paulson created a bailout atmosphere seemingly designed for the ethically challenged monster banks. Our leaders, Treasury Secretary Jack Lew, Attorney General Holder, and the President himself, can’t seem to deal with the legal challenges. It’s a situation crying out for creativity.
 
Al Capone, whose criminal “Creds” ran from hooch to hookers with lots of killings thrown in, laughed in the faces of the authorities just as the bankers have been laughing since the bailout. The banks sucked up the taxpayers’ bucks in billion dollar gasps, like the dying beasts they were. Once they were on sound footing, instead of using our money to help the economy, they went right back to the same crazy risky stuff that caused the recession. And why not? They know they can stick the taxpayers with their losses. When the authorities couldn’t pin Capone’s criminal activities on him they got creative and tried him for tax evasion, netting Capone 11 years in Alcatraz.
 
Senator Carl Levin watched Goldman Sachs CEO, Lloyd Blankfein, smirk his way through testimony before his Senate Committee and then turned his findings over to the Justice Department. Levin, a Harvard Law graduate and experienced prosecutor, was clearly disturbed when Justice failed to take action. The DOJ also declined to prosecute egregious criminal behavior on the part of HSBC, citing a fear that to do so might take the bank down and threaten our economy.
 
It’s time for creativity. The Supreme Court says corporations are people, so let’s prosecute their living parts. Let’s charge top executives and boards of directors who know –or have a fiduciary responsibility to know– what their corporation is up to. Sending the Board and the “C” Suite off to the slammer is not going to sink the ship. One thing we know for sure: there are lots of topnotch managers who could take over and probably do a better job than those they replace, especially when replacing the nitwits who green-lighted the HSBC mess. Unlike a massive fine that becomes a “Cost of Doing Business,” the prospect of a jail term should put a halt to the greed-fueled behavior all too common in our banking sector.

Published 2013.02.13 in CommPRO.biz

Deadly Doping

Fiction could never match the bizarre tale of greed and deceit that is bubbling to the surface in U.S. District Court in Boston. To understand the depth and breadth of this ethical cesspool, read investigative journalist, Kathleen Sharp’s book Blood Feud (in paperback Blood Medicine). It reads like a thriller. Tragically, however, it is playing out in real life.

Mark Duxbury was a Super-Star pharma rep for Ortho (a Johnson & Johnson subsidiary) until he began to realize that, used in the off-label doses he was being pushed to recommend, Procrit (AKA “EPO”) had dangerous side effects up to and including death. At that point he and another Ortho rep tried to call attention to the danger EPO presents. Their whistle-blowing efforts got them fired, but they soldiered on without much luck until Kathleen Sharp took time to listen to them lay out the complex web the Big Pharma giant has created.

Duxbury began bugging Sharp in 2004; she did her best to ignore him until EPO (Epoetin alfa, also known as Procrit, Eepgen, and Aranesp) was red flagged by the FDA in 2007. After Sharp’s meeting with Duxbury she realized that this story was way more than she could cover in one of her normal contributions to the New York Times, Fortune, and other major publications. Sharp realized it would take a book. Her real life thriller was ultimately selected as an Oprah Top 10 Pick.

As it turned out, EPO in large doses seemed to work miracles with some patients it even gave athletes like bicycle racers (Lance Armstrong among others) extra stamina to power them to victory. But it also accelerated some forms of cancer, triggered heart attacks, strokes, and aneurysms; it proved fatal to many patients. The book paints a sorry picture of doctors and hospitals accepting huge amounts of free Procrit and billing Medicare for its use. The whistle-blowers estimate that these medical entities rang up more than three billion dollars in Medicare fraud.

So far the private lawsuit in Federal Court has seen the Justice Department on the sidelines. Given the level of alleged fraud that seems strange. It is especially odd in light of the connection between Attorney General Eric Holder and the law firm representing Johnson & Johnson. Holder was a partner in that firm until he joined the Obama administration. Wouldn’t you assume that he would want to remove any hint that he was holding back in pursuing his former client? It’s past time for our Justice Department to act and bring those responsible for this series of tragedies to justice.

Kathleen Sharp’s book is on its way to becoming a motion picture. Sadly, Mark Duxbury will not see the story he triggered come to its conclusion in court or on the screen; he died at age 49.

Published 2012.01.30 in CommPRO.biz

Too Big To Loan?

Earlier this month (2013.01.16) the president of the Dallas Federal Reserve Bank, Richard Fisher, delivered a speech worthy of a Texas straight shooter. It was followed up the next day by a 30+ page report supporting the need to deal with the danger a handful –about a dozen- Too Big To Fail (TBTF) banks present to our economy.

These are the same financial monsters whose reckless actions pulled the rug out from under the world economy and brought about the 2008 crash. The folks who put millions of people out of their homes, crippled small businesses and drove the unemployment numbers in America sky high. The same handful of reckless banksters, who rolled the dice, lost and left the rest of us with no alternative but to bail them out.

In an effort to avoid a repeat of this disaster the Congress passed the Dodd-Frank Act. In the end the TBTF banks’ lobbying efforts allowed them to stay focused on risky speculative (AKA gambling) deals, knowing full well that contrary to its intent, Dodd-Frank does nothing to protect against another taxpayer bailout. Mr. Fisher concedes there’s little chance that we can rein-in their reckless behavior in the short term. He does, however, offer an escape hatch to take the taxpayers off the hook to some degree.

If he had his druthers, Mr. Fisher would slice the monster banks into separate entities, none large enough to destabilize our economy. He would peel away all of their financial activities that fall outside the banks’ traditional role. While that remains the long-range goal laid out in the Dallas Fed’s report, their short-term goal seems to correct much of the problem.

Mr. Fisher points out that the insurance protection created in 1933 –The Federal Deposit Insurance Corporation (FDIC)– was intended to cover our hometown and regional banks. The 98.8% we ordinary folk are used to dealing with, not the 12 monster banks, the 0.2% who hog nearly 70% of all banking assets. Assets we furnish them with to make small business loans and create jobs. But that’s not what the use it for. Instead they use the free money we furnish to make wild bets, secure in the knowledge that if they lose, we pay.

Restricting FDIC protection to its intended role would roadblock moves like the one Bank of America made the first of this month (January 2013). They moved derivative contracts worth $15 trillion from their broker-dealer division to their insured depository institution. Guess who’s on the hook if those puppies go bad?

It’s past time that the low interest cash we provide the banks goes to the 98.8%, the regional and Community Banks who will provide small business loans. If the monster banks -the 0.2%- want to gamble, let them do it with their investors’ cash. And make sure those investors know that their funds will not insured by America’s taxpayers.

Published 2012.01.24 in CommPRO.biz 

http://www.commpro.biz/news/thursday-january-24-2013/

Do The Math

Those of us who have spent time in communications, be it journalism or public relations, are familiar with what we call a “Grandstand Move.” That’s when an outfit with a well-deserved lousy image will roll out some event or policy designed to make them look good. With luck they garner a ton of positive media attention. So it is with Walmart. Their latest is a pledge of a job for every returning veteran during their first year out of the service. It got Walmart more positive media than they’ve seen in years. Even we were impressed until we got to thinking about it.

The majority of jobs in the Wonderful World of Walmart are low-wage, part-time with zilch benefits. When you’ve served in the workplace culture prevalent in our military, who wants that kind of job?  Bill Simon, who runs the Walmart stores in the United States, joined the company less than ten years ago. He was paid about $8.5 million last year. Our guess is that not many of the hundred thousand vets Simon estimates Walmart will hire over the next five years will take home even the average US paycheck, let alone much above that figure. A hundred thousand hires over five years is just 20,000 a year, roughly four or five a year per Walmart store. So if you do the math Walmart’s offer to our veterans doesn’t add up to all that much.

Ironically, Bill Simon’s big announcement came just a few days before Fortune magazine rolled out their 2013 listing of the 100 best places in America to work. It’s no surprise that Walmart didn’t make the list. It was dominated at the top by Google and other enterprises that employ mostly high-skill, high-wage people. Except for the one in fifth place, Wegmans, a family owned supermarket chain.

Wegmans is one of only thirteen companies that have been on the Fortune list since its debut. They have more employees than any other company in the top forty on the list, and while they pay well, the majority of their people are not in the upper brackets. The Fortune research model includes a scientific sample drawn from all full-and-part time employees. In Wegmans’ case that includes the young people who round up shopping carts from the icy and snow-covered parking lots in the northeast where their stores are located.

The message is pretty clear, it’s the culture. Walmart can roll out all the PR events and policies they can come up with, it won’t change their culture. Their people on the front line do not create the culture – that comes from the top. Wegmans is in the hands of the fourth and fifth generations of the Wegman family who carefully guard their culture. Walmart is controlled by the Walton family. Their wealth is close to a hundred billion dollars; sadly that’s about all they have to show for it.

Published 2013.01.15 in CommPRO.biz

‘Big Pharma’s’ C-Suite 

All Money, No Ethics?

Groundbreaking investigative reporting by the Milwaukee Journal Sentinel and MedPage Today has exposed disgusting conflicts of interest in the guidelines doctors follow in treating almost every malady known to mankind. The various branches of medicine convene “panels” of their member doctors to examine the scientific evidence and create clinical practice guidelines for their members.

The Institute of Medicine (IOM), part of the National Academy of Sciences, an independent, nonprofit organization –not an arm of the government– has some pretty straightforward rules on how these panels are to be set up. They are very clear especially when it comes to a panel member’s connections to those peddling medications or other treatment tools. Less than half of the panel is to have a financial relationship with a company connected to the condition. The panel Chair is never to have such a relationship; pretty low ethical bars.

The Journal Sentinel/MedPage Today looked at a cross section of 16 panels that were willing to disclose conflicts. Of those only two met the IOM standard and at least ten panels (62.5%) were chaired by doctors with Big Pharma financial ties. The journalists looked at twenty clinical practice guidelines for conditions that may be treated in the US by blockbuster drugs like Lipitor, Cymbalta, OxyContin, and Nexium. Nine of the guidelines were written by panels with more than 80% of the doctors on Big Pharma payrolls. What do you think they recommend?

Overall, of the panels that even check for conflict of interest, 66% of the docs had connections to Big Pharma. “Some guidelines recommend drugs not scientifically proven to safely treat conditions, leading to inappropriate or over-prescribing, specifically guidelines for anemia, chronic pain, and asthma,” the journalists report. Research funded by drug companies was not counted as a conflict in the Journal Sentinel/MedPage Today investigative report, just fees for speaking, consulting and advising.

Big Pharma and other interested parties, including some docs, contend that all the top people have financial deals. They say it would be impossible to put together expert panels if you disqualify those with conflicts. We wonder how that came to be? Is it possible that those peddling drugs and medical gadgetry from artificial body parts to hi-tech imagery would seek out and sign-up as many of the very top doctors as they can when their bottom line might benefit? Of course they would and they have! How about the docs; how could any doctor consider serving on a panel related to companies they have accepted cash or other goodies from?

The companies have been slapped with massive fines to no avail. “What we’re learning is that money doesn’t deter corporate malfeasance,” says Eliot Spitzer, former New York State Attorney General. “The only thing that will work in my view is CEOs being forced to resign and individual culpability being enforced.” We agree. When there are billions in profits to be gained, fines are just another cost of doing business for these companies.

Published 2013.01.07 in CommPRO.biz

An Open Mind?

In a long overdue move Al Gore and his partner Joel Hyatt cashed out Current, a non-starter cable channel for lefties (a role already more than adequately filled by MSNBC). They have been trying to unload this turkey for years. Qatar owned Al Jazeera, the Middle East news network paid an astonishing five hundred million for Current. The network never had more than a handful of viewers; however, it does have distribution deals with most all of the sources where folks pick up cable content. Al Jazeera has worked to gain a spot on cable for its English broadcasts, so we can assume that’s what they ponied up a half-billion dollars for, Current’s cable slots.

The ink was barely dry on this deal when Time Warner, the number two cable company in the US, announced they were dumping Current. They gave no reason and say they have an “open mind” on returning the channel to Al Jazeera, a claim that is pretty hard to swallow. A case of Islamophobia seems a much more likely reason. Violent opposition to Al Jazeera by the Bush administration spooked the cable operators and reinforced their unwarranted bias against anything with the slightest connection to Islam. If bias concerns Time Warner, they obviously have not been watching Current or any number of other channels in their line-up.

Time Warner used a clause in the Current agreement that allowed them to dump the network if it was sold. Some have suggested that the cable giant took the “out” as a negotiating tactic to cut a better deal. Given the logistics involved –you don’t just flip a switch to take a channel down– that seems unlikely. Besides, a threat of a cut-off is a much more effective negotiating tool. Shame on Time Warner; there is no more reason to block Al Jazeera than BBC America. With the thousands of channels Time Warner offers subscribers, there is surely room to retain the space Current occupies. It’s not like anyone is going to be forced to watch Al Jazeera, it just should be available.

Al Jazeera’s plan to convert Current to Al Jazeera America sounds interesting to any open-minded individual or organization, as Time Warner claims to be. The plan calls for as many as ten bureaus in the country, up from the five they now have, and as many as 300 staffers. Just the potential for them to offer coverage of more than major happenings in America to the people of the Middle East is more than enough reason to encourage their growth.

While the First Amendment applies only to government interference with speech and the press, the spirit of that guardian of the people’s right to know should lead Time Warner to do the right thing, the ethical thing. Knock off this nonsense and offer Al Jazeera to your customers.

{From CommPRO.Biz 2013.01.02}
http://www.commpro.biz/corporate-communications/who-cares-what-you-think/

“Who cares what you think?”

The ‘How’ and ‘Why’ to Craft a Meaningful Opinion Piece 
–Understanding Both Sides

We like to kick off the New Year responding to the remark we have heard so often over the decades that we have been writing opinion pieces: “Who cares what you think?” Good question. Our response is always the same: “Hopefully, no one.”  However, we keep writing. The goal–to craft a meaningful opinion piece.  Here’s some background to help you get a sense of my ‘how-to’ steps for expressing my passion.

A friend owned the only newspaper and radio station in a small town. He ran editorials in the paper, and personally voiced them on his station. His newspaper would take one side of an issue and he would dispense the opposite on the radio; he wrote both. He believed a good opinion writer should be able to see both sides of an issue, or they shouldn’t be writing the opinion.

While we make every effort to look at both sides, we are not sure we can follow that ideal in every issue we address. We do not write to convince anyone to take up our position. We do the research; often we will have as many as fifty pages of research for a five-hundred-word op-ed. Ethics rarely has two acceptable sides. On the other hand, it isn’t always a simple matter of right and wrong either. Like it or not, Situational Ethics are called for at times; the situation can change the ethical call. There are times when one has to think about the impact of hard-line adherence to what seems the right thing at the moment. Or as our friend Saul Alinsky once defined truth, “You don’t have to cross the street to tell someone how ugly they are.”

So if we don’t write to change your mind, or help you make up your mind, and if we don’t expect people to care what we think, why do we write? We write because the ethical issues we raise seem important to us and we hope you will think about them. We want you to sort through the facts. We want you to search the internet, to read and find a position. If you toss a brick at your computer every time one of our OP-Eds turns up, that’s OK. At least you are thinking about the issues.

Beware those who disperse opinion for other reasons.

Beware the manipulators.

Happy New Year!