Roderick Mann, an economics and financial consultant, weeks ago posted a comment on LinkedIn that’s been weighing on me. Mann was responding to a CNBC report that Theranos founder Elizabeth Holmes was seeking to block federal prosecutors from introducing evidence of her wealth and luxurious lifestyle when she’s put on trial in March. The Wall Street Journal exposed Theranos as a fraud more than five years ago, and in the interim a couple of movies, multiple magazine articles, and a book were released and published.
Mann was aghast by the public’s disinterest in the wheels of justice grinding so slowly. Here’s Mann’s thoughtful post:
America is so fraught with fraud and corruption at every level of society today that people are numb and no longer bother to even demand muckrakers go in and clean up all the mess & sleaze. It has become so mainstream in government, business, even education as admission acceptance can be bought with a bribe.
Is it any wonder our nation is weakening sinking into a morass, a cesspool reserved for failing nations that lost their moral compass and discarded ethics and the value of virtues such as honesty, integrity and character — all the way up to the top job in the nation?
Mann’s post was initially comforting, as I was delighted to know that I’m not alone in my disappointment about the decline of morals and ethics in all facets of American society. Upon considerable reflection, I’ve concluded the issue isn’t that Americans have become inured to widespread wrongdoing. It’s that so many are willing to embrace and participate in it.
Theranos is but one example. Holmes orchestrated the alleged fraud, which involved falsely representing the company had developed a technology capable of delivering faster, cheaper, and painless blood tests. Many Theranos employees were complicit helping Holmes pull off her hoax, even after it was exposed. Rather than feel angered and betrayed after the Wall Street Journal sounded the alarm, employees derided the reporter who wrote the story.
Boeing employees involved in the manufacturing of the 737 MAX were aware of serious design flaws responsible for two crashes before the plane was grounded, according to documents made public at Congressional hearings. “Would you put your family on a MAX simulator trained aircraft? I wouldn’t,” wrote one employee in an email. Said another: “This airplane is designed by clowns, who in turn are supervised by monkeys.”
Six eBay employees in June were criminally charged for an aggressive cyberstalking campaign they waged against a couple who published a critically important industry newsletter. The campaign included a box of live cockroaches, a funeral wreath and a bloody pig mask – and conducting covert surveillance of the victims. Some high level executives were involved, including eBay’s former Senior Director of Safety & Security and the company’s Director of Global Resiliency. (The Fox Business News reporter’s disbelief reporting the story is worth watching.)
Rest assured these employees were acting in accordance with eBay’s corporate values as they understood them and with the expectation their behavior would ultimately be rewarded. They were not six bad apples that fell through the HR cracks. I’m confident that on sophisticated HR screening tools these employees tested well on the “team player” portion, which in corporate America increasingly means a willingness to shut up and do what you’re told, even if it’s wrong or ethically questionable.
The Wells Fargo account fraud scandal where millions of accounts were opened without the knowledge and consent of customers boggles the mind, as even low-level branch employees were in on the scam. It went on for years and yet CEO John Stumpf and his managers were confident they could get away with it. Stumpf even had the audacity to rail that the U.S. banking industry was overly regulated and hampered Wells’ growth opportunities.
Employees are often willing to take the lead on questionable behavior, especially when their bosses are aware of it. People like David Zapolsky, Amazon’s General Counsel and Secretary.
Leaked notes from an internal meeting of Amazon’s leadership that founder Jeff Bezos attended revealed that Zapolsky hatched a plan to discredit activist warehouse supervisor Christian Smalls, calling him “not smart or articulate” and wanting to make him “the face of the entire union/organizing movement.” Smalls, who is black, was subsequently fired after attracting media attention for what he and others claimed were unsafe conditions at an Amazon warehouse.
If Amazon was truly committed to diversity, safety, and workplace respect, you can rest assured Zapolsky wouldn’t have dared to advance a strategy to publicly destroy Smalls, particularly at a meeting where Bezos was in attendance. Bezos and his top managers didn’t protest or question Zapolsky’s strategy and spokesman Jay Carney gladly implemented it. That Amazon hired Carney speaks volumes; he’s Obama’s former press secretary and a passionate defender of what PolitiFact deemed the 2013 “Lie of the Year.”
Top executives are shielded from being held responsible for wrongdoing at the corporations they oversee, or don’t suffer appropriate consequences. It’s possible Holmes could do some jail time, but when she gets out, she can soon serve as an officer or director of a publicly traded company. The SEC gave Holmes a slap on the wrist and imposed a mere 10-year ban. Henry Blodget received a lifetime ban from the securities industry for publishing conflicted investment research when he was an analyst at Merrill Lynch.
I hold accountant David Calhoun, the former chairman of Boeing and a private equity vulture, ultimately responsible for the 737 Max crashes that killed 346 people. Know what Calhoun is doing now? He’s the CEO of Boeing, as arrogant as ever. Kristin Yetto remains as HR head of eBay, despite a former company executive being on record saying “HR needs to own the employee experience.”
The disclosure about Amazon’s Zapolsky sparked “racist” charges from Alexandria Ocasio-Cortez, New York’s Twitter Representative, and state attorney general Letitia James called for a labor department investigation. They haven’t said boo about the incident since, underscoring their feigned outrage wasn’t genuine. Zapolsky’s LinkedIn profile indicates he’s still the company’s general counsel.
It wasn’t all that long ago when American employees were willing to call out wrongdoing and they were celebrated in the media for doing it. Time magazine’s 2002 “Persons of the Year” were three women from Enron who challenged the company’s corrupt business practices. The corporate whistleblowers of today are mostly motivated by potential whistleblower rewards. Simply doing the right thing is so yesterday.
I’m guessing the name Sean Joyce means nothing to you, but it should. The Wall Street Journal recently reported that Joyce resigned from Airbnb after six months on the job “over concerns about how the massive rental platform shares data on millions of its users with Chinese authorities.” Joyce is a hero in my book, as was the former Boeing production manager who quit their job rather than help facilitate the manufacturing of an airplane with a faulty design. They and other corporate conscientious objectors should be publicly hailed for their ethics and integrity.
It’s understandable why employees increasingly feel compelled to engage in corporate wrongdoing or at least turn a blind eye to it. The top 10% of Americans by wealth owned 87% of all stock outstanding in the first quarter, according to Federal Reserve data. That’s up from 82.4% in 2009, when President Obama assumed power.
The job of CEOs is to enrich their shareholders, most of whom don’t care one iota whether the riches are achieved ethically. Legendary investor Warren Buffett is happy to collect his Coke dividends despite the company’s products contributing to America’s obesity problem. Shares of eBay were unchanged after criminal charges against the company’s employees were announced. Employees of publicly traded companies must get with the program or they’ll be promptly discarded.
Mann, the financial and economics consultant, isn’t alone in his concern about the future of America. JPMorgan Chase CEO Jamie Dimon is on record as saying the uneven pandemic recovery has made capitalism unstable. Dimon was wise to publicly embrace the Black Lives Matter movement and be photographed taking a knee in front of a Chase branch.
The image could possibly generate some leniency if America’s growing underclass, and good people tired of being forced to do bad things, band together and start rolling guillotines through the canyons of Wall Street and Silicon Valley.