Principled Profit: The Good Business Blog

Musings on the world-wide movement for ethical business, frugal marketing, and how honesty, integrity, and quality combine with deep relationship building to create business success. By the originator of the Ethical Business Pledge campaign and award-winning author of Principled Profit: Marketing That Puts People First and five other books

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Sunday, December 25, 2005

Ken Lay a Victim? Only of His Own Greed

Ken Lay has always had chutzpah; now he's trying to paint himself as a victim.

The St. Petersburg Times rightly says that won't wash:

Lay said the villains in the Enron case are federal prosecutors, who have hidden the truth in a "wave of terror." Lay apparently equates the deaths of innocent people at the hands of suicide bombers with his indictment in the corporate scandal. Such hubris takes a lot of nerve, but then Ken has plenty of that.

To which all I can add is they are absolutely right. This man caused financial harship for his loyal employees. I hope they make him pay back every penny of his ill-gotten gains.

If the actions of Ken Lay disgust you, consider signing the Business Ethics Pledge to make a public (and marketable) stand for business ethics.

Friday, December 23, 2005

The Spying Scandal is the Least of It

The big dustup over GWB's admission that he broke the law in having the NSA spy on American citizens has gotten even a lot of prominent Republicans upset. Columnist George Will, about as conservative as they come, called it a "mistake" the other day. And several GOP Senators (Spector, McCain, Hagel, and Snowe, among them) are saying, "hey, wait a minute!"

Oh yes, and Senator Barbara Boxer (D-CA) quotes no less an authority on presidential misconduct than John Dean, Nixon's counsel during the Watergate affair, as saying GWB is the first president to actually admit to an impeachable offense.

And yes, I think it's appalling that Bush not only condones illegal spying, but does so enthusiastically and repeatedly. To show just how much they don't get it:

At the White House, spokesman Scott McClellan was asked to explain why Bush last year said, "Any time you hear the United States government talking about wiretap, it requires -- a wiretap requires a court order. Nothing has changed, by the way. When we're talking about chasing down terrorists, we're talking about getting a court order before we do so." McClellan said the quote referred only to the USA Patriot Act.

(The above quote is from a Washington Post story by Carol D. Leonnig and Dafna Linzer, dated Wednesday, December 21)

But...I think there are far more serious high crimes and misdemeanors that are worth going after.

Congressman John Conyers points some of them out in his just-released report, "The Constitution in Crisis; The Downing Street Minutes and Deception, Manipulation, Torture, Retribution, and Coverups in the Iraq War." With over 2000 US soldiers dead, by some estimates much more than 100,000 Iraqis in fresh graves, and countless wounded, that's where I'd start the impeachment proceedings, if it were up to me. And continue through corporate corruption, election rigging, shredding the environmental and economic safety nets, and a bunch of other stuff. In the context of all this, the spying scandal is the least of it.

Wednesday, December 21, 2005

New York Times Complicity in Bush Spy Scandal

To me, the most scandalous part of this latest Bush administration scandal--that GWB personally authorized and oversaw illegal spying on American citizens--is not event he spying itself, though that's certainly bad enough (and one more reason why these dangerous and immoral people ought to be impeached). This program is so "out there" that a lot of prominent Republicans, including Arlen Spector and John McCain, are deeply concerned.

But what's really shocking to me is that the New York Times apparently knew at least a year ago, and chose to hold back on the story. Yes, of course, they'd need to thoroughly check their facts, in case it was another attempt to entrap and discredit journalists, a la the Dan Rather situation. But once they were sure, I would think the story of a US President knowingly and deliberately breaking the law would be considered news.

It's unclear to me whether the story was in the Times' hands before the 2004 election--but surely, if they knew, going public with that data might have changed the course of history, given that the results were already not only close but highly questionable.

The Times utterly failed in its responsibility to its readers and the world. Is this the same newspaper that was so active in reporting on the Pentagon Papers and Watergate?

Moral choices in business lead to business success, says Shel Horowitz in his award-winning sixth book, Principled Profit: Marketing That Puts People First.

Monday, December 19, 2005

More Payola in the News Biz

I suppose we should be grateful: this time, it's not the government who's paying pundits being. Still, it is disturbing to find out from both Business Week and the NY Times' Paul Krugman that Tom DeLay's good friend Jack Abramoff has been paying off think-tankers at the Cato Institute and elsewhere to spin op-eds that benefit his clients. And once again, there was no disclosure. Cato op-ed writer Doug Bandow, who writes a syndicated column for Copley, took payments of up to $2000 for each of at least 12 and as many as 24 columns promoting Abramoff's clients.

At least he has the good sense to say he made a mistake, as does his boss. What's truly disturbing is the statement by another of Abramoff's beneficiaries, Peter Ferrara (a noted architect of Social Security policy), who is completely shameless: "I do that all the time. I've done that in the past, and I'll do it in the future."

Oh, and Ferrara's boss at the Institute for Policy Innovation, Tom Giovanetti, hasn't figured out the problem either. Giovanetti accuses critics of a "naive purity standard...I have a sense that there are a lot of people at think tanks who have similar arrangements."

Ugly, ugly, ugly.

Sunday, December 18, 2005

Two Stories of Corporate Compensation: One to a Bad CEO, One to the Workers

Call me old-fashioned, but when I read stuff like this quote from Business Week's Talk Show column (November 14, 2005)

After the Securities & Exchange Commission launched a probe of accounting irregularities at Dollar General, Cal Turner Jr. in 2002 returned $6.8 million that he had been paid for results that were eventually restated; he then stepped down as CEO. The gesture was lauded by BusinessWeek and others. But in the two years since, Turner has remained employed by -- and paid by -- Dollar General, based in Goodlettsville, Tenn. After retiring as chairman in June, 2003, Turner stayed on as an adviser to the board: In 2004 he received $275,000 plus $113,000 in perks.

On Oct. 18, Turner fully retired and got another big payout. In an SEC filing reported on the Web site, Dollar General disclosed that Turner is getting a lump-sum retirement payment of $1 million, access to the company's box suite at Tennessee Titans games, title to a company-owned 2004 Audi A8 that he drives, and up to $100,000 to cover legal and consulting expenses. Dollar General also is making a "gross up" payment to cover taxes on the package. Turner directly owns 3.3% of its shares, worth $200 million.

I get pretty disgusted. Why do corporate boards persist in rewarding ethically questionable and/or poor management decisions? Is this the model we want to present to the next generation? I don't think so, and I think he should give any penny of the cash and gifts back to the stockholders, and the board that allowed this should all resign.

My thanks to David Batstone for calling my attention to this.

Interestingly, the same Business Week column notes that every Ecuadorian employee at Occidental Petroleum's Ecuadorian facilities got a bonus of $130,000 to $150,000, thanks to that country's profit-sharing law. Yes, the janitors, the secretaries, the field technicians. With an average annual income of just $2180 nationwide, these 350 individuals could make a significant dent in the quality of life in their families and villages.

And don't feel sorry for Oxy; its $464 million in locally-generated profits can easily fund the 15 percent payment to its workers. The US, with its rampant overpayment of poorly-producing CEOs (as cited above), could learn some lessons here.

Shel Horowitz's Business Ethics Pledge models a different--and healthier--way to conduct business.

Saturday, December 17, 2005

Moyers: The Lies of Tonkin vs. The Lies of Iraq, and What's Up with PBS

Another must-read speech by Bill Moyers, one journalist who is not afraid to tell the truth and doesn't try to hide it under "nice."

Moyers notes that, like the run-up to Iraq, intelligence leading to the Gulf of Tonkin Resolution (that opened the way to massive escalation of the Vietnam war) was faked--but not, he said, with LBJ's knowledge. Moyers was working in the White House at the time.

But then he looks at the Bush II administration's penchant for secrecy, for deception, for rewarding its corporate cronies--and for interfering with the few remaining institutions in journalism that have any backbone left--and the results aren't pretty.

Ethics in both business and government is crucial--and achievable. Visit Shel's site,, to learn more.

Thursday, December 15, 2005

One Good Bit of News from the Tyco Debacle

The State of New Hampshire gets a $5 million settlement from Tyco--and it's using it to start a business ethics education program. The program will be administered by Myron Kandel, who has many connections in media (especially CNN, which he co-founded), government, and business. Kandel has already announced that he'll use the program to help focus political candidates on questions of ethics as the barnstorm through the state during the run=up to the presidential primaries.

Seems like a win all around.

Ethics expert and ward-wining author Shel Horowitz is the initiator of the Business Ethics Pledge campaign.

Tuesday, December 13, 2005

The Good and the Bad of Google, Corporate Citizen

If I'm a tad schizophrenic in my feelings toward search engine giant Google, it's because the company sometimes seems like a many-headed hydra whose various heads have no clue what the others are up to.

On the positive side: Google last October announced a wonderful plan to donate one percent of its stock value--just a whisker under a cool billion at the time of the announcement--to various change-the-world charities--and to donate various other streams that push the total value well above that amazing $1 billion mark.

This is wonderful! It makes sense both to advance founders Larry Page and Sergey Brin's vision of the kind of world they want to live in, and to advance Google's corporate goals of continued market dominance. (One of the initiatives, for example, is to help MIT develop $100 computers. Guess how they'll link to the world?).

Also on the positive side is Google's ability to create a powerfully positive user experience. How did I find the above article? I received a Google News alert by e-mail for ethical business, that linked to a blog post by Joseph Newhard. After reading the article, which was more commentary than news, I wanted a more authoritative source to quote from, so I typed the following string into Google

google "$1 billion" healthcare

About three seconds later, I had the San Francisco Chronicle article I referenced earlier.

Oh yes, and I'm typing this on a Blogger blog, owned by Google. If you're reading it on my own site, I use Word Press for the mirror blog. And I switched my site-specific search engines to Google a couple of years ago, because it didn't need me to tell it each time I added content. Though I'd love to see them add the feature of searching a few sites at once under common ownership that my old, clunky search engine offered.

And I think it's fabulous that Google now has a share value of $100 billion and profits of $968 million--because those profits are built on doing a lot of things right--first of all, creating a search engine that gives the right results if you know what to ask for, and gives them instantly. Second, not bothering with a revenue model until "usership" had built up. And thirdly, introducing its primary revenue model--a modification of the old failed model of web ads--as the brilliantly successful low-key, non-intrusive contextual advertising, with millions of partner websites who are benefiting from Google' success. Obviously, it works.

But then there are those other heads:
Google Book, for instance, *almost* works. The ability to search books' complete text is great. The it's-a-big-pie model that shares revenue with publishers by directing purchasers to publisher websites to buy the book is great. But what's not great--and the Authors Guild is suing over it--i that Google insists it has the right to take books into the program without consent of the copyright holder.

If there is any justice in the courts, Google will lose this case--and it will be a big, expensive mess. Just as an example--I'm delighted to have the text of my most recent book, Principled Profit: Marketing That Puts People First, in the program; I think that can only help sales. But I have deliberately refused to put in my older e-book, The Penny-Pinching Hedonist: How to Live Like Royalty with a Peasant's Pocketbook--because with that book, appealing to a self-defined frugal audience, it's much more likely that a searcher would find the specific piece of information wanted and feel no need to then spend $8.50 to own the content. For authors of cookbooks, reference manuals, travel guidebooks, etc., involuntary participation in the program could be a disaster. Google could, I think, easily develop a form to submit to publishers enabling them to quickly import their entire catalog and check yes or no for the program. By saying "we have the right unless you opt out," they're acting like spammers, violating copyrights unnecessarily, and depriving publishers of the right to make decisions about how their copyright-protected material is used.

And then there are some serious concerns about privacy. See for instance "Google as Big Brother" on the Google-watch site (scroll down to "Google's immortal cookie"). If you want to find more, here's Google's own results page on a search for google privacy. Stories on Wired and elsewhere raise cause for alarm.

Of course, Google isn't the only company to be a bit erratic in its ethics. I could have easily written a similar article about Microsoft, or Ford, for instance.

But Google does so much that's right--I just have to wonder about their blinders on the copyright fronts, and take a watch-and-wait attitude on the privacy front.

Shel Horowitz's Business Ethics Pledge campaign seeks to create a climate where future Enron/WorldCom scandals will be impossible. He's the author of the Apex Award winner, Principled Profit: Marketing That Puts People First and five other books.

Friday, December 09, 2005

Why Journalists Have Forgotten How to Report News

Judith Trotsky wrote:
For examples, I would urge you to tune in on the PBS Newshour. They have top figures from all over the world giving facts, providing their own points of view. This is reporting BOTH sides of any controversial story: you might not like what you hear, it might contradict some emotional need you have to believe differently, but it will present the ENTIRE story, not just one side.
I was also trained as a journalist, and I'm sure there are many dedicated folks in the profession who see this as their mission. I have no doubt that Judith is one of them. In fact, I'll point out that she was on the pub-forum list (where all three of the quotes originally appeared, along with a slightly different version of this response) for many months before I, at least--and I think of myself as pretty tuned in to clues on this--had any inkling of her politics, other than as a strong and forceful advocate for writers' rights and an active NWU member.

But unfortunately...

  • I don't think journalism training is what it was in the 70s when I was trained, and certainly not in the earlier period when Judith learned her trade; today, the emphasis seems to be on glitz instead of news, and the tendency to spent absurd amounts of time following nonstories involving celebs while the real news is quietly sitting there on bloggers' desks is just shameful
  • This is in part because real news is expensive, and many news orgs are now owned by non-journo bean counters who see their only stakeholder as the stockholder, and not the public they're supposed to serve
  • It's also because the Internet has even shorter lead time than daily newspaper of old--instant stories are not always fully researched
  • The definition of what covering both sides means has become quicksand: far too many journalists think that if they give equal time to a Democrat and Republican who share a position (say, just for the sake of argument, the drive to go to war in Iraq)...or spokespeople from both the oil and coal industries, but not a knowledgeable advocate of solar
    Many stories have far more than two sides; the mainstream, well-funded, easy access sources of the large industries and government institutions get heard, because reporters (who are totally overworked and under immense pressure) already have them in their Rolodexes and databases, and know they won't get in trouble for going with known quantity (especially on TV
  • You will notice that certain organizations, and many members of the current administration, clearly favor those journalists who promote their policies--look how seldom a Helen Thomas or a Don Gonyea gets called on at those rare White House press conferences (I'm sure the notorious planted Jeff Gannon didn't have this problem for his softball questions)--it is well-known in Washington that those journos who "play nice" also have access in the form of 1:1 interviews that are denied to the critical voices
  • Quite a few journos have simply been forced out for speaking truth to power--even such respected figures as Bill Moyers and Phil Donahue, and many lesser known ones who happened to work for the likes of Clear Channel and Sinclair

    Judy Sulik wrote:
  • Also, sometimes a story shouldn't have 'two' sides. If one side is
    correct and the other side is factually wrong, then giving balance to
    both sides so some kind of objectivity can be claimed, doesn't lead to
    the truth.
    I totally agree; there's not enough skeptical analysis. Propaganda statements on all sides are far too often simply presented as fact. And most people would be shocked and horrified to learn how much of the news is planted rather than investigated

    And Bob Goodman wrote,

    [a journalist who was covering the Vietnam war] was given the boot because he kept asking why only deaths that occurred during actual combat were reported as casualties of war--why people killed by a rocket launched into their barracks, for example, didn't count. That's a reasonable question that deserves an answer instead of a plane ride home. I'll give the army and the State Department credit, though. They let him come home.
    Does anyone really believe the spin and propaganda? Now we learn that puff pieces are being planted at taxpayer expense and sycophants in the media are presenting them as news. That doesn't do much for the already miniscule credibility of the news desk.
    I do see some clear ethical differences between PR for companies (which I do) and PR for governments. First of all, when a company hires PR firms or in-house staff, it is funded out of the company's profits. But for the government, the person paying is the taxpayer--the same person being hoodwinked by misleading, feel-good "news." Also, one can at least hope that the private folks subscribe to the PRSA's code of ethics, which very clearly spells out responsibilities to the truth. And finally, private PR flaks do not have the luxury of ostracizing media people who don't toe the preferred line.

    Of course government, business, and even Pub-forum wonks give you the information they want you to know. So do reporters. The difference is that reporters have to dig while government only dispenses. The more sophisticated we get technologically, the easier it is for people who are already secretive to pull "facts" that only they could know out of blackboxes that only they have access to and say that this is all theinformation we need and all we are going to get. Didn't the USSR and Pravda do that?

    This battle comes up every now and then. I highly recommend the new movie, "Good Night and Good Luck," which chronicles legendary TV reporter Edward R. Murrow's and producer Fred Friendly's battle against the repressive Senator Joe McCarthy. We desperately need more Ed Murrows in the journalism biz, especially the TV side of things--and they need to be given the resources to do their job, as Bob Woodward and Carl Bernstein were during Watergate.

    (My thanks to Judith, Judy, and Bob for their gracious permission to quote them, and to Pub-Forum for its usual stimulating discussion.)

    Shel Horowitz is the creator of the Business Ethics Pledge, which you can sign by clicking here. He writes frequently on media, ethics, and government. His most recent book is the Apex Award winner, Principled Profit: Marketing That Puts People First

  • Sunday, December 04, 2005

    Norway Brings in Ethicist to Oversee Oil funds

    Some good news: The Wall Street Journal reports, in its December 1, 2005 issue,* that the Norwegian Petroleum Fund, in charge of managing the income from Norway's rapidly increasing oil revenues, has hired Henrik Syse, a professor of ethics and philosophy, to be its "moral compass."

    Syse cheerfully admits he hadn't even known the difference between a stock and a bond. And he's totally happy to go to work on the tram, no fancy limousine for him.

    Norway has adopted the corporate governance standards of the Organization for Economic Cooperation and Development. It's Syse's job to implement new ethical rules that prohibit investments that might put the fund in the position where it "may contribute to unethical acts or omissions."

    I find this refreshing and delightful. And I'd love to see more companies and government organizations embracing the idea that they need a moral compass. In my own small way, with the Ethical Business Pledge campaign, I've tried to provide a tool for finding that compass.

    * The article, "Oil-Rich Norway Hires Philosopher As Moral Compass: State Seeks Ethics Lesson On Investing Its Bonanza," by staff reporter Andrew Higgins, is available to non-subscribers for $4.95--or ask your local librarian to locate it for you.

    Four Reasons Why Nuclear Power is a Terrible Way to Generate Energy

    Nuclear power plants cause great risk, and the industry actually uses more power than it produces. Read on:

    My first exposure to the nuclear industry was in 1972 when Con Edison proposed to build a nuke 2 miles north of New York City's northern border and 3 miles north of where I was living at the time. We raised the issue of thermal pollution (yes, a contributor to global warming), and they caved almost instantly. Two years later, I found out why. I did a college research project on whether nuclear energy was save and what I found scared me deeply. And five years after that, I wrote my first book (co-authored with Richard Curtis and Elizabeth Hogan, who had written one of the books I read for my college project)--on why nuclear makes absolutely no sense as an energy alternative.

    Before I tell you what I found out, I want to say again that no environmentalist I am aware of recommends switching to coal. There are far safer and cleaner alternatives, including the sun--which could meet all our energy needs just by itself--as well as wind, conservation, and many other options. Just like nuclear, coal is a devil's bargain--but fortunately, it is not necessary.

    On to a few of the many arguments against nuclear power (there are a number of others, but these are the ones I find most perturbing).

    1. The need to completely isolate the stew of various toxic and radioactive wastes, all with different half-lives and corrosion factors--for between 100,000 and 250,000 years. To put that in perspective, the earliest known artifacts of human industry date back only about 25,000 or 30,000 years. The first cities were only 10,000 years ago. Yet we have the hubris to think we can not only build containers that will last ten times as long as recorded human ingenuity (and be immune to terrorism even though they're a much easier target than the power plants themselves) but that the warning signs will not only be legible but still be understood. I am highly skeptical of that ability, and it's an absolute necessity.

    2. The nuclear industry's lack of confidence in its own safety record, in that it relies on an insurance program, subsidized by our tax dollars, and with sharply limited liability in the event of an accident. Those who support free-market capitalism should be appalled and terrified at the incredible threat to private property rights that this represents. Even the US government's threat in the 50s to nationalize the power industry and produce its own nukes if the private sector didn't step up was not enough to create the nuclear power industry. It took this law that takes both the power companies and insurance companies largely off the hook in case of an accident or terrorist attack. I do see that the most recent (2002) renewal of this barbaric 1957 law finally pushed the cap from the $560 million that was totally unrealistic the day it was written to some $9 billion per accident--still a tiny fraction of what could be ruined in a Chernobyl-like accident, and you can bet the power companies will be first in line to collect the few dollars available, leaving little or nothing for ordinary folks. The plants themselves typically cost about $2 billion apiece back in the 70s when most of them were built, and the replacement cost in today's dollars would be much higher.

    3. The abysmal safety record of the US and Russian nuclear industry (France, as far as I know, has done a better job). There have been hundreds of minor but potentially serious accidents, touching, I believe, every nuke in this country. And there have been four major accidents that I'm aware of, within 20 years, one of which was catastrophic (Chernobyl, which removed much of the Ukraine from productive use and polluted the entire world--thank goodness it was not in a heavily populated area! Had that accident happened at, say, the Enrico Fermi or Indian Point site, or that nuke I helped to block in New Rochelle, NY, or the nuke that sits on the river just outside St. Petersburg--Russia's second-most important city--tens of thousands would have died)
    • Enrico Fermi, near Detroit, Michigan, 1966
    • Browns Ferry, Alabama, 1975
    • Three Mile Island, Pennsylvania, 1979
    • Chernobyl, Ukraine, 1986

    Oh, and there have been a number of other fatalities. See, for instance,

    4. We undergo all this risk *for zero benefit.*

    There is energy usage in fabricating and building and maintaining the power plant itself. There are energy costs in mining and refining and preparing the unranium and the fuel rods, and in recovering and reprocessing spent uranuim. There are energy costs in running the plant, and there are regular, heavy refurbishments necessary.

    What is usually ignored is that there are very substantial energy costs in dismantling and storing the used power plant (virtually the whole of the generation area and the cooling waters and all suitings etc) and the spent fuel which has to be monitored, kept cool and guarded from theft by - in particular - terrorists or Governments keen to join the nuclear weapon club.
    What he doesn't say is that according to my research, counting the entire fuel cycle--mining, milling, processing, transporting the uranium, and then reprocessing the spent fuel rods--and not even counting the vast energy costs of decommissioning the plants at the end of their lives, the nuclear industry is a net consumer of power. Counting decommissioning and storage, it's even worse. In other words, the nuclear industry consumes more energy than it produces! All risk, no benefit.

    In short: a whole lot of risk, no benefit.

    This is a stupid answer to the energy crisis, and don't let anyone try to build a nuke near you!

    Note: for many provocative and mostly solution-oriented articles on energy, please visit the sustainability section of Down to Business magazine. There are a whle lot of ways to do energy that are nonpolluting, renewable, and thoroughly achievable.

    Shel Horowitz, editor of Down to Business and Peace & Politics, has been writing about sustainability and social change for over 25 years. Click here to learn about his award-winning book, Principled Profit: Marketing That Puts People First, and his campaign to change the world of business with an ethics pledge campaign.

    Thursday, December 01, 2005

    I Have Nothing Against Getting Rich, But This is Offensive!

    According to the NY Daily News, military contractor David H. Brooks just spent--are you sitting down--ten million dollars on his daughter's Bat Mitzvah! Brooks says the figures are exaggerated, but he doesn't deny that it involved private jets, multiple performances by rock superstars, and a very expensive swanky New York venue.

    A Bat Mitzvah is a religious coming-of-age ceremony. A teenager (usually--I've been to the Bat Mitzvah of a woman in her 70s) leads a section of the prayer service, reads from the Torah (the five original books of the Bible) and chants a Haftorah (a section from one of the later Old Testament books such as the Prophets). Usually there's a party afterward. It should not be about ostentatious displays of wealth and one-upping your neighbors.

    With several hundred people attending, renting one venue for the ceremony/reception and another to prepare the food (an elaborate full luncheon), hiring a couple of workers, my daughter and two friends became Bat Mitzvah a couple of years ago. If memory serves me correctly, this whole event cost around $1800, or $600 for each participating family. And it was a great event--I daresay probably a good deal more spiritually meaningful than this obscene $10 million blowout. I can only imagine what her wedding will be like. Maybe Dennis Kozlowski, disgraced CEO of Tyco known for his lavish parties, will do the catering.