Introduction

Life is full of choices.  You can make one set of decisions and have one set of outcomes, or you can make another set of decisions, and the outcome will be dramatically different.  Every day you are faced with issues, which require you to make decisions.  Decisions about your associates, customers and acquaintances.  Often these decisions involve compromise and tradeoffs.  How you handle those decisions tests your moral and ethical beliefs, and is also a reflection of your organization.

Have you ever been in a position where you were asked to make a decision, and that decision caused a biological reaction like a churning sensation in your gut?  Or, you heard this little bell ringing inside your head?  When you reflect upon these experiences, you may recall it was when you were making a decision which may have called into question your basic moral fiber and that of your organization.  How did you respond?  Was your response consistent with the ethical values you hold, and the values your company holds?  Think how your decision may have been different if you presumed that substantial dollars or someone’s future was involved?

All of these questions surround the study of ethics.  It is a topic, which is now given much greater attention by business schools and business America.  In fact, in many corporations today, policies on ethics are written into their personnel manuals.  The U.S. Government has a 90-page document representing their ethical policy.  But how do those policies translate to global firms involved with multiple cultures?  There are no easy answers.

Ethics is the study and evaluation of human conduct as this conduct relates to an individual’s moral principles and standard of conduct.  Ethics vary greatly from one person to another, one company to another and one culture to another.  As you might imagine, this creates some significant challenges for both individuals and firms.  What is your ethical standard?  What is the ethical standard of your firm?  Is it higher or lower than yours?  How does that standard relate to the standard of other firms? Which set of ethical standards should one follow?  These are choices each individual and company must make every day.

The other day experienced something few people ever get the opportunity (or desire) to.  I was part of a group who visited Nellis Air Force Base outside of Las Vegas.  Few people realize that within one of the most secure Air Force bases in the world, exists a prison.  This is a minimum-security prison containing 437 inmates.  This prison is what the media refers to as a “White Collar Country Club”.  It is filled with individuals who have crossed the ethical line and eventually broke a law, and are now paying the price for those actions. 

What is missing from this “Country Club” is the golf course, swimming pool, tennis courts, and wonderful food associated with a typical country club. Some of the things it does have, which are worth mentioning, are meticulous landscaping and rock gardens (maintained by the inmates), and dormitories with rooms which sleep 30-50 people in bunks.  Beside each bunk is a small locker containing the inmate’s permitted personal possessions. 

Prison life consists of 6-8 hours of work detail on the military base - picking up trash, cleaning restrooms, and other assorted jobs which Air Force personnel are unwilling to perform.  In exchange, the inmates are paid 12-40 cents per hour (depending upon their skill set).  The higher wages go to those individuals skilled in carpentry and mechanics - not those skilled in Investment Banking, Law, Real Estate, Accounting and other such notable professions.  Those individuals are at the bottom of the pay scale. 

 After finishing their work detail, they are served lunch by their fellow inmates.  The food isn’t the same as eaten by the Air Force, but sufficient nevertheless.  A typical meal consists of two entrée choices, an iceberg lettuce salad, sheet cake, coffee or juice.  The balance of the day is left for them to read, write (no computers are allowed), lift weights in the Air Force weight room, run around the Air Force athletic field or do their laundry.  One day a week the inmates are allowed to go to the Commissary (a mini 7-11) where they are permitted to buy a maximum of 7 items.

The inmate population consists of men who are considered low risk criminals, and those nearing the expiration of their prison sentence.  Approximately 70% are in on drug-related charges and the balance are considered white collar criminals.  Their ages range from early 20’s to early 80’s.  Some are there as few as 5 days, and others will stay over 15 years.

There isn’t a single gun in sight, in fact, none of the guards are even allowed to carry guns.  Each inmate was dressed in identical khaki pants and shirts.  Every few hours, they are lined up and counted by the prison guards (including nights). Their families are allowed to visit two weekends per month.  Collect telephone calls are limited to a total of 15 minutes per day.

 We had the opportunity to visit with five of the inmates for the better part of a day.   We met them alone in a small auditorium.  No guards were present during our meetings.  As a result, the inmates talked freely about prison life and the crimes they were convicted of.  Let me take a moment to describe each of these individuals:

·       The first inmate, and our moderator, was a graduate of a major Southern California university, and one of this country’s preeminent law schools.  He was Managing Partner of one of this country’s most prominent law firms.  He was on the board of every major charitable organization you could think of in his city of residence.  He was serving a sentence for bribing a governmental official. 

·       The second was President of a Computer Maintenance company, which he started in his garage.  He never finished college because he had found an opportunity to buy used computer equipment, refurbish it, and resell it for a profit.  One of his major suppliers bought “scrap” from another major computer company.  Rather than crush the components as the suppliers’ contract specified, equipment was resold to third parties like this inmate.  After acquiring these goods, he refurbished and resold the equipment for a huge profit.  He would split his profits equally with the supplier.  His crime was money laundering, racketeering and transferring stolen property across state lines.

·       The third was a partner of a Big 5 Public Accounting firm. He had a B.S. in Accounting and a Masters in Taxation from a major University.  He was an author, teacher, and lecturer on taxation.  He has three children - all under the age of 12.  He described his crime as “Conscious Avoidance”.  He had a wealthy client who had some questionable financial dealings.   As his advisor, he chose not to question these activities.  He was charged with securities and bank fraud, among other crimes. 

·       Another inmate has a B.A. from a major university, and substantial postgraduate studies.  He is the author of a number of books on real estate investing, has hosted multiple television infomercials, and his face was well known on the talk show and public speaking circuit.  He pleaded guilty to several indictments of fraud from the Attorney General.

·       The final individual was one of the most successful developers in the western U.S.  He possesses a Bachelor and Masters degree from two major Southwestern Universities.  He was involved in the University’s sports programs and virtually every major civic and political group in his city.  He also served as Mayor of that city.  He was a multi-millionaire involved in many substantial real estate investments.  His crime was five counts of bank fraud with five different Savings and Loans. 

These five people have a number of things in common.  They were well respected in their companies and pillars of their communities; they were all wealthy, polished presenters, married, (99% of all inmates get divorced some time between indictment and release from prison), and all seemed very engaging and charismatic.  Another common trait is that none of them believe they did anything wrong.   They blame their circumstances, the government or other sources for the fact that they are in prison.

All of these “gentlemen” crossed the line and broke the law.  Some of the lines were gray, others were very clear.  All of them, however, made a conscious decision that what they were doing may have severe consequences.  What was surprising is that in each case, they compromised their ethics to such an extent that they didn’t believe they had done anything wrong. 

In fact, in some cases, their behavior was considered acceptable and a common business practice among their peers.  Even more surprising was the number of comments that others had been involved in much more severe activities, and had “gotten away with it”.

Clearly, somewhere along the way, each one of these individuals had rationalized their personal ethics, and it appears that each of their employers condoned this type of behavior - at least until they were caught.  What was most troubling is that even after serving time in prison, they still refused to come to grips with the fact that they had crossed the ethical line far enough to where their actions finally broke the law.  According to their Case Manager, this denial is what holds felons back and impedes the process for rehabilitation in preparation for return to society. 

Over the next few years, these “gentlemen” will be returning to society - some with many years of productive life left.  The question is, how will they use that time.  All appear to have financial resources socked away.  Two of the five commented that they have learned a good lesson.  But from my discussions with them, these comments meant that they had now figured out how to beat the system and stay out of prison.  One indicated that everything was in his wife’s name.  Another indicated he would use offshore bank accounts in the future.  This doesn’t indicate to me that the system has done a good job at rehabilitating them.

However, we shouldn’t blame the system; we all must take responsibility. We need to begin with ourselves and set our own ethical standards.  Then we must practice those standards and become role models for our children.  The next step is to take the pulse of the ethics of our companies.  Then we must set the ethical bar at a level which will send a message to all of our employees. 

You don’t need to be a manager to make a difference.  Become a role model for your peers.  You will be surprised how your example and influence will raise the ethical bar with all of the individuals you touch each day.  People will naturally attempt to emulate the benchmark you set.

You don’t want to become a member of this “Country Club”.  This one is not glamorous or fun.  Nor is it enticing to return to society with a criminal record.  Listen to your gut or that little bell ringing inside your head.  Your ethical standards are your most valuable asset.  Protect, preserve and grow them, as you would with any other valuable possession.  As you do, you’ll find that these standards are an important partner in your journey through life.