By RANDALL SMITH

In the weeks since Goldman Sachs Group Inc. was sued over alleged fraud, the firm has engaged in a charm offensive to keep customers from defecting. But it hasn't always worked.

Goldman sent out emails to clients on the day of the allegations, April 16, giving the firm's defense. Since then, Goldman executives have crossed the country to meet personally with clients. One Goldman insider said colleagues crammed roughly two months of client visits into two weeks.

Last week, the $9 billion Oklahoma Teachers Retirement System voted to put Goldman's asset-management unit "on alert" for possible termination pending a review of the allegations as "an organizational concern."

Other clients say they are concerned as well. The Securities and Exchange Commission accused the firm of failing to disclose the role of a short seller in constructing a pool of mortgage-related assets sold to investors. Goldman has denied wrongdoing, saying its disclosures were adequate. A related criminal investigation disclosed last Friday and congressional hearings on April 27 focusing on the charges have intensified scrutiny of the firm.

The action by Oklahoma, which was earlier reported by Reuters, shows how state and local governments can be sensitive to such issues for political reasons. Goldman has ranked No. 5 in U.S. municipal underwriting in the years 2007 through 2009, according to Thomson Reuters. This year it ranks No. 6.

Such issues by state and local governments and authorities, many of them tax-exempt, are used for public purposes such as schools, sewers and water systems-financing projects often launched by elected officials and closely scrutinized by tax payers. Some public-finance experts say politics often plays a role in underwriter selections.

"I think in the municipal world, people are more sensitive to some of these issues just because of the political environment in which they live," says municipal-bond lawyer Dee Wisor of the Denver firm Sherman & Howard LLC.

Goldman declined to comment for this article.

"People are talking and this can't help them," said Brian Thomas, chief financial officer of the Metropolitan Water District of Southern California, which has issued short-term notes through underwriters including Goldman.

"In the near term I don't think it's going to have a large impact," Mr. Thomas added. "But we're concerned. We have talked to them. They called us pretty much after the news broke."

Goldman has met with clients "to discuss any concerns they may have with the firm," according to Brad Hintz, a securities analyst at Sanford C. Bernstein & Co. who met with top Goldman executives Friday. The upshot: Goldman has seen "no degradation of business," has been winning assignments it expected to win and "trade flows remain in line with expectations," Mr. Hintz added.

Some Goldman clients say they will have to see the whole case unfold before making longer-term decisions. "We're at this time very pleased with the services they provide," said James Fuller, chief financial officer of the Municipal Electric Authority of Georgia, which issued $2.7 billion of debt with Goldman as a senior manager in March. "We would like to see the situation play out and see what happens before we make any rash decisions."

Still, other public officials aren't waiting. Chriss Street, the Treasurer-Tax Collector of Orange County, a member of the county's public-finance advisory committee, last Friday called for "hearings to review the appropriateness of retaining Goldman Sachs" as an Orange County, Calif., underwriter.

In an email to Huntington Beach, Calif., Treasurer Shari Freidenrich, who heads the public-finance panel and is running for the Orange County Treasurer post that Mr. Street is vacating, Mr. Street cited the fraud charges filed in April.

In her reply, Ms. Freidenrich told Mr. Street that he was free to bring up the issue at the panel's next meeting on Thursday. "Then the board can decide if it would like to place this on a subsequent board agenda." Ms. Freidenrich referred a call to a county spokesman, who said that while Goldman is on a list of qualified underwriters, the firm hasn't done financing work for the county since 2006 and isn't under consideration for current assignments.

A federal bankrupcty court ruled in March that Mr. Street breached his fiduciary duty in a previous job as a trustee in the bankruptcy of Fruehauf Trailer Corp., ordering him to repay more than $7 million to the trust. Mr. Street said he is appealing the ruling.

BY JACOB BUNGE

The Securities and Exchange Commission and the regulatory arm of NYSE Euronext disciplined an equities unit of Goldman Sachs Co. on Tuesday for alleged violations of rules on short selling stocks.

In December 2008 and January 2009, Goldman Sachs Execution Clearing LP allegedly failed to buy enough shares to cover short positions held by customers, according to a notice from NYSE Regulation.

The issue was compounded as the firm continued to accept hundreds of short-sale orders in stocks in which it hadn't obtained enough shares to cover clients' existing short positions

Comments welcome on Gibbs / Salazar statements - Boot on Throat

WASHINGTON, May 3 (UPI) -- White House spokesman Robert Gibbs Sunday said all assets
are being deployed to contain the oil spill in the Gulf of Mexico and prepare for its onshore arrival.

"Everything that can be done has been done. ... Every asset that we have available is being used," Gibbs told reports aboard Air Force One.

Gibbs said President Obama and Louisiana Gov. Bobby Jindal briefly toured the coastline by helicopter but were hampered by low visibility and high winds. They did not make visual contact with the oil slick.

When pressed to respond to comparisons with Hurricane Katrina, Gibbs said, "We're obviously dealing with a situation of great potential environmental and economic devastation. I think the analogies though are tougher to make in an event that -- a storm that you track for several weeks that comes ashore and kills 1,800 people. ... I think the timeline I was looking at this morning ... had the Coast Guard and the Navy there on site immediately after this explosion. We've done everything that we could."

Gibbs repeated Interior Secretary Ken Salazar's promise to "keep the boot on [BP's] throat" in terms of stopping the leak at the source as well as paying for environmental and economic damage. He said Obama wants to ensure "that for fishermen who depend on making a catch, selling that catch to be able to pay for resources to go out and do it again, that their lifeline isn't cut off."

Gibbs said "all future decisions" regarding new offshore oil exploration will be "based on a full examination of what happened."

"What the president outlined at the end of March requires at least two sets of extensive reviews in order to both identify areas suitable for leasing and then ultimately an environmental plan for what ultimately is leased. ... Not to mention the eastern part of the Gulf would still require additional congressional action to open up," Gibbs said.

Friday 4-30

Hello All: I will be returning to class on Friday 4-30.

Goldman Political Contributions

Here is the news article I was referring to in our discussion in class yesterday about whether or not corporations should contribute to political campaigns:

http://www.usatoday.com/news/politics/2010-04-20-goldman-sachs-donations_N.htm

To me it certainly seems like there is a strong correlation between the amount of money Goldman Sachs has contributed- especially to people in Finance overseeing positions and the fact that the specific case the SEC is bringing up against Goldman Sachs is not necessarily an easy case to win. The SEC could have gone a different route and gotten them in trouble for unethical behavior but instead they have chosen to sue them for something which leaves them room to potentially escape unscathed. What is the motivation of the SEC for doing this? In my opinion: $$$.

Freedom of Speech (South Park/Muslim Controversy)

The radical Islamic Web site Revolutionmuslim.com is going after the creators of the TV cartoon series "South Park" after an episode last week included an image of the Prophet Mohammed in disguise.

Revolutionmuslim.com, based in New York, was the subject of a CNN investigation last year for its radical rhetoric supporting “jihad” against the West and praising al Qaeda leader Osama bin Laden. Its organizers insist they act within the law and seek to protect Islam.

On Sunday, Revolutionmuslim.com posted an entry that included a warning to South Park creators Trey Parker and Matt Stone that they risk violent retribution– after the 200th episode last week included a satirical discussion about whether an image of the prophet could be shown. In the end, he is portrayed disguised in a bear suit.

The posting on Revolutionmuslim.com says: “We have to warn Matt and Trey that what they are doing is stupid and they will probably wind up like Theo Van Gogh for airing this show. This is not a threat, but a warning of the reality of what will likely happen to them.”

Theo van Gogh was a Dutch filmmaker who was murdered by an Islamic extremist in 2004 after making a short documentary on violence against women in some Islamic societies. The posting on Revolutionmuslim.com features a graphic photograph of Van Gogh with his throat cut and a dagger in his chest.

The entry on Revolutionmuslim.com goes on to advise readers:

“You can contact them [the makers of South Park], or pay Comedy Central or their own company a visit at these addresses …” before listing Comedy Central’s New York address, and the Los Angeles, California, address of Parker and Sloane’s production company.

Contacted by CNN, the author of the post, Abu Talhah al Amrikee, said that providing the addresses was not intended as a threat to the creators of South Park but to give people the opportunity to protest.

Over still photographs of Parker, Stone, van Gogh and others, the Web site runs audio of a sermon by the radical U.S.-born preacher Anwar al-Awlaki, who is now in hiding in Yemen. The sermon, recorded some time ago, talks about assassinating those who have “defamed” the Prophet Mohammed – citing one religious authority as saying “Harming Allah and his messenger is a reason to encourage Muslims to kill whoever does that.” U.S. officials say al-Awlaki is on a list of al Qaeda leaders targeted for capture or assassination.

The clip ends with a warning on a graphic directed at Parker and Stone, saying “The Dust Will Never Settle Down.”

Al Amrikee said the purpose of including the al-Awlaki sermon in his posting was to remind Muslims that insulting the prophet is a severe offense for which the punishment in Islam is death. He said RevolutionMuslim may hold protests about the show.

Calls to Comedy Central were not returned.

http://news.blogs.cnn.com/2010/04/19/security-brief-radical-islamic-web-site-takes-on-south-park/

Internet

After watching this video, I thought it was somewhat dumb that she is complaining about not having the internet in her community. However, after actually thinking about what is going on in the world and the necessity for technology it got me to thinking that her arguments are pretty fair. As we get farther into the 21st century technology becomes more of a necessity and part of everyday life. With out it, many things in your everyday life like your job, communicating with other and entertainment is in jerpody. The need for the internet is crucial and makes sense of her plead to help bring it to her community. With dial up as we remember is very slow and now a days we complain when the internet takes more than 10 seconds. So after viewing this video I feel that having the internet in your community is assential and her arguments make sense.

At first I thought the video was a joke.... but the more I thought about it the more I realized how important broadband internet is. We take it for granted and even get upset if USD internet is running "slow" but do you remember dial up?

She had some valid points and I think something needs to be done, but I do not think every person has the right to free broadband....

Justice Alito - State of the Union Address

CHHS Interview Citizens United

Citizens United Video

Understandable...

I understand Rhonda Locklear's concern for her son's lack of advantages through internet use but I think that the idea of the Digital Divide goes deeper than just people who are lacking internet use. The schooling system has attached computers, which coincide with the use of internet for schooling, so dependently as a learning tool that it will not be surprising to find in the future everything from books to teacher's lessons solely learned through the internet. The idea of a classroom is starting to fall apart. Yes. There needs to be efficient internet access for people like Rhonda's son who depend on the internet to do homework. BUT, there needs to be a reevaluation of this Digital world that is taking over the nature of learning.

Digital Divide

After watching Rhonda’s comment on the digital divide, I was not really moved or touched by her reaction. This is simply because I instinctively reflected on my home town, Jakarta, Indonesia where most of the people still do not have proper houses to stay let alone own a computer that can access internet with cable speed. Some of them even do not have enough money to keep themselves alive, so sometimes they cannot buy books to read. Therefore, they have to go to the library to borrow books or borrow their friend’s book and share the cost. And surprisingly, some of these people became successful without the help of the best technology and live their lives happily without whining and complains.

My point is not that I am opposing this idea of allowing students in America to have access to the best technology, but one can still survive without these technologies. We tend to forget that we are becoming more and more attached to these technologies and we are oblivious that living life in a simple way may bring us more happiness in life.

Digital Divide

The digital divide is something that many people do struggle with today, and I see how a student could be put at a disadvantage, however, I do not think that this is something that the government should be focusing on. There are a lot larger issues that are more prevalent for our nation to be worrying about such as homelessness. " One approximation of the annual number of homeless in America( from a study by the National Law Center on Homelessness and Poverty,) estimates between 2.3 and 3.5 million people experience homelessness. " This is something that the nation should be worried about, not whether students have the newest and best technology available. I grew up with dial up, I survived, and did pretty well in school.

Digital Divide

I think that not having access to the internet is a disadvantage especially to students. However i also believe that having a dial-up connection is better than nothing and that there are so many families that would be happy with just that, to be connected in some way. Since Lochlear mentioned about her children having to complete assignments online I assume that the school or local library could provide the needed internet to complete these assignments. Overall I do not think that she is entitled to have internet given to her. People who do not have cell phones are put at a disadvantage but if they cannot afford to pay the bill there is nowhere saying that they are entitled to staying connected. The internet is quickly becoming a necessity but I think it is premature for her to be asking for high speed internet because it is still a service that must be paid for, especially in the case that she does not complain about not having internet at all, but that it is just not fast enough.

Digital Divide Video

I think that Rhonda makes a good point about the internet divide. It is important to have internet provided to all people at a a reasonable price and not have people stuck with dial-up. It does put children at a great disadvantage when they do not have access to the internet to do their homework assignments. Now a days most school assignments require the use of the internet and it is difficult if the students do not have access to an adequate source of internet service. Every child should have the same type of internet available to them so they can be on an equal playing field. The school system is already divided we should not add another source of division between students and their education. There is a problem with the internet divide and it should be addressed, but Rhonda was a little too emotional about it.

Rhonda Locklear's Digital Divide Concern

I feel that what she is saying it absolutely true that the internet has become an entity of practically everyone's daily lives (especially for students). Students are at a disadvantage if they cannot conduct research, do homework assignments, and projects if they have poor internet providers, or just dial-up in general. And since there are people, like Rhonda Locklear, who cannot provide a good internet source to their families, there should be some kind of assistance to these families, so that their children are not caught within the digital divide. And also so they can use this powerful tool to help them in completing assignments and projects for school. The internet has and will continue to become more of a necessity as the years progress. Also those that do have access to good internet sources will be at a higher advantage, especially in the schooling system, than those who are not.

In-Class Assignment - Citizens United v. FEC

Business & Society – Custin – April 19, 2010

In essay form, please answer the following questions:

1. Please describe the United States Supreme Court’s rationale or reasons for their decision in United States Supreme Court case of Citizens United v. Federal Election Commission.
2. Describe your prediction as to how this important legal decision will affect decisions corporations will make concerning contributions to political candidates.
3. Do you believe that corporations should contribute to political campaigns? Fully discuss.

Summit on High Speed Internet

Obama Says Tea Party Protestors Should Thank Him

http://www.examiner.com/x-19632-Salt-Lake-City-Headlines-Examiner~y2010m4d16-Obama-said-that-Tea-Party-protestors-should-thank-him-for-cutting-taxes-video

Assignment for Monday April 19

1) Read and Study Chapter 9 in Text
2) Locate and be familiar with the United States Supreme Court case of Citizens United v. Federal Election Commission. McCain Feingold Campaign Financing

Is Health-Care reform Constitutional?

http://www.washingtonpost.com/wp-dyn/content/article/2010/03/19/AR2010031901470.html

WSJ- Study of Ethics

By BETH GARDINER - Wall Street Journal 4-14-10

The study of ethics, once an academic orphan, is grabbing a more central role at many business schools since the financial crisis shone a spotlight on the damage that can be done by irresponsible business practices and an exclusive focus on the bottom line.


Critics have suggested that B-schools bear some responsibility for the culture of excessive risk-taking that helped trigger the credit crunch, saying they failed to teach students that there is more to business than just making money. Many schools have responded by re-examining their priorities, and giving ethics more classroom time, either in modules of its own or incorporated into key classes like strategy, finance and accounting.

Faculty are defining the subject broadly, arguing that ethical business practice is not just about refraining from cheating and corruption, but recognizing that a company has responsibilities beyond its shareholders' wallets—to employees, community, customers and the environment.

Schools may have erred in the past by assuming students were sufficiently aware of the importance of responsible behavior and failing to give it enough emphasis in the classroom, says Caroline Wang, who teaches a new, mandatory course on responsible leadership and ethics at the Hong Kong University of Science and Technology Business School.

By focusing on profit without talking enough about a company's wider responsibilities, "we gave people the impression that only profit counts," she says. "We must bring out the other elements."

Ms. Wang, whose course is required of both M.B.A. and executive M.B.A. students, takes a novel approach, using examples from outside the business world to demonstrate the power of strong leadership. She sees good leaders as the linchpin of ethical businesses, and holds up Antarctic explorer Ernest Shackleton and Anne Sullivan, who taught Helen Keller, as models.

Although Shackleton's 1914-1916 mission failed when his ship the Endurance became trapped in ice, his success in keeping his crew safe and undivided by infighting holds valuable lessons in responsibility for everyone who manages people, Ms. Wang tells students. At the heart of Shackleton's approach was his honesty in warning potential crew members of the hardships of their mission before it began, she says.

"He set the right expectations, and that really helped him to manage the morale when they did encounter difficulty," she says. "The majority of entrepreneurs fail, but if they are good leaders people follow them again, and eventually I think they will succeed with a group of passionate people."

Many B-schools boosted their offerings on ethics and responsible business practice several years before the financial crisis, after the scandals at companies like Enron and WorldCom, says Huw Morris, chairman of the Association of Business Schools in London.

Businesses have let schools know it matters.

"Companies, when they used to come to the school, they used to start with 'We want talented people,' but now they start their speech with 'We need people with very good ethics,' and after that they talk about" skills, says Pascal Krupka, M.B.A. director at Rouen Business School in France.

In a survey by the London-based Association of M.B.A.s and northern England's Durham Business School, B-school administrators rated ethics the most important subject for students in the current business climate. Seventy-nine percent of schools and 59% of alumni questioned said M.B.A. programs should teach what's called a stakeholder approach—focusing on companies' responsibilities to communities, customers, employers and society at large—rather than encouraging students to think only of their obligations to shareholders.

Despite the increase in interest, there are pressures on schools to produce students who make money their top priority, particularly from school rankings that are based partly on how much salaries increase after graduation, Dr. Morris says.

"Built into those structures are incentives to behave unethically," he argues.

The increased focus on ethics is not just happening in the West.

Students in China are more interested than ever in issues like social responsibility and sustainability, says Charles Chen, director of executive M.B.A. programs at the China Europe International Business School, or CEIBS.

"Although the economy has been in a boom, pollution is terrible, and people can see that if we don't do anything about it, we will be hurt," he says. "If the corporations do not act responsibly, there's no way the economy can keep on growing."

Dr. Chen says he talked to students in one recent executive M.B.A. class about what happens when powerful companies push their suppliers too hard in an effort to maximize profits, citing as examples Toyota's recent quality problems and the toxin-tainted milk that sickened about 300,000 babies in China in 2008 and 2009.

"If you have a dominant position in a supply chain, you could squeeze upstream and downstream to the limit, but there is a point beyond which it will break up," he says.

At Rouen, Mr. Krupka has found an unusual way to engage students in the subject. He regularly invites Benedictine monk Didier Le Gal, who comes in traditional robe and sandals from a nearby monastery, to his classes. Dom Le Gal, whose abbey operates a successful document-scanning business—an outgrowth of the monks' ancient skill at copying books by hand—talks about ethical ways to manage people and make money.

Dom Le Gal brought a book by St. Benedict about "how to manage a monastery, how to manage people, how to make decisions," Mr. Krupka recalls. "He said in this book, you can replace brothers with colleagues, you can replace the word priest with leader," and its lessons are relevant for modern executives.

Dr. Morris noted that the teaching of ethics often comes into fashion during economic downturns and after scandals like the junk bonds of the 1980s. "This has happened before," he says. "I suppose we'll have to wait and see how long our collective and corporate memories will be" this time.

Health Care Reform Discussion on April 14

Please provide your follow-up comments to the Constitutional issues concerning the health care reform. Please consider all of the cases we discussed: Wickard, Heart of Atlanta Motel and Lopez (regulation of non-economic activity). Also consider Article I section 8, the Commerce Clause, the 10th Amendment and the legal requirement to purchase of health insurance.

Please review this Video re: L3C - Social Responsibility

L3C Assignment

Please bring to class your draft paper on the L3C Low Profit Corporation. Please also bring copies of any articles or reference material cited in your draft paper. The final paper for each group is due on Monday. Please also post your final paper on the Blog for comment and review on Monday A.M. Rick Custin

L3C

http://richiericher.wordpress.com/2009/09/04/foundations-listen-up-why-pris-and-l3cs-matter/

Corporate Social Responsibility & Green Business Panel

Thursday, April 15th

IPJ Theatre

12:30pm – 2pm

Moderated by Professor Patricia Marquez

Panelists to be announced

Whistle-Blowing seems to work in targeting corporate misdeeds. It uncovers corporate misconduct.

Since we spent a considerable amount of time talking about whistle-blowing, this may be useful.

Whistle-blowing by employees and insiders is a “useful mechanism” for uncovering corporate misbehavior, with clear economic and governance impact on the companies involved, according to a new academic study.

“Whistle-blowing allegations had an immediate negative economic consequence for target firms,” the study found. On average, the stock price of a target company fell 2.8 percent in the five days around the day an allegation became public and even more severely – an average of 7.3 percent - when the whistle-blower alleged “earnings management.”

The paper – Whistle-Blowing: Target Firm Characteristics and Economic Consequences – was written by Robert Bowen and Shiva Rajgopal, Professors of Accounting at University of Washington, and Andrew Call, Assistant Professor of Accounting at the University of Georgia. Highlights of the paper were first posted on the Harvard Law School Forum for Corporate Governance and Financial Regulation.

In the wake of scandals at Enron, WorldCom and other companies, the Sarbanes-Oxley Act of 2002 incorporated provisions to encourage and protect whistle-blowers, including requirements for whistle-blowing “hotlines” that facilitate employee reporting. The paper addresses critics who have argued that whistle-blowers often misjudge a situation and “indulge in trivial or frivolous complaints.”

“Our results suggest whistle-blowing is far from a trivial nuisance for targeted firms,” the paper reports, and provide “indirect evidence on the efficacy” of whistle-blowing protections in the Sarbanes-Oxley Act.

The researchers found that whistle-blowing generally led to more earnings restatements, more shareholder lawsuits, and “relatively poor operating and stock return performance” compared to other firms. “Whistle-blower allegations appear to be an early indicator of future negative economic consequences for targeted firms,” the study found.

On average, whistle-blowing targets exposed in the press “improved several dimensions of governance relative to the year before the whistle-blowing event” and relative to a matched sample of control firms. Those governance improvements were not apparent for firms subject to whistle-blowing allegations that were not widely disseminated, the researchers said.

High-growth companies and those with strong stock market performance are more likely to encounter whistle-blowing, according to the study, as are those that have recently made reductions in work force. “Employees, especially former employees who have been let go, are more likely to make public allegations following layoffs,” the paper says. “Further, layoffs can increase the animosity between the firm and existing employees, and if existing employees perceive their job as being less secure, the potential cost of blowing the whistle decreases.”

Corporate social responsibility worth the additional costs? Yes since consumers are willing to pay more for socially responsible corporations. This proves it increases brand value, the intangible assets.

American consumers are willing to pay a premium for goods from socially responsible companies, with 70 percent saying they would pay more for a $100 product from a company they regard as responsible, according to a new survey.

Despite the economic recession, 59 percent of those responding said they plan to spend the same or more on products from socially responsible companies.

The second annual Corporate Social Responsibility Perceptions Survey was conducted by research-based consultancy Penn Schoen Berland in partnership with brand consulting firm Landor Associates and strategic communications firmBurson-Marsteller. The results are based on 1,001 online interviews with the general public in the U.S. conducted in mid-February 2010.

The survey found that 75 percent of consumers say it is important for companies in each of the 14 industries tested to be socially responsible. Of those industries, Food, Consumer Goods and Retailers were perceived as performing best, while Financial Services, Healthcare and Media were perceived as performing worst.

Food giant General Mills was perceived to be the most responsible of 64 tested brands.

The survey found that more than half (55%) of consumers are unsure about the meaning of “corporate social responsibility.” Of those who do know what “CSR” means, 20% percent said it involves “giving back to the community” while 19% say it is about “self-regulation and accountability.” Responsible environmental (16%) and employment (16%) practices were seen as the top ways to be socially responsible, the survey found.

Seventy-eight percent of employees are “unclear or unaware” of their employers’ CSR activities, according to the survey. One third of workers said they would take a pay cut to work for a socially responsible firm. About one half (49%) of 18-24 year old employees would take a pay cut to work at a socially responsible firm compared with 33% of 35-39 year olds and 25% of employees 65 years of age and older, the survey found.

Class Cancelled on March 31

Class is canceled on March 31. Make up tba. Students scheduled for tests at 7 A.M. please meet me at my office at 7 A.M. on the Wednesday when we return to class after Easter break. Have a safe and happy Holiday!

A Downward Spiral of Business Ethics

Scrolled across this blurb in an article about ethics. The key concept behind the idea is a variation of the Dunning-Kruger effect.

The psychological root of this vicious circle is human misperception, says Dunfee. "Research consistently indicates that people think of themselves as more ethical than others. That leads them to overestimate the amount of unethical behavior others engage in. People adjust their own behavior to that misapprehension, and then it gets scary: There's a downward spiral."

*Thomas Dunfee (deceased); former professor of legal studies and business ethics at UPenn Wharton School of Business

Here is my proposition. Let's assume you are a top executive in a multi-million dollar firm. Competitive pressures from other firms in the industry require you to run a lean operation. In order to remain profitable and keep your shareholders satisfied, you must continually take measures which are marginally beneficial to the firm. Now, refer back to Dunfee's argument. You estimate yourself to be more ethical than the average person. This will consequently lead you to believe that other firms are engaging in unethical behavior, and that is how they remain competitive in your industry. Because of this overestimation, you are now left with no alternatives: you must engage in (enter your unethical behavior here) to remain competitive and thus you succumb to the evils which we are taught to avoid.

http://seattletimes.nwsource.com/html/localnews/2011367936_walgreens18m.html

Walgreens: no new Medicaid patients as of April 16

By Janet I. Tu

Seattle Times staff reporter

Effective April 16, Walgreens drugstores across the state won't take any new Medicaid patients, saying that filling their prescriptions is a money-losing proposition — the latest development in an ongoing dispute over Medicaid reimbursement.

The company, which operates 121 stores in the state, will continue filling Medicaid prescriptions for current patients.

In a news release, Walgreens said its decision to not take new Medicaid patients stemmed from a "continued reduction in reimbursement" under the state's Medicaid program, which reimburses it at less than the break-even point for 95 percent of brand-name medications dispensed to Medicaid patents.

Walgreens follows Bartell Drugs, which stopped taking new Medicaid patients last month at all 57 of its stores in Washington, though it still fills Medicaid prescriptions for existing customers at all but 15 of those stores.

Doug Porter, the state's director of Medicaid, said Medicaid recipients should be able to readily find another pharmacy because "we have many more pharmacy providers in our network than we need" for the state's 1 million Medicaid clients.

He said those who can't can contact the state's Medical Assistance Customer Service Center at 1-800-562-3022 for help in locating one.

Along with Walgreens and Bartell, the Ritzville Drug Company in Adams County announced in November that it would stop participating in Medicaid.

Fred Meyer and Safeway said their pharmacies would continue to serve existing Medicaid patients and to take new ones, though both expressed concern that the reimbursement rate is too low for pharmacies to make a profit.

The amount private insurers and Medicaid pay pharmacies for prescriptions isn't the actual cost of those drugs but rather is based on what's called the drug's estimated average wholesale price. But that figure is more like the sticker price on a car than its actual wholesale cost.

Washington was reimbursing pharmacies 86 percent of a drug's average wholesale price until July, when it began paying them just 84 percent. While pharmacies weren't happy about the reimbursement reduction, the Department of Social and Health Services said that move was expected to save the state about $10 million.

Then in September came another blow. The average wholesale price is calculated by a private company, which was accused in a Massachusetts lawsuit of fraudulently inflating its figures. The company did not admit wrongdoing but agreed in a court settlement to ratchet its figures down by about 4 percent.

That agreement took effect in September — and prompted a lawsuit by a group of pharmacies and trade associations that said Washington state didn't follow federal law in setting its reimbursement rate, and that that rate is too low. The lawsuit is pending.

"Washington state Medicaid is now reimbursing pharmacies less than their cost of participation," said Jeff Rochon, CEO of the Washington State Pharmacy Association.

Pharmacies that continue to fill Medicaid prescriptions at the current state reimbursement rate are "at risk of putting themselves out of business altogether," he said.

Information from Seattle Times archives was used in this report.

Motorola's Social Responsibility Site

"

• Motorola Provides More Than $2 Million in Aid for Haiti Earthquake
• Motorola Named Sustainability Leader by Dow Jones Sustainability Index for Sixth Straight Year
• Dell, HP, Intel and Motorola aim to ensure mineral supply chains are conflict-free
• U.S. EPA Recognizes Motorola Among Nation's Leading Green Power Purchasers
• Motorola Supports Student Achievement in Science and Math, Competitiveness in Knowledge-Based Economy
• Motorola Unveils World's First Mobile Phone Made Using Recycled Water Bottle Plastics

"

http://www.motorola.com/staticfiles/Business/Corporate/US-EN/corporate-responsibility/cr/cr-home.html

Disparate Treatment

Here's a recent court case I found regarding an employee (Coar) who claimed that he was terminated wrongfully and argued that he was a victim of disparate treatment by his employer (Alabama Aircraft Industries), using prima facie as the main basis for his argument.

"Coar argues on appeal that the district court erred in granting summary judgment to AAI on Coar's disparate treatment and retaliation claims. Specifically, Coar asserts that, regarding the disparate treatment claim, he satisfied Title VII's prima facie requirement by presenting evidence of similarly situated employees outside his protected class who were treated more favorably by AAI, and that his other circumstantial evidence of discrimination sufficiently showed that AAI had acted with discriminatory animus. In the alternative, Coar argues that he could show that AAI's legitimate nondiscriminatory reason was pretextual. Regarding the retaliation claim, Coar submits that he satisfied Title VII's prima facie requirement by proving the requisite causal connection between his statutorily protected activity and termination. In the alternative, Coar again asserts that he could demonstrate pretext..." More can be found at >> http://www.leagle.com/unsecure/page.htm?shortname=infco20100225089

Toyota Recall Fix Not Working, Drivers Tell Federal Safety Agency - ABC News

Toyota Recall Fix Not Working, Drivers Tell Federal Safety Agency - ABC News

GM to recall 1.3M compacts for steering problem

DETROIT – General Motors Co. is recalling 1.3 million Chevrolet and Pontiac compact cars sold in the U.S., Canada and Mexico to fix power steering motors that can fail.

The recall affects 2005 to 2010 Chevrolet Cobalts, 2007 to 2010 Pontiac G5s, 2005 and 2006 Pontiac Pursuits sold in Canada and 2005 and 2006 Pontiac G4s sold in Mexico.

The automaker said Monday the vehicles are still safe to drive and never lose their steering, but it may be harder to steer them when traveling under 15 mph.

GM spokesman Alan Adler said it will take time for the automaker to get 1.3 million new power steering motors from the supplier, JTEKT Corp., and GM will notify car owners when the parts are available.

Adler said the failures are rare and the cars can still be driven until motors can be replaced by dealers. Drivers will see a warning light and hear a chime if the power steering fails, but they could be surprised when the steering becomes more difficult.

GM told the National Highway Traffic Safety Administration about the recall on Monday. NHTSA began an investigation into 905,000 of the models on Jan. 27 after getting 1,100 complaints that the cars lost their power steering assist. The complaints included 14 crashes and one injury.

The automaker will fix older models first because it usually takes 20,000 to 30,000 miles of driving for the condition to develop, Adler said. GM also will have to repair thousands of vehicles on dealer lots before they can be sold, he said.

"Recalling these vehicles is the right thing to do for our customers' peace of mind," Jamie Hresko, GM's vice president of quality, said in a statement.

Adler said if the power steering assist fails, it usually comes back for a time after the car is shut off and restarted.

The recall comes at a time of heightened interest in auto safety after sudden acceleration problems experienced in some Toyota Motor Corp. vehicles.

Toyota has had to recall 8.5 million vehicles worldwide to fix problems with sticky gas pedals, floor mats that can snag the gas pedal and cause unintended acceleration, and brake software problems with the Prius gas-electric hybrid.

Toyota executives have been summoned to testify before congressional committees investigating the company's actions and whether NHTSA did enough to make sure the Toyotas are safe.

UPS SUED FOR DISABILITY DISCRIMINATION

EEOC Says Class of Disabled Employees Fired After Taking Medical Leaves of Absence

CHICAGO – In a major class lawsuit filed here in federal court, the U.S. Equal Employment Opportunity Commission (EEOC) charged that Atlanta-based United Parcel Service, Inc. (UPS), the world’s largest package delivery company, violated federal law by rejecting an extension of medical leave as a reasonable accommodation for its employees with disabilities.

The EEOC’s administrative investigation, conducted prior to filing the lawsuit and supervised by Chicago District Director John Rowe, found that UPS violated the Americans With Disabilities Act (ADA). According to Rowe, Trudi Momsen, an administrative assistant at UPS, took a 12-month leave of absence from work when she began experiencing symptoms of what was later diagnosed as multiple sclerosis. She returned to work for a few weeks, but soon thereafter needed additional time off after experiencing what she believed to be negative side effects of her medication. Although Momsen could have returned to work after an additional two-week leave of absence, UPS fired her for exceeding its 12-month leave policy. Following its investigation, the EEOC reached an administrative determination that UPS failed to accommodate Momsen’s disability, in violation of the ADA.

“This case should send a wake up call to Corporate America that violating the Americans With Disabilities Act will result in vigorous enforcement by the EEOC,” said Commission Acting Chairman Stuart J. Ishimaru. “The ADA has been the law of the land for nearly two decades now, and employers simply have no excuse for failing to abide by its provisions.”

The EEOC filed suit late yesterday in U.S. District Court in Chicago after first attempting to reach a voluntary settlement with UPS. The litigation, captioned EEOC v. United Parcel Service, Inc. (Civil Action No. 09-C-5291) and assigned to U.S. District Judge Robert M. Dow, Jr., seeks back pay and compensatory and punitive damages for Momsen and a class of disabled employees whom UPS similarly refused to accommodate, as well as an order barring future discrimination and other relief.

EEOC Chicago Regional Attorney John Hendrickson said, “One of the main goals of the ADA is to provide gainful employment to qualified individuals with disabilities. However, policies like this one at UPS, which set arbitrary deadlines for returning to work after medical treatment, unfairly keep disabled employees from working. Sometimes a simple conversation with the employee about what might be needed to return to work is all that is necessary to keep valued employees in their jobs.”

According to company information, Atlanta-based UPS, which describes itself at the world’s largest package delivery company, is a $49.7 billion global corporation operating in more than 200 countries and territories worldwide. The EEOC Chicago District Office is responsible for processing charges of discrimination, administrative enforcement, and the conduct of agency litigation in Illinois, Wisconsin, Minnesota, Iowa, and North and South Dakota, with Area Offices in Milwaukee and Minneapolis.

The EEOC enforces federal laws prohibiting employment discrimination. Further information about the EEOC is available on its web site at www.eeoc.gov.

PRESS RELEASE
8-28-09

Class Canceled Today- 2 -26-10 - Friday

Class is canceled today- Friday 2-26-10. The test will be on Wednesday. Make-up class tba. Rick Custin

Did possible Toyota crashes in the past cause more deaths and incorrect sentences?

LINO LAKES, Minn. – Ever since his 1996 Toyota Camry shot up an interstate ramp, plowing into the back of an Oldsmobile in a horrific crash that killed three people, Koua Fong Lee insisted he had done everything he could to stop the car.

A jury didn't believe him, and a judge sentenced him to eight years in prison. But now, new revelations of safety problems with Toyotas have Lee pressing to get his case reopened and his freedom restored. Relatives of the victims — who condemned Lee at his sentencing three years ago — now believe he is innocent and are planning to sue Toyota. The prosecutor who sent Lee to prison said he thinks the case merits another look.

"I know 100 percent in my heart that I took my foot off the gas and that I was stepping on the brakes as hard as possible," Lee said in an interview Wednesday at the state prison in Lino Lakes. "When the brakes were looked at and we were told that nothing was wrong with the brakes, I was shocked."

Lee's accident is among a growing number of cases, some long resolved, that are getting new attention since Toyota admitted its problems with sudden acceleration were more extensive than originally believed. Numerous lawsuits involving Toyota accidents have been filed over the recent revelations, and attorneys expect the numbers will climb.

In testimony before Congress, company executive renewed their apologies for underestimating the safety problems but also acknowledged that they still may not have identified all the causes for the sudden acceleration.

The uncertainty could wind up helping Lee and others. Attorneys for both the 32-year-old St. Paul man as well as the victims' families say they're encouraged by the evidence that the problems went beyond models that originally were recalled.

If Lee's car was defective, "We don't want an innocent man sitting in prison," said Phil Carruthers, who prosecuted the case for Ramsey County.

A Toyota spokesman declined to comment on Lee's case.

Lee, a recent Hmong immigrant with only about a year of driving experience, was driving his pregnant wife, 4-year-old daughter, father and brother home from church the afternoon of June 10, 2006, when their Camry zoomed up an Interstate 94 exit ramp in St. Paul. Police said it was traveling between 70 and 90 mph when it rear-ended an Oldsmobile stopped at a red light.

Javis Trice Adams, 33, and his 10-year-old son, Javis Adams Jr., died at the scene. Adams' 6-year-old niece, Devyn Bolton, was paralyzed from the neck down, and died shortly after Lee was convicted.

At his 2007 trial, Lee testified he was certain he tried to brake. But a city mechanic testified the brakes worked fine, and Carruthers, the prosecutor, argued Lee must have hit the gas by mistake. Lee's attorney at trial, Tracy Eichorn-Hicks, seemed to concede as much, arguing Lee's actions fell short of gross negligence.

In the end, a jury convicted Lee on two counts of criminal vehicular homicide. At sentencing, Ramsey County District Judge Joanne Smith gave Lee the maximum after emotional testimony that included Devyn Bolton's mother, Bridget Trice, saying to Lee: "I hope you understand what you've done to my family, Mr. Lee. You have ruined it."

Lee's Camry wasn't among those subject to Toyota's recent safety recalls, but Toyota did recall some 1996 Camrys for defective cruise controls that could cause sudden acceleration.

Lee's current attorney, Brent Schafer, said several '96 Camry owners whose cars were not in the recall have filed sudden-acceleration complaints with federal regulators.

Bob Hilliard, a Texas attorney, is preparing a lawsuit by the victims in the Lee crash. Hilliard said other federal complaints suggest a defect more widespread than recalled cruise controls — something with engine control modules that could extend to other Toyota makes and model years.

Hilliard said he's aware of about 16 potential class-action cases filed around the country on the basis of the automaker's recent revelations. Attorneys for the victims' family declined to make them available, but Hilliard said they feel differently about Lee now. "They seem to have made peace with the fact that he's telling the truth," Hilliard said.

Lee said he's grateful.

"I feel like them believing in me is a gift that I've received from God," he said.

Schafer said he'll file paperwork soon asking to reexamine the wrecked Camry, which still sits at the St. Paul police impoundment lot. All sides expect that request to be granted. Then Schafer would have to persuade the judge that new evidence merits a new trial.

Judges usually are skeptical about claims of new evidence, but Joseph Daly, a law professor at Hamline University in St. Paul, said Lee's chances appear to be good. "I really think a judge would be inclined to let that evidence be presented," Daly said.

Still, Carruthers said several factors would work against Lee. Lee testified his brakes didn't work, not that his car suddenly accelerated. And two experts — a city mechanic and an engineer hired by Lee's insurance company — didn't identify sudden acceleration as a problem with the car. Schafer said sudden acceleration is the only reasonable explanation for what happened.

Lee said he never had driven before immigrating to the United States and settling in St. Paul's large Hmong community in 2004. He was working to get his high school equivalency degree before the crash, and he's still working on it in prison. He wept as he described the impact of his imprisonment on his wife and four children, ages 8, 5, 3 and 2, who are on welfare.

"Right now it is very difficult for them," Lee said tearfully. "It's because my children are still very young. My wife is going to school and there aren't people to help her out. My kids ask about me constantly. They ask me when I'm going to come home. They ask about me. I don't know what to say to them."