By Posted on Posted in Ethics in Government

That’s what 8-term Republican Congressman Randy Cunningham said in his resignation speech, after pleading guilty to taking $2.4 million in bribes. Oh yes, and then talk about chutzpah, listen to this:

The
tax evasion charge came after Cunningham reported joint income with his
wife of $121,079 for 2004 and claimed he was due a refund of $8,504.
Prosecutors said his income was $1,215,458 and he owed $385,077 in
taxes.

(You won’t find that in the above link, but it’s in the copy of the AP story a friend sent me.)

Hmmm, yet another GOP Congressional scandal–this makes the fourth one
(DeLay, Frist, Bob Ney), not counting Plamegate and other White House
scandals. One Democrat, William Jefferson of Louisiana, is also under
investigation.

The Washington Post reports,

Democrats
have vowed to make what they have called the GOP’s “culture of
corruption” a major theme of a 2006 congressional election campaign
already unfolding under the twin clouds of the Iraq war and high energy
prices.

The Post kept a sense of humor in its report:

For
a gruff war veteran, Cunningham emerges from the court documents as a
man with surprisingly delicate tastes. Among the gifts he accepted were
a $7,200 Louis-Philippe commode, circa 1850; three antique nightstands;
a leaded-glass cabinet; a washstand; a buffet; and four armoires. After
paying $13,500 toward a Rolls-Royce in April 2002, one of Cunningham’s
benefactors tossed in $17,889.96 toward the car’s repairs less than a
month later.

Rep. Randy

Rep. Randy “Duke” Cunningham (R-Calif.) talks to reporters in San Diego after pleading guilty to conspiracy and tax evasion. (By Lenny Ignelzi — Associated Press)

Now
he’s forced out of not only the House but his ill-gotten house, and
will probably go to jail. You’d think these people would figure out by
now that crime doesn’t pay–unless, perhaps, the President calls you
“Kenny-boy.” Lay’s trial was supposed to start over a year ago, and
even that was years late. Why are they waiting?

And whatever
happened to the days when public office was a public trust, and CEOs
saw their mission as stewardship of shared resources rather than
feathering their own nests? It’s important to note that those who paid
the bribes, and received vast return on their investment, are just as
tarnished as the fallen Cunningham.

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By Posted on Posted in Marketing Trends/News

3. New Business Ideas are Everywhere
It
seems there’s no shortage of unfilled needs that could become the core
of wildly successful businesses. Here are a few I noticed:

Ralph Stevens turns 100 (See #4, below).
(Photo by Alana Horowitz Friedman)

A. Mail-back kiosks and/or check-this-as-luggage containers at airport security checkpoints:
My 13-year-old son brought his oboe on the trip, including a set of
four tiny screwdrivers, like the sort for tightening eyeglass frames.
TSA confiscated three of the screwdrivers. (I offered to let each of
the four of us take one screwdriver, but this was not acceptable.)
Apparently there was some rather inconvenient way we could have mailed
it to ourselves for $10, but it would cost less to replace them. We
could have also sent the whole bag through checked baggage, but the
risk of damaging or losing the instrument far outweighed the
convenience of keeping the screwdrivers.

There must be thousands
of items per day that are confiscated, causing great inconvenience to
the owners of the objects, and also a substantial disposal problem for
TSA. Someone should come along and contract with the postal service and
TSA to set up a self-service mail kiosk at each security checkpoint,
with a selection of small padded envelopes and the ability to type an
address label and take credit cards. Charge actual postage plus maybe a
$3.00 or $4.00 service charge, of which two-thirds would be profit.
Someone would need to refill the envelopes and be available for
maintenance problems, but the post office would collect the packages
for free.

Another possibility: rent small suitcases big enough
to go through baggage without being lost or crushed, with drop-off at
any airport in the U.S.

B. Travel planning website for fixed dates, open destination:

We’ve been trying to plan a trip for our next vacation, over Christmas
week. But we have to try one destination at a time. The truth is, we’re
not so fussy about where we go. I’d like to be able to select a date
range of two or three days on each end and see destinations ranked by
fare within broad categories of U.S., Europe, Asia, Africa, Pacific.
Then we could quickly narrow it down and click for more
information/booking. I checked with two prominent travel experts;
neither knew of such a site.

C. Urban compost centers:
In my brother-in-law’s food-co-oping, Prius-driving, recycling
Minneapolis neighborhood, a lot of food scraps end up in the municipal
garbage system. If someone could figure out a way to create a business
model around composting, while still keeping the disposal a free
community service, it wouldn’t be hard to generate a significant
quantity of waste. I live on farm and my neighbors sell composted cow
manure for $5 a bag, but my guess is they sell only a few bags per
week. Still, there surely must be people who would pay for high quality
compost; it’s just a matter of figuring out who has the need, wants to
pay, and can generate enough orders to be worthwhile. Garden centers,
perhaps? They’re already selling fertilizer. Or maybe the garden
centers should operate the compost operation.

4. Aging Populations Have Different Needs
My
sister-in-law’s grandfather, Ralph Stevens, turned 100 while we were
out there, and we went to the party along with about 40 of his
relatives. I’d never been to a 100th birthday party before, although I
did go to my neighbors’ 70th wedding anniversary.

When I was a
kid in the 1960s and 70s, many people born around the beginning of the
20th century were dying off; if you lived past 70, you were considered
old. Yet 76,000 Americans have reached that amazing 100-year milestone–and
these are the same generation that appeared to be dying off thirty and
forty years ago. What marketing opportunities are presented by people
living to be 100? By having four or five generations of the same family
alive at once? What does Ralph Stevens, a wheelchair-using blind
centenarian who loves to sing and lives in close proximity to a large
family, want and need in his life? How would you market to him in his
nursing home or through his family?

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By Posted on Posted in Business Ethics, General Commentary, Marketing Trends/News

Just back from several days in Minneapolis, and I had my trend-spotting radar up. Some observations:

1. The airline industry continues to shift.

We flew ATA and Southwest, and it was illuminating to contrast them. Southwest still very much encourages the nonconformists and humorists among its staff, and continues to do very well with on-time performance, full or nearly-full planes, and other metrics. And they continue to make things nicer for their customers. For instance, online check-in is a big improvement over the cattle-herd system of the old days, and printing your boarding group right on the boarding card is much better than the old plastic passes. Maybe it was my imagination, but it seemed to me there’s a bit more leg room than there used to be. And on today’s flight home, they even gave us each a square of chocolate!

Lessons for other companies: give your people room to shine and they will. Fill a market niche, and you’ll be profitable. Be nice to your customers, and they will return. Do all three things right and you’re a rare success in a troubled industry.

ATA, by comparison, was not a pleasant experience. The seats are jammed together to the point where, even at only 5’7″, I was extremely grateful to have an aisle seat so I had someplace to put my feet. (My wife flew Northwest recently, and said the legroom is even worse there.) On the way there, we discovered that the airline had never entered a change in our itinerary and had us flying the previous day. Luckily, we had a paper trail and there were still enough seats. Yet, even though I watched the ticket agent enter the correct information for our return trip, it seemed the check-in agent on the flight home had some difficulty getting the reservation to show up appropriately. And other little things–no sparkling mineral water or seltzer, only club soda (which has salt, on top of all the salt in the pretzels). And big things: ATA had over two hours to get our luggage to Southwest during our Chicago transfer; not one of our four bags made it on the plane, and neither did the bag of another passenger with the same itinerary. None of this was life-threatening, and most of it is a pretty small inconvenience–but it added up to somewhat negative experience that is likely to influence future purchase decisions. Oh yes, and the reason we were on Southwest in the first place is that ATA suddenly pulled out of our market long after we’d booked our flight. (Southwest doesn’t fly to Minneapolis.)

Lesson: No matter how good your advertising, your brand is built on positive and negative customer experiences.

(Disclosure: I was a fan of Southwest long before this happened, but I should point out that the company bought 1000 copies of Principled Profit: Marketing That Puts People First, prepublication. If that colors your view of my comments, so be it.)

2. A Discounter Goes Upscale

Southwest again. The airline’s Unique Selling Proposition has always been the combination of low prices, reliability, and superior service. Perhaps it’s the service aspect that’s helping Southwest Spirit, the inflight mag, to go after a very upscale advertiser profile. The pages are filled with ads for expensive high-rise housing, Las Vegas casinos, glitzy restaurants, expensive gizmos…and there are a lot of ads!

This could mean several things:

  • High-end consumers are putting greater value on low prices
  • Southwest’s superior experience means non-price-conscious consumers are seeking them out because they want to get there on time and be entertained
  • The airline may be experimenting with moving away from that USP, and higher prices may be on the way (though I suspect they wouldn’t be quick to throw away 30 years of loyalty built in large measure by affordability)

I’ll try to do Part II tomorrow

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By Posted on Posted in Ethics in Government

This week, I received a fund appeal on behalf of none other than Katherine Harris. Remember Harris? She was the highly partisan Florida Secretary of State whose conduct of the 2000 election and counting cast a cloud of illegitimacy over the entire Bush II administration (a cloud that only gets thicker with time).

This would be funny if she weren’t serious. Ms. I-Have-No-Integrity-To-Start-With has the chutzpah to write,

I can no longer take the high road, turn the other cheek, or consider the source when faced with character assassinations, half-truths, and outright lies, I must fight back.

Protecting my integrity takes money.

Well, I don’t know how much father she can fall off the integrity wagon! Her conduct as Secretary of State was shameful. In an normal era, it might have been labeled criminal.

When Harris says she will no longer take the high road, I don’t even want to speculate on how low she will stoop.

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By Posted on Posted in Business Ethics, General Commentary

Something most of the corporate scandals have in common over the past few years: those with their hands in the cookie jar already were receiving compensation that most of us would consider wildly excessive.

For a number of years, some companies have established maximum earnings for top execs as a multiple of the earnings of the company’s lowest- paid employees. So if the multiple were, say, 50 times, and the lowest paid worker made $15,000, CEO pay would be capped at $750,000. If the CEO wanted higher pay, that $15,000 a year worker would get an increase as well.

But we see CEOs with compensation in the hundreds of millions. Often the crooked ones. The Wall Street Journal reported that Enron Chairman and Chief Executive Kenneth Lay was paid $67.4 million in the year immediately prior to the company’s bankruptcy filing. That same year, according to the American Institute of Certified Public Accountants, Tyco’s Dennis Kozlowski received $125.3 million in total compensation. And you can bet that the lowest paid workers at Tyco got nowhere near 1/50th of that.

Yet these outrageous figures weren’t enough to keep them from stealing? How much money does any single person really need to live on?

A very interesting solution was proposed in this report of the Center for Corporate Policy; I like it because it relies on tax law, rather than coercion, to enforce the cap:

Cap CEO pay through a maximum wage. This can be done by eliminating tax deductions for executive compensation above a certain amount — e.g. above 25 times that of the lowest-paid employee, a standard originally proposed by management guru Peter Drucker. Rep. Martin Sabo (D-Minn.) has included this proposed standard in “The Income Equity Act of 2003” which would eliminate all tax deductions for compensation above 25 times that received by the lowest paid worker in the corporation.

Another law, proposed by Rep. Barney Frank of Massachusetts, would initiate strict disclosure rules for CEO compensation, making the packages subject to investor scrutiny for the first time.

These are both positive steps. And long overdue.

There will be a consumer rebellion if steps are not taken to curb these excesses.

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By Posted on Posted in Ethics in Government

Talk about too little, too late! In the throes of a popularity plunge, GW Bush decides to have Harriet Miers conduct ethics trainings for key staff. So reports the Washington Post.

This is the most scandal-ridden administration since maybe Warren G. Harding. The group that has built its entire platform on lies, favors to friends at taxpayer expense, suppression of legal dissent, illegal disclosure of an undercover agent in apparent retaliation for a policy critique, and criminal foreign policy. Oh, and can we throw in a level of disaster unpreparedness that would embarrass a typical 3rd or 4th world country coupled with a president who doesn’t have a clue about what to do when his people are hurting?

Ethics training? Don’t make me laugh! These guys (mostly, they’re guys) wouldn’t know ethics if it walked up to them and bit them on the cheek. If I thought for a moment that this was anything other than a PR stunt to begin damage control, I might be hopeful. But call me cynical, but I think this gang is far too far gone to actually care about their impact on others.

You want to show me you’re serious, Mr. Bush? Start by making good on your promise to fire anyone tainted by the Plamegate scandal. I don’t see Karl Rove or Cheney packing their suitcases just yet, and Libby’s replacement is part of the same skunkworks. So let’s not pretend ethics has anything to do with this administration while those two “gentlemen” go to work at the White House each day.

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By Posted on Posted in Business Ethics, General Commentary

Let me get this straight right at the beginning: I believe in capitalism. In fact, I write books teaching people how to be better and more successful/ethical capitalists, like my award-winning most recent book, Principled Profit: Marketing That Puts People First.

But my sense of justice is deeply affronted by this week’s news. The Washington Post story says, in part,

High prices for crude oil, gasoline and natural gas helped Exxon Mobil Corp. to its highest-ever quarterly profit, $9.92 billion, up 75 percent from the third quarter last year, the company said yesterday.

Profit in the third quarter at the world’s largest publicly traded oil company set an industry record, and its sales of $100.72 billion were the highest in a quarter by U.S. company, according to Standard & Poor’s.
Exxon Mobil’s third-quarter profit, $9.92 billion, was the highest the oil company had ever recorded.

Analysis
Oil Industry Seeks to Cast Huge Profits as No Big Deal
By most familiar comparisons, the $9.92 billion profit earned by Exxon Mobil Corp. in just three months is almost unimaginable. It would cover all Social Security benefit payments for three months. It would pay for an Ivy League education for about 60,000 kids. It would pay the average list price…

Other oil companies have reported soaring third-quarter profits this week. Royal Dutch Shell PLC, based in the Hague, said yesterday that its third-quarter profit was not far behind Exxon Mobil’s: $9.03 billion, up 68 percent. London-based BP PLC reported profit of $6.53 billion, up 34 percent.

(If that link goes dead, or you want other perspectives, here’s a link to a whole bunch of other stories on the same theme. That includes the YahooNews story that says Exxon Mobil “rewrote the corporate record books.)

There’s nothing wrong with profit in and of itself. But could this obscene 75 percent profit possibly have something to do with increases of up to a dollar a gallon at the pump in the immediate aftermath of Katrina, which followed closely on a wave of increases that added about 40 cents a gallon even before Katrina hit? Bodies were floating through the streets of New Orleans, tens of thousands were made homeless, and meanwhile, oil company profits–not revenues, but merely the money left over in these three months after the costs of operations–$25.5 billion just from the three largest profiteers–is equal to or exceeds the entire yearly economic output of any of the world’s poorest 159 countries, from Jordan on down.

While I’m fully convinced that “peak oil”–the idea that the easy-to-get stuff is gone, and that the cost of oil extraction will continue to rise rapidly as supplies diminish, and that we had darned well better get off the petroleum economy–is a reality, this is price gouging, clear and simple. I don’t have enormous sympathy for the single occupant of a mammoth and usually unnecessary SUV, croaking out all of 9.6 miles per gallon in the case of a Hummer S2, but I do feel sorry for the working stiff who bought an appropriate vehicle and watched fuel costs double. And then, factor in home heating costs, which are a big factor here in the Northeast–or cooling costs elsewhere. It ain’t pretty.

Surely the time has come to make a commitment, as a society, to nonpolluting, nondepletable, environmentally friendly ways of powering our economy. The technologies–solar, wind, small-scale hydro, and others–have been around for decades and continue to improve. Let’s leave the profiteers out of the loop.

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By Posted on Posted in General Commentary, Media Ethics

Paul Demko writes in the Twin Cites alternative paper, City Pages, about one Tim Mahoney, a part-time copy editor who attended the big September peace rally in Washington with other members of his church.

Mahoney got a stern talking-to, a three-day suspension without pay, and was removing from editing any stories about Iraq. He was told he’d be fired for a repeat offense.

The paper claimed, as it has claimed previously in another case now making its way through the grievance system–two reporters attended a rock concert that raised funds for the Kerry campaign–that Mahoney’s actions were a violation of the paper’s ethics policies.

Now, you know that I can be pretty loud when I see ethics violations. As the author of Principled Profit: Marketing That Puts People First, a columnist for Business Ethics magazine, and the originator of an international pledge campaign around ethics, I think I’ve got some credentials in this area. And while I certainly see the ethics issues if a reporter gets involved with partisan political activity that he or she is actively covering (did someone say “Judith Miller”?), I fail to find the justification here. Journalists are allowed to have personal politics, last time I checked. And a copy editor isn’t even creating the story, merely making sure that it’s internally consistent with its own logic and the rules of English.

This strikes me as a punitive action on the part of a newspaper that doesn’t happen to agree with the stand the reporter took, and is trying to pre-emptively prevent other staffers form expressing their opinions. It reminds me of the time an employee of one of the two major soda companies was fired for drinking the competitor’s product, outside of work if I remember correctly.

No one should have to leave their soul outside on the way to work.

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By Posted on Posted in Other, Shel's Personal Life

I just got back from the twice-a-year Town Meeting in my small farm town of Hadley, MA, USA. Town Meeting is a New England tradition where the citizenry engages in direct democracy. Any registered voter can show up speak about any item on the agenda (one article at a time), and cast a vote for or against. The vote, in most situations, is binding on the town (sometimes the vote is only to put something on the next election ballot, and then it’s only binding if the citizens vote for it the second time.)

It’s an imperfect and often cantankerous process, but it actually works amazingly well.

Tonight, we finally got to vote on the town’s Long Range Plan: a massive document compiled over the last five years, with tons of citizen input including surveys sent to every household, numerous meetings, and so forth. And those surveys had something incredible like a 63 percent response, so this document really does reflect the people’s will. The town wants controlled, appropriate growth, in ways that do not throttle are already overcrowded roads, sewers, etc.

Unfortunately, while we’ve been waiting for the plan, a whole lot of commercial and large residential development proposals have come forward, and they threaten to chew up our farmland–considered by experts to be the best in the entire country–choke us in traffic, and draw down our wells. We’re facing about a million square feet of new retail, in three separate massive projects, all within a half mile of each other–this in a town with fewer than 5000 residents, extensive existing mall development, and narrow two-lane roads leading through that intersection.

I got up and made a passionate speech about my experience revisiting a town some 130 miles east of here after 28 years, and not even recognizing it in the acres of concrete and parking lots and big box stores and fast food restaurants and slow food restaurants. Then I asked that we send a strong statement by adopting the plan unanimously.

Land-use issues have often been controversial in this town–but amazingly enough–I got my wish! I am hoping that this will prove a powerful weapon in the struggle to protect our town’s rural agricultural heritage. And that the people who live in a town have as much right to control its destiny as the out-of-town profiteers who try to squeeze our lifeblood away.

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By Posted on Posted in Media Ethics

William Powers of the National Journal says the Judith Miller caper, and the Times’ earlier handling of Jayson Blair’s distortions of the truth, show the responses of a self-protective power structure much like the Church’s response to the priest-abuse scandals.

A fascinating perspective, and one that continues to force us to ask the questions about what Miller knew, who else at the Times knew, was she given a security clearance, and is she in any way a paid and/or covert propagandist of the government a la Armstrong Williams?

If it’s been archived, the date on the column is October 21, and here’s some text you can search for at Google:

On October 12, as a frustrated media establishment (plus a few scattered readers) was waiting for the paper to explain the role played by reporter Judy Miller in the case of outed spy Valerie Plame, The Times published a front-page, above-the-fold news scoop.

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