A noble lie is still lying, cheating, and deceit

This week my ethics class studied lying, cheating, and deception.  I particularly enjoyed studying this chapter because I think it addresses all of the things that are wrong in the public sector. Please do not misinterpret my words; I do not think that all government lies, cheats, or deceives their constituency. The overwhelming majority of government is committed to providing the best services possible with the funds they are provided.

One of the readings discussed “The Nobel Lie”.  This is a term where a lie or act of cheating or deceit is
carried out for the potential to reach a larger, better goal. Sissela Bok (2007) discusses:

 “I have shown how lies in times of crisis can expand into vast practices where the harm to be averted is less obvious and the crises less and less immediate; how white lies can shade into equally vast practices no longer so harmless, with immense cumulative costs; and how lies to protect individuals and to cover up their secrets can be told for increasingly dubious purposes to the detriment of all” (p. 105). 

Bok continues to offer the idea that when a white lie is combined with deceit to avoid harm, the duty to protect one’s secrets, and the quest for public good, it can result in potentially dangerous decision making and deceit.

A later reading touched on falsifying documents in the quest for the greater good. A contracting officer for the Department of Defense is trying to release a quarter of a million dollars of equipment held in customs. The officer has a time-sensitive notarized document that will release the equipment, but will expire, rendering it void. Out of desperation, the officer contacts his legal counsel asking for advice.  Legal counsel coerced the officer to falsify the document by cutting and pasting a new expiration date onto the document. The
officer submits the falsified document, the equipment is released from customs, and the officer receives praise for his outstanding work in avoiding additional delays. The officer felt that falsifying the document was the only way to avoid further delay, it wasn't going to hurt anyone, and the only people who knew of the unethical act were him and the legal counsel who assisted him. Do you think that the officer’s actions were immoral?  While nobody was hurt by his actions and he had the best of intentions, his ethics fell short when he falsified the document. Decisions like this shape who we become while it desensitizes our conscience, blurs lines, and makes future unethical decisions much easier to make. My theory is this: making the wrong decision for the right reason is still the wrong decision!

Both of these readings spoke volumes to me, and reminded me of the lying, cheating, and deceit that was associated with some of the recipients of the Troubled Asset Relief Program (TARP). An example I would consider as TARP recipient fraud is Goldman Sachs, who received TARP funds only to use $2 billion (yes, billion!) to buy back company stock shares, resulting in an increase in the per-share price of their stock. At the time, Lloyd Blanldein, the CEO for Goldman Sachs, owned just under 2 million shares of his company’s stock. Additionally, after receiving TARP funds, Goldman Sachs after reported profits of $2.3 billion dollars, then paid out over $4.8 billion dollars in bonuses. Hmmm. Another example of TARP abuse can be found with Citigroup, where the bank had corporate losses in 2008 totaling over $27 billion dollars. The same year, Citigroup paid bonuses of over $5.3 billion dollars while receiving over $45 billion dollars in TARP funds. If the TARP funds equated to stock shares, the American taxpayers would own about one third of the corporation.

To aide in accounting for TARP fund misuses, Washington DC created a new department titled the Special Inspector General for the Troubled Asset Relief Program, aka “SIGTARP”. According to the SIGTARP website, they consider themselves to be “a sophisticated, white-collar law enforcement agency, was established by Congress in 2008 to prevent fraud, waste, and abuse linked to the $700 billion Troubled Asset Relief Program (TARP)” (SIGTARP, ND). One concern have is that the government used additional taxpayer dollars to create an agency to monitor and report on the misuse and abuse of taxpayer dollars that were given to banks, investment corporations, and automobile companies? Quarterly, SIGTARP releases a report to Congress on their findings related to the progress of TARP recipients paying back their loans, as well as an evaluation of the program as a whole. This is sort of a progress report.  The report from this past quarter, SIGTARP reported that while some TARP recipients are 1 to 2 quarters behind on their payments, 3% of the recipients are nearly 2 years behind on making any payments on their government loan.

How does this relate to lying, cheating, and deception? Currently, there are 103 TARP recipients with a total outstanding balance due of over $17 billion dollars to the US government (ProPublica, 2013). Seventeen billion taxpayer dollars that could be used for its intended purpose: to provide essential services for our
citizenry.




References

Bok, S. (2007). The noble lie. In W. L. Richter, & F. Burke, Combating corruption, encouraging ethics: a practical guide to management ethics (pp. 105-107). Lanham: Rowman & Littlefield Publishers, Inc.

ProPublica. (2013). Bailout Tracker. Retrieved from Pro Publica: http://projects.propublica.org/bailout/list/losses

SIGTARP. (ND). Welcome to SIGTARP. Retrieved from The Office of the Special Inspector General for the Troubled Asset Relief Program: http://www.sigtarp.gov/Pages/home.aspx