Boston Globe Article

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UPDATE: You should read at least the three main articles (Part I, Part II, Part III)

Two items for today. . .

The top headline for the day is that Tom DeLay, the House majority leader, has been indicted in a scheme to get around a Texas law which forbids corporations from making political contributions.

Also, today begin's the fraud trial for Parmalat, which has been dubbed "Europe's Enron".

Friedman

Put your comments here on Friedman's article on corporate social responsibility. . .

(Everyone should post on this and/or stakeholder theory)

Bill Frist and the Hospital Corporation of America

Check out this item in the Washington Post:

It might not mean anything but Senate Majority Leader Bill Frist (and one of the more prominent names mentioned as potentially the next President) sold all of his household's holdings in the Hospital Corporation of American (the business of his extended family) just weeks before a disappointing earnings report that led to a 15% drop in the stock price. Check out the story, as things are a bit complicated.

The company was formerly known as Columbia HCA Healthcare Corporation, and I recall that it was involved in a significant government overbilling scandal about ten years ago.

UPDATE (9/29/05): Here is an article which talks about the overbilling.

Two interesting items

Here are two items.

The first is about the prosper punishment of corporate executory for white collar crimes .

The other is an update on how the KPMG tax shelter abuse investigation is broadening to other subjects such as Deutsche Bank. It may also come to include another of the "final four" accounting firms, Ernst & Young:

The lawsuit says that several Ernst & Young tax experts raised doubts
about the validity of Cobra in fall 1999, at the time that the firm greatly
relaxed the standards it had been using to approve of tax shelters before
offering them for sale.

This is reminiscent in a few ways of Andersen's behavior in the Enron case. Even the cute/menacing name of the product 'Cobra' sounds like the 'Raptor' of Enron.

Corporations and Katrina

Here is a good follow-up to the corporate response to the Katrina disaster:

http://www.nytimes.com/2005/09/14/business/14give.html

This would make a good paper topic for somebody (or a few somebodies).

Guidant Corporation

In todays NYT there is a story about how Guidant continued to sell heart devices that were known to short-circuit. They did notify the FDA of these failures. Did Guidant act ethically in this case? Was this a government failure, the company's failure, or no failure at all?

The agency's inquiry into Guidant began after The Times reported in late
May that the company had not told doctors about flaws in the Prizm 2 DR and kept
selling older versions of the model after developing an improved one in
2002.

Guidant has said it knows of 28 units that have short-circuited out of
26,000 made before the modification.

Dr. Schultz said he was not familiar with the February report from Guidant that broke out the short circuit figures. He said he did not have information about what percentage of reports were reviewed within 90 days.

Told of Dr. Schultz's comments about the agency's disclosure policies, Dr. Douglas P. Zipes, a professor at the Indiana University School of Medicine, said he took exception to them, saying he believed that the Guidant episode had highlighted gaps in how the F.D.A. oversaw the safety of heart devices. Dr. Zipes added that both the agency and manufacturers needed to provide doctors with more data about product failures.

Enron Thread

Post your observations and comments about your Enron reading here. . .

KPMG and Tax Shelters

KPMG is one of the "final four" accounting firms. It seems to have cut a deal from joining the fate of Arthur Andersen, which received, in effect, a "death penalty" for its various misdeeds.

See the latest on the investigation of KPMG's marketing of fraudulent tax shelters:

How far should accountants push tax shelters? What exactly did KPMG do wrong?

Is KPMG too big to fail, even with these (allegedly) massive misdeeds?

Corporations, Katrina and Disaster Relief

Wal-mart announced that it would "donate $1 million to the Salvation Army for relief assistance such as meals for victims and emergency and rescue personnel. The retailer said it would also accept customer donations nationwide at all of its stores this week as well as credit-card contributions through walmart.com."

Is this too much or too little? (Remember, they are donating shareholders' money.) How much should corporations give, if any at all? What resources should they make available? Answer in comments.

Welcome.

Welcome to the Business Ethics Course Blog (Phil 200) for students in Professor Silver's Fall 2005 Business Ethics course at the University of Delaware.

This is an experiment in which students (and occasionally the professor) will post relevant items on the blog. This may include links to articles on the web with snippets of text along with some insightful commentary. It may include critical analysis or observations related to the course readings.

Every student is authorized to post to the blog, and to make comments on other posts. Every post and every comment should be directed to advancing the discussion.

Remember, this is an academic exercise that is governed by the values of the academy. No anonymous posts or comments are allowed. Respect each other, but challenge each other in the pursuit of the truth.

By the way, I anticipate that there will be many posts to the New York Times. Please take a minute and go through the free registration process at www.nytimes.com. You cannot do well in this course, and you cannot be a good citizen in this society, if you do not keep up with the news. You may post from any reliable and reputable source. It is your responsibility to figure which sources fall in this category.

One note regarding blog etiquette: you do have the power to edit your posts after they have been published to the blog. Blog etiquette requires that any non-trivial change be noted clearly as UPDATED with the original text preserved somewhere within the post.