April, 2013 | Bottom Line Ethics

Helen Sharkey is a felon. That sentence seems in every way to be wrong, even as I write it. Helen Sharkey is a mom of Tae Kwon Do twins, a loving wife, a faithful friend. She is a diminutive dynamo, energetically expressing truth, thoughtfully responding to questions. She is a star, a top accounting graduate of Southwestern University with a Big 4 pedigree who had a rising career in the energy industry. But, there it is again. Helen Sharkey is a felon.

In perhaps, the most eloquent expression of remorse that I have heard in many years, Ms. Sharkey told the story in my Ethics class of her fall from grace at Dynegy a decade ago. She spoke of the people who influenced her, of the pressures she felt, of the key turning points when failing to “listen to her gut” diverted her life in ways she could never have imagined. She became, with her decisions, what in retrospect is the one thing she never wanted to be: Googlable.

And that Googlability is what triggered the introspection necessary to allow her to speak about her experience to a broader audience. Since she got out of federal prison in late 2006, she has quietly raised her children with her husband and led a “normal” life out of the public spotlight. She has established the connections that have allowed her to flourish, perhaps influenced by a reticence to trust broadly that comes both from being “perp walked” and from watching others more involved in your crime never get indicted.

But her eyes were opened to the fact that in a fully searchable world, her sons were quickly coming to the age where she would have to explain that, in her own words, “Mommy is a felon.” This not only permitted introspection, it made that process urgent. Ms. Sharkey needed to understand her story so that she could explain it to two boys coming of age. And the result of walking through that process is a lucidity to her message that few people can match.

Being in that room was like watching a match dropped on dry tinder. In the midst of a draining week, I was locked on each word of her story, as was virtually everyone in the room. She spoke in measured tones, but she was able to convey the changing emotions of each stage of her ordeal in her voice and in her eyes. Standing behind a podium meant to protect her, she opened her heart and her life to a group of students I am asking to examine theirs. And she opened them to me as well.

She did not have to dramatize, because the room was walking with her through her boss’s detachment from correspondence related to the structured finance transaction that was her downfall, and through the New York meeting that sealed the deal when her boss did not backstop her. Her stomach in knots, she said, “For the first time in my life, I gave up on myself.” We could feel the impact of the Wall Street Journal article revealing the transaction, the subsequent criminal investigation, the tightening noose of the indictment, with the U.S. attorneys referring to her as “smart and articulate,” as an “alchemist.” What followed—Dynegy cutting off legal funding, losing her job at Chevron, being alongside of her father as he died of cancer—are the things that make any reasonable person shudder. She did not have to serve the five-year sentence that could have been her fate based on her guilty plea. But she felt the incalculable pain of leaving her twin babies to walk into a federal prison.

It was hard to pull the students away from her after class. I heard one say that she would stay all day if she could. Until she came to my class, I had never met Helen Sharkey. I have dealt with these issues professionally for many years. I am not purely clinical, because I care deeply about people’s outcomes. I am always rooting and praying for my students to avoid these paths. But, if they walk down them, I want to be a redemptive voice who gives them hope that there is more to life than their failure.

I have never known how to do that effectively. But I know someone who does. Her name is Helen Sharkey.

Categories: Bottom Line Ethics, Business, Crime, Politics

As an NBA fan, officials are not high on my favorites list. As a San Antonio Spurs fan, one official, in particular, draws the ire of all Tim Duncan supporters: Joey Crawford. Crawford is famous for throwing Spurs star Tim Duncan out of a late 2007 season game against the Mavericks for laughing at his officiating calls from the bench. But the referee was suspended for the rest of the season and playoffs, apparently for challenging Duncan to a fight in the confrontation. Crawford has recently said that the event caused him to reevaluate the way he refereed and to seek more extensive counseling to deal with anger management.

What Crawford, a skilled, veteran referee had lost with respect to Tim Duncan was objectivity. This week a similar incident came to light when former NBA referee Ed Rush, now the supervisor of basketball officials for the Pac 12 Conference, allegedly offered $5000 or a trip to Cancun to any official who would give a technical to or eject Arizona coach Sean Miller during the Pac 12 tournament. It may have been in jest, but according to one official, Rush reiterated the focus on Miller during a meeting on the tournament’s second day. In fact, official Michael Irving called a late-game technical on Miller for yelling about a double-dribble call, and UCLA went on to beat Miller’s Wildcats, 66-64. While Pac 12 Commissioner Larry Scott agreed that it was “completely inappropriate” and reflected “very, very poor judgment,” he concluded that it was not an offense worthy of Rush being fired. In fact, he concluded that “[t]here was nothing unethical or a breach of integrity.” His conclusion is dead wrong.

Actually, these comments are not unprecedented for Rush. After he finished his NBA officiating career, he served as the league’s director of officials. In January of 2002, Dallas Mavericks owner famously said of Rush’s leadership, “Ed Rush might have been a great ref, but I wouldn’t hire him to manage a Dairy Queen. His interest is not in the integrity of the game or improving the officiating.” Cuban tweeted after the latest incident, “Not surprised…It will get worse.” Former NBA referee Tim Donaghy, who famously sacrificed his own objectivity and career by gambling on NBA games, accuses Rush of making comments about Cuban to NBA officials similar to the ones he made about Miller. Of course, Donaghy’s own lack of credibility comes into play here.

Whether the comments were made in jest or not, Rush provides strong evidence that he has lost his objectivity. And the power that he wields over Pac 12 officials gives the appearance that his loss of objectivity contributed to unequal treatment in a tournament game. The issue is not that Miller was treated badly; it would have been just as bad if he had been favored by officials, or an insinuation had been given that someone should be helped. What is wrong here, and what drew Larry Scott’s ire, is that Ed Rush was not objective.

It makes no sense for Scott to claim that integrity was not sacrificed; in officiating, integrity and objectivity are inseparable. You cannot be “whole” or “true” in your evaluations as a referee if you are biased, or if you introduce that bias as a person in authority.

The same is true for auditors, the people I train for our profession. It is not enough to be technically competent, as all three referees in this story arguably are, or were. You must also be a person of integrity and objectivity. And, what is critical, you must be objective not just in fact, but in appearance. If you lose the appearance of objectivity, you have lost the trust of those who rely on you for unbiased judgments so that they are not misled, whether in the financial statements or in the final score of a basketball game.

The bigger danger with auditors, and with those who supervise them, is to lose objectivity by becoming cheerleaders for their clients, not by harshly and unfairly judging them. Many accounting firms have found out that juries are apt to punish auditors harshly in the case of audit failures when it is obvious that they have lost objectivity and become their clients’ advocates.

The jury may still be out on Ed Rush’s objectivity. But, if the accusations are true, Commissioner Scott’s conclusion that Rush did not sacrifice his integrity by making those statements may come back to haunt him.

Categories: Athletics, Bottom Line Ethics, Texas A&M

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