Bottom Line Ethics

We were driving to a former student’s wedding in west Texas this weekend, and our trip provided an up close and personal look at the damage that has been done by the wild fires raging across Texas this summer. Virtually every mile of the landscape was bone dry, but parts had been ravaged. We had to detour around Bastrop, which would have been our normal route, because the largest wild fire in Texas history had wiped out hundreds of homes and much of the state park. It likely will never be the same in my lifetime.

West of Austin, near Spicewood, the ground was charred on both sides of the road. The Pedernales River had no water in it where we crossed. Once we passed Brady, we were moving into what is traditionally west Texas, where the ground is always dry in the summer. It looked more natural there.

The winery where the wedding was held, near Christoval, could not have provided a starker contrast. Massive oak trees shaded the folding chairs from the evening sun, offering a majestic backdrop for those watching the ceremony. On either side were the rows of grapevines, lush and full, with a slow drip of water falling to the ground below them every few feet. The grass under the chairs was a luxuriant green. Everything about the setting, including the ceremony, spoke of tender care and careful attention.

Two west Texas families, one dressed mostly in cowboy formal, embraced the couple and one another in genuine joy. My wife and I were invited to join a table reserved for wedding party members that included two other former students. My primary observation sitting there was that I could not remember seeing more couples who were genuinely enjoying dancing together, not just dancing. I kept sensing that there was nowhere those couples would rather be than in each other’s arms. Daddies danced with daughters while Moms took pictures. The pastor danced with every woman who wasn’t chained down. There was the deep and unmistakable smell of life in the place. I was reluctant to leave, even though virtually everyone there was a stranger to me.

There is a tendency to take for granted the reliability of the seasons, of rain, of the essentials being provided when we need them, of life. This summer has made me less complacent, and more conscious of preserving the things that sustain life. We are living on the edge. A friend recently had to call 911 because someone’s cigarette butt had started a grass fire in her neighborhood. One moment she was trying to beat it out with a blanket, the next it was a 20 by 40 foot fire ready to take off down the street. Only a quickly arriving pumper truck prevented a serious problem.

I have noticed that, for many people, relationships are a tinder box as well, ready to catch fire and run out of control. And what catches them on fire are careless words. Speaking without thinking, angry words stretch and break relationships that have held together for years. Economic pressures make people self-interested and magnify others’ offenses.

We have even seen it in the process of Texas A&M detaching from the Big 12, and not just in blog posts. People are ready to set on fire longstanding relationships, and they make comments designed not to persuade, but to anger and to cut.

It may be time to leave, but bridges burned are not easily rebuilt. I know that many Aggies are tired of one school being condescending and another clinging on for dear life. But there are also legitimate concerns when we walk away from commitments, whether or not there are official contracts. We ought to patiently listen, even if it can be tiring and unnecessarily contentious. We could have left last year when it would have been easier. But we didn’t. We cannot control what others say about the situation, but we can make the choice to say less ourselves.

The ground is really dry out there. What we need is the drip, drip, drip of wisdom to bring back some life to the soil, and to the vines. It is a lot easier to toss the cigarette butt out the window and see what happens than it is to stop the vehicle and stomp it out on the pavement. But we shouldn’t be surprised if the pumper truck doesn’t get there in time to prevent some unintended consequences.

I have a high school friend who told me the other day that she could guess what I was going to write about this week. I am quite confident that more than necessary has already been written about the latest New York politician to implode. I watched a brief press conference today in which the moral high ground was held by a celebrity lawyer who specializes in taking high profile clients and ratcheting up the public embarrassment to squeeze additional dollars out of people who have morally compromised themselves. At least I think she held the moral high ground. It might have been the dancer next to her who just wanted her life back.

Anthony Weiner seems oblivious to the damage he is doing to his reputation, to his party, to his marriage, and to his causes. It is clearly all about him, with his life meaning inextricably tied to his ability to retain power and the benefits that go with it. He is what he does. It is hard not to wince.

But he is not the only one. West Virginia University head football coach Bill Stewart recently resigned under pressure after being accused by a former Pittsburgh Post-Gazette reporter of asking the reporter to dig up dirt on head-coach-in-waiting Dana Holgorsen. Holgorsen, who is now the head coach, made the job somewhat easier a few weeks ago by allegedly being escorted from a casino at 3 a.m. by security personnel, leading to other rumors. WVU athletic director Oliver Luck thought that it was a good idea to hire Holgorsen while telling Stewart he would be gone in a year. This was despite the fact that Stewart had been hired after being the interim coach for a huge upset of Oklahoma in the Fiesta Bowl, and followed that up with three nine-win seasons. This is roughly equivalent to being asked to wash the socks of your girlfriend’s new boyfriend (only you get paid seven figures to do it). I think it is safe to say that we will not see any more head-coaches-in-waiting.

Stewart was understandably upset at being dumped. But he managed to take a bad situation that elicited sympathy even from people who thought he should be fired, and turn it into a permanent divorce from the university. He could not accept that it was time to move on.

Last year’s news was dominated by this same story involving Brett Favre, whose closing chapter of his career managed to combine both football and sexual harassment. As his body and his season fell apart, he finally found it in himself to say that it was over.

UPDATE: Shortly following the publication of this column, Rep. Anthony Weiner held a press conference announcing his immediate resignation from his seat in the U.S. House of Representatives.

Or did he? Few believe that John Edwards can ever be a viable presidential candidate again after his scandal. But apparently the taste of power, and fame, and money can make men do strange things. Some things are apparently so precious that they must be secured at any cost, regardless of the damage to others.

Maybe we can think of Weiner, Stewart and Favre as the Fellowship of the Ring. But what they bring to mind for me is a song from the early 70’s that the Jackson Five made famous—”Never Can Say Goodbye.”

One day they will ask me to walk away from the classroom and not come back. My name won’t be on any statues or doors on the campus. My day will have passed. And that day will be here before I know it.

I only hope, when it comes, that I have what it takes to say thanks and walk away. Because, if what you do is who you are, you never can say goodbye.

Life has thrown me a softball. As an ethics commentator, the Jim Tressels of the world are red meat. He has made an almost unimaginable series of ethical blunders in the whole Ohio State fiasco, leading to his resignation as the Buckeyes’ head football coach. And the “leadership” and “oversight” of those at the university could only be characterized as indefensible. Some of the statements that have been made seem like the definition of “lack of institutional control.”

But who wants to cast the first stone? One of the major reasons for the moral agnosticism that characterizes big-time collegiate sports is that every coach, every athletic director, and every president knows that they are one e-mail away from a disaster that draws the NCAA to campus. I am very grateful not to read about these things regularly around here, but I am not naïve. I know from speaking to student-athletes that there is a compliance environment that sometimes seems overbearing to them. But it is there for a reason. And who is to say it will be effective tomorrow? We have failed here before.

No one in intercollegiate sports wants to cut off the lifeline, which is access to student-athletes when they are in high school. And that environment is arguably getting worse, not better. A recent ESPN report on the 7-on-7 summer football leagues that have proliferated in recent years makes it clear that they are the avenue to being recruited by the top football schools. They are run by folks that are, for the most part, not high school coaches. They are the equivalent of the AAU leagues that have taken over the placement of high school basketball players. And the “coaches” often end up being channels that college football coaches must use to have a chance to sign a particular player. That can lead to booster involvement, side benefits for student-athletes, and hiring go-betweens into coaching and other roles at universities.

In other words, it’s a market. You can use pejorative terms like “meat market” if you like, but it’s a market. Milton Friedman, one of the great defenders of markets, still insisted that participants in markets had to “play by the rules.” But you can make a lot of money if you don’t, and you can even feel good about yourself if you play before they even make the rules, as folks running the 7-on-7 leagues are doing right now. Talking “duties” and “responsibility” in this environment is laughed at by the markets’ participants.

But when you fail to self-regulate, you always get regulation, and the NCAA is cracking down in unprecedented ways. USC will not just lose post-season eligibility for two years for its recruiting of Reggie Bush, but it will sacrifice ten football scholarships for each of the next three years, taking them from 25 to 15. Good luck to head coach Lane Kiffin staying on the straight and narrow during those years. It could happen, because he has a straight arrow athletic director in Pat Haden, and because USC could realistically receive the death penalty for another serious infraction. But when you can only take 15, you had better take the right 15, and that will introduce dangerous temptations.

It is clear that the NCAA no longer believes that big-time programs will hold to a duty to protect the university’s reputation, so they are changing the consequences. I would not be surprised to see them come down very hard on Ohio State, which has protected its coach much as Tennessee did basketball coach Bruce Pearl after he knowingly broke rules.

Many people have suggested paying athletes in order to solve the problem. But this will simply change the price of the market; it will not eliminate it. And the same types of differential incentives will be offered to get the next Reggie Bush to enroll, over and above what the athletes are paid. This is assuming Title IX issues could be worked out about which athletes are paid, and how much.

As cheaters in business have found, modern technology, including e-mail and texting, has made it much easier to build a case against you when you are lying and covering up. In the absence of any sense of duty in intercollegiate athletics, the NCAA will just ratchet up the consequences to go along with the increased probability of being caught. And self-interested young people who have been on the take often like to tell their story after they are no longer relevant, as Ohio State is currently finding out, which will help the enforcers. But in intercollegiate athletics, as in the business world which is usually the focus of my attention, the incentives to win and the money tied to winning are so strong that the NCAA has no choice but to step up the penalties significantly.

As I said, life threw me a softball this week. But in a world that is sadly unable to self-correct, and in which no one is listening, I can’t bring myself to lecture folks one more time. I think I will just turn around and walk back to the dugout.

I have been in the back yard too much lately, pulling weeds and putting down mulch. But the biggest problem has been my lawn. I don’t take great pride in my grass, but I try not to let it become a basis for neighbors to storm my castle bearing torches. A large section of my lawn has a burned out appearance, which I attributed at first to the lack of rain and a badly functioning sprinkler system. But the news is worse; I have grubworms.

What a name—grubworms. It must be a bummer to have a compound name where each half is a really negative word. When they get into your lawn, all you can do is nuke them and lay down new grass. So this past weekend I bought half a pallet of grass and started putting it down. This is way more work than I really wanted to do, but I didn’t have much choice. When I was done, what came to mind in looking at my back yard was a badly fitting toupee. There were parts of the lawn that clearly needed more living grass coverage, and parts that had lumps that should not be there.

But it seems to me that watching people try to recover their integrity after a public fall is much like watching someone whose hairpiece falls short of the ideal. This is particularly true when they seem ambitious as well. Former House Speaker Newt Gingrich is discovering this as he puts himself forward as a presidential candidate. If he implies any change in a position, as Gingrich has with requiring Americans to purchase health insurance, people roll their eyes and say, “There he goes again.”

This may be less true with entertainment figures; Arnold Schwarzenegger is about to find out. But it is still awkward to think about Eliot Spitzer being a talk show host rather than the governor of New York. And trying to see Tiger as the good guy becomes a bit tiresome. His string of injuries, which prompted his drop from the world’s top ten golfers for the first time in 14 years, has almost served as a relief from constant discussion of his character and attitude.

I have concluded that though folks largely want to read these stories, they quickly move to a stage where they do not care about these people any more. It is really difficult to gin up the emotion time after time that would somehow make these people an example not to be followed. Instead, they are a news item, and then, history.

Andy Fastow of Enron fame has been transferred to a halfway house prior to his release from prison later this year. He is 49. What hope does he have to regain his reputation? Perhaps more than you think. It is difficult enough to find people who finish well among the general populace, much less among those whose lives have cratered. But there are exceptions. Chuck Colson, famous for being one of Richard Nixon’s hatchet men and the first member of the administration to go to prison for Watergate, bounced back from his prison term to found Prison Fellowship, an evangelical organization that has had significant influence for good. He went to prison in his mid-40’s, and he will turn 80 later this year. Perhaps Fastow will have a similar experience.

But it is not easy. Grubworms eat the roots, and that’s why my work in the back yard is so painful and unsatisfying. Who wants to stay after it year after year, when it would be much easier to move to a condo? (I have suggested this on more than one occasion to my wife.) It would be very difficult to do it to please others. There probably has to be a genuine inner transformation that withstands the catcalls, the snickers, the derision, and the lingering bitterness that big mistakes bring.

Because, in the end, recovered integrity is just like a badly fitting toupee. People may smile and treat you the same. But, despite their best intentions, they can’t help but notice.

In the biorhythm of the academic year, this time of year ties together all the loose ends, providing a sense of finality. Next week I will attend graduation again. This must be how my daughter, who is a pediatrician, feels when she attends a child’s birth. It is incredibly unique to the participants, but the doctor has seen this before. Actually, Linda and I have already attended nine graduations of our own children, and we likely have at least three more to attend, the Lord willing.

This does not count all the graduations I have attended in my 22 years as a professor. They have varied in size and approach, but I am taken by how the people involved always embrace the event. In my first academic stop, I was not a fan of attending what seemed an impersonal exercise. In my second job, all faculty members were required to attend graduation and, since there were only about 100 of us, you would be noticed if you didn’t. Faculty would wait at the end of the stage for students from their discipline to walk off, and the students would go through a receiving line of handshakes and hugs. It was a very personal experience, usually held on the college lawn in May. It is one of the reasons that parents spend inordinate amounts of money to send their kids to small liberal arts schools.

As everyone knows, the ceremonies themselves are inordinately boring, almost without fail. Because of the size of the graduation, Texas A&M hosts the keynote speaker at a commencement convocation on Thursday prior to the five graduation ceremonies on Friday and Saturday. This shortens the graduation ceremony considerably, but it also removes virtually all hope that anything memorable will be said. But this does not mean that the ceremony is unimportant.

If Muster is what brings us back and holds us together, graduation is what propels us forward. For students, it is the uncertain embracing of responsibility, a little like cliff diving when you are not exactly sure how deep the water is. For those of us who invest in these students, it is a bittersweet goodbye to conversations in the hallway and the classroom, and a recognition that we are largely unnecessary to our students’ future successes. This is healthy, because there are others who need our investment. To linger too long regretting our losses is to miss the opportunity to invest our lives again.

This morning at Starbucks I saw Jessica, who is two years removed from this place that she loves, early in her marriage and motoring forward with her accounting firm. It brightened my day to see her face. But it heartened me even more to hear that she is investing her life in ministering to the homeless in Dallas through her church, even while she assumes substantial responsibility running jobs at the firm. She is not simply pursuing wealth and building business skills; she is investing in people and leading, inside and outside the work environment.

Last weekend Linda, Nathan and I drove to central Oklahoma to meet our older son, Kenny, at a state park. We spent our time together hiking and playing games but, more than anything, we laughed. It was a celebration of life, both life as we knew it and life as it is. Our boys are ten years apart in age. One still needs us, to some extent, and the other one doesn’t. One has gone on to greater things, the other aspires to greatness.

Still, it is clear to me how important it is to plug back in, to recharge, and to remember. It would be sad for Kenny if he did not have a place to return to where he is loved unconditionally, not based on his performance as a line manager in a Cessna plant. It would also be sad if he had not moved forward into his life apart from us. We pray the same will be true for his younger brother, and we are grateful for how Kenny reaches out to mentor Nathan in making the transition, while affirming him in who he is as a high school sophomore.

We have seen this happen before with our children, but we are reaching the end of watching these transitions. On the other hand, as long as I have the privilege of entering the university classroom, I will watch this process repeat itself with my students. I will cheer from the bleachers for them, and I will pose for a few pictures afterwards. I will rejoice in the celebration of their accomplishments.

I will watch them walk across that stage, and down the steps, and into a world that desperately needs people of character who will invest themselves in others. I will watch them walk forward confidently, but not without a glance over the shoulder to remember what this place has provided them.

Because, on a May Saturday in a place like this, walking forward into the waiting world is exactly what you ought to do.

​Today I sat across the picnic table from a gorgeous, blue-eyed girl who had fixed me a fancy sandwich and snicker doodles. She proceeded to recite the second chapter of I Peter from memory, pausing only for one conjunction. Impressive. All that, and good-looking, too.

​She memorized that because it is important to her, the way she knows the birthday of every living human being who has come into contact with us in the last 33 years. She knows what gift she gave you, and she rightly expects that I ought to remember what gifts others gave me.

​I, on the other hand, remember Jim Gentile’s important batting statistics from 1961. No one else remembers Jim Gentile. I remember where I was sitting, and who I was sitting with, and how cold I was at the 1974 A&M-Texas game. I remember K.C. and the Sunshine Band. But I also remember the anniversary of my first date with the World’s Most Beautiful Woman. And I remember being 22 and staring through the glass at the most glorious sight I had ever seen, my baby girl, as I left the hospital at 2 a.m. with my last two dollars in my pocket.

​My office is gradually transitioning from a place of pictures and gifts from my children into a shrine to grandkids. But there are still important memories in this place. Behind my desk is a small plaque from one of my first students that says, “A Loving Teacher Makes Learning a Joy.” There is a picture taken by a photographer of me on another campus walking across the street with my two youngest children when they were small. I have an aquarium hanging up made out of two paper plates, and a picture of all five kids in the backyard in Michigan. The class of 1998 at Hillsdale College, one of whom just made partner at a major accounting firm, is on my file cabinet. I even have the radio I listened to in high school.

​There is a significant need within each of us to remember the things that matter. It seems that this longing only grows as our capacity for it diminishes. I find that my wife is generally a superior judge of what ought to be remembered, because she has a better sense of what are truly the permanent things. But we both have to work harder than we used to at remembering.

​I have also found that it is very important to people to be remembered. I think I underestimated early in my career how important it was to my students that I know who they were. When you teach 250-300 students a year, and when those students love to come back to campus to remember, and to recruit people to their firms, it is a challenge to always have names on the tip of your tongue. But it would be naïve of me to think that it doesn’t matter whether or not I try.

​The traditions at Texas A&M are centered around remembering. We remember E. King Gill as the 12th Man stands ready to take the field, if necessary, on fall Saturdays. Every month we remember the current students we have lost at Silver Taps. Elephant Walk, Final Review, and, in former days, Bonfire, have evoked emotions in Aggies as accumulated history washes over each person’s personal experience with this place. And its graduates wear a ring like no other, proudly earned and warmly extended to others, as the ultimate sign of a common bond of memories.

​I say all this because tonight I will attend what is perhaps the finest of Aggie traditions, Muster. It seems ironic that it falls on Holy Thursday: “Do this in remembrance of me.” I will go to remember, and to celebrate the lives of those who have gone on before us. I may not feel the need to call out “Here!” as I have in another year. But I will be there. And I will remember.

With the jury deliberating in the Barry Bonds trial, one of my students asked me to blog about steroids. My student’s basic view is that people have the right to take whatever they want to enhance their performance, as long as they are willing to live with the personal consequences. This is a viewpoint commonly applied to drinking, smoking, and other personal choices. And it is probably more appealing when it comes to performance enhancing drugs, because smoking and drinking have more easily recognized externalities, or consequences to others, such as second-hand smoke and a variety of alcohol-induced behaviors.

I am in favor of steroids. My son is able to see clearly because of steroids that have been planted in his eyes as “seeds” that leech out a little bit at a time over multiple years. I am also against steroids. I have seen how oral steroids affected his body when he had to take them over a modest period as a young boy. I am very thankful for the more targeted steroids that help his vision.

So I am in favor of steroids. I am just not in favor of steroids used to enhance performance in sports.

Sports generally evolve in one of three ways: changes in equipment, changes in rules, or changes in people. There is almost always disagreement about whether these changes are good or bad. But let me provide an example of each.

Today’s Wall Street Journal has an article about bats that have been banned from Little League this year because of dangers to players. These titanium composite bats apparently get springier with use, launching balls at speeds not experienced by past Little Leaguers. I admit to being jealous of today’s bats, because I was a lousy hitter with the old wooden bats growing up. But the fact that you can hit the ball farther and harder is not necessarily a good thing, particularly when you are hitting it at people who are just learning to use a glove.

Of course, many changes in equipment are designed to provide additional protection, such as better designed football helmets. The unintended consequence of equipment that makes players feel safer can be an unlimited amount of spearing with the helmet, leading to serious injuries for the tackler and the ball carrier.

Swimming changed equipment by allowing buoyant, full body suits. But as record after record disappeared, it quickly became evident that the swimmers were not any better. The records were being set by the equipment. And the swimming establishment pulled back, banning the suits. Golf has not pulled back as quickly from advances in clubs and golf ball materials. You can always make fairways narrower and rough deeper, greens more challenging. But at some point, when people are driving par 5’s, the nature of the game will change in a way where it becomes unrecognizable.

The second way that sports evolve is through changes in rules, often to generate more offense. Baseball added the designated hitter, for example. Purists hate it, fans love it. As with most changes, the market decides whether it stays. In 1968, when pitching was dominant, major league baseball lowered the pitching mound and hitting proliferated. Three-pointers are here to stay in basketball. If soccer changed the offside rule, the game would change dramatically.

The final way sports change is through changing people, the athletes themselves. This has happened through nutrition, particularly in the last generation. Many baseball fans my age can remember Charlie Hough of the Texas Rangers smoking between innings in the runway between the dugout and the clubhouse. Now, you need a personal trainer by the time you are fifteen if you hope to compete at a high level. Most would say better nutrition is a good thing.

Pressures change people, too. My buddies in my Little League played in the Little League World Series Championship game on ABC Wide World of Sports. None of them played on travel teams, or had personal trainers. None of my friends went to a baseball camp. We played hotbox, and whiffle ball, and backyard baseball. And then we played every other sport in its season. Now you have to specialize.

And steroids in sport are largely a result of the competitive setting that arises from specialization. Specialization and excellence allow people to get rich, and steroids provide an advantage. Like better nutrition, they change people physically, and there is evidence that they change them emotionally as well. The question is whether they change them for the better.

I have seen steroids provide healing. But even in settings with carefully controlled doses, I have also seen them cause damage. And steroids in sports are not carefully controlled. If they were, human nature says athletes would push past those limits and game the system to gain an advantage (think Tour de France). The drugs are new enough, and they change often enough, that it is difficult to estimate long-term effects. But, as with most things that provide short-term benefit, the tendency is to underestimate long-term harm if you are making the decision.

What seems certain is that, over time, steroids will exclude the non-steroid user from the game. There are a fixed number of slots available on pro teams, and college teams, and high school teams. Today’s good high school teams are like the last generation’s small college teams. It will become evident that you do not play if you do not take steroids. And, as with personal trainers and travel teams, steroids will be taken at younger and younger ages.

As the Little League article in the Wall Street Journal indicates, we pull back from other types of changes in sports because we see the potential for people to be harmed at significant levels. I could use dramatic examples of what steroids have done to people like former NFL stars Lyle Alzado and Mike Webster. But suffice it to say that steroids have the potential to do untold damage when compared to differences in equipment, especially when they are taken for advantage, and not simply for healing.

I cannot safely predict what a generation of athletes who were virtually all on steroids would be like in their 30’s, 40’s, and 50’s. But if it happens, the effects of their choices will not just be limited to what happens to their bodies. I can make serious justice arguments against allowing steroids in sports. But even if they are refuted, those unintended consequences that arise from changing people, not just equipment or rules, weigh heavy on my mind. It takes a lot for me to support restricting people’s freedom. But steroids should be banned from sports.

It is impossible to read the business press in recent weeks without being impressed by the extent to which insider trading dominates the headlines. Last week Berkshire Hathaway executive David Sokol resigned after revealing that he had taken a large stake in Lubrizol prior to pushing for Berkshire Hathaway to acquire the company, a transaction that increased the value of his stake by $3 million. He invested only after Citigroup had identified them as a good acquisition target for Berkshire Hathaway.

The Wall Street Journal’s Holman Jenkins opined that “…Berkshire’s shareholders aren’t out a dime unless Mr. Sokol has somehow put out word that Lubrizol was in play, thus driving up the price—which he didn’t.” Even if you believe that a previously uninterested party taking a $10 million stake in a company sends no signal and has no effect on the price of the stock, you would also have to assume that Mr. Sokol had no influence on the price offered for Lubrizol, which may be true. To be fair, even Mr. Jenkins saw a whiff of insider trading, a conflict “[t]o the normal business eye.” And this is a lot for Mr. Jenkins, who rarely objects to any behavior that makes the market more efficient. He largely assumes away any mixed motives in Mr. Sokol, and the editorial’s title clearly states his opinion that it did not bother Berkshire Hathaway CEO Warren Buffett: “St. Warren Casts Not the First Stone.”

But it bothers a lot of other people. It is true that insider trading increases the efficiency of the market by speeding up the incorporation of information into the share price. But what drives insider trading laws, and what bothers most people about it, is the issue of fairness. Trading on insider information is not a victimless crime. There is another party on the other side of that transaction, since the number of shares in the market is fixed. What are that person’s (or investment fund’s) rights?

My guess is that Sokol’s situation is not something that will result in any kind of criminal charge, though it may result in SEC sanctions. Raj Rajaratnam, on the other hand, is fighting for his future in a courtroom. If courtroom testimony and the confessions of others who have pled guilty are to be believed, Mr. Rajaratnam never hesitated to mine information for his Galleon Group by whatever means possible. The vortex surrounding his trades has sucked in people within his firm, traders with other firms, an IBM executive, even his own brother. As detailed in a recent Fortune article, the story is a real page turner.

The FDA is holding its collective breath after charges were filed last week against an employee accused of making millions trading on information to which he was privy. He allegedly used seven accounts in other people’s names. He had access to the system that tracks the approval process for drugs, trading against denials and buying shares ahead of approvals. Not that long ago, it was inside information about an FDA action that led Martha Stewart to dump ImClone shares to avoid a loss, and the subsequent investigation led to charges of lying to investigators, and a federal prison sentence.

Once Mr. Rajaratnam’s trial is over, we are likely to see one or more high profile trials aimed at ferreting out networks of “experts” that may be enabling insider trading on a massive scale. Firms hire “experts” as consultants who are then interviewed by hedge funds and other traders. These experts are often insiders at public companies. If they do not reveal private information, but just opine on industry conditions, this is generally not a problem. But there appears to be significant evidence that a number of these experts have stepped over the line.

So what is fair? If there is bad news, shareholders will be impacted eventually when it is revealed. This is just accelerated by the insider trade. However, the insider trader avoids the loss by trading out of it. It reminds people of what happened at Enron when management changed pension plan providers, preventing employees from selling their Enron stock while management was dumping its stock in large quantities. It helped adjust the stock price rapidly and efficiently. But was it fair?

When an insider buys shares on inside information, the insider is taking those shares from someone at a discounted price from their true value, which is unknown to the seller. I am guessing that David Sokol will hear from one or two of those folks who traded out of Lubrizol when he was buying in.

I am a believer in market efficiency, both as a description of what is generally true and something that is largely good, and to be preferred. But that does not make it the ultimate value that ought to control markets.

There is a moral problem in insider trading that is rooted in fairness. Immature markets are dominated by insider trading. But in mature markets, as long as there are people who care about fairness, you can expect to see insider trading prohibitions enforced.

Barry Minkow’s career has largely paralleled mine, and he has always been to me one of the most interesting personalities to intersect with my profession. His audacious ZZZZ Best fraud still stands as one of the preeminent examples of creating something out of nothing. Perhaps 80 percent of the sales for his public company were completely made up, and he managed to fool auditors and investors long enough that at one time the company had a market capitalization of over $240 million. When they liquidated the company, the total assets brought less than $60,000.

What fascinated me was the fact that Minkow did not slip quietly into oblivion, as so many fraudsters do. While he was serving seven years in federal prison, he was interviewed by Joe Wells, who founded the Association of Certified Fraud Examiners. That interview has been watched by tens of thousands of accounting students, including many of mine. Minkow was completely transparent about the ways he deliberately manipulated audit partners and their spouses to believe a lie and to embrace his media personification as a “boy wonder” entrepreneur. The video is instructive, and it has helped to better calibrate the professional skepticism of many people.

In the 1990’s, after his release from prison, Minkow rebuilt his life on the foundation of a conversion to Christianity and the pursuit of fraud performed by others. I followed this next chapter with interest as well, particularly as it seemed to validate the story of redemption which seems so central to men continuing to have hope after their inevitable failures. While spending 14 years as a pastor, Minkow also founded the Fraud Discovery Institute, and he worked undercover in multiple situations to root out fraud being committed by other companies. The judge who sentenced him was so impressed by the work that Minkow did that he removed all the conditions from his federal parole. Minkow worked closely with law enforcement and gained a reputation for his insights into fraudulent dealings. He even taught fraud courses for the FBI.

The one consistency across the years as a business owner, felon, and fraud detective has been Minkow’s tendency toward self-promotion. Never afraid of a camera, a willing story teller who seems to revel in revelations, he was never far from a press release or YouTube clip. In fact, a major motion picture biography of his life has been made recently, starring James Caan and Mark Hamill (Luke Skywalker of Star Wars fame). The movie’s release and, in fact, its ultimate ending, are uncertain now.

Last week The Wall Street Journal and The Washington Post reported that Minkow has agreed to plead guilty to a securities charge that could land him in prison for five years. He has been accused of falsely citing homebuilder Lennar Corp. with producing fraudulent financial statements, depressing the price of the stock, at the same time he was betting against the stock in the market on supposedly nonpublic information.

Many will write this off as the story of a man who never changed, but there seems much more to it than that. For my young auditors, I would warn them to always be professionally skeptical, and especially of those who tend to promote themselves or focus on themselves. You should not be surprised that these things happen, but you do not need to be cynical about people as a result. Many lives turn, stay turned, and finish well.

What I take to heart for my own life is that we are all vulnerable. Every indication is that Barry Minkow’s spiritual conversion was genuine, and that he has been a mentor to many men, as well as being a good husband and father. The price he will pay in his personal life, what he will have to give up, is much higher now than it was the first time. I need people to watch my back, and to point out to me when I am making myself vulnerable to a fall. I need to be accountable.

Finally, I need to be careful if I find myself drawn to the limelight. If what I want is approval and applause, the price can be very high. That siren call will draw my students as well, and I need to find ways to let them know in advance.

I am sorry to say that, until I become a better lighthouse, the wreckage of Barry Minkow’s ship on the rocks will have to be warning enough.

As a parent, one of the hardest things to do well is to transfer values into free-thinking individuals. Raising children requires establishing boundaries and helping them understand why it is important to think and behave in particular ways. The boundaries are enforced regularly when they are small, and they grow to believe, for a period of time, that this is the way life will always be. And then something scary for all parents kicks in—the notion of choice.

Sometimes it happens early, but most often it happens as children enter adolescence and watch others make choices against their parents’ wishes. Sometimes as parents we tighten the screws to make sure that our kids comply with our standards. This is often important in preventing harm. But at some point, the transition has to be made to our children making their own choices.

For our first four kids, this has largely taken place when they left for college, with high school serving as a transition period. They received progressive freedom over their last four years at home, and since all four went away to college, they were then launched to fend largely for themselves on a day-to-day basis. We have been available, and we have been praying, but they have been making the decisions.

Our fourth is a freshman in college, and I don’t like the process much better with her than I did with the first. But I know that it is necessary. We have had people tell us that we have “good children” during the years they were living at home. But children who have their decisions made for them are not really “good.” They are obedient, or well behaved, or compliant, all descriptions that are mostly positive in my mind while they live at home. But they can only truly be good when they are free to choose.

Since I teach ethics, I am aware that there are a wide variety of classroom approaches to the subject. In teaching auditing and accounting ethics, I need to explain the constraints on professionals’ behavior that are important because of the trust placed in them by others. I teach them rules that they must follow or expect sanctions from the profession or the public. I teach them compliance.

But what is interesting is that I have observed much more progress in ethical thinking since I started giving my students significant freedom in what they choose as outside reading for my course. They have to summarize for others’ review what they are learning from the material, and I have found that they take the material much more seriously, including trying to apply what they have learned. In fact, at least one group of students is continuing to meet weekly, six months after the course was over.

In the end, I ask them to develop ten or fewer principles to guide their professional lives. I have made plaques of their principles for a few of them because I want them to know how important their self-chosen principles are to living out the kind of life they envision. I hope that each of them will choose, freely, to be good and to do good.

What do I mean by good? I mean they will choose to value others the way they do themselves, and sometimes even more. I mean they will not violate a trust for their convenience or their gain. I mean they will speak truth when they speak, but they will not simply speak it to be hurtful. I mean they will help those less fortunate, not because they get a t-shirt or others command it, but because they value individual lives.

In many ways, I see this as a national conversation. There are well-intentioned people who want us to be good, and there are others who want us to be free. Those who want people to be good do not always define it the way I do, but they often picture those who want to be free as selfish, and rational self-interest as evil. Those who value freedom see their counterparts as “do gooders” who only want compliant behavior and are willing to enforce it, usually through the law or government intervention.

There are laws and rules that must be complied with for the common good. But I am convinced, from my experience as a parent and a professor, that in the end people must be free to choose how to live, especially when the choice does not cause harm.

After all, in the end, the goal is not compliance, but a life well lived. The end in mind is that someone will be good and will do good.

And you cannot be good unless you are free.