Corporate Competition and Crime: The News Corp Scandal

by Gina Simmons, Ph.D.

In the recent News Corp scandal, Emperor Rupert Murdoch's imperial warrior reporters allegedly hacked into and erased messages on the phone of a murdered girl, Milly Dowler, giving false hope to her family, and corrupting the police investigation. Allegations still stand that a Murdoch company attempted to hack into the voice mail messages of 9-11 victims.  News reports suggest that for over a decade, many of Murdoch's companies got their competitive edge by corporate espionage, or cheating. Murdoch settled with several companies that sued, claiming a Murdoch company stole secrets. The lawsuits were settled with the purchase of the victimized company. Rep. Peter King (R. New York) wrote to FBI director Robert Mueller suggesting "the conduct would merit felony charges for attempting to violate various federal statutes related to corruption of public officials and prohibitions against wiretapping” here in the U.S.

While we like to think of cheaters as a deviant few living among us, the research results are far more disturbing. Studies show, cheating increases with competitive pressure. Give financial incentives to schools for improved performance, you get teachers falsifying test results. In the competitive field of journalism, a winner-take-all contest propels some to use every tactic available, no matter how illegal, to beat the competition. In the 1940's about 20% of high school students admitted cheating. Now, between 75 and 98% of college students admitted to cheating in high school. Reasons given for cheating include:

• It doesn't hurt anybody.
• Everybody does it.
• Don't want other cheaters to have unfair advantage.
• Not likely to get caught.
• High pressure to get good grades.

When people feel that achievement is more important than anything, cutting legal and ethical corners often becomes the norm. If a reporter feels they don't possess the skills to get the story legitimately the odds that they will cheat increase. Don't underestimate the pressure of the situation to make good people do bad things.

When my son was in high school he faced a moment where he might have lost his integrity. One step toward getting into a classical music conservatory required making an unedited tape of a performance. He received pressure from several people to edit his tape to make it perfect. He looked sick, seeing the faces of the adults around him urging him to cheat with comments like, "everyone does it; at this level it has to be perfect; no one will know." Seeing the torment in his face I said, "let's reread the rules." The rules clearly stated no editing allowed. I said, "we're sending in the best take, unedited." My son's face relaxed in relief. He was accepted into and graduated from a top conservatory with his integrity intact. He wanted to succeed on his own merits. He had the skills to do it honestly. When people don't have the skills, they're more likely to cheat. I still remember the pressure we both felt that day.

When businesses create a culture of achievement over quality of work they encourage cheating behavior. A management style that values a code of ethics creates an atmosphere of respect for honesty. When people cheat, faulty engineering appears on cars, bad drugs get into the market, and dangerous products fill shelves. Psychologist Phillip Zimbardo coined the term "The Lucifer Effect" describing the tendency for corrupt systems to corrupt good people. He describes how he was corrupted by his own experiment to conform to harmful behavior as set up by the demands of his famous "Stanford Prison Experiment."

It takes more than a code of ethics posted on a wall to keep people honest. Encouraging cooperative achievement, valuing integrity over results, fostering the exposure of errors and mistakes can help reduce cheating in any organization, while improving quality performance. All human organizations, whether it be a church or a business, can fall victim to the Lucifer Effect. When we encourage our employees, children and coworkers to achieve honestly, others will follow. One antidote to The Lucifer Effect is the Heroism Project. This curriculum encourages young people to look for opportunities to do the right thing and behave heroically. It's a good start.

Photos courtesy of ssoosay and Enokson.

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P.I.'s High-profile Clients Got Off Easy

by Tina Dirmann

Here in California, one of the splashiest cases to hit this state’s court just wrapped up. Anthony Pellicano, private investigator to the rich and famous, was found guilty on 76 counts of wire fraud, computer fraud, wiretapping, and racketeering.

Despite the number of counts, he’ll likely do just about 10 years in prison when he’s sentenced later this summer.

Although the case is long and involved, the gist is that Pellicano used mobster-like methods to spy on people for his high-powered clients. And the client list is a glitzy one. CAA talent agency co-founder Michael Ovitz and Paramount Pictures chief Brad Grey used Pellicano’s talents to get dirt on their enemies. Comedian Chris Rock hired Pellicano to investigate a woman claiming, erroneously, that she was carrying the comedian’s baby. And Sylvester Stallone was on the other end, a victim, wiretapped by Pellicano when the actor’s former business manager hired him to get dirt on Stallone that might help in a nasty court case between the two. Garry Shandling was a victim, too.

I don’t think anyone is sad to see a man like Pellicano go down. How low did it get? This self-described wanna-be Tony Soprano even dropped a dead fish onto the hood of a car belonging to reporter Anita Busch, hoping to intimidate her enough, she’d stop the negative articles she was writing about his clients (specifically, Michael Ovitz) for the New York Times.

But here’s what I’m wondering as Pellicano fades from the headlines.

How is it that Pellicano is going down – but none of the clients who hired this man for his below the belt information gathering tactics aren’t going down with him?

In the early stages of the six-year investigation, journalists following the case speculated that it could involve trials against Hollywood’s power elite. The highest rollers on Tinsel Town would be shown that they aren’t above the law.

But alas, the Hollywooders and moneyed types would go unscathed. Again. We didn’t even see most of these folks in the courtroom. Not even Bert Fields, THE de facto attorney to the stars. Witnesses described Fields as Pellicano’s mentor. And, later, his frequent employer. And though his name was mentioned repeatedly in court testimony, was he ever called to take the stand? No. He was not. Though I suspect if he was called, he may have stood up there and pleaded the 5th, for fear of implicating himself with each and every word.

It reminds me of the headline-grabbing profile madam cases, which typically end with the prosecution of the ladies. And who goes free? All of those high-power, high-dollar clients. I never see justice in that, either.

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