A Culture of Ethical Failure

6.19 A Culture of Ethical Failure

Cases: 3.1, 3.2, 3.4, 4.9, 5.5

Did you ever wonder what a public agency looks like that is awash in unethical practices and behavior? Consider the following:

◾ More than a dozen employees in a fifty-member organization received meals, ski trips, sports tickets, paint ball, and golf outings from industry representatives.

◾ Employees engaged in substance abuse and promiscuity. Social outings included alcohol, cocaine, and marijuana filled parties.

◾ Many employees didn’t think ethics rules applied to them because they needed to socialize with industry representatives.

◾ A high-ranking manager arranged a million-dollar deal for two retired employees.

◾ Key qualification criteria upon which bidders would vie for lucrative con- tracts were shared with a contractor before bid proposals for the first contract

were due. ◾ Th e director of the agency netted more than $30,000 from improper outside work and hid information about the true nature of his outside employment. ◾ Th e director engaged in sexual relations with subordinates and some mem- bers engaged in brief sexual relationships with industry contacts. ◾ Th e director received annual ethics training.

222 ◾ Ethics Moments in Government: Cases and Controversies

Th is is not fiction. It is a description of the Royalty-in-Kind Program in the Minerals Management Service of the Minerals Revenue Management in the U.S. Department of the Interior (DOI). The Office of Inspector General (OIG) released a blistering report describing the “culture of ethical failure.” The investigation “revealed that a relatively small group of individuals wholly lacking in acceptance of or adher- ence to government ethical standards; management that through passive neglect, at best, or purposeful ignorance, at worst, was blind to easily discernable misconduct; and a program that had aggressive goals and admirable ideals, but was launched with- out the necessary internal controls in place to ensure conformity with one of its most important principles: Maintain the highest ethical and professional standards.”

Th e report took two years to complete and cost $5.3 million. The OIG turned over its findings to the Justice Department for possible criminal action against the director, who retired before the report was released. The Justice Department, with- out explanation, declined to prosecute.

Discussion Questions

1. Why didn’t employees in the agency who were not unethical speak up?

2. Is this an example of the failure of ethics training?

3. If so, why did it fail?

4. Is this an example of the ethical pitfalls of privatization?

5. What would you do to turn this organization around?

Commentary by Author

A culture of ethical failure does not occur overnight. In this case, the prime culprit was the director, who turned an innovative program for collecting royalties from the oil and gas industry into a “sweetheart” arrangement that infected others in the organization. Can you imagine working in an organization like this? Would you be able to resist the temptation to “go along to get along” and maybe worse? This worst case situation is a total betrayal of assuming a “public office is a public trust.”

Sources: Derek Kravitz and Mary Pat Flaherty, “Report Says Oil Agency Ran Amok,” washingtonpost.com, September 11, 2008; and Earl E. Devaney, Inspector General, U.S. DOI, Office of the Inspector General, “OIG Investigations of MMS Employees,” September 9, 2008.