FacebookTwitterGoogle+RedditEmail

State Street Bentley University Business Ethics and Corporate Crime

Universities in the United States don’t teach corporate crime.

Instead, they teach business ethics.

One reason — corporations increasingly are funding the ethics programs.

And the corporations want to keep the focus positive (business ethics), not negative (corporate crime).

Take the case of the Center for Business Ethics at Bentley University in Boston, Massachusetts.

You have your Bentley Center for Business Ethics Verizon Lectureship. (Verizon fined $370 million since 2010 for everything from worker health and safety violations to False Claims Act violations.)

You have your Bentley Center for Business Ethics Raytheon Lectureship. (Raytheon fined in 2013 $8 million for export control violations.)

And most prominently, since 2005, Bentley and State Street have teamed up to create a “partnership in global business ethics.”

Earlier this year, State Street paid $64 million to settle criminal charges that the company defrauded bank clients by secretly applying commissions to billions of dollars of securities trades.

State Street entered into a deferred prosecution agreement to settle the criminal charges. (State Street promised prosecutors that it would display the agreement and statement of facts “conspicuously” on the company’s web site. Instead, the company put the link to the documents at the bottom of its home page.)

The Justice Department said that State Street engaged in a “concerted effort to fleece its clients by secretly charging unwarranted commissions,” that it “fundamentally abused its clients’ trust and inflicted very real financial losses” and that “State Street cheated its customers by agreeing to charge one price for its services and then secretly charging them something else.”

Recently, two former State Street executives — Richard Boomgaardt and Edward Pennings — have plead guilty to criminal charges in connection with the case.

A third executive, Ross McLellan, has plead not guilty and is scheduled for trial October 23, 2017 in Boston.

Since 2010, State Street has paid $740 million in fines and penalties to federal authorities to settle criminal and civil charges. 

A State Street spokesperson refused to say how much State Street pays to fund the ethics program at Bentley, explaining  that because a reporter’s focus on corporate crime, it sounded as if the resulting article was going to be “negative.”

Bentley spokesperson John McElhenny refused to say how much State Street pays to fund the program.

Every year, Bentley holds a Global Business Ethics Symposium featuring a State Street executive.

The keynote speaker at this year’s symposium was Rakhi Kumar, who sits on State Street’s Corporate Responsibility Working Group.

At her keynote, Kumar didn’t mention the ongoing criminal case against State Street and its executives.

Patrick Burns of Taxpayers Against Fraud says that State Street needs to get its priorities straight.

“A lot of companies seemed confused about what to do to get on the straight and narrow path,” Burns said.  “I am not sure why.”

“We know incentives work to promote integrity, and that personal consequences work to stop fraud. And yet, if we look around, we find that whistleblowers are too often isolated, humiliated, and terminated, while the folks who design and operationalize frauds keep their jobs, promotion, bonuses, and stock options. All the incentives run the wrong way.”

“Turn those internal incentives around, and you change corporate culture overnight. It’s not complex or mysterious, but it’s not being done because, as Upton Sinclair observed, ‘It is difficult to get a man to understand something, when his salary depends on his not understanding it.’”

More articles by:

Russell Mokhiber is the editor of the Corporate Crime Reporter..

September 25, 2018
Kenneth Surin
Fact-Finding Labour’s “Anti-Semitism” Crisis
Charles Pierson
Destroying Yemen as Humanely as Possible
James Rothenberg
Why Not Socialism?
Patrick Cockburn
How Putin Came Out on Top in Syria
John Grant
“Awesome Uncontrollable Male Passion” Meets Its Match
Guy Horton
Burma: Complicity With Evil?
Steve Stallone
Jujitsu Comms
William Blum
Bombing Libya: the Origins of Europe’s Immigration Crisis
John Feffer
There’s a New Crash Coming
Martha Pskowski
“The Emergency Isn’t Over”: the Homeless Commemorate a Year Since the Mexico City Earthquake
Fred Baumgarten
Ten Ways of Looking at Civility
Dean Baker
The Great Financial Crisis: Bernanke and the Bubble
Binoy Kampmark
Parasitic and Irrelevant: The University Vice Chancellor
September 24, 2018
Jonathan Cook
Hiding in Plain Sight: Why We Cannot See the System Destroying Us
Gary Leupp
All the Good News (Ignored by the Trump-Obsessed Media)
Robert Fisk
I Don’t See How a Palestinian State Can Ever Happen
Barry Brown
Pot as Political Speech
Lara Merling
Puerto Rico’s Colonial Legacy and Its Continuing Economic Troubles
Patrick Cockburn
Iraq’s Prime Ministers Come and Go, But the Stalemate Remains
William Blum
The New Iraq WMD: Russian Interference in US Elections
Julian Vigo
The UK’s Snoopers’ Charter Has Been Dealt a Serious Blow
Joseph Matten
Why Did Global Economic Performance Deteriorate in the 1970s?
Zhivko Illeieff
The Millennial Label: Distinguishing Facts from Fiction
Thomas Hon Wing Polin – Gerry Brown
Xinjiang : The New Great Game
Binoy Kampmark
Casting Kavanaugh: The Trump Supreme Court Drama
Max Wilbert
Blue Angels: the Naked Face of Empire
Weekend Edition
September 21, 2018
Friday - Sunday
Alexandra Isfahani-Hammond
Hurricane Florence and 9.7 Million Pigs
Andrew Levine
Israel’s Anti-Semitism Smear Campaign
Paul Street
Laquan McDonald is Being Tried for His Own Racist Murder
Brad Evans
What Does It Mean to Celebrate International Peace Day?
Nick Pemberton
With or Without Kavanaugh, The United States Is Anti-Choice
Jim Kavanagh
“Taxpayer Money” Threatens Medicare-for-All (And Every Other Social Program)
Jonathan Cook
Palestine: The Testbed for Trump’s Plan to Tear up the Rules-Based International Order
Jeffrey St. Clair
Roaming Charges: the Chickenhawks Have Finally Come Back Home to Roost!
David Rosen
As the Capitalist World Turns: From Empire to Imperialism to Globalization?
Jonah Raskin
Green Capitalism Rears Its Head at Global Climate Action Summit
James Munson
On Climate, the Centrists are the Deplorables
Robert Hunziker
Is Paris 2015 Already Underwater?
Arshad Khan
Will There Ever be Justice for Rohingya Muslims?
Jill Richardson
Why Women Don’t Report Sexual Assault
Dave Clennon
A Victory for Historical Accuracy and the Peace Movement: Not One Emmy for Ken Burns and “The Vietnam War”
W. T. Whitney
US Harasses Cuba Amid Mysterious Circumstances
Nathan Kalman-Lamb
Things That Make Sports Fans Uncomfortable
George Capaccio
Iran: “Snapping Back” Sanctions and the Threat of War
Kenneth Surin
Brexit is Coming, But Which Will It Be?
FacebookTwitterGoogle+RedditEmail