Litany of misdeeds: incredible, but true.

• Author: McQuade, Paul F.
• Position: ETHICS CORNER

The summer of 2006 brought forth more than normal attention and debate concerning ethical failures in contracting. In June, the office of general counsel of the Department of Defense issued its 110-page "Encyclopedia of Ethical Failure," cataloging dozens of incidents of malfeasance and their consequences.

A thematically related bit of summertime ethics activity surfaced in mid-July when Senators Charles Grassley, R-Iowa; John McCain, R-Ariz., and John Warner, R-Va., complained publicly that Attorney General Alberto Gonzales failed to state that the $615 million settlement of various claims against Boeing--stemming from the multi-billion dollar tanker scandal and alleged misappropriation of Lockheed Martin trade secrets--were "fines and/or penalties" that could not be deducted from taxes owed. Grassley has suggested that legislation may be forthcoming to clarify any concerns about the settlement being interpreted to be a tax-deductible expense, "thereby leaving the American taxpayer to effectively subsidize its misconduct."

It now seems to be a good time to contemplate past lapses in judgment and to speculate about why, long after the "Ill Wind" scandal and the advent of stiffer federal sentencing guidelines, companies and individuals continue to be blind to the dividing line between appropriate and inappropriate behavior.

The Defense Department's encyclopedia is a good place to start. Its 110 pages are organized by type of infraction at issue with anecdotes briefly discussing pertinent facts and applicable penalties. While designed to inform federal employees of "do's and don'ts" by way of true stories, its accounts of some of the better known and more egregious infractions are sanitized to a degree that one not having heard or seen reports on television might wonder what all the "hoopla" was about.

In condensed form, some of the more noteworthy and ironic examples are digested below:

* A not-so-bright supervisor at the Bureau of Indian Affairs had BIA purchase excessive quantities of overpriced light bulbs in exchange for $21,000 in bribes (as well as one year and nine months in prison and a fine of $72,000).

* An offshore safety inspector found much of the rig equipment then in use to be in violation. He referred the rig operator to his brother-in-law's repair shop. Upon investigation, the FBI discovered that in exchange for each referral, the brother-in-law was treating the inspector to an evening with a lady of dubious morals. His...