THE UNIVERSITY OF TAMPA A Publication of the Center for Ethics S YK E S COLL E G E OF B U SIN E SS FALL 2017 ENRON AND ANDY FASTOW side of the story. As business students, it was We believe his outreach in speaking to SUSTAINABLE BUSINESS AWARDS ETHICS SPEAKER SERIES OUR PERSPECTIVE a great experience listening to him. We, as a students like us, without receiving any financial collective group of individuals, have the ability compensation for doing so, is his way of helping by Jessica Luce by Jessica Luce by Alaina Butler and Duncan McGarry to ensure the business world functions without atone for his negative actions. Businesses the center On June 7, 2017, the UT Center for Ethics, with its community partner the Sustany Foundation, corruption and fraud, with ethics and morals. As operate every day in the gray area, making it each Fall Ethics Speaker Series: “Rules hosted the 9th Annual Sustainable Business Awards luncheon. Seven businesses were honored versus Principles.” See review, page 5. we listened to Fastow speak, we saw the world individual’s responsibility to make the ethical for their contributions to building successful companies that positively impact the community. The through his eyes. Although he now admits doing choice; therefore, at any moment an executive businesses were recognized for their contributions in building a sustainable economy in Tampa for ethics wrong and feeling great remorse for harming so can choose poorly, beginning the spiral to fraud. Bay, while embracing the “triple bottom line” — advancing the interests of people, planet and Fall Ethics Hot Seat Series: “Ethics many individuals and families, he admitted that Fastow helped us see just how thin this line can profit through innovative practices, products and services. The 2017 winners include Suncoast from the Outside In and Inside Out.” On “The Best Way to Rob a Bank is to Work for One” at the time of his arrest he did not believe he be in business; explaining how he crossed that Federal Credit Union (NFP), Doubletree, INETICO, Jones Potato Farm, Safer Home Services, Atelier Wednesday, Nov. 8, Earnest Broughton, – Joke Punchline had broken any rules. Today, Fastow admits that line helped us to understand what we can do to Architecture and Kenyon Energy. AACSB International, The Association to Advance Collegiate while he may have technically followed the rules prevent making unethical decisions. senior advisor for the Ethics and Schools of Business, was awarded the Jan Roberts Leadership Award. For more information go to and therefore less threatening than of the time, his actions were unethical because Fastow’s presentation brought the UT Compliance Initiative, was on the hot WHITE COLLAR www.ut.edu/centerforethics/sustainablebusinessawards. violent crime. Our laws, police, and they violated the principles upon which the rules community together for a unique experience, seat. He brought a sold-out crowd on CRIME Alaina Butler Duncan McGarry courts prioritize addressing violent were based. giving us the opportunity to hear the Enron story B.S. Management ‘20 B.S. Finance ‘21 an interactive journey that explored the by Robert Marley, Ph.D. crimes, dealing with white collar Fastow’s perspective was explained through from the perspective of somebody at its core. emerging science behind why we act Although the above quote is a crimes more leniently. Perhaps Boom and bust. Enron flourished and inspired a discussion of loopholes. At Enron, he found If put in a position similar to Fastow’s, would one-liner commonly delivered during unsurprisingly, white collar crime many Americans leading up to the year 2000, loopholes in the rules, being proud of his today’s business students behave similarly? the way we do, especially when our stand-up comedy routines, we continues to increase, while violent and then plummeted once the nation discovered creativity at the time. He helped to create the Those who attended his presentation likely have behavior runs contrary to the values we chuckle because it holds several crime has decreased by 30 percent the truth behind the company’s “success.” illusion of billions of dollars in profits for Enron, a better understanding of right and wrong and hold dearest, and what we can do about it. truths. First: knowledge is power. since 1990. What can be done to stem Three leaders of the company — Kenneth Lay, but his motives were corrupt. Thus, instead of how the gray zone can lead to unethical choices. By working for a bank, a would- the rising tide of white collar crime? Inside this Issue: Jeffrey Skilling, and Andrew Fastow — released breaking the rules outright, he subverted the Thus, our moral compass was strengthened be robber acquires knowledge not Robert Marley, Ph.D. An appropriate starting point seems financial statements that created the appearance spirit of the rules to avoid their intent. Fastow due to this event. With our ethical awareness Associate Director, Page 1... available to the public, giving him to be understanding what motivates of a financially successful, innovative company. stated that there will always be a gray area heightened, we are in a better position to learn Center for Ethics • White Collar Crime more opportunity to steal from the individuals to commit white collar These misleading statements were approved in any business decision, between what is the rules of accounting, keeping in mind the bank without holding it up at gunpoint. Second: crime, so that is precisely what this issue seeks • Researchers Find Security Loophole by Enron’s own accounting department and by technically allowed and what is right. He stated principles of right and wrong. Having gained society views white collar crime as non-violent, to provide. for Square e-Payment App its independent auditor. The actions of these that he lacked the moral compass required new perspectives from Fastow’s presentation, three executives lead to the largest corporate to make the right decisions. We came away we hope that UT graduates will work towards Page 2... accounting scandal in America. believing that Fastow regretted his unethical improving business ethics, perhaps even • Congratulations Rebecca White On Monday, Oct. 16, 2017, over 400 UT actions. When asked by a student what he ensuring that harmful scandals like Enron never Winners of the 2017 Sustainable Business Awards faculty, students and alumni had the opportunity would do today if he were a CFO again, Fastow occur again. RESEARCHERS FIND SECURITY LOOPHOLE FOR SQUARE • Why Does Fraud Occur? to meet Andrew Fastow, the only Enron executive said that he fears the corporate world because E-PAYMENT APP Page 3... who has admitted doing wrong, and hear his he is afraid to go near the gray area again. by Claudia Rodriguez • Faculty in the Spotlight Most people have mobile individuals’ personal information • Global Perspectives on Corruption payment applications on their easily stolen. From Equifax to Target Page 4... TAMPA BAY smartphones these days. Mobile data breaches, the public has become ETHICS AWARD CENTER FOR ETHICS ADVISORY BOARD payment applications such as Venmo, aware that hackers can do pretty • Ethics in the News by Jessica Luce Christine Dever Homack Jessica Luce Square, and PayPal offer easy and much anything from the other end of a Page 5... affordable e-payment solutions to computer terminal. Lorna Taylor, president and CEO of Principal, Accountabilities Consulting Services LLC Associate Editor, Center for Ethics small businesses, allowing customers Recently, during a Black Hat • Enron and Andy Fastow Premier Eye Care, received the 27th The University of Tampa C. Lee Essrig to make payments with the click of a security conference researchers Our Perspective annual ethics award on Friday, Oct. Principal, Lee Essrig and Associates LLC Robert Marley, Ph.D. button. Square, a very popular mobile figured out a unique way to hack Square • Tampa Bay Ethics Award 6, 2017, at a breakfast ceremony at Associate Director, Center for Ethics Brent Fernandez payment application, offers e-payment readers. Adam Laurie and Zac Franken, UT before her friends, supporters and Assistant Professor, The University of Tampa Project Manager, IDSTC processing services for a small fee Claudia Rodriguez directors of Aperture Labs, created Page 6... Premier Eye Care employees. Sandra Moscovic, Ph.D. of 2.75% per transaction. You have Certifed Fraud a code that let them feed magnetic • Sustainable Business Awards Taylor is an accomplished leader, William “Bill” H. Geiger Examiner Director, Corporate Ethics and Compliance probably seen Square in small shops, stripe data from stolen credit cards both in directing fast-growing Premier Jessica Luce Retired, formerly Corporate Counsel and Group • Ethics Speaker Series Associate Editor TECO Services Inc. farmers’ markets and salons. Square into a microphone, converting it to a and in making an impact in the VP-Compliance, Transamerica/AEGON • Center for Ethics Advisory Board “readers” are easy-to-use payment facilitators sound file. They then played that sound file—a community. Premier, ranked as one of “Florida’s Award recipient Lorna Taylor (third from left), stands alongside Dr. Dan Verreault, Dr. Robert Marley, Brianna Reeves ‘19 First lady Renée Vaughn, President Ronald Vaughn and Dean Frank Ghannadian F. Frank Ghannadian, Ph.D. that snap into the end of a smartphone and read series of beeps—into the Square reader via Best Companies to Work For” for six consecutive UT Student Dean, Sykes College of Business a customer’s credit card information, making stereo cable. The researchers found these beeps other mechanisms to detect fraud. However, I years, has also ranked as one of the state’s Award from the Sustany Foundation and Center Directors (MMD) Board, Preserve Vision The University of Tampa Daniel A. Verreault, Ph.D. Square very attractive to business owners who permitted a Square user to perform electronic sure feel like many big fraud stories started with fastest-growing companies two of the past three for Ethics.