September/October 2003

Our Cheatin' Hearts

by Rusty Wright

The Wall Street Journal has reported a rash of petty personal cheating ranging from zipping through turnpike tollbooths without paying to pocketing restaurant silverware.1

One Los Angeles network television employee described the rush he felt from sneaking into an airline First Class seat from his coach section. "It was exhilarating," he explained of his stealth upgrade. "I felt like I robbed a bank."

A Las Vegas restaurant lost $10,000 in pilfered ashtrays during its first two weeks of operation. A New Jersey engineer refuses to pay automated tolls on the Garden State Parkway because he feels the toll plazas are poorly designed and irritating. The state established a bad system, he reasons, so "you have to abuse it." Convenience stores report massive losses from "pump-and-flee" customers who fill their gas tanks and take off without paying.

A Knoxville-based theater chain watches for discount cheaters who purchase pay-by-phone automated tickets at undeserved senior discounts and hope ticket takers won't notice. Shoppers buy party dresses and power tools, use them and return them for refunds. A California bookseller laments the customers who try for full-price refunds on books they've purchased from discount outlets. "You want to send them to Miss Manners," she says.2

Prominent sports figures have been flagged for un-citizen-like conduct. George O'Leary lost the head football-coaching job at Notre Dame within a week of his hiring for padding his resume. U.S. Olympic Committee president

Sandra Baldwin resigned after confessing lies about her academic background.3 Similar irregularities led to the firing or resignation of Dartmouth's athletic director, Vanderbilt's women's basketball coach and several assistant college coaches.4

Golfers not only adjust the lay of the ball, some duck pricey greens fees by sneaking onto the course.

I know something about golf-course ethics. My childhood Miami home bordered a golf course. Occasionally, stray balls landed in our back yard. Neighborhood kids decided a ball was fair game only after the golfer had walked by without retrieving it. But it was entirely ethical, we determined, to cover the ball with a large almond leaf until the golfer passed.

What are the roots of dishonesty? Why do people cheat? How does cheating impact society? Is there a solution, and what is it?

Campus Cheating

What part does education play? Duke University president Nannerl Keohane says that 45 percent of Duke students have cheated at least once during college. US News and World Report quoted one Duke student who plagiarized an assignment: "It's not a big deal because it's just a mindless assignment. It's not a final or a midterm."5

The Center for Academic Integrity (CAI) reports that:6

· On most university campuses more than 75 percent of students admit to some cheating.

· About one-third of 2,100 participating students in a 1999 survey on 21 university campuses nationwide admitted to "serious test cheating."

· Half of the students in that survey admitted to "one or more instances of serious cheating on written assignments."

The Internet expands convenience and choices. Web access and a credit card can buy ready-made term papers or customized writing. Cybercheating can backfire though.

Special computer searches can allow suspicious professors to discover the original sources in only minutes.7

The Center for Academic Integrity reports research on nearly 4,500 high school students in 25 schools during 2000-2001. Seventy-four percent admitted to "serious test cheating," 72 percent to "serious cheating on written assignments." Over half admitted to some form of Internet plagiarism.8

Cheating is bad enough when students do it to boost their academic standing.

It's a mess when teachers and administrators orchestrate it. So called "high-stakes testing" has tempted some educators to cheat to retain their jobs, earn merit pay or even preserve their schools. Some states base financial allocations on school test scores. Administrators anxious over funding cuts prompt teachers to provide, shall we say, inappropriate assistance.

Stacey Moscowitz, a New York City teacher, gave her students answers to tests, raising their scores and the school's academic ranking. She says the school principal encouraged the practice. Later, Moscowitz felt she had betrayed her kids. Students needing remedial help did not qualify for it due to their artificially high test scores.

Moscowitz blew the whistle, prompting an investigation by Edward Stancik, the New York City School District independent investigator. Stancik found 52 educators implicated in 32 schools. Among the methods he uncovered was the "scrap paper" method: Students took the exam on scrap paper, a teacher corrected the answers, then the answers went onto the standardized answer sheets, so as not to reflect erasures. In the "group testing" method, students called out the answers, the group agreed on the correct answer and everyone filled it in.9

Corporate Cheaters

Corporate cheating has had devastating effects. U.S. corporate scandals have seen thousands of employees lose their jobs while stocks plummet and corporate executives are led off in handcuffs. Enron, WorldCom, Arthur Anderson, AOL Time Warner, Adelphia, Xerox -- sometimes the patterns of financial scandals can be confusing.

Consider a simple illustration. Suppose you want your local bank to lend you money so you can purchase your dream house. The bank views you as a means to make money. They want to assess their risk of investing in you to be sure you can pay them back faithfully and with interest. So they check your credit, income, assets and liabilities and get you to fill out lots of forms.

Suppose you deceive the bank into believing that your financial status is better than it really is. You lie about your income and indebtedness. They believe you and lend you the funds. You buy your castle, then can't make the payments. You default on the loan, declare bankruptcy and the bank loses its money.

Corporations that cook the books look like better investments than they really are. Investors buy their stock, driving the price up and enriching leaders who profit personally from stock gains. When irregularities are exposed, companies restate their actual earnings and indebtedness and lay off employees. Investors, realizing they've been hoodwinked, sell their stock. Stock prices plummet. Investors question the sincerity of other corporations and are reluctant to buy. The market system falters.

Michael Kopper, the first convicted former Enron executive, pleaded guilty to money laundering and conspiracy to commit wire fraud. He agreed to surrender $12 million in ill-gotten gains in a plea bargain. That was little comfort to the thousands of Enron employees who lost jobs and investment value as Enron went under.10

Federal Reserve Chairman Alan Greenspan summarized for Congress corruptions' impact on the nation: "Fraud is theft... It is indistinguishable from going into a bank and stealing something. Our free market capitalist system cannot function in an environment in which fraud and misrepresentation are critical elements, because trust is so essential to making that system work."11

Corrupt CEO's wield power similar to economic "weapons of mass destruction" said University of Minnesota accounting professor Brian Shapiro.12 Consumer advocate Ralph Nader called it "greed on steroids."13

Cheating's Costs

Epidemic cheating has serious costs. Who can you trust?

Time magazine compared what executives of seven troubled companies received (in stock sales and severance) with what their shareholders got.14

Adelphia's John Rigas gained $4.2 million in severance. When Adelphia filed for bankruptcy, its stock was worth 14 cents, a decline of over 99 percent in about a year. Enron's Jeffrey Skilling made $78 million in stock sales between 2000 and 2002. Shareholders got a bankrupt company. Global Crossing's Gary Winnick sold $273 million in stock from 2000 to 2002. The company went bankrupt.

Have your medical insurance premiums been rising? Some of the increase may be offsetting corruption losses. Big names in healthcare like

Columbia/HCA, National Health Laboratories and GlaxoSmithKline have paid millions in fines to settle billing or fraud charges or investigations.

While corporate accounting scandals may seem complex, the healthcare crisis involves outright theft such as overcharging for hospital care. This profitable game has even drawn drug criminals and the Russian mafia.

Each year, four billion healthcare transactions occur, valued at $1.5 trillion. Experts feel 3 to 10 percent of that represents fraud. Premiums skyrocket and employers lower or eliminate company benefits. Some have called the healthcare industry terminally ill.15

Identity thieves use computers to snoop. The biggest identity theft in U.S. history garnered information on 30,000 people. Thieves used pilfered data to siphon bank accounts and tap credit card accounts. The prosecutor described the situation as "every American's worst financial nightmare multiplied tens of thousands of times."16

Cheating that may begin in school can have disastrous results in society. Duke's president Keohane aptly summarizes: "...An education that involves cheating instead of learning... is no education at all.... In the real world, when you set out to build a bridge or craft a legal document or begin brain surgery, just knowing what the result is supposed to be is of mighty little use in making it happen; pity the poor patients and clients!"17

The Psychology of Cheating

Why do people cheat? Some seek the thrill of beating the system. Others want to make ends meet, protest high prices or achieve difficult -- perhaps unattainable -- standards.

Actress Winona Ryder's shoplifting conviction prompted questions about why a wealthy person would steal items they could easily afford. Often anxiety or depression accompanies kleptomania. The rush of theft may assuage deep emotional pain. Young shoplifters have stolen on dares from their peers.18

Desires for approval, advancement, avoiding embarrassment -- all influence self esteem. People sometimes take foolish risks to feel good about themselves.

Seemingly, obvious roots of dishonesty are self-centeredness and lax standards. The Securities and Exchange Commission began requiring CEO's of major companies to personally affirm "in writing, under oath and for publication" that their corporate reports are "complete and accurate."19

Restructuring business relationships to avoid conflicts of interest could reduce temptation. Stiff penalties -- suspension, expulsion, prosecution -- may help slow moral hemorrhaging. Strong role models, peer support and ethical codes are significant. Elizabeth Dole, now a U.S. Senator, told graduating university students,

"In the final analysis, it is your moral compass that counts far more than any bank balance, any resume and, yes, any diploma."20

Ultimately, honesty is an individual matter. Federal Reserve Chairman Alan Greenspan told Congress of "an infectious greed" that influenced corporate scandals. "Greed is not an issue of business," he emphasized, "it's an issue of human beings."21

I swiped a plastic bucket from behind the lectern in the psychology lecture hall my sophomore year in college. It had been there every day during the semester. "No one wants it. It deserves to be taken," I convinced myself. I used it to wash my car.

Two years later, I found a statement by an early follower of Jesus : "If we confess our sins to him, he (God) is faithful and just to forgive us and to cleanse us from every wrong" (1 John 1:9 NLT). I not only needed to admit my theft to God. I needed to make restitution.

My booty long since lost, I purchased a new bucket and carried it sheepishly across campus one afternoon. Finding no one in the psychology building to confess to, I left the bucket in a broom closet with a note of explanation. Maybe a janitor read it. My conscience was clear.

Solid spiritual commitment can help develop inner strength to resist temptation and act honorably. It can provide reasonable standards for civil society. And it can bring forgiveness and power to rebound from personal failure. 

1 Eileen Daspin, "The Cheater Principle," The Wall Street Journal, August 25, 2000, pp. W1, W16.

2 Above illustrations and quotations are from Ibid.

3 The Associated Press, "Wilson Firing Reportedly Due to Discrepancies in Bio, AOL News, June 29, 2002.

4 The Associated Press, "Fayetteville State Fires Coach for Falsifying Resume," AOL News, August 6, 2002.

5 Nannerl O. Keohane, "A Climate for Honor," DUKE Magazine, May-June 2000, p. 20.

6 Center for Academic Integrity research summary.

7 Peter Dizikes, "Pay Grades," ABCNews.com, May 7, 2002; Robert J. Bliwise, "A Matter of Integrity," DUKE Magazine, May-June 2001, p. 3.

8 Center for Academic Integrity research, loc. cit.

9 NewsHour with Jim Lehrer, "Cheating Teachers," PBS.org, April 26, 2000.

10 Kristen Hays, "Experts: Greed Led to Enron Crash," The Associated Press, AOL News, August 23, 2002.

11 Reuters, "Highlights of Greenspan Q&A to US House Panel," AOL News, July 17, 2002.

12 Nancy Gibbs, "Summer of Mistrust," TIME.com, July 22, 2002.

13 Ralph Nader; Matthew Cooper, "10 Questions for Ralph Nader, TIME.com, July 31, 2002.

14 "Seven Top Executives with No Retirement Woes," TIME, July 29, 2002, p. 31.

15 Healthcare information taken from Carl Quintanilla, "Health-care industry rife with fraud," MSNBC.com, November 12, 2002. The website dateline did not list a year for this article, but I accessed it in November 2002 and am assuming that 2002 is the correct year of publication.

16 Larry Neumeister, "U.S. Charges 3 in Historic ID Theft Case," The Associated Press, AOL News, November 25, 2002.

17 Keohane, loc. cit.

18 Nadya Labi, "Why Did She Do It?" TIME.com, November 12, 2002.

19 Calvin Woodward, "Corporate Ledgers Teach a Few Tricks," The Associated Press, AOL News, June 21, 2002.

20 "Quad Quotes: Heard Around Campus," DUKE Magazine, July-August 2000, p. 56.

21 Jeannine Aversa, "Greenspan Chastises Misleading Execs," The Associated Press, AOL News, June 17, 2002.

Laddering: Cheating Average Investors CBS News 60 Minutes II explained how insider agreements may have fuelled artificially high stock price jumps that enriched brokerages and their privileged clients but bilked average investors. Here's how the alleged scam works: · A brokerage or investment bank introducing a new stock privately offers its best clients huge chunks of stock at a bargain price, $10 a share, for example. · In exchange, these clients agree in advance to place various subsequent orders for additional shares at escalating prices, such as $20 per share, then $40, then $100. The practice is called "laddering." · The new stock -- which may represent a weak company -- soars in price. The CEO appears on television all smiles about the "hot" stock. · Average investors watching TV or the Internet figure they've found a winner and buy the stock. · Eventually the artificially inflated stock falls -- say to $2 -- and the little guy is burned. · Over 300 class action lawsuits have alleged brokerage laddering. Some feel the suits could hamstring Wall Street. CBSNews.com, "Was IPO Frenzy Rigged?" November 13, 2002, http://www.cbsnews.com/stories/2002/11/13/60II/printable529225.shtml.

Counterfeit Products U.S. businesses estimate their losses at nearly $250 billion annually because of counterfeiting -- the theft of patents and trademarks to market bogus products -- often manufactured outside the U.S. Once confined to luxury goods, this practice now encompasses prescription drugs, clothing, toys, electronics, auto parts, liquor, chemicals -- anything with a brand name. At a time when the global economy is struggling, losses incurred by this form of piracy would otherwise go to create new jobs and boost the economy. Dishonesty and greed are taking their toll.

Digital Piracy A couple of decades ago, few people felt guilty about making tapes of music or TV shows. But who could have foreseen today's widespread piracy? Digital technology allows nearly effortless copying of music, movies, video games and software. This theft costs the entertainment industry billions annually. Napster, the hugely popular bootleg music file trading service, was shut down three years ago, only to be replaced by similar operations. Unprincipled tekkies continue to crack DVD copy protection codes, while the entertainment industry resorts to legal hardball to protect itself. Yet few "pirates" believe they are doing anything wrong.

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