- Steven Chibnall and Peter Saunders, “Worlds Apart: Notes on the Social Reality of Corruption” (1977) 28(2) British Journal of Sociology 138, 142 quoting Poulson, an architect charged with corruption.
- Napoleon, Maxims, 1804.
- See eg Marleen O'Connor, “The Enron Board: The Perils of Groupthink” (2003) 71 University of Cincinnati Law Review 1233; Donald C. Langevoort, “The Organizational Psychology of Hyper-Competition: Corporate Irresponsibility and the Lessons of Enron” (2002) 70(5/6) George Washington Law Review 968; Donald C. Langevoort, “Resetting the Corporate Thermostat: Lessons from the Recent Financial Scandals about Self-Deception, Deceiving Others and the Design of Internal Controls” (2004) 93(1) Georgetown Law Journal 285; James Fanto, “Whistleblowing and the Public Director: Countering Corporate Inner Circles” (2004) 83 Orlando Law Review 435.
- See for example Milton C. Regan, “Moral Intuitions and Organizational Culture” (2007) 51 St Louis University Law Journal 941; Andrew Perlman, “Unethical Obedience by Subordinate Attorneys: Lessons from Social Psychology” (2007) 36 Hofstra Law Review 451; Nancy Rapoport, “The Curious Incident of the Law Firm that did Nothing in the Night-Time” (2007) 10(1) Legal Ethics 98.
- This public company was originally the Australian Wheat Board. It paid significant “kickbacks” to the Iraqi Government in contravention of United Nations sanctions between 1999 and 2003.
- See for example C.R. Snyder, Raymond L. Higgins and Rita J. Stucky, Excuses: Masquerades in Search of Grace (Hoboken, NJ, Wiley, 1983), 1; B.E. Ashforth and V. Anand, “The Normalization of Corruption in Organizations” (2003) 25(1) Research in Organizational Behavior 52; C. Argyris, Overcoming Organizational Defenses. Facilitating Organizational Learning (Boston, Allyn and Bacon, 1990); C. Argyris, “Teaching Smart People How to Learn” [1991] Harvard Business Review, May–June, 99.
- Ashforth and Anand, ibid.
- For a similar argument in the context of moral intuitions see Regan, supra n. 4.
- Discussed extensively in the text accompanying infra, n. 44.
- See also Kath Hall, “Why Good Intentions are Not Enough: Psychology, Ethical Blindness and Legal Decision-Making” (London, Routledge, forthcoming 2009).
- Commonwealth of Australia, Inquiry into certain Australian Companies in relation to the UN Oil-for-Food Programme, Final Report (2006), vol. 1, xi (referred to in this article as “Cole Report”).
- Snyder et al, supra n. 6, 1.
- See Roy F. Baumeister, “A Self-Presentational View of Social Phenomena” (1982) 91(1) Psychological Bulletin 3; Dan P. McAdams, The Stories We Live By (London, Routledge/Guilford, 1993); T. Sarbin, “The Narrative as Root Metaphor for Psychology” in T. Sarbin (ed), Narrative Psychology: The Storied Nature of Human Conduct (Westport, CT, Preager, 1986), 3.
- Dan P. McAdams, “Personal Narratives and the Life Story” in Lawrence A. Pervin and Oliver P. John (eds), Handbook of Personality: Theory and Research (New York, Guilford press, 2nd edn, 1999), 478, 482.
- See Charles Ford, Lies! Lies!! Lies!!! The Psychology of Deceit (Arlington, VA, American Psychiatric Press, 1996) and McAdams, supra n. 13.
- See for example E. Aronson and J.M. Carlsmith, “Performance Expectancy as a Determinant of Actual Performance” (1965) 65 Journal of Abnormal and Social Psychology 178 and Dolly Chugh, Max H. Bazerman and Mahzarin R. Banaji, “Bounded Ethicality as a Psychological Barrier to Recognizing Conflicts of Interest” in D.A. Moore et al (eds), Conflicts of Interest: Challenges and Solutions in Business, Law, Medicine, and Public Policy (Cambridge University Press, 2005).
- Ann E. Tenbrunsel and David M. Messick, “Ethical Fading: The Role of Self-Deception in Unethical Behavior” (2004) 17(2) Social Justice Research 223, 226.
- See Michael L. Benson, “Denying the Guilty Mind: Accounting for Involvement in a White-Collar Crime” (1985) 23(4) Criminology 585; Michael L. Benson, “The Fall From Grace” (1984) 22(4) Criminology 573.
- Guy Adams and Danny Balfour, Unmasking Administrative Evil (London, Sage, 1998).
- Gresham M. Sykes and David Matza, “Techniques of Neutralization: A Theory of Delinquency” (1957) American Sociological Review 664.
- “Ex-Enron CEO indicted: Skilling pleads not guilty to all counts, released on $5 million bail” MSNBC at <www.msnbc.msn.com/id/4311642.>
- Ibid.
- “Lay, Skilling guilty on nearly all counts: Former CEOs convicted of fraud, conspiracy, face lengthy prison terms” MSNBC May 25 3006, <www.msnbc.msn.com/id/12968481.>
- David Luban, “Making Sense of Moral Meltdowns” in Deborah Rhode (ed), Moral Leadership: The Theory and Practice of Power, Judgment and Policy (Hoboken, NJ, Jossey Bass/Wiley, 2006) 57, 70.
- Ashforth and Anand, supra n. 6.
- See also Blake Ashforth and Glen Kreiner, “ ‘How can you do it?’: Dirty Work and the Challenge of Constructing a Positive Identity” (1999) 24(3) The Academy of Management Review 413; Mary Douglas, How Institutions Think (London, Routledge, 1987), 69.
- Blake Ashforth and Yitzhak Freid, “The Mindlessness of Organizational Behaviors” (1988) 41(4) Human Relations 305, 308. See also Peter Fleming and Stelios C. Zygidopoul s, “Time and Deceit: A Process Theory of How Lying Escalates in Corrupt Organizations” (Paper presented at the Theorizing Process in Organizational Research Conference, Santorini Greece, 2005) and Theodore M. Schartz, Stephen X. Doyle and Robert A. Eberle, “The Strategic Management of Corporate Myths” (1998) 11 International Journal of Value-Based Management 237.
- This is similar to the argument of lawyers “seeing no evil”. See further Mark Sargent, “Lawyers in the Perfect Storm” (2004) 43 Washburn Law Journal 1, 32.
- Ibid.
- Richard Wasserstrom, “Roles and Morality” in David Luban (ed), The Good Lawyer (Lanham, MD, Rowman & Littlefield, 1984), 26.
- Ibid.
- Ibid. See also Tim Dare, “Mere-Zeal, Hyper-Zeal and the Ethical Obligations of Lawyers” (2004) 7(1) Legal Ethics 24.
- Christine Parker and Adrian Evans, Inside Lawyers' Ethics (Cambridge University Press, 2007), 14.
- As discussed below, this argument makes more sense when applied to in-court advocacy than when applied to in-house legal advice unrelated to litigation. It has also been critiqued by many, perhaps most noticeably David Luban, “The Adversary System Excuse” in Luban, supra n. 30, 83–122.
- Wasserstrom, supra n. 29, 29.
- Christopher J. Whelan “Some Realism About Professionalism: Core Values, Legality, and Corporate Law Practice” (2006–7) 54 Buffalo Law Review 1067, 1113.
- Doreen McBarnett, “After Enron will ‘Whiter than white collar crime’ Still Wash?” (2006) 46 British Journal of Criminology 1091, 1091–109.
- Sargent, supra n. 27, 33.
- Roger C. Cramton, “Enron and the Corporate Lawyer: A Primer on Legal and Ethical Issues” (2002) 58 Business Lawyer 143, 173 in Sargent, supra n. 37, 33.
- Sargent, supra n. 27, 33–34.
- Sargent, supra n. 27, 33–34.
- Ibid.
- Stephen Bartos, Against the Grain—The AWB Scandal and Why it Happened (Sydney, University of New South Wales Press, 2006), 20.
- Ibid.
- Cole Report.
- Caroline Overington, Kickback: Inside the Australian Wheat Board Scandal (Sydney, Allen & Unwin, 2007) and Bartos, supra n. 43.
- Overington, ibid; Transcripts of Commonwealth of Australia, The Inquiry into Certain Australian Companies in relation to the UN Oil-for-Food Programme.
- Cole Report, vol. 2 [9.16].
- Ibid [9.1, 9.2].
- Ibid, vol. 1 [1.102].
- Ibid, xiii.
- Ibid, xiv.
- Ibid, xxi.
- Ibid.
- Ibid, vol. 2 [9.65].
- Ibid [9.83].
- AWB Legal employed five solicitors between December 2000 and 2003. A further five had joined the Division by 2006. From December 2000 until April 2006, AWB Legal was headed by General Counsel, James Cooper. Cole Report, vol. 2 [9.109, 9.110].
- Cole Report, vol. 2 [9.113].
- Arthur Andersen's understanding of its retainer as set out in a letter to AWB's Senior Corporate Counsel, Ms Sachak, dated 5 September 2000: Cole Report, vol. 2 [22.2].
- Ibid.
- Ibid. The Arthur Anderson report is circumspect in its language and does not explicitly find that breach of UN sanctions was occurring.
- Ibid, Ex 731, WST.0029.0050 at 0053, para. 21.
- See also Commissioner Cole's comment that Cooper had a copy of the final report prior to being given one in June 2003, at Commonwealth of Australia, vol. 2 [22.22]. See also Transcripts 3326. 26 and 3326.39.
- Overington, supra n. 46, 91 and 92. This deal was publicly lauded by the Australian Minister for Trade and the Prime Minister on the delegation's return to Australia.
- Cole Report, vol. 4 [31.35].
- Ibid, vol 1, lviii-lix.
- AWB Ltd v Cole (No 5) (2006) 234 ALR 651, 711 [229]. The Federal Court found that the price in these contracts was inflated so as to extract money from the United Nations' escrow account and pay it indirectly to the Iraqi regime through a trucking company.
- Cole Report, vol. 3 [27.313].
- In 1996, BHP Petroleum made a “humanitarian” donation of wheat worth US$5 million to Iraq. Iraq was not told that the wheat was a donation. Tigris and AWB later represented to Iraq that the shipment of wheat was paid for by a loan to Iraq of US$5 million. BHPP assigned to Tigris any rights relating to the shipment. During 2001–2, AWB assisted Tigris to persuade Iraq to repay the “loan”: Cole Report, vol. 1, xlviii. Iraq's motives for agreeing to this are not clear. See Overington, supra n. 46, 90.
- Cole Report, vol. 1, lx.
- Ibid.
- Ibid, vol. 3 [27.424]. See also vol. 1, lxi: “The recasting of the [sham Tigris] transaction was done on the advice of, or with the concurrence of, internal and external lawyers for AWB.” Mr Quennell was a solicitor with the firm of Blake, Dawson, Waldron.
- Cole Report, Transcript, 26 September 2006, 7238.
- Prime Minister Howard press conference, Kirribilli House, 8 August 2002, quoted in Overington, supra n. 46, 92.
- Cole Report, Transcript, 26 September 2006, 7238.
- AWB tried to prevent discovery by claiming client legal privilege over Lyon's advice.
- Cole Report, vol. 3 [27.318]. Transcript, 26 September 2006, 7274, 7276.
- See discussion above of professional rationalizations and reference to Sargent's work above.
- Cole Report, Transcript, 26 September 2006, 7274.
- Cole Report, vol. 1 [1.40].
- Ibid, vol. 5, Appendix 26. See also the discussion of the regulatory environment in Linda Botterill and Anne McNaughton, “Laying the Foundations for the Wheat Scandal: UN Sanctions, Private Actors and the Cole Inquiry” (2008) 43(4) Australian Journal of Political Science 583, 589–91.
- Overington, supra n. 46, 265. ABC Radio National, “ATO rules AWB kickbacks not a bribe”, PM, 20 December 2006 <www.abc.net.au/pm/content/2006/s1815915.htm,> last visited 20 October 2007.
- Cole Report, vol. 1, liii–liv (Recommendations 1–3).
- Ibid, vol. 3 [27.422].
- Ibid.
- Ibid, vol 1, xii.
- Ibid.
- The only lawyer referred by Commissioner Cole for further investigation by law enforcement authorities was General Counsel, Mr Cooper. That referral related to possible offences against the Corporations Act (2001) (Cth), concerning misleading the AWB Board over the Tigris “debt” arrangements. It was submitted to Commissioner Cole that Ms Lyons and Ms Peavy might have committed an offence of aiding or abetting AWB in relation to offences of money laundering arising under contracts A1670 and A1680 (Ms Lyons) and/or falsification of books/documents concerning the Tigris transaction (Ms Lyons; Ms Peavy). However, Commissioner Cole was not satisfied that AWB had committed these offences. Consequently, he made no adverse findings against either Ms Lyons or Ms Peavy. See Cole Report, vol. 5, Appendix 26 and vol. 4 [31.426]; [31.443–31.445].
- Cole Report, vol. 1, xii.
- See Richard Coughlan, “Codes, Values and Justifications in the Ethical Decision-Making Process” (2005) 59 Journal of Business Ethics 45, 50.
- See Linda Botterill, “Doing it for the Growers in Iraq? The AWB, Oil-For-Food and the Cole Inquiry” (2007) 66(1) Australian Journal of Public Administration 4.
- Ibid, 11.
- Mark A. Sargent, “Lawyers in the Moral Maze” (2004) 49(4) Villanova Law Review 101, 105–10.
- Ibid, 880.
- Chibnall and Saunders, supra n. 1.
- B.A. Green, “Professional Challenges in Large Firm Practices” (2005) Fordham Urban Law Journal 185, 502. See also Botterill, supra n. 91, 11.
- Chibnall and Saunders, supra n. 1, 139.
- See eg comments made by former Prime Minister John Howard when he said, “There was absolutely no belief, anywhere in the government, at that time that AWB was anything other than a company of high reputation”, BBC NEWS, “Howard Denies Iraq Bribe Warnings” at <http://news.bbc.co.uk/go/pr/fr/-/2/hi/asia-pacific/4901938.stm.>
- New paper and earlier evidence.
- See Overington, supra n. 46, 142.
- Sargent, supra n. 93, 879.
Legal Ethics
Volume 11, 2008 - Issue 2