Response
to Ignorance or Insider Trading?
In the December 2001 issue of PA Times, the Ethics Moment discussed an ethical dilemma involving a young analyst who, in his second month of work for a federal law enforcement agency, divulged confidential information to an acquaintance that is affiliated with a very prestigious think tank. Only after the analyst divulged the confidential proposal information did he realize his error. The analyst was unaware he was not at liberty to reveal information about requests for proposals. In the midst of this dilemma, the analyst confided and confessed his actions to a co-worker. She subsequently suggested that discussing the situation with his boss would only result in termination of future handling of confidential documents. Many questions surfaced during analysis of this dilemma. Is this analyst error simply ignorance? Did the young analyst act unethically? What role did the organization take to prevent unethical acts?
Gerald Caiden, a prominent ethics researcher, noted that when bureaupathologies grip systems, the problems caused are not the individual failings of individuals who compose organizations, but the systematic shortcomings of organizations that cause the individuals within them to be guilty of malpractices. Despite the mistake of the analyst, this dilemma appears to have emerged, in Gerald Caiden’s words, out of the systematic shortcomings of the organization. In order to prevent recurrence, suggestions for structural and cultural organizational change must be embraced. To maximize effectiveness and efficiency, the agency must begin to proactively approach issues of ethical conduct and establish its organizational values.
It can be asserted that the analyst is guilty both of insider trading and ignorance; however, the latter is the cause of the former. Moreover, it is our belief that the young analyst did not intentionally act unethically when divulging the information. The analyst realized his mistake only after he familiarized himself with the formal ethics booklet provided in training. The organization abdicated the responsibility of creating a collectively accepted values system. Although the agency provided the analyst with the ethics booklet, the culture of the organization was not conducive to employees collectively embracing ethical standards. Without clearly understanding the organizational values, the analyst is forced to rely on his own individual values to resolve the dilemma.
The analyst is faced with two base approaches to resolving this dilemma. He may accept the role of whistleblower and admit his error while also drawing attention to the failure of the organization to ensure employees are aware of all ethical responsibilities. Or, in the interest of self-preservation, he may admit to nothing and accept the ethical culture of the organization. As noted by Montgomery Van Wart in his book, changing Public Service Values, the analyst is faced with the dilemma of sacrificing his individual values of honesty, consistency, coherence and reciprocity in order to preserve his position of employment. Conversely, the analyst may choose to uphold his own civic integrity and risk the loss of his employment.
The personal ethical choice for the analyst is to approach the division chief in an honest and forthright manner. The analyst should explain the circumstances of the incident and illustrate his lack of knowledge. Although unlikely within this organization, it is possible the division chief may accept the analyst’s error and take steps to improve the culture of the organization. However, from the analyst perspective as a new employee, it is more likely that he will conceal his mistake and subsequently accept the current values put forth within the organization in order to sustain employment.
Another issue surfaces when evaluating the leadership roles within this organization. The division chief for the analyst does not communicate standards or expectations to his team members. Based on the information provided, it appears this leader operates by using a culture of fear among his employees, and he approaches problem issues reactively. His leadership style is not indicative of an open and transparent culture within the organization. By not developing transparency in the culture, the division chief has effectively encouraged a climate of secrecy with employees to keep mistakes quiet. In order to change this behavior within the division and organization, he must develop an environment conducive to open exchange and transparency.
The shortcomings in this dilemma are not solely that of the analyst or the division chief. This agency failed to effectively transcend its expectations to employees through a poorly developed values system that was sparingly embraced in a reactive environment. A large part of the organizational failing can be attributed to the absence of a strong code of ethics, leadership and employee ownership of the organizational values. The analyst was given an interim secret clearance for a position on a grant and contract review board after only two months of employment. A federal agency should not delegate such clearance without enumerating the conduct expected of employees within high-security positions.
To prevent a similar recurrence of this dilemma the agency must develop clearly stated and collectively accepted values. Furthermore, the agency must allow employees to participate in the development of values and ethical standards in order to encourage individual and ultimately collective ownership. Employee ownership of organizational values encourages operation under an agreed framework of ethical standards. By involving employees in the values formulation process and eagerly transcending the organizational values to new employees, the agency will develop strong ownership of values and personal action to uphold them.
It is also imperative that employees be empowered with the necessary tools to conduct themselves in the most professional and ethical manner within any given organization. The internal structure of the agency should echo underlying cultural values embraced by leadership and employees alike. In this ethical dilemma, no clear organizational values are evident. The agency seems to have a reactive approach to ethical standards and dilemmas in the workplace. This is evidenced by the analyst’s behavior and the reaction of his co-worker.
Ultimately, the agency must also accept a proactive roll. Deep structural and organizational reforms must be made in order to develop a culture of transparency in which values are operational. If the agency had recognized the importance of transcending organizational values, it is possible the analyst would have embraced the values and maintained lawful and ethical behavior.
This ethical response is
provided by MPA students in the Ethics in Public Service course at the