Sermon: Non-Judgmental Integrity

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Non-Judgmental Integrity

By Charles Rush

February 17, 2002

got this a week ago, not surprisingly from one of Arthur Andersen's competitors. It was entitled “Enron Explained”. It takes off on the well-known Two Cows theory of explanation. As in:

Feudalism: You have two cows. Your lord takes some of the milk.

Fascism: You have two cows. The government takes both, hires you to take care of them and sells you the milk.

Communism: You have two cows. You must take care of them, but the government takes all the milk.

Capitalism: You have two cows. You sell one and buy a bull. Your herd multiplies, and the economy grows. You sell them and retire on the income.

Enron: You have two cows.

You borrow 80% of the forward value of the two cows from your bank, then buy another cow with 5% down and the rest financed by the seller on a note callable if your market cap goes below $20B at a rate 2 times prime.

You now sell three cows to your publicly listed company, using letters of credit opened by your brother-in-law at a 2nd bank, then execute a debt/equity swap with an associated general offer so that you get four cows back, with a tax exemption for five cows.

The milk rights of six cows are transferred via an intermediary to a Cayman Island company secretly owned by the majority shareholder who sells the rights to seven cows back to your listed company.

The annual report says the company owns eight cows, with an option on one more and this transaction process is upheld by your independent auditor, with no Balance Sheet provided, and a press release that announces that Enron is now a major owner of cows and will begin trading cows via the Internet site www.COW.com (cows on web).

I am sure you now fully understand what happened.

No one came out looking good on that one. Jeffery Skilling, former CEO, Andrew Fastow, CFO, Jeffery McMahon and Jordan Mintz, president and Senior lawyer, Michael Kopper, Managing Director of Global Finance… None of them had a single idea what was going on. All these tope Executives presiding over a company that had numerous off-book deals and went bankrupt on their watch and none of them had any idea what was going on. They sound like my teenager. You drive up. There are 6 teenage boys in a car. Everyone acknowledges that the car was, in fact, wrecked. But, no, nobody knows how it happened. CFO- “I didn't know anything about it.” CEO “I didn't know anything either.” “Any of you guys see any funny business going on anywhere? Nope, nobody knows a thing Mr. Rush. I wish I could help you.” Everyone is guilty but no one has done anything wrong. Even if they were telling the truth, you have to ask yourself as a stock-holder, “what exactly were we paying you guys for?”

And I'm not sure that we are doing any better teaching the next generation about the nature of morals. The NYT reported last week (February 7, 2002, “2 Harvard Students Accused of Embezzling From Theatre Club”) a story on two students at Harvard University. One of them, Suzanne Pomey, was profiled in the Harvard Crimson as one of the 15 outstanding seniors at the college. The other, Randy Gomes, may well be related to the College Chaplain of the same name- I'm not sure. Both of them have been indicted because over $100,000 was embezzeled from the Hasty Pudding Theatricals Club. Both pleaded ‘not guilty' to grand larceny, though Ms. Pomey admitted that she gave the Club's credit card to Mr. Gomes so that he could pay off some drug dealers and that she had transferred money to her account “one or two times.” (Is it not stealing if you only do it one or two times?)

Ms. Pomey told the judge that she had repaid Hasty Pudding Theatricals ‘as much as $23,000.' That is nice, but even if true, I think that still leaves about $77,000 still unaccounted for.

Mr. Gomes blamed his behavior on his use of the drug ecstasy and crystal methamphetamine which “clouded his judgment”. Now there is shocking news. The article also noted that Mr. Gomes purchased stereo and video equipment for himself and bought several airline tickets to New York, Chicago, Palm Springs California, and Cape Cod.

I don't know either of these two, but the way that the article was written, you presume that these two had every opportunity growing up, were afforded every privilege, come from solid families- and… what they learned was that they were entitled and that it was very expensive to maintain the lifestyle of their parents. I think this article grabbed me because it is a living account of my worst fears for the next generation. I'm worried that in all that we have provided for them, that the main thing they will have learned is the desire to maintain the lifestyle we have given them at all costs- that somehow allows them to treat the colleges money like it was their parents Master Card- something that they might liberally dip into as a kind of loan that never really needs to be paid back. It gives new meaning to in loco parentis- the idea that Colleges ought to act as surrogate parents for college kids.

Finally, in between, college and the CEO's of major corporations, the last couple weeks have detailed the interior moral psyche of Sid Rosenberg, age 34, the sports reporter on Don Imus' radio show in the morning. Mr. Rosenberg admitted, on air, that he had taken half a dozen shirts from the dry cleaners only to discover that they weren't his when he returned home. But, rather than return them, Mr. Rosenberg decided to wear all of them and return them dirty. What followed was several weeks of Mr. Rosenberg wondering aloud, ‘what was wrong with that?' In the process of exculpating his detiorating reputation, he admitted to occasionally taking several papers at a time from the paper box while paying for only one; he admitted that several times he had skipped out on his bill at a restaurant because he didn't have enough money to pay for it. In none of these cases, did he see anything really wrong with his behavior, though he admitted that if these things happened to him, he would be fuming with anger.

This is why we need Lent in our lives. Lent is a season for moral introspection. We are not given over to moral inspection naturally. We never seem to get around to it on our own. And there is no moral doctor we can go to see annually for a check-up, to give us a read out like an EKG to show us just how out of shape spiritually we have really become.

And we shield ourselves from any kind of personal reflection by group involvement. We are surrounded by people that are more or less like ourselves, and this acts as a spiritual shield against too much reflection, because we only have to judge ourselves relative to them. I'm sure that this is what was going on at Enron, in large part. People said something like this. “Relatively speaking, this isn't that far out of line because everyone else that I know is doing something more or less the same, and no one is complaining because there is a lot of money to be made for those who are clever.” Until, the big end comes, and then everyone else in the world says, ‘what were you guys thinking?' So, finally, the employees say to themselves in the shower in the morning, ‘what were we thinking?'

We are exceedingly accomplished at fooling ourselves morally because moral fat is not visible for the most part. And Group think is great protection. Lately, I've started swimming again. It is a pretty sad sight but what I lack in grace and speed, I make up for in distance. And I'm getting better. The group that I swim with are mainly retired folks and a group of, shall we say, acquatically-challenged people. As I said, I do a lot of laps, keep a steady pace, which means I have a lot of free time on my hands. I know I'm strange, but I have this testosterone delusion from time to time that I am actually getting in shape and I imagine myself speeding up and catching the Olympic swimmer from Australia. Never mind that the Olympic swimmer from Austrailia is really a 75 year old guy that is taking his third swimming lesson. Probably, I think to my deluded self, I'm not that far from Mark Spitz or Rowdy Gaines. I can hear the announcer Bob Costas from CBS… “Here comes the American turning for home… Chris, what a story of a middle age comeback.”. It is completely delusional.

The other day, the pool was nearly empty, I was deluding, when this 17-year-old Butterfly swimmer… Probably she missed practice and was making up a few laps, jumped in the lane next to me. It was like… whoosh… there goes Flipper. She wasn't just a little faster, she was, like 3 times as fast… and not really working that hard. Lap after lap this goes on… a really depressing encounter with reality. Finally, I said to her- underwater so I don't think she could hear me. “Well, Just try carrying this tire around with you Missy. Let's see how fast you go then?” It was just sort of sad, pathetic really, on my part.

But delusion is like that. You surround yourself, day in and day out, with people that make the same moral and spiritual compromises that you do, people who adjust their sights to the horizons of the world that is defined for them by their work environment, and throw in a sprinkling of folks that could- at best- be described as ‘morally challenged', and you think you are… “you know… pretty ethically svelt… I mean for a guy that has to do what I have to do… and… you know… provide for my family what they are accustomed to… Hey look this is a very difficult business… and it could be a lot worse- trust me on that one.” It is just sort of pathetic.

That is why we need Lent. Classically, we used the physical realm as a gateway to the spiritual realm. It remembers the 40 days that Jesus spent in the wilderness being tempted by Satan, growing in clarity in his character, in order to fulfill the mission that he had to fulfill.

In the Middle Ages, people were encouraged to give up one thing that they really loved, say desert, or alcohol. It wasn't supposed to be something that you wanted to give up already, but something that you really desired. The test was for just 40 days. Anyone can go without for 40 days. Except… The point being, that if you really love that evening glass of wine, and you give it up, then every evening you have this encounter with your finitude. Daily, you have this struggle. And you find your mind making these bizarre rationalizations- “one glass of wine is actually good medicinally… It's not like I'm going to finish the bottle”. Or, “normally, I would skip it, but this has been an excruciating day and my God, enough is enough.” On and on the mind goes, until Libido convinces Superego that Ego deserves a little toddy. And then Ego takes one and Superego says “You are weak” and Ego tries to stave off guilt and shame in a variety of different ways- usually through various strategies of willed ignorance. Or you just run away.

The stockbroker Frank Gruttadauria[i], aged 44, at S.G. Cowen until it was bought by Lehman Brothers, systematically pilfered the accounts of his clients for 15 years. He couldn't take it anymore and left his girlfriend a note on January 12th that he wasn't what he appeared. “Remember Joe Black”, referring to the movie starring Brad Pitt, he left in the letter.

He took off with about $150 million in other peoples money, after years of being an investor that paid attention to his clients, even taking some of them out to dinner, like Golda Stout, a grandmother, aged 86, who gladly received a kiss on the cheek at the end of the night from Mr. Gruttadauria, before he looked around her house to make sure it was safe. Mrs. Stout thought she had $2.5 million and found out yesterday she only has $86,000 in her account. “I could kill him”, she said but “he was really, really nice to me.”

Mr. Gruttadauria couldn't live with his conscience any more, so he fled. He even left the F.B.I. a note explaining his transactions. And he wrote to his mother that he had no idea how to live like a fugitive and he hoped she would remember him as a boy. It appears that his guilt got to him and he is just making the rest of this up as he goes.

That is a classic response on our part, just split – just avoid the whole thing, just quit the relationship, just start over – fresh beginning – out – done. Learn from it and move on. It conveniently avoids any consequences. It conveniently deflects any responsibility.

Jesus suggests for us a different path for our healing. He suggests that we make restitution to those that we have wronged. He suggests that we think of creative ways restoring that harm that we have inflicted on others.

Like the little man, Zaccheus, the tax collector that comes to hear the famous teacher Jesus. He climbs the tree, listens to the very positive words of Jesus, and is led, spontaneously to say, “I shall restore 4 fold that which I have taken from the poor.” Now, tax collectors made their profit margin by taking from the poor. The Roman authorities set the amount that each of them had to turn in, somehow, someway. The Romans left quite a lot of leeway as to how they did it. And the Tax collectors could use the Roman army to squish you like a bug, if you didn't pony up. Whatever, the tax collector took in, over and above what he owed the Imperium of Rome, he kept as his commission. It was a dirty business. These were the bottom feeders of the 1st Century. When Zaccheus announced that he was going to repay these poor people, over and above, what they had lost, Jesus says to him, “Today Salvation has entered your house.”

Jesus taught us that God wants us to move towards moral and spiritual integrity. He taught us that the way to do that spiritually was through repentance. Repentance is not remorse, feeling bad about what you have done. We often hope our children will just feel bad about doing things they know are wrong. But Jesus was remarkably uninterested in remorse, uninterested in how we felt about things.

Repentance involves two things. As I said, already, is about making recompense. And secondly, it is about changed behavior. Jesus taught us that God wants for us reconciliation, a restored relationship. Recompense is part of the way that reconciliation begins to take place. It encourages forgiveness on the part of the person who was wronged because it is concrete evidence that acknowledges the depth of the injury that you have caused other people. And it also speaks of the fact that you actually desire a reconciliation of the relationship as well. The model that Jesus held out for us is not repentance or forgiveness. It is Both/And. We make restitution, we change our behavior and others forgive us. Together, we grow. Together, we mature morally and spiritually.

This makes us stronger spiritually and morally. We begin to develop real character, real substance. The reason that this takes place so rarely in our world is that it is very difficult for us to be so directly honest with ourselves. It is a very vulnerable to admit that we are wrong; it is even more vulnerable to admit that the relationship is more important than we are as individuals. We could be embarrassed by the other person and so often we don't really have relationships with people we harm that are so intimate or trusting. Realistically speaking, the only way that the kind of repentance that Jesus had in mind can happen with people we don't know well is if we already have integrity, if we already understand that reconciliation is more about what we need to do than it is about how it is received or what others will make of it.

Which is why the church is so really important. By ‘the Church' I don't mean the institution exactly, though usually the institution encourages real Spiritual fellowships to occur. By the Church, I mean, the real relationships that you are able to work through reconciliation unto integrity. As the Christians used to say, moments like that, the Spirit of God is moving, and that is when Church meets, for real.

If you are lucky, you will find yourself with a circle of people around you that you can trust, really trust. You will find yourself with a circle of people that will not let you just do anything you want, but will encourage you to live out of your higher self and become what you were meant to be. You will find yourself with a circle of people that will confront you and remind you when you fall short, when you are a disappointment to yourself and to other people. You will find yourself with a circle of people that will work things through with you until they get worked out, who won't give up on you and won't let you go. And that, my friends, is where you will meet the Spirit of the Christ that is at work amongst us.

It keeps us honest. It keeps us from petty judgmentalism. And most of all it moves us towards integrity. May you be graced to have the Spirit move in your midst this season.

Amen.

[i] This comes from the article in the Wall Street Journal, Friday, February 8, 2002, p. 1, 12.