Thursday, February 9, 2012

Clorox Takes “Fresh Step” Into the Litter

As a younger attorney, I got my clock cleaned by the National Advertising Division (NAD) of the Better Business Burea (BBB) in New York City when I unwittingly thought I understood the high standard by which they review ads on Madison Avenue. The NAD and its review panel of advertising executives are the folks who review ads to see if an advertising claim is substantiated by actual data or evidence. It was there I learned that what seemed logical to most of us needs to have actual documentation to establish its “truthiness.” One thing I learned was that just because the ingredients in a product are known to behave in a certain way, like absorbing odor, it isn’t a valid advertising claim unless you test the actual product that a consumer can purchase. Anything short of that is an “unsubstantiated claim.”
If a company whose ads are found false doesn’t take the warning of the NAD and change its ad copy, the case is referred to the Federal Trade Commission (FTC). In my experience, it’s always a good idea to listen to the NDA because the FTC has subpoena power and can show up with a warrant to seize your hard drive. Worse case is when an injunction is filed in a court of law and you have a few hours as a manufacturer to find the data files and appear in court, and a judge has the discretion to pull your product off the shelves without a chance to fully explain the situation.
In the case of Clorox’s Fresh Step Kitty Litter, it was a judge rather than the NAD or FTC who found the superiority claims of Clorox were unsubstantiated. Clorox failed to have statistically significant data to back up the claims. Many advertisers resor0t to puffery, such as “Papa John’s is the best pizza!” which is not really a superiority claim. To say a consumer “prefers” one pizza over another, the company would have to do a blinded study that had enough test subjects to create a statistically significant preference indication and keep that data on file during and after the ad was shown to the public. In case of Fresh Step, Clorox couldn’t do more than discuss the ingredients in the abstract and their use of glass jars to determine odor. It doesn’t appear that anydata using the Fresh Step product and its competitor was presented.
Here’s the news story from AP Wire:
A Manhattan judge ruled yesterday that Clorox, maker of Fresh Step cat litter, made “literally false” claims in its litter commercial when it said its product kills odor better than Arm & Hammer’s Super Scoop, a rival litter, made by Church & Dwight Co. (C & D). U.S. District Judge Jed S. Rakoff ordered Clorox to stop airing the ads, which began running in February 2011.
In his ruling, Judge Rakoff cites the “unrealistic conditions” of testing Clorox claims to have performed on the litter. The company claimed to have conducted a “jar test,” which it says proved carbon, rather than baking soda, better eliminated cat odor.
“The court agrees with C & D’s expert that it is highly implausible that eleven panelists would stick their noses in jars of excrement and report forty-four independent times that they smelled nothing unpleasant,” the judge said. The judge added that continuing to air the ads would cause “irreparable harm” to Church & Dwight.
A Clorox spokesman said the company is disappointed in Judge Rakoff’s ruling and plans to vigorously defend the matter, according to the Wall Street Journal.

Sunday, December 12, 2010

Facebook Founder Follows Financial Superheroes to Give Away Fortunes

Billionaire Mark Zuckerberg, cocreator of Facebook,
gives away majority of his fortune

I went to a business lunch with an attorney a few months ago who was very wealthy. Not earned wealth, but epic family money. Unlike many of my friends, who would just pick up a fifteen dollar lunch check and say "you can get it next time," more for convenience than anything else, this particular attorney studied the bill intensely. She then hailed down the waiter abruptly and went over the bill in great detail. With the mistake that had been made in the bill was discovered (an extra iced tea!! Aaahhhh!), she used that as a rationalization to only tip ten percent on her soup. "That will show him to not be perfect," she must have thought. I marveled at the thrift of the attorney knowing she would never be able to spend all of the money in her many accounts and portfolios.

I've also found a different, more generous, approach to wealth by those who were suddenly wealthy. New money seems to be less of a burden. Despite earning their fortunes through tireless work or a moment of genius that resulted in a novel patent idea, I have had clients who were so generous it was inspiring. I know a professor at a major teaching hospital who is paid about one hundred million dollars a year for a medical device he invented and licenses to a major pharmaceutical company. He drives a 1985 pick up truck and worn blue jeans every day. And unlike lottery winners who are suddenly wealthy, but didn't earn the money, he gives a large portion of his earnings each year to nonprofits in San Antonio and Kerrville, Texas. He's happy with the life he had when he became remarkably wealthy and had the good sense to not change what already worked. Unlike the attorney who was not very generous to the waiter, money was not a burden to him because he had not been born with it. It is a luxury to have... and to let go of...

Bill Gates and Warren Buffett are self-made men who concluded recently they could substantially change civilizations by focusing their billions of dollars on certain humanitarian efforts. To increase the impact of "letting go of" some of their fortunes, they have invited other billionaires to dinner (it was probably pretty nice, don't you imagine? No cold cut platter I'm guessing) to discuss their goals. It conjures a vision of financial super heroes with special cash capes and cool gadgets that only gazillionaires could have made in underground "Iron Man" type labs.

From what the Wall Street Journal reported, it sounds as though the "new money" billionaires have decided that growing huge wealth into even larger wealth is not as exciting as helping millions of people live better lives. If that isn't an inspiration, I don't know what is. Here's a take on the story by Philiana Ng.

Mark Zuckerberg to Give Away FortuneFacebook founder Mark Zuckerberg has signed on to give away a portion of his fortune, the Wall Street Journal reports.

The 26-year-old is one of 16 billionaires who have agreed to join "Giving Pledge," which asks its participants to publicly commit to giving away a majority of their wealth.

Zuckerberg, who founded Facebook in his Harvard University dorm and is portrayed by Jesse Eisenberg in The Social Network, is one of the youngest billionaires in the world. According to Forbes, he is said to be worth $6.9 billion, though the Journal notes his value is theoretical.

Earlier this year, Zuckerberg donated $100 million to the Newark public school system, which was announced on The Oprah Winfrey Show.

Facebook co-founder Dustin Moskovitz, who is played by actor Joseph Mazzello in the film, has also agreed to participate.

New additions to the pledge include AOL co-founder Steve Case, Carl Icahn and Michael Milken, an ex-junk-bond king. Other billionaires who had previously signed on include Oracle founder Larry Ellison, George Lucas and New York Mayor Michael Bloomberg.

Bill Gates and Warren Buffett started Giving Pledge in order to persuade the rich to be more philanthropic. Last year, the two hosted several dinners for billionaires to discuss setting up the pledge, which then led to its official launch in June.

"I view this as a call to others who might in their 30s or 40s use some of their creativity to get involved in philanthropy earlier in life," Milken said of Giving Pledge.

Steve and wife Jean Case chose to participate because of they wanted to learn from each other. "It is less about what size of a check that you write and more about the outcome," Steve Case said. His wife noted that people who start web companies, like Zuckerberg and the founders of AOL, want "to change the world," so it was only appropriate that "they are giving back in big ways."

Wednesday, May 5, 2010

Former SEC Investigator (and former Ethics Follies speaker!) May Have Known of R. Allen Stanford's Ponzi Scheme

Is Spencer Barasch the man who single-handedly let alleged Ponzi schemer R. Allen Stanford (pictured left) off the hook three times, costing investors more than $7 billion? Yikes!

Mr. Barasch gave a humous talk at Ethics Follies 2008 about business ethics right here in the River City. I guess Ethics Follies was even more in touch with current ethics issues than it even realized! Who would have guessed that a guest speaker at Ethics Follies could be responsible for a $7 Billion dollar Ponzi scheme?

Or is he an honest Dallas defense attorney unfairly blamed for the failings of a government regulator? Yeah...I have no idea. He seemed like a nice guy when he was at the Empire Theatre and he understood ethics issues which relate to SEC investigations.

The Securities and Exchange Commission's Inspector General has issued a 151-page report that says he was the former. It skewers Barasch, former head of the SEC's enforcement efforts at its Fort Worth office, as a poster child for an agency critics say missed one of the biggest investor scams of our generation. Mr. Barasch and his law firm deny his culpability.

Here's an interesting quote from the Executive Summary of the SEC Inspector General's Report of Investigation on the Allen Stanford debacle:

"Finally, the OIG investigation revealed that the former head of Enforcement in Fort Worth, who played a significant role in numerous decisions by the Fort Worth office to deny investigations of Stanford, sought to represent Stanford on three separate occasions after he left the SEC, and represented Stanford briefly in 2006 before he was informed by the SEC Ethics Office that it was improper to do so.

This former head of Enforcement in Fort Worth was responsible for: (1) in 1998, deciding to close a MUI opened regarding Stanford after the 1997 broker-dealer examination; (2) in 2002, deciding to forward the [redacted] complaint letter to the TSSB and deciding not respond to the [redacted] complaint or investigate the issues it raised; (3) in 2002, deciding not to act on the Examination staff's referral of Stanford for investigation after its investment adviser examination; (4) in 2003, participation in a decision not to investigate Stanford after receiving [Confidential Source]'s complaint letter comparing Stanford's operations to the [redacted] fraud; (5) in 2003, participating in a decision not to investigate Stanford after receiving the complaint letter from an anonymous insider alleging that Stanford was engaged in a "massive Ponzi scheme;" and (6) in 2005, informing senior Examination staff after a presentation was made on Stanford at a quarterly summit meeting that Stanford was not a matter they planned to investigate.

Yet, in June 2005, a mere two months after leaving the SEC, this former head of the Enforcement in Fort Worth e-mailed the SEC Ethics Office that he had been "approached about representing [Stanford] . . . in connection with (what appears to be) a preliminary inquiry by the Fort Worth office." He further stated, "I am not aware of any conflicts and I do not remember any matters pending on Stanford while I was at the commission."

After the SEC Ethics Office denied his request in June 2005, in September 2006, Stanford retained this former head of Enforcement in Fort Worth to assist with inquiries Stanford was receiving from regulatory authorities, including the SEC. He met with Stanford Financial Group's General Counsel in Stanford's Miami office and billed Stanford for his time. Following the meeting, he billed 6.5 hours to Stanford on October 4, 2006, for, inter alia, "review[ing] documentation received from company about SEC and NASD inquiries." On October 12, 2006, he billed Stanford 0.7 hours for a "[t]elephone conference with [Stanford Financial Group's General Counsel] regarding status of SEC and NASD matters." In late November 2006, he called his former subordinate, the Assistant Director who was working on the Stanford matter in Fort Worth, who asked him during the conversation, "[C]an you work on this?" and who in fact told him, "I'm not sure you're able to work on this." Near the time of this call, he belatedly sought permission from the SEC's Ethics Office to represent Stanford. The SEC Ethics office replied that he could not represent Stanford for the same reasons given a year earlier and he discontinued his representation.

In February 2009, immediately after the SEC sued Stanford, this same former head of Enforcement in Fort Worth contacted the SEC Ethics Office a third time about representing Stanford in connection with the SEC matter - this time to defend Stanford against the lawsuit filed by the SEC. An SEC Ethics official testified that he could not recall another occasion in which a former SEC employee contacted his office on three separate occasions trying to represent a client in the same matter. After the SEC Ethics Office informed him for a third time that he could not represent Stanford, the former head of Enforcement in Fort Worth became upset with the decision, arguing that the matter pending in 2009 "was new and was different and unrelated to the matter that had occurred before he left." When asked why he was so insistent on representing Stanford, he replied, "Every lawyer in Texas and beyond is going to get rich over this case. Okay? And I hated being on the sidelines."

The OIG investigation found that the former head of Enforcement in Fort Worth's representation of Stanford appeared to violate state bar rules that prohibit a former government employee from working on matters in which that individual participated as a government employee. Accordingly, we are referring this Report of Investigation to the Commission's Ethics Counsel for referral to the Office of Bar Counsel for the District of Columbia and the Chief Disciplinary Counsel for the State Bar of Texas, the states in which he is admitted to practice law."

Friday, April 23, 2010

Boy Scouts of America's Apology Could Have Saved Millions: The Ethics of Accountability

Do you remember the lawsuit where McDonalds corporation was hit with a really large judgment when the woman spilled her hot McDonalds' coffee in her lap? It was a claim that could have been contained or handled without litigation, but arrogance and a lack of an ethical culture of accountability caused the jury to punish McDonalds and their attorneys (who were reportedly horribly arrogant in front of the jury with their cross exam of the plaintiff). Without having heard the testimony, I am speculating that a similar situaton happened with the man who sued the Boy Scouts of America (a huge organization with good lawyers). It was reported by the judge that no one with the Boy Scout's corporation had even attempted to apologize for the sexual abuse of seventeen boys by the same Boy Scouts assistant troup leader. The Boy Scouts of America was aware that the assistant troup leader had prior sexual abuse incidents in his past, but allowed him to accompany the plaintiff on the campout.

There's no doubt that there are wonderful Boy Scout troups all over the country. However, the corporation itself could probably take a lesson from some of them in taking accountability and respect. Imagine, if you will, for a second that your son was injured at a campout, and you told the company, and they came to your home to tell you how sorry they were, and even offered to pay for counseling or medical care, and perhaps some other cash for your troubles. It is highly likely the settlement would have been less than the $18M judgment. More importantly, headline news about the long history of sexual abuse in the Boy Scouts organization would have been avoided. The actual public relations cost and damage to the organization of this judgment is far in excess of the jury's punative number.

Like McDonalds, the jury is sending a message of accountability and respect. Smart corporations will anticipate the need for a program in their organization to take control of this sort of situation and find genuine remorse for individuals who are harmed or believe that they are. The full story of the historically large judgment follows.

PORTLAND, Ore. - A jury on Friday ordered the Boy Scouts of America to pay $18.5 million to a man sexually abused by a former assistant Scoutmaster in what is believed to be the largest such award against the organization.

Lawyers for Kerry Lewis had asked the jury to award at least $25 million to punish the Boy Scouts for what the jury had already agreed in the first phase of the trial was reckless and outrageous conduct.

They also noted the Boy Scouts had never apologized to Lewis, who said Friday at a news conference that the verdict shows that "big corporations can't be above the law."

Lewis added that an apology "would mean something to me, but I'm not expecting it."

The jury decided on April 13 that the Boy Scouts were negligent for allowing former assistant Scoutmaster Timur Dykes to associate with Scouts, including Lewis, after Dykes admitted to a Scouts official in 1983 that he had molested 17 boys.

The jury awarded Lewis $1.4 million in compensatory damages with that verdict and agreed the Boy Scouts of America were liable for punitive damages to be determined in the second phase of the trial that ended Thursday.

Boy Scouts officials declined to comment on details of the case because other cases are pending, but issued a statement saying it maintains a "rigorous" system to screen Scout leaders.

"The Boy Scouts of America has always stood against child abuse of any kind," it said.

The case was the first of six filed against the Boy Scouts in the same court in Oregon, with at least one other separate case pending. If mediation fails to settle the next cases, they also could go to trial.

Significant award
The amount of the damages surprised Patrick Boyle, editor of the Youth Today newspaper and author of a book about sex abuse within the Scouts.

"That's a lot of money. This is by far the biggest award against the Scouts for sex abuse, probably by several times," Boyle said.

The award is also significant, he said, because it is only against the national Boy Scouts organization and is not divided among any of its local councils or other defendants.

Kelly Clark and Paul Mones, the attorneys for Lewis, told the jury the Boy Scouts were nearly a $1 billion corporation that could well afford punitive damages intended to deter them from similar conduct in the future.

Clark and Mones said Friday after the verdict that publicity about the case also could act as a deterrent.

"They've always settled. And they're silent. No one hears because it does not see the light of day," Mones said. "What we saw here in Portland really pulled back the covers on the Boy Scouts of America, and what it did to cover up."

During the first phase of the trial, Clark and Mones introduced more than 1,000 files the Scouts kept on suspected child molesters from 1965-85 as evidence the organization should have put a sex abuse prevention program into place decades ago.

The Scouts executive now in charge of those files admitted they had never been evaluated or analyzed to help design or determine the effectiveness of a prevention program that is now in place.

A number of witnesses testified for the Scouts during the second phase of the trial that they participated in a training and prevention program since at least the late 1980s. None could say why the Scouts had not yet made the "youth protection training" program mandatory.

Punitive damages
Under Oregon law, 60 percent of the punitive damages awarded by the jury will go to the state crime victim compensation fund.

Because the Boy Scouts have settled some lawsuits out of court, it is difficult to say where the total awards imposed by the Portland jury rank with those of the past.

In a 1987 sex abuse case, an Oregon jury awarded more than $4 million to the victim, including $2 million in punitive damages against the Scouts that were thrown out when the case was appealed. A jury in San Bernardino, Calif., awarded $3.75 million to three sex abuse victims in 1991.

Boyle said from 1984 through 1992, the Scouts were sued at least 60 times for alleged sex abuse with settlements and judgments totaling more than $16 million.

Tuesday, November 17, 2009

"Cusenbary Takes Out Trash Without Being Asked by Wife"

It always seems funny to me that the government has its own press releases. This was the most entertaining back when labs all over the country were investigated by the Office of Inspector General (OIG) billing for labs that weren't actually done. "Lab Scam" was in the news due to the many press releases by the OIG, which bragged with abandon about the millions of dollars recouped for the Medicare Trust. One laboratory paid the largest Medicare settlement in history, and it took on a permanent place in my slide deck that was part of my regulatory talk I did for hospitals, labs and doctor groups before working at Mission Pharmacal. Joking aside, the press releases raise awareness of what is illegal in the area of billing the federal government and raised awareness of why the correct billing codes must be used and audited internally to avoid liability.

It would be cool if we all did press releases when we thought we did a good job, like "Cusenbary Daughter Has Awesome Volleyball Game," or "Cusenbary Takes out Trash Without Being Asked by Wife." This time, it's the SEC who is tooting it's horn about the computer programmers who kept the fraud looking real for Bernie Madoff. I'm glad the SEC has found yet more criminals who were enticed by Bernie's scheme to defraud innocent investors. I just wish they had caught them years ago before people, companies and charities lost everything they had saved. The SEC's press release follows:

Washington, D.C., Nov. 13, 2009 -- The Securities and Exchange Commission today charged two computer programmers for their role in helping convicted Ponzi schemer Bernard L. Madoff cover up the fraud at Bernard L. Madoff Investment Securities LLC (BMIS) for more than 15 years.

The SEC alleges that Jerome O'Hara of Malverne, N.Y., and George Perez of East Brunswick, N.J., provided the technical support necessary to produce false documents and trading records, and took hush money to help keep the scheme going.

"Without the help of O'Hara and Perez, the Madoff fraud would not have been possible," said George S. Canellos, Director of the SEC's New York Regional Office. "They used their special computer skills to create sophisticated, credible and entirely phony trading records that were critical to the success of Madoff's scheme for so many years."

According to the SEC's complaint, filed in U.S. District Court for the Southern District of New York, Madoff and his lieutenant Frank DiPascali, Jr., routinely asked O'Hara and Perez for their help in creating records that, among other things, combined actual positions and activity from BMIS' market-making and proprietary trading businesses with the fictional balances maintained in investor accounts. O'Hara and Perez wrote programs that generated many thousands of pages of fake trade blotters, stock records, Depository Trust Corporation (DTC) reports and other phantom books and records to substantiate nonexistent trading. They assigned file names to many of these programs that began with "SPCL," which is short for "special."

A separate computer internally known as "House 17" was used to process BMIS investment advisory account data at the direction of Madoff, DiPascali and others. The SEC alleges that O'Hara and Perez knew that the House 17 computer was missing a host of functioning programs necessary for actual securities trading and reporting. According to the SEC's complaint, they recognized that the trades being entered into House 17 and the account statements and trade confirmations being sent to investors did not reflect actual trades.

The SEC alleges that O'Hara and Perez had a crisis of conscience in 2006 and tried to cover their tracks by attempting to delete approximately 218 of the 225 special programs from the House 17 computer. But they did not delete the monthly backup tapes. O'Hara and Perez then cashed out hundreds of thousands of dollars each from their personal BMIS accounts before confronting Madoff and refusing to generate any more fabricated books and records.

According to O'Hara's handwritten notes from the encounter, one of them told Madoff, "I won't lie any longer. Next time, I say 'ask Frank,'" meaning that Madoff should rely on DiPascali alone to create the false data and reports.

The SEC's complaint alleges that Madoff responded by telling DiPascali to offer O'Hara and Perez as much money as necessary to keep quiet and not expose the misrepresentations. O'Hara and Perez considered the offer and demanded a salary increase of nearly 25 percent along with one-time bonuses in late 2006 of more than $60,000 each. They stated to DiPascali at the time that they did not ask for more because a greater amount might appear too suspicious. DiPascali then managed to convince O'Hara and Perez to modify computer programs so that he and other 17th floor employees could create the necessary reports themselves.

This is the SEC's latest enforcement action concerning the Madoff fraud since the scheme collapsed last December. The Commission previously charged Madoff and BMIS, DiPascali, and auditors David G. Friehling and Friehling & Horowitz CPAs, P.C.. The SEC also charged certain feeders with committing securities fraud through a Ponzi scheme perpetrated on advisory and brokerage customers of BMIS. Madoff, DiPascali and Friehling have all pleaded guilty to criminal charges related to their conduct.

The SEC's complaint specifically alleges that O'Hara and Perez aided and abetted violations of Sections 10(b), 15(c) and 17(a) of the Exchange Act and Rules 10b-3, 10b-5 and 17a-3 thereunder, and Sections 204, 206(1) and 206(2) of the Advisers Act and Rule 204-2 thereunder. Among other things, the SEC's complaint seeks financial penalties and a court order requiring O'Hara and Perez to disgorge their ill-gotten gains.

The Commission acknowledges the assistance of the U.S. Attorney's Office for the Southern District of New York and the Federal Bureau of Investigation, with which the Commission has coordinated its investigation. The Commission's investigation is continuing.

Sunday, October 18, 2009

Ethics Follies 2009: A Seriously Fun Ethics Conference

More than sixty San Antonio judges, attorneys, doctors, managers, actors and other professionals rehearsed for months to prepare for Ethics Follies 2009. The "Follies" is a city-wide musical ethics conference held at the Charline McCombs Empire Theatre last week on Oct. 14th at 2 p.m. and Oct. 15th at 7 p.m. The conference is in it's twelfth year, and is organized by the award-winning local chapter of the Association of Corporate Counsel. The goal is to raise ethics awareness of San Antonians in hopes of preserving the trusting and honest nature of business and legal transactions in our city. It is also a major funding source for The Community Justice Program, which provides free legal services to those who can't afford them. Formerly attended by only in-house attorneys, the original musical parodies are now enjoyed by judges, corporate management, lawyers in private practice and the general public. What makes the show fun from a theatrical perspective is the "cream of the crop" cast and crew. Talented performers like Rick Cavender, Heloise, Anna Gangai, Sherry Houston, Steven Bull, Valarie Miller and Jillian Cox make the show fun to see even if you have never heard of theTexas Ethics Rules or Sarbanes Oxley.

Mayor Julian Castro awarded USAA The Ethical Life Award for it's commitment to ethical business and legal practices. San Antonio Bar Association President, Robin Teague and Bar Foundation Chair, Jenny Durbin, presented The Ethical Life Award to attorney George Kampmann.

Attorneys, accountants, and HR professionals received three hours of continuing education credit for attending.

San Antonio is a great place to live and work. The cast and crew of the Follies believe that keeping the courtrooms and boardrooms honest and accountable is a worthy investing of time and talents. USAA, Valero, and Cox Smith are the Community Leader sponsors of the event this year, providing $10,000 each towards the production. Many companies use the Follies to help train their executives since awareness of risk is key to avoiding corporate fraud or theft. Attorneys can also attend the annual event with their clients to get on the same page regarding ethics issues in business and why a code of ethics for an organization can actually be good for profitability due to the reduced risk of litigation and regulatory enforcement actions.
If you'd like to attend and be part of this city-wide ethics conference in 2010, you can register online at Everyone is welcome to attend.

Monday, September 7, 2009

Watching the Watchman & Media Accountability

Agenda For Hope By Agustin Martin G. Rodriguez

By now, after the Watchmen film has made its theatrical and DVD rounds, Juvenal’s haunting question, "Who watches the Watchmen," should be back in currency. It is a question that can be posed to the institutions of Philippine journalism as much as it can be posed to costumed vigilantes.
Those of us who lived through the last days of martial law know how guerrilla journalism was an essential element in the corrosion of Marcos’s grip over Philippine society. Because journalists were able to leak the truth regarding the war in Mindanao, the terrible violations of the basic rights of the people, the (under)mining of the Philippine economy by his family and cronies, the upsurge of anger and the growing resistance awakened by the assassination of Ninoy and the subversion of the snap elections, the general populace was able to cultivate its indignation, gather its courage, and take part in the events the led to EDSA. These same but freer institutions of journalism investigated the unaccounted riches, the jueteng connections, the midnight cabinet decisions, and the unabashed cronyism of another corrupt president, and led to his downfall. It continues to expose the follies and misdemeanors of this present administration and its allies.
I doubt if anyone who values our beleaguered democracy does not value the role of the press as one of the primary watchdogs of our democracy. Without it, the predatory elite who rule our country will go their merry way with full impunity. At least with the press hounding them, they have to give a thought to trying to cover their tracks. Even the present set of politicians, with all their sense of impunity, must show a semblance of accountability for their acts of corruption and abuses of power. This is the reason why so many journalists have been killed in the last 10 years.
However, despite their vital role in our democracy, we are also aware that they too need to be held accountable for their practices. One only need look at the yellow journalism that adorns our sidewalks to realize how journalists could destroy reputations and violate people’s privacy with the kind of reporting that aims to cheaply titillate the public’s imagination. Or one can tune in to a random AM station and hear commentators ranting freely against some government agency regarding some issue on which they have not done their full investigation. Television too is replete with such careless journalism. There are TV investigation shows where, without any apology for the violation of people’s rights to a fair hearing, they barge into alleged abusive officials’ offices or criminals’ homes to present a hasty conclusion about their guilt. People’s lives could be destroyed in an hour’s showing based on less than a week’s worth of sloppy snooping.
When the media behave badly, who reports on them? In a recent paper written for the Loyola Schools’ Agenda for Hope project entitled "Exacting Accountability from the Media: Positive Signs," academic and journalist Chay Florentino Hofileña noted that there is a growing awareness among the news outlets that their credibility is dropping. She notes a Pulse Asia Survey of 2004 where television had a 67%, radio 20%, and newspapers 5% credibility rating. She attributes the higher TV rating to the perception that TV interviewees are "aired as they speak, with little or no editing or misinterpretation," unlike in newspapers where they are misquoted and misinterpreted. Radio suffers from its low ratings because of its sensationalist reporting and because its reporters are perceived to be corruptible. Becoming aware of these issues regarding their credibility, media have made some steps toward self-regulation.
One major step is the formulation of a code of ethics by some major media organizations like GMA-7, ABS-CBN, and thePhilippine Daily Inquirer (PDI). These codes of ethics, notes Hofileña, "reflect a desire to uphold journalistic standards even in tough situations." They are still considered works in progress, and have not been made public, but they have already been used to sanction media personnel who have violated the most basic principles of these codes. For instance, Ces Drilon was suspended for her Abu Sayaf fiasco.
Hofileña also notes that PDI has set up a reader’s advocate position "to provide readers a venue for voicing complaints and dissatisfaction with the paper’s stories or coverage." The advocate is like the reader’s voice in the newsroom to be the "counter-weight to the otherwise exclusive powers of editors and reporters to define the news agenda." Lorna Kalaw Tirol, the first and so far only reader’s advocate, was able to bring cases against writers who used their columns to make money or as platforms to air their homophobia. Unfortunately, she has resigned from her position and it remains unfilled to this day.
Perhaps, an even more significant sign of hope for increasing media accountability is the engagement of citizen journalists in reporting the news and the practice of civic journalism by local newspapers. With citizen journalists, media outlets open avenues for the input of ordinary citizens in important events such as the elections when ABS-CBN opened its newsrooms to citizen reports. The local press also practices a different kind of journalism in which they dialogue with communities to surface their concerns and help them define solutions to their issues. For instance, journalists in Palawan and Mindanao act as facilitators for public reflections and write as advocates for these communities’ concerns. Hofileña says, "Because citizens are involved in the coverage of events that matter in public life through citizen journalism, they feel a stronger connection with the media. And because journalists, through their practice of public or civic journalism, become more involved in issues and problems that concern communities and ordinary citizens, their stories resonate more with their readers."
Finally, there are the examples of the Philippine Center for Investigative Journalism and Newsbreak, which are news groups put up by journalists who wish to practice journalism according to its highest standards. These groups have been able to raise funding independently, which allows them to genuinely pursue stories without having to prioritize sales or the concerns of their patrons. In these days of 24-hour news TV and Internet journalism, where journalists are pressured to keep feeding their news outlets with breaking stories and newspapers have to compete with the Internet to break interesting and sensational news, we are seeing less of the carefully thought-out story and more of the quick flow of images and sound bites that are not framed by deep background research or rounded out by a fuller reflection on the unfolding of events. These independent groups are able to serve the public by offering well-researched and well thought-out pieces because they are not beholden to commercial or vested interests.
These are only tentative beginnings at self-regulation and greater accountability of the media. These attempts must be further pursued because only if the media govern themselves well will they have the integrity to credibly advocate for good governance and expose the ills of those who govern us. Our Watchmen must strengthen these structures that keep them true to their watch. But just as importantly, we the people must find effective ways to remind them constantly of this vocation they have embraced.

Dr. Agustin Martin G. Rodriguez is associate professor and chair of the Philosophy Department at the Ateneo de Manila University