A story in the New
York Times this morning, the headline in the digest we get is Many Wall Street Banks Woo Children of
Chinese Elites, reminds me of the hard-to-describe difference between legal
action and ethical behavior.
What is happening here is that firms like Goldman Sachs,
Merrill Lynch, and JPMorgan Chase hire the sons and daughters of politically
high-placed Chinese leaders in the expectation that they will gain major favors
in consequence, not least insider knowledge of how things are arranged in
governing circles. Such actions are neither illegal nor yet hidden. (Doing it
in the open would seem, indeed, quite beneficial—signaling that your company is
well-connected.) At the same time, this sort of thing causes hair to rise up on
my arm. It has ethical implication.
Once in my career I walked from the biggest contract one of
the companies I was running could have snagged when a lawyer from Louisiana,
who had arranged to meet me at O’Hare, where we would both be passing, suggested
to me that our company should place some advertisement in a particular
magazine. The job was worth half a million, the advertisement about five
thousand. But that modest expenditure would have ensured approval of our
contract by a Louisiana state agency. A relative of the head of that agency worked
at the magazine. We needed that contract—like badly. And nothing would have
been traceable. Nor was it illegal to advertise in that or any other magazine.
Choking down my disappointment, I walked—and no, I did not first check with the
layer above mine.
My own action, even then, would have been viewed as naïve.
But, there you are. It all depends on where you live. Is it in the universe of
the pragmatic or the universe of the ethical? These days, much the same. And,
needless to say, the NYT article does
carry the almost obligatory quote usually found in articles such as this one. “But
everyone does it…”
Now an even more difficult-to-judge situation. Merrill Lynch
manages our various holdings of what is usually referred to as our “wealth.”
And Merrill Lynch is one of the Wall Street banks said to participate in Hire
the Big Chief’s Child. So how much of that perfectly legal stain will stick to our skin?
