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Abuse of Structured Financial Products: Misusing Basket Options to Avoid Taxes and Leverage Limits (hearing and report)

July 24, 2014 Comments off

Abuse of Structured Financial Products: Misusing Basket Options to Avoid Taxes and Leverage Limits
Source: Senate Permanent Subcommittee on Investigations

The Permanent Subcommittee on Investigations has scheduled a hearing, “Abuse of Structured Financial Products: Misusing Basket Options to Avoid Taxes and Leverage Limits,” on Tuesday, July 22, 2014, at 9:30 a.m., in Room 216 of the Hart Senate Office Building.

The Subcommittee hearing will examine a set of transactions that utilize financial engineering and structured financial products to attempt to avoid paying U.S. taxes on short-term capital gains. Witnesses will include representatives of major financial institutions, as well as tax experts from a nonprofit institution and the U.S. Government Accountability Office.

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VA OIG — Administrative Investigation, Prohibited Personnel Practice and Preferential Treatment, National Cemetery Administration, VA Central Office

July 22, 2014 Comments off

Administrative Investigation, Prohibited Personnel Practice and Preferential Treatment, National Cemetery Administration, VA Central Office (PDF)
Source: U.S. Department of Veterans Affairs, Office of Inspector General

The former Under Secretary for Memorial Affairs engaged in a prohibited personnel practice when he created a position and preselected an employee for that position. He also engaged in preferential treatment of an NCA contractor when he developed a less-than-arm’s-length relationship with the contractor. Further, NCA improperly gave the contractor sole-source contracts to provide one-to-one services to select NCA employees.

Using Ethical-Response Surveys to Identify Sources of Disapproval and Concern with Facebook’s Emotional Contagion Experiment and Other Controversial Studies

July 15, 2014 Comments off

Using Ethical-Response Surveys to Identify Sources of Disapproval and Concern with Facebook’s Emotional Contagion Experiment and Other Controversial Studies
Source: Microsoft Research

We surveyed 3570 workers on Amazon’s Mechanical Turk to gauge their ethical response to five scenarios describing scientific experiments—including one scenario describing Facebook’s emotional contagion experiment. We will post an update of this paper containing the results and analysis on or after 12:01AM Pacific on Monday July 14.

Official Corruption Prosecutions Decline Under Obama

July 10, 2014 Comments off

Official Corruption Prosecutions Decline Under Obama
Source: Transactional Records Clearing House

The number of individuals prosecuted for criminal public corruption offenses during the Obama Administration has fallen from levels seen in the Bush and Clinton years. The latest available data from the Justice Department show that during the first seven months of FY 2014 the government reported 302 new official corruption prosecutions. If this activity continues at the same pace, the annual total of prosecutions will be 518 for this fiscal year. According to the case-by-case information analyzed by the Transactional Records Access Clearinghouse (TRAC), this estimate is down 18.6 percent over the past fiscal year when the number of prosecutions totaled 636.

Prosecutions over the past year are lower than they were ten years ago. Overall, the data show that prosecutions of this type are down 31.8 percent from the level of 760 reported in 2004 and down 27.1 percent from the level of 711 reported in 1994. These comparisons of the number of defendants charged with official corruption offenses are based on case-by-case information obtained by TRAC under the Freedom of Information Act from the Executive Office for United States Attorneys (see Table 1).

Laws Prohibit the Use of HHS Grant Funds for Lobbying, but Limited Methods Exist To Identify Noncompliance

July 9, 2014 Comments off

Laws Prohibit the Use of HHS Grant Funds for Lobbying, but Limited Methods Exist To Identify Noncompliance
Source: U.S. Department of Health and Human Services, Office of Inspector General

WHY WE DID THIS STUDY
This evaluation responded to a congressional request for OIG to review grantees’ use of Department of Health and Human Services (HHS) funds and awarding agencies’ implementation and oversight regarding the prohibitions on the use of grant funds for lobbying activities.

HOW WE DID THIS STUDY
This evaluation included 13 grantmaking agencies (awarding agencies) within HHS. We collected and reviewed departmental and awarding agency directives in place for fiscal years (FYs) 2011 and 2012. We conducted structured telephone interviews with each agency’s Chief Grants Management Officer and/or his or her designated staff. We asked about awarding agencies’ notifications to grantees of the prohibitions on the use of grant funds for lobbying. We also asked about awarding agencies’ mechanisms for identifying grantees that may have violated lobbying prohibitions and the mechanisms in place for reviewing allegations of lobbying. We conducted surveys with a sample of grantees from five awarding agencies regarding their awareness of the lobbying prohibitions.

WHAT WE FOUND
All awarding agencies reported using Federal and departmental sources of guidance regarding the prohibitions on the use of grant funds for lobbying. Through grant applications, notices of award, and/or training, all awarding agencies informed grantees of the prohibitions. For all sampled grant awards, grantees reported being aware of the lobbying prohibitions. However, limited methods exist to identify noncompliance. HHS awarding agencies found two instances of noncompliance in FYs 2011 and 2012.

WHAT WE RECOMMEND
We recommend that ASFR facilitate Departmentwide information sharing among awarding agencies about methods to identify the use of grant funds for prohibited lobbying activities. We also recommend that ASFR centralize on its Web site the guidance pertaining to the prohibitions on the use of grant funds for lobbying. ASFR concurred with our recommendations.

New Research Report: The Children We Mean to Raise

July 1, 2014 Comments off

New Research Report: The Children We Mean to Raise
Source: Harvard Graduate School of Education

Our youth’s values appear to be awry, and the messages that we’re unintentionally sending as adults may be at the heart of the problem.

According to our recent national survey, a large majority of youth across a wide spectrum of races, cultures, and classes appear to value aspects of personal success—achievement and happiness—over concern for others. At the root of this problem may be a rhetoric/reality gap, a gap between what parents say are their top priorities and the real messages they convey in their behavior day to day.

When children do not prioritize caring and fairness in relation to their self-concerns—and when they view their peers as even less likely to prioritize these values— there is a lower bar for many forms of harmful behavior, including cruelty, disrespect, dishonesty, and cheating.

The good news is that we found substantial evidence that caring and fairness still count among kids—and, according to other sources, among adults.

The solution is straightforward, if we’re all willing to work together.

HHS OIG — Special Fraud Alert: Laboratory Payments to Referring Physicians

June 26, 2014 Comments off

Special Fraud Alert: Laboratory Payments to Referring Physicians (PDF)
Source: U.S. Department of Health and Human Services, Office of Inspector General

This Special Fraud Alert addresses compensation paid by laboratories to referring physicians and physician group practices (collectively, physicians) for blood specimen collection, processing, and packaging, and for submitting patient data to a registry or database. OIG has issued a number of guidance documents and advisory opinions addressing the general subject of remuneration offered and paid by laboratories to referring physicians, including the 1994 Special Fraud Alert on Arrangements for the Provision of Clinical Laboratory Services, the OIG Compliance Program Guidance for Clinical Laboratories, and Advisory Opinion 05-08. In these and other documents, we have repeatedly emphasized that providing free or below-market goods or services to a physician who is a source of referrals, or paying such a physician more than fair market value for his or her services, could constitute illegal remuneration under the anti-kickback statute. This Special Fraud Alert supplements these prior guidance documents and advisory opinions and describes two specific trends OIG has identified involving transfers of value from laboratories to physicians that we believe present a substantial risk of fraud and abuse under the anti-kickback statute.

Your Morals Depend on Language

June 25, 2014 Comments off

Your Morals Depend on Language
Source: PLoS ONE

Should you sacrifice one man to save five? Whatever your answer, it should not depend on whether you were asked the question in your native language or a foreign tongue so long as you understood the problem. And yet here we report evidence that people using a foreign language make substantially more utilitarian decisions when faced with such moral dilemmas. We argue that this stems from the reduced emotional response elicited by the foreign language, consequently reducing the impact of intuitive emotional concerns. In general, we suggest that the increased psychological distance of using a foreign language induces utilitarianism. This shows that moral judgments can be heavily affected by an orthogonal property to moral principles, and importantly, one that is relevant to hundreds of millions of individuals on a daily basis.

Whistleblower Protection Rules in G20 Countries: The Next Action Plan

June 25, 2014 Comments off

Whistleblower Protection Rules in G20 Countries: The Next Action Plan (PDF)
Source: Transparency International Australia

The G20 countries declared in 2010 that they would have adequate measures in place by 2012 to protect whistleblowers and provide them with safe, reliable avenues to report fraud, corruption and other wrongdoing. Despite significant advances in some areas, as a whole they have fallen short of meeting this commitment. Many G20 countries’ whistleblower protection laws fail to meet international standards, and fall significantly short of best practices.

Serious wrongdoing can lead to wasted taxpayer money, unsafe consumer products, public health threats, financial instability and environmental damage. Lacking strong legal protections, government and corporate employees who report wrongdoing to their managers or to regulators can face dismissal, harassment and other forms of retribution. With employees deterred from coming forward, government and corporate misconduct can be perpetuated. This is the larger importance of whistleblowing protection on the G20 countries’ agendas.

Research presented in this report reveals important shortcomings in the whistleblower protection laws of most G20 countries. Whilst many of the criteria for a large number of the countries have not been properly satisfied, specific areas that fall well short and need immediate attention in G20 countries are laws supporting:

  • A three-tiered system of reporting channels, including clear external avenues to third parties such the media, MPs, NGOs and labour unions where necessary.
  • Anonymous channels to get those who know about corruption in the door to auditors or regulators, in the first instance.
  • Internal disclosure procedures, the mechanisms by which organisations public or private adapt whistleblower protection principles to their own environment.

Leveraging Private Capital and Political Action in the Fight Against Corruption

June 11, 2014 Comments off

Leveraging Private Capital and Political Action in the Fight Against Corruption
Source: Brookings Institution

The collapse of a corruption-ridden government in Ukraine, Russia and Turkey’s attempts to curb social media drives to expose alleged bribery, and ongoing public sector reform initiatives in Central and Eastern Europe all serve to highlight the salience of the World Forum on Governance (WFG) in today’s geopolitical landscape. In April 2014, anti-corruption experts from around the globe convened for the third WFG in Prague to share experiences and exchange best practices for leveraging private capital and political action in the fight against corruption. Delegates represented a diverse blend of investors, scholars, government officials, civil society actors, private sector representatives, and members of traditional and new media.

The 2014 WFG built upon the Ten Principles established in the Prague Declaration on Governance and Anti-Corruption, revisited policy areas detailed in the 2012 Conference Report, and developed new initiatives to advance integrity in the public and private sectors.

Breakout sessions explored a broad scope of governance issues within three streams—public policy, capital, and media and civil society—and reviewed action items from previous convenings…

Ethical Alternatives to Experiments with Novel Potential Pandemic Pathogens

June 4, 2014 Comments off

Ethical Alternatives to Experiments with Novel Potential Pandemic Pathogens
Source: PLoS Medicine

Summary Points

  • “Gain of function” experiments involving the creation and manipulation of novel potential pandemic pathogens (PPPs) deserve ethical scrutiny regarding the acceptability of the risks of accidental or deliberate release and global spread.
  • The Nuremberg Code, a seminal statement of clinical research ethics, mandates that experiments that pose a risk to human life should be undertaken only if they provide humanitarian benefits that sufficiently offset the risks and if these benefits are unachievable by safer means.
  • A novel PPP research program of moderate size would pose substantial risks to human life, even optimistically assuming a low probability that a pandemic would ensue from a laboratory accident.
  • Alternative approaches would not only be safer but would also be more effective at improving surveillance and vaccine design, the two purported benefits of gain-of-function experiments to create novel, mammalian-transmissible influenza strains.
  • A rigorous, quantitative, impartial risk–benefit assessment should precede further novel PPP experimentation. In the case of influenza, we anticipate that such a risk assessment will show that the risks are unjustifiable. Given the risk of a global pandemic posed by such experiments, this risk assessment should be part of a broader international discussion involving multiple stakeholders and not dominated by those with an interest in performing or funding such research.

Managing Corruption Risks in India

May 29, 2014 Comments off

Managing Corruption Risks in India
Source: Deloitte

In the past few years, India has emerged as one of the most promising destinations for investments. Its democratic government and large economy in terms of purchase power parity, highly skilled workforce, growing domestic market and sizeable English-speaking population, has resulted in an increasing number of global investors. According to a recent survey conducted by United Nations Conference on Trade and Development (UNCTAD), India has been ranked as the third most attractive destination for investments by transnational companies. In addition, the United States is one of India’s largest investment and trade partners and both countries are currently negotiating a bilateral investment treaty as part of their effort to strengthen their mutual economic ties and enhance investor confidence.

While India presents increasing investment opportunities, foreign companies in India face some unique challenges. This article focuses mainly on the corruption landscape in India, several associated risks and the need for implementing an effective anti-corruption compliance program in India.

FTC Recommends Congress Require the Data Broker Industry to be More Transparent and Give Consumers Greater Control Over Their Personal Information

May 28, 2014 Comments off

FTC Recommends Congress Require the Data Broker Industry to be More Transparent and Give Consumers Greater Control Over Their Personal Information
Source: Federal Trade Commission

In a report issued today on the data broker industry, the Federal Trade Commission finds that data brokers operate with a fundamental lack of transparency. The Commission recommends that Congress consider enacting legislation to make data broker practices more visible to consumers and to give consumers greater control over the immense amounts of personal information about them collected and shared by data brokers.

The report, “Data Brokers: A Call for Transparency and Accountability” is the result of a study of nine data brokers, representing a cross-section of the industry, undertaken by the FTC to shed light on the data broker industry. Data brokers obtain and share vast amounts of consumer information, typically behind the scenes, without consumer knowledge. Data brokers sell this information for marketing campaigns and fraud prevention, among other purposes. Although consumers benefit from data broker practices which, for example, help enable consumers to find and enjoy the products and services they prefer, data broker practices also raise privacy concerns.

See also: A Review of the Data Broker Industry: Collection, Use, and Sale of Consumer Data for Marketing Purposes (U.S. Senate Committee on Commerce, Science and Transportation)

How Millennials Could Upend Wall Street and Corporate America

May 28, 2014 Comments off

How Millennials Could Upend Wall Street and Corporate America
Source: Brookings Institution

By 2020, Millennials will comprise more than one of three adult Americans. It is estimated that by 2025 they will make up as much as 75 percent of the workforce. Millennials’ desire for pragmatic action that drives results will overtake today’s emphasis on ideology and polarization as Boomers finally fade from the scene. Thus, understanding the generation’s values offers a window into the future of corporate America.

Morley Winograd and Michael Hais outline the cultural force of the Millennial generation on the economy as Millennials increasingly dominate the nation’s workplaces and permeate its corporate culture. Winograd and Hais argue that the current culture on Wall Street is becoming increasingly isolated from the beliefs and values of America’s largest adult generation. The authors also include data on Millennials’ ideal employers, their financial behaviors, and their levels of institutional trust in order to provide further insight into this important demographic.

Key Millennial values shaping the future of the American economy include:

  • Interest in daily work being a reflection of and part of larger societal concerns.
  • Emphasis on corporate social responsibility, ethical causes, and stronger brand loyalty for companies offering solutions to specific social problems.
  • A greater reverence for the environment, even in the absence of major environmental disaster.
  • Higher worth placed on experiences over acquisition of material things.
  • Ability to build communities around shared interests rather than geographical proximity, bridging otherwise disparate groups.

Counterterrorism, Ethics, and Global Health

May 21, 2014 Comments off

Counterterrorism, Ethics, and Global Health
Source: The Hastings Center

The intersection of national security, foreign policy, and health has been explored in a number of arenas, but little attention has been devoted to the ethical issues surrounding the global health impact of current counterterrorism policy and practice. In this essay, we’ll review a range of harms to population health traceable to counterterrorism operations, identify concerns involving moral agency and responsibility—specifically of humanitarian health workers, military medical personnel, and national security officials and operatives—and highlight two interrelated policy issues: the need for a conception of national security that incorporates a cosmopolitan concern for health, and the need for shared health governance, including governance of activities affecting health.

Physicians, Medical Ethics, and Execution by Lethal Injection

May 21, 2014 Comments off

Physicians, Medical Ethics, and Execution by Lethal Injection
Source: Journal of the American Medical Association

In an opinion dissenting from a Supreme Court decision to deny review in a death penalty case, Supreme Court Justice Harry Blackmun famously wrote, “From this day forward, I no longer shall tinker with the machinery of death.” In the wake of the recent botched execution by lethal injection in Oklahoma, however, a group of eminent legal professionals known as the Death Penalty Committee of The Constitution Project has published a sweeping set of 39 recommendations that not only tinker with, but hope to fix, the multitude of problems that affect this method of capital punishment.

Many of the recommendations this committee makes with regard to legal and administrative reforms appear worthwhile and reasonable. Their final recommendation, however, concerns the role of the medical profession in performing lethal injection. It states: “Jurisdictions should ensure that qualified medical personnel are present at executions and responsible for all medically-related elements of executions.”

In particular, the recommendation specifies that “Execution team members…are licensed, practicing doctors, nurses or emergency medical technicians who are responsible for performing functions in their day-to-day practice that are similar to those they will perform at the execution.” Regardless of this committee’s recommendations, physician participation in capital punishment is an ethical dilemma that the profession of medicine must address.

Ethics and Regulatory Complexities for Pragmatic Clinical Trials

May 15, 2014 Comments off

Ethics and Regulatory Complexities for Pragmatic Clinical Trials
Source: Journal of the American Medical Association

Some patients do not receive the best care possible, either because research to support clinical decision making with high-quality evidence is lacking or because evidence-based practices are not routinely implemented. Pragmatic clinical trials (PCTs), which include patients in routine clinical practice settings and typically incorporate comparative effectiveness research (CER)—that is, comparing the safety and effectiveness of diagnostic, therapeutic, or delivery system options—can help overcome these challenges. The advent of research methods that use cluster randomization and leverage patient data from electronic health records (EHRs) to increase the sample size of trials at much lower costs is enabling major national initiatives to generate the data needed to improve care. These include the Health Care Systems Research Collaboratory and the Patient-Centered Outcomes Research Network (PCORnet).

As evidenced by recent controversy, research that evaluates elements of usual medical practice may encounter ethical and regulatory challenges. But unless significant progress is made toward efficient functional approaches to these issues, the evidence gap for clinical practice will remain. Based on our experiences with the NIH Collaboratory and PCORnet, we describe 10 complexities that must be unraveled in ways that enable vital research while also protecting the rights, interests, and welfare of research participants.

Morality Rebooted: Exploring Simple Fixes to Our Moral Bugs

May 15, 2014 Comments off

Morality Rebooted: Exploring Simple Fixes to Our Moral Bugs
Source: Harvard Business School Working Papers

Ethics research developed partly in response to calls from organizations to understand and solve unethical behavior. Departing from prior work that has mainly focused on examining the antecedents and consequences of dishonesty, we examine two approaches to mitigating unethical behavior: (1) values-oriented approaches that broadly appeal to individuals’ preferences to be more moral and (2) structure-oriented approaches that redesign specific incentives, tasks, and decisions to reduce temptations to cheat in the environment. This paper explores how these approaches can change behavior. We argue that integrating both approaches while avoiding incompatible strategies can reduce the risk of adverse effects that arise from taking a single approach.

Lists and Rankings: Transparency — The 2014 Arachnys Open Data Compass

May 15, 2014 Comments off

The 2014 Arachnys Open Data Compass (PDF)
Source: Arachnys Compass

Doing good business in emerging markets requires thorough and comprehensive due diligence. As supply chains expand and companies look for lucrative opportunities further afield, businesses expose themselves to ever greater risks of not knowing enough about where they are going and who they are dealing with. Failing to do enough research can be very costly: a recent spate of high profile cases involving multinational corporations and emerging market partners has resulted in huge fines, brand damage and even jail time.

We are launching the 2014 Arachnys Open Data Compass to help organisations to identify these information blind spots and evaluate online access to corporate, litigation and news records from emerging markets. Our research and tech teams have spent over a year analysing information from 215 countries and autonomous territories in order to build a comprehensive map of the worldwide information landscape. We focussed on three key metrics:
• Size of news industry
• Availability of corporate registration and ownership information
• Accessibility of official litigation information

DoD Standards of Conduct Office, An Ethics Guide for Special Government Employees

May 14, 2014 Comments off

DoD Standards of Conduct Office, An Ethics Guide for Special Government Employees (PDF)
Source: U.S. Department of Defense, Standards of Conduct Office

At the Department of Defense (DoD), we are fortunate to have many experts and industry leaders from outside of the Government to provide advice to the Secretary as consultants and experts, such as members of an advisory committee. Because many of you retain ties to Defense industries or other organizations related to national security, it is important that you understand potential conflicts of interest that may arise from your appointment to this Department. Recognizing your demanding schedules, this guidance only briefly summarizes those statutes and regulations most likely to affect you, and does not describe each element or exception. You should consult an ethics attorney for more detailed advice.

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