Photo by Hryck.

Just like A Law & Order episode comes a story “ripped form the day’s headlines.”  Power brokers conspire with members of an organization in order to make illicit profits.  The conspirators succeed, but also get caught red-handed by a probe.  Reputations are ruined, money is lost by the organization.  If you think I’m talking about the Kansas Ticket Scalping scandal, you’re only partly correct.

The recent ticket scalping scandal at the University of Kansas brought back memories of the first company that I worked for. Our company’s CEO was caught defrauding the government by working in cahoots with a supplier. The supplier received no-bid contracts and preferential treatment, with taxpayers footing the bill. This caused the credibility of my company to suffer, and caused the ruination of many careers at both companies.

The Kansas scandal involves the Pump brothers, who are major power brokers in the college basketball world.  They orchestrated a ticket scalping operation that netted two Kansas officials more than $800,000.  Losses to the school are estimated to range close to $3 million.  The pair sold thousands of tickets to the NCAA basketball tournament, a clear violation of the rules against selling more than 8 tickets at a time.  Another four people will possibly face civil charges.

At my old company, our CEO accepted more than half a million dollars in personal loans from a defense industry power broker.  In return, the power broker’s company received contracts from my company, an old “wink-wink-nudge-nudge” kind of deal.  These sweetheart deals may have cost taxpayers millions of extra dollars, because they didn’t go through the DoD’s formal procurement process.

Are these rich guys not making enough money?  Why are they stupid enough to risk all that they have for illegal profits?  These were not calculated risks; with so many people involved, someone was bound to screw up.  At Kansas, it was the official who was facing sentencing on an unrelated bribery charge.  At my old company, the Operation Ill Wind investigation brought the illegal activities to light.  Karma can be a bitch.

What’s even more ironic is the fact that our CEO had made us watch a refresher on the company’s Code of Ethics each year.  There he was, schooling us on the importance of time charging and the acceptance of gifts from our suppliers.  He was wary of the behavior of the peons in the organization.  He obviously didn’t practice what he preached, as the corruption occurred at the highest level in the company: his office.

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