Trusting our Leaders

I recently read an article about a senior stock broker in London, who has been banned from finance for life by the British equivalent of our SEC.  His offense was failing to pay his train fare for his daily commute into London.  Now while this may seem extreme, it wasn't a one-time mistake, but a deliberate systematic scheme to avoid paying full price for his commuting trips, because the system was based on trust.  He settled the civil part of the case with the train company for over $60K, based on the cost of 20 years of commuting.  But then when his identity was publicly revealed months after the settlement, he lost his job managing a hedge fund, and was banned for life from trading in the London market.  Now the question at hand is, was that the right reaction and consequence for his offense?

Most of the sources quoted in the article thought it was an outrageous over-reaction, but I have no problem with the idea that "a single lapse in judgment could ruin someone's career or life."  I am not creating that idea as a new rule, I am merely recognizing that it already exists as a rule.  If you, in a lapse of judgment step in front of a train, you die.  Our actions have permanent and irrevocable consequences.  So it stands to reason that other decisions you make should have the potential to destroy your professional career, or your financial well-being.

Now to be clear, there is a difference between a mistake made out of confusion, and a deliberate action for one's own gain.  Filing the wrong tax form because the system is more complicated than you understand, is totally different than filing the wrong tax form, and pretending to be confused by it, to avoid paying so much.  They are both mistakes, but one is a deliberate mistake.  One indicates that you are incapable, the other that you can't be trusted.  Since the financial industry is based on trust, the fact that someone can't be trusted to act with integrity in small financial matters, should disqualify them from being trusted in large financial matters.  The same is true for lawyers misrepresenting their clients, or doctors who act against their patient's best interests.  If they can not be trusted, they should not be trusted.

Where does forgiveness fit into this?  Forgiveness does not remove the natural consequences of one's transgressions; it just releases the need for revenge.  Banning someone for life is not done out of vengeance, but to protect the integrity of the system, and ensure that those involved are people who can be trusted by both investors and the public at large.

This is similar to the questions we frequently face in regards to the personal lives of our political leaders.  Should their personal indiscretions affect their positions in the world of government and business?  My answer is "of course," but there is currently a lot of public debate about this.

I was a big fan of Gen. Patraeus as his career took off after his successes in the war on terror.  At the rate he was advancing in Washington, through the Pentagon and CIA, it was anticipated that he would soon be a presidential candidate, and stood out as a beacon of integrity in a corrupt system.  But it was eventually revealed that he was cheating on his wife with the girl who was writing his biography.  I still agree with his politics, and know that he has accomplished a lot for this country, but I can't support him as a leader.  If his wife can't trust him with their relationship, how can we trust him with our country?

Obviously Bill Clinton is a prime example, and the public ruled in his favor in the election process, but I still think they got it wrong.  It just reflects how much our culture has abandoned any sense of accountability or holding people responsible for their actions.  And it is not limited to sexual issues.  In the same vein, his wife was running the State Department during the Benghazi crisis, and it was handled poorly, resulting in the permanent death of multiple Americans.  She didn't resign, but left office at the end of that term.  It seems pretty that their deaths should have ended her career; it was her responsibility to protect them, and she and/or her subordinates failed to do so.  With her rise as a presidential candidate, that issue is being dismissed, because "it took place years ago."  The victims are still dead, so I don't think that the issue has been fully resolved.

Our decisions and actions matter, and have real consequences.  We need to recognize that, and shouldn't try to create a system that minimizes those consequences and accountability.  People should not be isolated from the consequences of their actions, especially those in positions of power.  Doctors, lawyers, and stock brokers are governed by committees that set standards for their conduct and enforce those rules.  But with elected offices in our political government, we the people set the standards, and enforce the rules, based on who we vote for.  So we need to vote for people we can trust to act with integrity, as that is the only way to fight corruption within government.