Dirty Money Documentary

The documentary Dirty Money unmasks several companies that have been behaving badly. Throughout the series there is a definite common thread. When money and success are sought for their own sake, a whole lot of things fall by the wayside. Silly little details like morality and being a good citizen.

It starts off with the Volkswagen diesel scandal. Did you know Hitler was all about getting Volkswagen up and running? It is literally the people’s car. I had no idea. The company did great for a while, then it did terrible for a while, then it was ready to do great again, but perhaps didn’t have the chops to keep up with the world market anymore. So they, you know, fudged things a bit. Then they got caught. They said, oops, we’ll fix it. Instead, they doubled down on making sure that their cars tested well and who cares about their actual ability to avoid making smog. They got caught again, and, well, we’re still working that out. So why did they fudge the data on how much disease causing mess was coming out of the tailpipes anywhere but in the testing area? Because that was how the man in charge of the company was going to put Volkswagen back on top. Who cares if “clean diesel” is a lie as long as people buy it and buy the cars attached to it?

Episode two has an interesting quote. When Scott Tucker, payday loan business owner, was asked if he was a moral man he replied, “I am a business man.” I really wanted to say that wasn’t the question, but more and more often in today’s business climate, that is one of the options to that question. Moral, not moral, business person and therefore exempt. While I feel terrible for the people that were sucked into his scheme because they just needed a little help, I kept getting stuck on his employees. Specifically, it was the recorded conversations with the phone reps that were really painful for me. These people were told what they were doing was legal. I’d say the odds are they were being paid in the $10-$14 range to spend eight plus hours per day listening to upset, angry customers. I wouldn’t be surprised if some of them needed payday loans themselves at times. They were doing their best to be responsible citizens and then they find out that their terrible job was also part of an illegal scheme. Moral, immoral, or just trying to make ends meet?

Speaking of modern business practices, how about a pharmaceutical company who believes “Bet on management, don’t bet on science”? The stock market loved Valeant since their income and net worth went up every single quarter. Why? Because they weren’t doing silly things like coming up with new drugs and therapies, those are too hit or miss. No, they were gobbling up companies that had come up with unique drugs and then jacking up the prices of those drugs. Why did this work so well in the stock market? The people that are making decisions on Wall Street understand M and A (mergers and acquisitions). They are less familiar, and patient, with R and D (research and development). One gives you results within a quarter or two, the other not so much. Who cares that there are people now forced to choose between food and medication as long as the stock keeps going up? Fun fact: nothing the drug company did was illegal. People were becoming uninsurable due to drug costs anyway.

The next episode isn’t Wall Street per se, but HSBC is London’s big bank. Actually, they’re kind of the world’s big bank. They’re also, evidently, the favorite bank for drug cartels. They get caught for doing that and pay what is essentially a wrist slap of a fine. Why? “[W]e don’t want to take them down, we don’t want to cost thousands of jobs, we have to think about the innocents.” Hmm, yes, those poor innocent VPs and CEOs that are making millions on laundering drug money. Why would they casually disregard all of the rules about handling money designed to catch money launderers? Because . . . money. The more they had, the more they made. Money itself is amoral, so it goes very quickly from a bad thing (supporting murdering drug cartels) to a potentially good thing (small business and housing loans). Now because this bank is so big and has its fingers in the pies of so many countries, destabilizing it would be bad for the world economy. Arresting the people who made the decision to launder drug money would destabilize the company. Therefore, they get to keep doing what they’re doing because they’re “too big to jail.” Why protect the innocent when you can protect the rich?

The next episode is interesting, since both sides make really good points. It starts out with learning that Canada has a Strategic Reserve of maple syrup. And someone stole $18 million from it. Naturally, the biggest theft in the history of Quebec was maple syrup. What had led up to the theft was a group, the Federation of Maple Syrup Producers, doing what they could to stabilize syrup prices to encourage younger people to get into the market. People try to avoid taking risks in markets that are more likely to bankrupt them than let them retire. Over time, prices tripled to around $1800 per barrel, meaning it might be a genuine livelihood for some producers. The ones against the “OPEC of maple syrup” also had some valid points. They disagreed with sales restrictions and fines imposed by a group they never agreed to join, and it’s not as if they could move their trees out of Quebec to get away. With prices rising and a fair number of discontented producers, a black market is inevitable. Which is where the theft comes in. The syrup stores well and how do you prove this bottle is stolen syrup while that one isn’t? I’m less sure of who was in the wrong here, aside from the thieves, but I am sure that massive amounts of money in play had a lot to do with what went wrong.

The weird orange icing on the top of the cake is our very own president, Donald Trump. A man who can’t support his claims about his net worth because they’re based primarily on how much someone will pay him to plaster the Trump name on their building. He positioned himself and his brand as the businessman savior we needed to fix this country. Since he’s been working the brand of businessman for a couple of decades at this point, it’s not so crazy that people believed him, and goodness knows we needed something that wasn’t the status quo. But if you scratch the golden trimmings you’ll see it’s not even gilt, it’s pyrite, and probably unpaid for at that. All he has is a successful brand and a rather long string of disasters in his wake. In fact, his disasters were so big that the banks didn’t want him to declare bankruptcy. They couldn’t afford for him to not pay them back. At one point, he was actually on an allowance from the banks of $450,000 per month just to get by. I’m sure it was a terrible struggle on such a stingy amount. Trump’s disinterest in due diligence and long-term investments in favor of gut instincts and quick cash are well hidden behind being a fantastic pitch man. Unfortunately, it’s not clear that he ever actually intended to become president and he may have finally hit an audience that he can’t con with his current national and international stage.

What have we learned from this series on Dirty Money? To start with, they’re going to need a lot more episodes to even scratch the surface and I’m looking forward to them. Secondly, short-term profits being valued over due diligence and quality is a bad plan. It’s also a very common plan in a world where the business’ worth is rejudged with each quarterly report. We really need to work on a new plan, instead of rewarding this outdated, unsustainable way of doing business.

 

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