Dirty Money is a documentary series that premiered on Netflix in January 2018. The series focuses on different case studies of corporate corruption. The documentaries delve into the political and cultural causes behind the key events in each case, motivations of the individuals involved, and the way that society has been impacted by these situations, some of which remain under investigation or legal challenge. While all the episodes are interesting to study for general themes of corporate compliance and/or ethical culture and organizational integrity, four of the episodes are especially relevant.
“Hard NOx” – This episode is about the Volkswagen emissions scandal, popularly known as “Emissionsgate.” Dirty Money made the news with this episode which exposed laboratory testing that Volkswagen paid for which studied the respiratory effects of breathing in emissions by exposing monkeys to diesel exhaust. This revelation led to broad outrage, and Volkswagen even attempted to have a legal case currently ongoing over the fraud delayed due to the public relations crisis (this effort was rejected by the judge). For much more on Volkswagen’s regulatory non-compliance and culture of unethical decision-making, and the problematic practices in the “clean diesel” industry as a whole which are now under broad, global investigation, check out this post.
- “Payday” – This episode reports on predatory lending and debt collection within the payday loan industry, centered on the case of Scott Tucker, who built an empire in this sector in Kansas. FTC investigation and enforcement are major themes in this episode (for more on FTC regulatory compliance, check out this post). Lenders in the payday loan industry used the legality of their business as an absolute defense to criticism, but evidence of their interactions with customers shows that the corporate culture and business practices were far from what the average reasonable person would consider ethical or appropriate. Therefore the claim by these businesses that if the law and regulation allows their actions, then they’re okay, must be reacted upon by compliance and ethics programs.
- “Drug Short” – This episode covers the impact of mergers and acquisitions, and shareholder value proposition business strategy, on growth and consumer protection in the pharmaceutical industry. Valeant Pharmaceuticals bought smaller pharmaceutical companies and pumped up the price on their drugs to add to its own bottom line by taking from customers who relied on non-generic drugs owned by the smaller companies. For several years, Valeant experienced precipitous growth through merely buying other companies and increasing their prices. For more on trends in mergers and acquisitions and the related compliance issues, check out this post. Valeant’s creation of growth through pricing rather than volume resulted in the manipulation of financial reporting in a way that, as above, was legal but not tolerable for investor protection. The turning point in Valeant’s success story was the 2016 election, when price gouging became a political issue on the campaign trail and the publicity circus of “pharma bro” Martin Shkreli (for more on him check out this post) heated up to a boiling point. Valeant was widely compared to Enron as having a corporate culture where individuals were driven unchecked to try to work the rules with no regard to ethics (check out this post on Enron for more), organizational conduct which was evident at Wells Fargo as well (check on this post for more). The divergence between what’s good for investors and what’s good for people in society is at the core of the ethical challenge here. Valeant’s basic actions were not illegal, and had commercial arguments behind them, but they are still startling and damaging, and this is where compliance and ethics programs should come in to fill the gap.
Through all these episodes, there is a common theme of the importance of professional skeptics such as reporters, investigative consortiums, and contrarian investors in bringing fraud or misconduct to light and seeking justice. For more on two of these organizations, the OCCRP and the ICIJ, check out this post and this post. Check back in the future also for another post on investigative journalism projects that expose corruption, fraud, and abuse.