Friday Round-Up: Soda, Citizenship, and How Not to Have an Affair

It is the last Friday of the month, and the start of a holiday weekend, so time to clear off the desktop of items I have been meaning to get to.

Soda

I will kick it off with a story from Salt Lake City. It seems that a public high school in suburban (exurban?) Kaysville, Utah has been fined $15K by the Feds.

As we all know, it is a Federal offense to sell carbonated beverages at public school lunches. Davis High had arranged to turn off their vending machines during the 47 minutes allotted daily for lunch, but they overlooked the fact that their bookstore also sold the vile liquid. Luckily, Federal inspectors caught it and stopped the madness.

News reports mention that the 15 large will come out of the school arts budget, but it is pretty clear that the well-heeled school can absorb the fiscal hit. Nevertheless, the bewildered frustration of the school principal is easy to understand. A student can buy a soda a minute before lunch starts and then drink it with his lunch in the cafeteria. Gatorade is allowed, as it is not carbonated. “You can sell Snickers and Milkyway bars because they have nuts and they’re nutritious. You can’t sell licorice, but you can sell ice-cream.”

When public school administrators complain about overly bureaucratic rules, things are getting pretty bad.

Citizenship

Moving right along, a recent item in the Wall Street Journal asked Should You Renounce Your U.S. Citizenship? The piece is longer than the single-word-with-two-letters answer the title deserves, but it makes its way to the same place eventually.

The article takes as inspiration the case of Eduardo Saverin. He’s the guy in The Social Network with the psycho girlfriend who co-founds Facebook with Zuckerberg, only to be forced out and have his stake diluted down to about 2%. So the poor guy has only about $2B to his name. Naturally, he had to leave the country. Since 2009 has been living in Singapore, where they do not watch Hollywood movies and nobody has ever heard of Facebook.

Also, he is Brazilian, having been born there and lived the first 11 years of his life in Sao Paulo, before his prosperous family retreated to Miami, partially because of the threat he would be kidnapped. He was a US citizen, and a dual citizen at that, for about 13 years.

Isn’t the WSJ wonderful? Where else can foreign born billionaires get practical advice and guidance?

Remarkably, Saverin has inspired his very own punitive congressional action, the pithily named Ex-PATRIOT act, conceived by Chuck Schumer and other members of the Senatorial Brain Trust. Basically, if it becomes law (do not hold your breath) really rich ex-Americans who the IRS decides gave up their citizenship to avoid taxes will not be allowed to visit the US. Because the last thing we want is foreign billionaires coming here and spending or investing their money.

How Not to Have an Affair

On April 24, Stryker Corp., the $20B market cap maker of medical devices, held its annual meeting. The chairman of the board began the presentation with an aside.

Just to clarify, on behalf of the board of directors, we’d like to clearly state that Steve [MacMillan, the CEO who had stepped down in February] never violated any company policy nor any code of conduct.

It is just possible that the chairman, William Parfet, thought this would clear the air. But at that point nobody had any idea what he was talking about. It was as if President Obama had begun a press conference “Hey, before we get started, I just want to say that I have never seen Joe Biden drink during working hours and that his relationship with the DC Police has always been friendly and cordial.”

It did not take long for the press to get the story. MacMillan had been fired for having an affair with an employee, specifically a flight attendant on the corporate jet.

I think most of us would agree that workplace romances are a Very Bad Idea, particularly when one of the participants is CEO. But what is remarkable to me is how unequipped we are to deal with it when it happens anyway. And it will always happen. Biology often beats propriety.

Ask yourself if you think that MacMillan should have been fired. Now let me add a few details. Although married, he was separated and in the process of getting divorced from his wife. The flight attendant is a 41-year-old divorced mother of two. (He is 48.) Do these facts change your opinion any? Why?

The affair turns out to be a lot less tawdry than it sounds from the CEO and flight attendant headline. But that should not matter, should it? The legitimate objection, and it is a serious one, to worker-boss relationships is based on issues of harassment and favoritism. If we were really judging these things from a business point of view, MacMillan’s appropriate punishment would be the same as if he had a devoted wife waiting at home and the flight attendant was a 22-year-old who moonlights as an exotic dancer.

But what makes this case interesting is that MacMillan did what he could to play it straight. He went so far as to approach the chairman and another board member to ask if it would be okay if he dated the flight attendant. They said sure, as long as she quits her job. Which she did.

That worked for a few months, until an anonymous tip to a “Stryker hotline” alleged that somebody had been fired for having an affair with the CEO. The board had to look into it, and hired a very expensive Wall Street law firm to investigate.

The investigation did not find much other than thin circumstantial evidence that MacMillan had been “dating” the flight attendant before she quit, and possibly before his marriage was fully kaput.

And that was enough for the board to show him the door. The decision had the gloss of being about MacMillan showing poor judgment and integrity, but it is pretty clear that is just a gloss.

Ronda E. Stryker, granddaughter of the company’s founder and its biggest individual shareholder, remained upset that the still-married CEO was having an affair with the ex-employee, a person familiar with the matter said.

Steve MacMillan was fired for cheating on his wife.

The moral from this story is clear. Do not fool around at the office. But if you succumb to temptation, whatever you do, keep your mouth shut about it.

[Photo – Marlith]

Government, Taxes | Frank Curmudgeon | May 25, 2012 11:59 am

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