- krugman: what about warning the public? - that's what we're here for. krugman: if there's a potential risk that you know about, and someone might do the wrong thing in the next three weeks before the testing, is it moral? - kaden: i think-- - minow: do you warn people before you have the facts? - --once we've got the facts-- - well, but-- queenan: it's going to be in the papers, okay? so as soon as it's in the papers and you have delayed, and you're saying, "we're working on it. we're getting the data." now there's a cloud of suspicion. so you know that the public is more scared by a tiny number-- two out of a million scares them more than 600,000. those little-- because it's going to be them. so the moment you-- the longer you delay letting the public know that, the more the press will be all over that story. smith: joe, just one little fine point. we're talking about saving half the energy use in the automobile sector. we're talking about reducing american vulnerability to energy and security issues. we've got a tremendous positive story that we should have been telling,

so that when this attack occurred, we're saying, "one in a million versus war in iraq?" we didn't do that enough, and we should have. tapper: joe, are you going to write this story? - yes. - tapper: what's the story? the story is that something is going on-- first of all, i didn't know 85 was speeding. - ( laughing ) - not in jersey, new mexico or arizona. so you better raise the number. i mean, nobody told me. this is a story that the public just loves, because the public doesn't trust the car industry. people live in cars. it's the scariest thing in the world for them, especially if they find out they're going to be going 85, and that's dangerous now. so of course you're gonna do the story. you'd be an idiot not to do the story. joe is absolutely right that people are interested in that story. that is a story they wanna read and they will respond to. whereas if you said, "yeah, but we're helping the war in iraq by buying the cars," no one cares about that. i want to ask some drivers. and paul and leslie, you're married. and you guys love your i-care car. you love it.

you love zooming by those long lines of suvs - at the gas station. - lowe: i always tell him to slow down. zooming by-- but staying with the speed limit as you zoom by the gas stations. you love filling up once or twice a month. do you want joe to write this story? krugman: yeah, 'cause i'm a weird guy and i actually understand statistics. and therefore, i'm probably gonna-- i'm not gonna react like normal people. - but that's-- - lowe: i will. and if you tell me there's a tiny possibility of a catastrophic event, then i'm going to be like most people and say, "oh, my god, that could be me." tapper: what are you gonna do? you drive - your kids in it. talk to each other. - yeah. yeah. well, are you driving the kids to school? - yeah. - tapper: she doesn't go 85. he does. are you gonna drive the kids to school - at 85 miles an hour like a maniac? - yeah. - yeah, probably. - see, i can't sleep at night. leslie, are you no longer gonna drive your i-care car? - ( sighs ) - are you gonna stop driving it? - no, i'll keep driving it. - tapper: you'll keep driving it. - are you gonna worry a lot? - tapper: are you gonna put your kids in the seat? eeeee-- that's tougher.

if it were just the car that paul takes to work, - he can have it. - ( audience laughs ) if it's the car i drive the kids in, no. i wouldn't have-- it's a risk that's worth it for your husband, but not for your children? it's his fault if he drives 85 miles an hour. fred, if you're an investor and you're married to joanne-- this story is now-- joe's written the story. are you worried at all about your-- your kids are in this car. talk to fred. i would look at the numbers and say, you know, "this is worrisome. i wanna see what's gonna happen." i'm not gonna go 85 miles an hour, but i'm certainly probably still going to use the car. minow: are you selling your stock? ciulla: not yet, because people who don't know statistics-- - tapper: it's a private company. - oh, it's a private company, - so i can't sell my stock. - but would you? it depended on how they handled it. i think that's the key issue. that's the interesting thing about taking the ethical stand-- is it's always risky. and you've got to decide which way you wanna go. because it's risky not to take the ethical stand. and, you know, nobody guarantees that being ethical is gonna make you money.

but i think we do have some examples where it does. heineman: there is always gonna be a very gray moment when we don't know. if we knew that, say, you know, one or two in a million caused fatalities, then you might publicize it and recall it-- if you knew. there's always gonna be a very awkward moment when you've got some incidents, you don't know whether it was the driver or whether it was the manufacturer, what the problem is-- in good faith. i mean, we're acting in good faith here. we're not just trying to make a buck. and you don't wanna tank the company because a lot of people have jobs. there's a great technology that can help america. you could set it all back. so there is this gray moment when we have to go as fast as we can - to establish whether there's a problem. - minow: but you've already-- you've already said that you know enough - not to ship that next shipment. - no, we know enough to-- i think we ought to tell the people that we're about to ship to - that we've got a problem here. - we definitely have to do that. you make up your own mind whether he wants to ship. atkins: as soon as we determine we're not gonna ship, i actually think bill was right in saying--

that's the time to get out in front of the bad news, - to manage the story... - minow: exactly. ...to be the one to put the best face on a bad situation - and craft what you are doing. - minow: the minute you tell anybody, - you have to assume everybody's gonna find out. - that's right. and you wanna be the one telling the story. smith: we should recognize we're in a period like in the 1890s where every businessman is considered to be a crook, a scoundrel or an embezzler in some sense. we need to relegitimize the positive elements of a free society. the challenge, though, is to recognize that a world that sees every business act and every unexpected finding of a risk as an example of some immorality or criminal liability is a society that'll never go into the future. we've got to find ways of immunizing our system. sarbanes: you don't seek to immunize the system by doing something that puts a blanket of immunity over everybody. because then that covers the bad actors. and there are a fair number of bad actors. and no one has a greater interest in cleaning out these bad actors than the good actors

- in the business community. - minow: you are absolutely right. i think what fred just referred to as the delegitimization of business is because business executives have acted like scoundrels. no no, leslie. we're not gonna find every business run by an honest man. - then that's why you need oversight. - no-- what we then need is, since you know you're gonna to be attacked sooner or later, you should have some ability to have joe write a story that says, "well, on the one hand, it was one in a million, and on the other hand, more warmth or what?" i don't think that washes anymore. i think that, you know, coming back to the auto safety issue, if i read the story and it said, "well, it is saving all the energy that we need to save to make america energy independent and reduce global warming, which is a subject very dear to my heart, i would have to say, "whoa, but it's at the risk of my kids' safety." - smith: risk risk. - a small risk versus a large benefit. whether-- you know, there are kids that are killed every year by air bags in cars. still, air bags are required to be in cars. paul, how does-- how does society weigh a finite number of deaths

versus a larger benefit to the society? krugman: we actually do that. - i mean, we, in fact-- - woman: but we do it badly. in fact, on air bags, there are actually calculations made, - and the decision was made-- - that's right, people die from air bags. krugman: some people die from air bags, but more people will be saved. but of course, what makes that a little easier is that that's a decision being made by government regulators who can't-- they can be accused of lots of things, but they're not a profit-making corporation. but the point is that we have a potential problem here. we are trying to serve the public interest. we are not saying, "gee, you know, if we can hide this, or keep it quiet for a few months longer, we can make more sales." we have to stop that right now, now that we know there's a potential problem. because we-- society does, in fact, make those kinds of decisions. minow: society makes those decisions very inconsistently and very badly. abele: we let teenagers drive cars. minow: we let teenagers-- we let adults drive cars. queenan: we let teenagers drive suvs, which is worse. it's a very inconsistent process. and-- and you always have to remember how this looks in the press.

the press is not going to be fair. tapper: we have to move on, because as wonderful as the maximile may have been, there is more than one way to save the earth. and one of the ways that you can save the planet is through the spread of information, and lew kaden, you are the c.e.o. of a publicly-held company called "wowie info." ( chuckles ) it provides maps, information, e-mail, blogging, telephones through the internet. it is a huge success. you and your college roommate bill mcdonough put this together. you guys now dominate the internet marketplace in the u.s. and in europe. is there anywhere else you maybe want to look to expand your operation? lew, let's go to asia. tapper: have you considered jaigunda? as the ambassador to the united states-- kaden: i was there just last week. tapper: we are a rapidly industrializing country. we have a population approaching a half a billion people; highly educated;

80 million internet users. that's more than anywhere except for the united states and china. and we are about to open our country to internet companies such as yours to come in and offer your services. - great market opportunity? - yes. - woman: but? - tapper: but-- ( all laughing ) as you know, we are not apologetic about preserving social harmony. anyone found to be encouraging civil disharmony is dealt with appropriately. so anyone who comes in to jaigunda has to sign a pledge promising that their business will practice self-regulation and business ethics. that sounds okay to you, right? well, i think we have to know more about what lies behind it, and what your specific rules are, and how they affect our business. tapper: we monitor the internet in jaigunda. there are things we don't dig, like... - democracy; - ( laughing ) certain spiritual cults;

people who report on police brutality; criticism of the government; i would be remiss if i didn't mention pornography, of course, but that's not what the jaigundan people want. they want freedom that the internet can provide. we should go into the country only with the condition that we be allowed to distribute information which we believe is responsible. we are not going to accept a government filter either formal or informal. i'm not sure i would go quite as far as bill. i think we need to go there, send people there, show them our product, how it works, understand their restrictions-- what are they going to do to it-- in detail. and then see whether there's a set of principles that we can live with. tapper: let me just say as the ambassador from jaigunda, look, you can't turn jaigunda into the united states like that. it's a process. you guys can be a part of that process.

that's the first thing i want to tell you. the second thing i want to tell you is your competitors are on the other line-- with me. atkins: and this is the largest emerging high growth market, and if we don't go into it as a for-profit public company, what is our response to our shareholders when we've ceded 29% of the world market? we've said, "we're not going." what's our answer? i don't think the ambassador cares about that. - kaden: what i'm interested in-- - i'm the ambassador, and i'm interested in the pledge. --is moving this service into your country according to a set of principles that meet our business practices. if your concern is pornography, i think there's probably a way for us to do business. if it's something else, then we have to take a look at it. - tapper: betsy, are you willing to sign the pledge? betsy. - mcdonough: no. - oh, betsy. sorry. - you're obviously not willing to sign the pledge. lew, i'm getting a vibe that you're not willing to sign it either. - atkins: i'll sign. - i don't think the problem will be resolved by whether we sign or not. you two are fired. betsy, you're in charge of the company. - ( laughing ) - mcdonough: we were fired with pride. tapper: i'm sorry, but it's a publicly-held-- it's a publicly held company,

and there are stockholders who want to make money and want to expand into jaigunda. so you've signed the pledge. my two competitors are in there, it's the largest growing market, and i believe over time i can have some amount of incremental change and get better public information flow. but i'm a practical business person. i'm a for-profit public company. i disdain the business ethics or the principles that i had to sign on the pledge to filter and control information. but yes, i am going to sign the pledge. tapper: does anyone want to join up with betsy? smith: i definitely-- 'cause betsy-- we were doing some historical research, and we found out one of my ancestors was a printing-press manufacturer in the earlier period of the middle ages. and the catholic church banned a bunch of books, but we still opened up an outlet in italy, because we decided printing some books, at least, gave the italian public a chance to know-- we're opening up a window. we're not opening a window as big as we wanna see.

but betsy, i'm convinced, with you and us operating there, it's going to be a freer country in 10 years. it'll be faster because us rather than second-rate company, wowie-- wowie? - tapper: right, wowie info. - wowie info is good. tapper: welcome to jaigunda. thank you very much. we're very excited. a couple of months go by, and tens of thousands of jaigundans are signing up. they love wowie info. they love the fact that you promised confidentiality, and you're dedicated to your users. listen, jaigundans expect censorship. yeah. it's not like they were in indiana, and then they woke up in jaigunda. - ( laughing ) - right? they are excited about consumer information, they're excited about the fact that they can share information with each other about movies and horticulture and education and health care. it's a fantastic success. one day, a government official comes to you, ben-- you're the counsel-- and says somebody has been using wowie info to e-mail and sell child pornography.

that is a violation of the jaigundan law against distributing criminal materials. we need you to give us his identity. what was the deal when we went in about revealing people's identity? in the pledge, it didn't say that we had to ever give up our confidential users. and we have a policy globally as part of our business ethics that we protect the identity of our users; and it would compromise our business and corporate reputation, and it would impact our stock. heineman: you know, basically, we all pledged to operate under local law, with some exceptions. and if there is proper process "under their law" to obtain the information, the general practice of multinational corporations is that they may follow a higher law, but they certainly follow local law. we knew this was a risk, and we realized that if we were going to engage in information services, we had to find a way of making sure that even under those situations, privacy would be preserved. you've already compromised your principles in being there. - smith: i don't think so. - you have, with filters.

mcdonough: lew and i are still major shareholders, and we're calling a shareholders' meeting. - ( laughing ) - and so if you-- if you don't comply-- what we need to know is if you don't comply with their legal processes, what are the consequences? and if the consequences are to shut you down, - is it worth it? - tapper: joe, what do you think would happen if the fbi asked wowie info for information about a child pornographer? queenan: they'd get it. in the united states? they wouldn't have any trouble getting the information about child pornographers. tapper: i don't understand the problem. why would they do it in the u.s. but not in jaigunda? it's a child pornographer! smith: we're certainly gonna kick them off our system as soon as we find out who they are. tapper: that's not good enough. they want to know who it is. they should find out without compromising the ability of us to provide secure financial and economic and information privacy to the vast majority of people who are not abusing that privilege. tapper: you are getting conflicting information. kaden: i think, with respect, that's nonsense. as ben said, you go into a country, whether it's the u.s. or jaigunda, you operate under the rules and procedures of that country.

and if proper process is used to make a request to you to respond with information under your control, no promise or no contract of confidentiality can overcome that. if there's the right process, then i think we're going to have to release-- you're going to turn over the kiddie-- child pornographer. if it's... a correct process, and... i think-- - abele: you know what's going to happen. - yeah. - abele: i just thought i'd-- - ( all laughing ) it's the slippery slope. - as her counsel, can i say something else? - please. we're not going to obey every law of jaigunda. we're going to obey this law, because this law doesn't sort of offend western or global sensibilities or standards. but in terms of our reputation, there may be laws in jaigunda that they'll ask us to obey-- atkins: the political harmony law, we're probably not going to obey that. and we may choose not to obey them. tapper: so the child pornographer has been turned over. months go by.

everything is still going great. wowie info is building up market share. government official comes to you again, ben. somebody else has been breaking the law, distributing criminal materials. we need his name too. can we have it? more facts, please. it's a blogger that was writing about police brutality in the outer provinces. well, i think by going in the way we have gone in, we have accepted the fact that there's going to be a compromise of free speech over the internet. - and that's the decision made going in. - yes. so that is not inconsistent with that decision, if we made the right decision in the first place. minow: and you made that clear to your jaigundan customers too. when they signed up, they scrolled down through that long long page with all the little letters on it that said-- and clicked on the "i agree," saying "i have absolutely no privacy rights because i live in jaigunda." no no no. we can't have an information society if government can intervene at will. it can, under very circumscribed circumstances,

pull that piece of information out, but it better be tight. you're gonna break the agreement you made going in? that's the deal you wished you made, not the deal you made. you agreed to that going in. betsy was the first one to raise her hand. that's how she got the job as c.e.o. but not the privacy, the content control. it was content control, not information sharing we gave. lowe: so you're willing to conceal a crime by protecting the privacy of your customers. we don't think it's our job to be the government police force. it is our job to provide a liberating information service. heineman: you are being subpoenaed. if they've got crimes, let the police do their job. - you're being subpoenaed. - tapper: i just wanna give you some information. i want you to go back to talking, but while you're talking, your servers in jaigunda have gone down. the government knows nothing about it, of course. "we're waiting for the name of this blogger you haven't given to us." your servers are down. your competitors are getting all sorts of people to sign up. heineman: look, we made a pact with the devil to begin with, on the broad theory-- no, on the broad theory that it was better to be there than not be there. if you're going to be there, in a totalitarian or authoritarian society, you're going to do certain things

consistent with the original decision. there will come a point when you have to get out. now whether that point is when they ask for someone who was politically protesting as opposed to child pornography, or-- it's not unsurprising, sometimes they ask for the religious affiliations of your employees. - or tax records. - things like that. then you may just say, "no mas. goodbye, not now." tapper: you think you should pull out? atkins: i think we have to be mindful of when we cross that line. and when they ask for everybody in mongolia who went to visit the dalai lama because they want to execute them, then maybe that's well beyond our line. and it's a continuum. lowe: how much of your shareholders' money - did you sink in jaigunda? - it was always cost effective. in fact, we couldn't have afforded as a public company not to go to the largest high-growth market in the world. that would have been hugely irresponsible by us, where our other competitors were already there. so that was a business decision, and maybe... we at this point

call up our fellow competitors, and speak to the other two large internet companies and ask them if we can get some agreement as a consortium of how we want to do business or what rules we wanna create. since there isn't a regulatory body to protect us, perhaps it's time to have an industry association and look at how we solve it. krugman: this is where, again, the n.g.o.s were generally-- aroused citizen groups can be your friend, because they can say, "look, we are going to urge people to boycott companies that go along with the jaigundan government in this stuff." it's actually a good thing if we can have a political process or a quasi-political process on this end to make it easier for companies to behave well. queenan: but it's inconceivable that you went into this country jaigunda without knowing that the servers were going to go down. you knew that-- it's inconceivable that you didn't know that you weren't in indiana, or even illinois. but your original agreement actually dealt with this. your original agreement was, "yeah, we'll play by your rules,

and your rules are not great rules." so you knew, of course they're going to ask for the names of the bloggers. absolutely. and of course, the bloggers knew that too. i mean, the bloggers are-- they're guys who like to get attention and now they got it. so you've already kind of dealt with the problem by saying, "yeah, we've made a deal with the devil." krugman: but you can change-- a parallel: there was a time when u.s. companies blithely went around bribing officials in countries where bribery of officials was normal. rules were passed saying "you can't do that." - except in louisiana. - right, except in louisiana. the fact that a u.s. company signed an agreement to go ahead with whatever horrible things they do in jaigunda doesn't mean that the aroused u.s. populace can't demand that u.s. companies stop doing that. - joe, it is a story, right? - queenan: sure. tapper: do the american people care? - no, i don't think so. i think-- - lowe: i do. - well, great. - lowe: i mean, yeah! ( all laughing ) lowe: i'm an american, i care! tapper: is wowie info having problems with getting customers

in the united states or europe? no. every american accepts that the rules in jaigunda or the rules in many of these other countries are going to be different. where the company would run into problems would be if it said in advance, "we're not the kind of company that does that," when you are the kind of company that does that. lowe: they said confidentiality. that's why i raised it. how can you promise your customers confidentiality if you're in jaigunda? you can't. - they didn't. - lowe: they did. smith: how can you promise it in america? we've got problems everywhere. we do the best we can. lowe: i agree and i think it's terrible. abele: the phraseology is, "don't be evil," right? queenan: don't be that evil. part of the promise of globalization, and i hear it all the time, is that ultimately, the market economy is going to bring freedom to people. i always say, "tell that to the enslaved africans who toiled in capitalist america." it doesn't necessarily bring freedom to anybody. and i think we're kind of in the situation we were with child labor in the 19th century. it's a race to the bottom unless somebody says "stop,"

and you get enough people along with you to agree to that. and that's why i think betsy's idea of an industry standard would be the way to go. we've stopped economic growth many times historically, and we might do it again. - but wealth-- - child labor is necessary for economic growth? wealthier is healthier, wealthier is cleaner, wealthier eventually leads to more freedom. we're not going to change the world tomorrow. but american corporations and corporations more generally, start a process. - it doesn't get to perfection. - we're not in complete disagreement. what i'm just saying is that the american start to the freedom that is going to ultimately lift people in these countries has to be the kind of start that says, "no, there is a floor here." there are certain things we will not do, notwithstanding the emerging market and the lure of dollars. tapper: nell, as a stockholder, do you think they should turn him over? um... as i said, they signed an agreement going in. once they've made the decision to go in with jaigunda, and they signed agreements with all of their jaigundan customers

saying that this was what they intended to do, and so, i think that they must turn them over. there's pain in any of these gray moral difficult decisions. and although you have set a standard, and you've made a business decision that it was the right thing for your investors and your shareholders to enter a major market, that doesn't make it less painful when you're faced with, you know, dealing with some of the actual realities. but in the end you have to swallow hard and weigh the good, the bad, the value that you're bringing to the actual country and the citizens of jaigunda, the right business decision in a competitive global market, the hope that you can change and influence things with your colleagues, perhaps use the n.g.o.s to help raise awareness and pressure. i mean, it's not a perfect world, and it's painful when you're facing the fact that you're going to do harm to an individual's life.

tapper: is this the kind of decision that as a c.e.o. would keep you up at night? it would keep you up at night, but you'd have to make the decision. so, ladies and gentlemen, we are out of jaigunda. we're back here in the united states. please give this panel a huge hand. ( theme music playing ) announcer: "ethics in america" is a presentation of the "fred friendly seminars" at the columbia university graduate school of journalism. "fred friendly seminars" is solely responsible for its content.

>> the san francisco ethnic dance festival is one of the jewels on san francisco sculptural crowns. this is in its 32nd year of showcasing the celebrated dance troupes. this year will be one of the past with four new works representing kondo, afghanistan, china, mexico. -- congo, afghanistan, china, mexico. more than a hundred 30 ensembles and soloists auditioned in january for a slot in the ethnic dance festival. in the end, 37 companies were selected to perform.

26 of those performances are world premieres. >> each year, we assembled a panel of dance experts that is made up of academics, scholars, researchers. people have been working for decades in the field. many of them came to this country in the seventies and have trained the next generation of dancers. they are proud to see many of these students at the these masterful levels. this was one of the best panel'' we have ever had, extraordinary people. at the end of the process, they rank their top groups which are then merged into a master list. >> performers are judged on

stage presence, costumes, and innovation. >> the four programs are created around an exciting and dynamic range so the soloists and groups selected each weekend will have enough dynamic range to be a society overall to are experience. >> hundreds of dancers from different countries need each other, compare stuff, and make new friends. this has resulted in new cross- cultural collaborations'. >> one of the extraordinary things is that it really only happens here in the san francisco bay area. all of the dancers that we are presented -- presenting are from the area. they have full-time jobs and

they spend their weekends nurturing their passion to sustain these extraordinary dance forms from around the world. the audience cannot help but be inspired. >> this year, the festival will feature a special collaboration that celebrates the mexican bicentennial and commemorates the 100th anniversary of the mexican revolution. >> one of the great area biographers has stepped out of that role and we asked them to create a special work working with 6 x ordinary dance companies that we have assembled dancers from all of these companies to present a united work in celebration of the bicentennial. >> dancers from over 20 countries