Episode are the women a fox news who dont have a primetime show, who at great risk to themselves because no one thought he was going to get fired, found the nerve to walk into paulweiss when murdoch started that investigation and told their story, believing that he would continue being there boss. And those women want their and an i would never out them, but those are the courageous ones. Its much harder than it sounds. We can just carry on gabbing. Settle for more, everyone knows youre in the process and that in a contract year new britain a book that is the number one New York Times the best seller, congratulations. Thank you. [applause] what does megan kelley want more of . For me its pretty clear, im doing a job i love, but theres something i love more. Three Little People in a big person named doug. Doug and i are good, we see each other because hes a writer, he writes he writes books for a living, he actually is a writer. Then he is a Flexible Work schedule and we can see each other. And a pretty open about this, i am missing too much of my childrens childhood. When i first started this job they were just barely four and basically three, two, newborn. And i had the whole day with them and that i would go to work at 330 or 44 and get home at midnight. And now their aging, their seven, five, three. So are we. [laughter] and now to out of my three go to school at 8 15 a. M. And dont get home until 330 when im walking out the door. Honestly, thats not acceptable to me. Thats not more. They mean to much to me. I refuse to miss their childhood. Just so i can do a job that i love. So im not breaking news here, ive set all of this to my employers, they know this too, and that is my challenge now decided what im going to do. Can i find a way to work with my schedule at fox and continue to do the kelley file and see my children and if the answer to that is no then i will have to make a different decision, because they are most important. Settle for more as the book, thinking very much. Thank you. Think you also much. [applause] thank you for coming. [applause] cspan, where history unfolds daily, in 1979, cspan was created as a Public Service by americas Cable Television companies. This brought to. This brought to today by your cable or satellite provider. Afterwards is next on book tv, covered Business School professor eugene is the author of why they do it, and examination of whitecollar crime. To write his book he spoke with nearly 50 former Business Executives involved with corporate crime. Good morning. It is a pleasure to have this opportunity to speak to about your book, why they do it, let me start with asking you, how is it that you came upon deciding to write a book about the perspectives and the backgrounds and thinking of what color criminal . , financial economist by training, this book begin when i was a graduate student working on large Empirical Data set which most guys are doing at three in the morning and i came across a show called msnbc lockup. Cross between a Reality Tv Show in a documentary. On the show they had a crew going to various prisons and they were interviewing convicted felons much were convicted for violent offenses. I was watching the show and i started think about the kinds of people that i wonder think about, the people who are in the industry, who donate generously and wonder what happened to these guys with these people that i like many people really respected in their convicted for offenses and then they disappear. And so this project began as a personal interest that i saw the headlines, this is 2008, enron, theres very much in the headlines and that evening out of personal curiosity, this is not a scholarly project at all. I did what i think a think a lot of people have the back of my, what are some of these guys thinking. I thought maybe if i could do it theyre doing on the show and spent time talking with them might see a different perspective. Spee01 so give us a sampling or list of who it is you spoke to spee02s over the last seven years roughly 50 people, most of which were convicted criminals, some civilly and some have been overturned. A prominent a prominent name big data from enron, dennis and the former co tyco, people convicted of ponzi schemes in stanford, number one and two of the recent ponzi schemes in history. Host how did you approach them and why do you think they agree to talk to. Guest thats a great a question as an attorney asking that. I approach them as an educator, im someone the teachers the material to my students at harvard Business School. Its not something a student would ever think they would face, so i wanted to see how did some of these individuals some of which are llama the school it check, what happened along the way. So i wrote a short letter, i would like to better understand your perspective, can we spend time together. The first night when i spent the first ten questions that i receive some responses. Someone from the sales, Stephen Richard roden only elegant eightpage cursive letter back, others set im happy to chat, my plenty of time now, come visit me. Hes in upstate hes in upstate new york in a prison. So i started taking them up on this offer. Was started at half now here, letter there, and email if theyre in federal prison back and forth threaded special system began something that has become more apparent to me that it was interesting and humbling speaking to some of these extraordinary intelligent individuals that face consequential sanctions, teacher her their perspective. Why they spoke with me, i think one thing of privilege to be an academic is that i can commit to spend as much time as i needed to understand their perspective. I could say not going to try to write something or teach something till the end of the week as a journalist might have a deadline. I could spend weeks, months maybe years corresponding to try to really understand how they see the world. Thats the ultimate goal of the project. Also i think many simply just missed their business world. I keep finance, we can talk about the financial crisis, we can talk about going whats going on other firms. Most firms. Most of the conversation was not about their case, most of the revealing aspects was talking about everything else, was going on in the wall street journal. I would send them books that i was reading, hearing what they had to say versus my colleagues and students whose oftentimes was fascinated. Host did you talk to Family Members, victims . Others who are around these individuals in the crimes that were committed . Guest i did. Much more my focus was on the individual, in some instances Family Members and many of the cases much of the correspondence is among the family. I think its her easy and i approach it like many people that we see this extraordinary crime that cost such devastation to say someone is going to get one or two years in prison does not seem very much but to see what that does to a family, was with the kids, its quite extraordinary. And humbling. Even if it is short, nothing from their perspective with their family and also to see how they get out of prison how some people are finding Different Things to do and pollution in different ways and others are stuck having the sanctions on them is something they cannot overcome. And in some cases like made off, some people were truly devastated by his actions. Part of my goal speaking to the victims is to go back to some of like bernie made off and set i just had this conversation can you help me understand why this doesnt seem to be resonating with you. Thats why learn about their personality, some just didnt seem to settle in, there is people on other side that lost everything. Host would ask the question whether you thought they were truthful with you, though perhaps the way you describe it youre not necessarily in the business of trying to determine what the truth was in confronting them with it, is that right . Guest the broader goal, their subjective view of the world. I wanted to put myself in their shoes and see how they view the world. Their own cases and as any prosecutor knows her defense knows that peoples memories, even if theyre trying to be truthful, theyve all been changed. Particularly when it comes to their cases. Even the best Case Scenario is hard to remember the details but on top of this most are convective villains such rely on untruthfulness would be a little naive on my part. This this is why try to rely much more of the other information i was going around their case at the time. For example example we have a lot of email and in some cases there is show me that they were not worry us to after they completed the deal. They werent worrying they were celebrating and described how they went out with their spouses. So that piece of information is more powerful, its not something widely reported. If you know people are doing after you come back up, what they were thinking a little bit better time or their immediate reaction. Thats it is trying to do his piece it together in a different way. Host the sig digestion was that i didnt want to my defense lawyer that night i went out had a party so therefore i was not really intentionally doing anything wrong. Guest i dont want to say intentionally but they werent worrying about what theyre doing. We all do some things that are wrong, well speed driving the car, we know its wrong but we still do it. But if we know that something is actually harmful and going to create a significant personal harm or devastation moe generally have a deeper pause for going ahead and i would argue. Many of these cases i think making note that theyre pushing something aggressively could be wrong this could lead to a slap on the wrist, it would not lead to the kind the consequences that we saw described in the book. Host let me ask, what you think is the difference, if there is one between the white collar criminal and those who can commit other types of crimes the be it burglary or drug crimes or assault, as their fundamental difference between the profile of the perpetrator . Guest i think it leads to the profile of the perpetrator of the crime itself. The thing thats different about most whitecollar offenses is you dont have to get close to the victim, so the victim themselves are distant and think of like insider trading. Its difficult to identify the actual name of the individuals and we could say more broadly is systematic it creates a harm to the Financial System as a whole. Host anonymous persons on the other side of the trade so we can think of, they exist, its not to say it doesnt exist but you cannot pick them out to and actually see their picture. In other cases even when there are identifiable victims the timing in which theyre identified is offset. Like a ponzi scheme. At the time of harming the individuals investing in an investment scheme, theyre clamoring to give him more money, theyre trying trying to give him our leadership position in industry, you come home and most of the day looked pretty good, its only when its revealed later that all of this starts to unwind and becomes clear that there are people being harmed. So this is where i find it interesting, i can spend hundreds of hours it with individuals in the room and i never once worried about if one of these guys going into my back pocket and stealing 20 out of my wallet. Many of these individuals, through funds that i own, retirement accounts, have actually taken far more than 20 for me. The question is why do i not need to need them stealing 20 my wall but many would, without steal a couple hundred from my account and i think thats the fundamental difference in terms of these crimes. You can do some pretty devastating things and not have that good feeling of doing something harm. Host as opposed to put it a knife at someones throat and demanding their wallet. Guest right which takes a fundamentally different kind of person or a different kind of deaf desperation. Host he also point out that in addition to the anonymity of the victim in the longer time it takes the victim to be revealed, it is the act itself and you talk about how the crimes are often committed by the click of a mouse or erasing and putting in a new number on the balance sheet. Is the nature of the act also something that distinguishes the whitecollar criminal from others . You can create extraordinary devastation. Theres 11 case in which someone uses the white spot feature and excel and could cause hundreds of millions of dollars of loss for the firm. And it takes 30 seconds, doesnt feel all that harmful at the time. Its really the click of a mouse or signing a paper. One that was prostituted after Stephen Garfunkel a former cfo, he described he was actually comfortable and didnt feel bad about signing many documents attesting to a false letter of collateral, youre just signing a sheet of paper so what it was only once he actually confronted by someone, it was a banker who did not think the numbers made a lot of sense and he said the numbers dont line up that he was going to be forced to lie to someone facetoface and then at that point he said its a lie, this doesnt make sense so the most subtle distinction of lying on paper is very easy, lying to their faces harder and we can keep escalating from their. So does the fact that, does does this give you some insight potentially into how one might better deter White Collar Crimes, knowing how it is different from other type of crime, does i give you any insight or did you reach a conclusion about how best to prevent it . Guest this is a challenging question. One thing thing that initially surprise me but then over time became something they came to expect is that most of these people, even theyre doing something egregious, the kind, the kind of think thats going to land you in prison, its not a gray, its not if we hire great lawyers we can get up this comments youre going to prison for some time, they still found ways of not seeing how they were ever can go to prison. Thats extraordinary to realize that even if you do something really wrong that you never see that outcome happening, this isnt a deliberate cost and benefit calculation, theres two ways to increase the cost, we can either increase the probability of being caught that we increase the sentence once caught. So i think the historical approach weve taken has been, lets increase the cost associated with once youre caught. So rather than a potential sentence of one year coast from three to five and in some cases they argue that some of them actually look to long compared to serious personal. Host i think there is one cited in your book that about a 12 milliondollar fraud that impacts shareholders in the 19 80s was punishable by approximately three years in prison which is by the early 2000, that had increased fourfold to somewhere between 13 and 16 and 16 years in prison for the same offense. Obviously a drastic increase the penalties and sanctions and fines. But your point seems to be, that may not have much of an impact on deterring whitecollar crime. Guest were talking about the most privilege here. It is a specific type of individual. Whether you go to prison for six months or three years, that id is not resonating in most of these cases. You still think thats were someone else commits those guys that go to prison not me. Host how about the fact of prison. Guest so this goes to the other way, and two other norms, this stuff is wrong its going to have really serious sanctions associated with it which could be heavily financial penalties and it could be prison, something that people normalize and this is what happens to people that do this kind of thing. Thousand peoples minds i think that would change. Thats not a costbenefit calculation, that becomes part of our norms and culture about whats appropriate and whats not appropriate. I think think the challenge is that you need resources. In order to detect more cases especially the more difficult cases you need resources to police which is challenging because this is a political consideration of how much resources to investigators have. Host what about if white collar criminals you find dont really make that costbenefit analysis, then do you or in your book have suggestions on how it is that this crime can be better deter . Guest i go back to the individual at the end. The people in here i not predisposed or have any inclination to actually want to do something criminal. These are things that happen because of the things theyre exposed to, the norms and cultures in which they grow up in a firm and and the pressures they face, i think of for example the Business School student, theres not one Business School student when theyre about to leave a prestigious Business School that says my goal is to go out and become wealthy and prove the industry, donate to wonderful organizations and then maybe near the end of my career it might engage in some fraud or insider trading, no one thinks like that, but we can find cases of people doing exactly that he had this extraordinary career as one can have, more than three decades, one of the most well respected firms the world, potentially ceo he became the lead person of the most celebrated firms and what it means and soon after his retirement hes on the board of a number of prestigious firms, Goldman Sachs is one of and at 1. 23 seconds seconds after Goldman SachsBoard Meeting is calling a wellknown billionaire , hedge fund and divulging confidential information. This is against everything that he did it for being successful. Spee01 let me stop you there for moment. I moment. I was going to say the cynic might suggest thats exactly the kind of approach and conduct that gets you head in the business world. It is not a place necessarily where ethics and morality prevail, but its those persons who operate in gray area and may be across the gray area that get ahead. So what what he may have done was an extension of how he operated mckinsey. Guest it could be. Its impossible to rule that out. One thing i think about in the case of him and the other partner mckinsey is that one of the most cherished values at a place his client confidentiality. This is a place where you dont talk in an elevator about your clients. You dont even tell your spouse, you go to st. Louis but you dont know what firm youre working for. It would be a remarkable to be a was spent decades in that culture in one hand teach it, lead it, and do it successfully around client confidentiality and then to not respect that and sti