01 Mar 2004
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Ex-Con Talks Ethics with HBS Students


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80240ad2c5f43acc66f13dc5e89928ff There’s not much room for theory when Patrick Kuhse talks about business ethics. A successful stockbroker and entrepreneur, Kuhse became an international fugitive after being charged in 1994 with 32 counts of conspiracy, money laundering, and bribing a public official. He eventually turned himself in and served four years in prison in Costa Rica and the United States. Currently on probation, he spoke at HBS last November as part of the Leadership & Ethics Forum (LEF), a student-led organization.

Kuhse’s descent into crime began innocuously enough after he dropped out of college and joined a New York securities firm. He saw his sales and commissions rise after he decided to be less than forthcoming about potential drawbacks to the investment ideas he was pitching to customers. Over time, Kuhse prospered, later moving with his family to the West Coast, where he opened a lucrative financial practice. His downfall came in 1989 when a business acquaintance invited him to join in a bond-trading scheme involving the state of Oklahoma. In addition to skirting the intent of some laws, Kuhse, in order to corner good deals, agreed to pay the acquaintance what amounted to kickbacks. A suspicious state employee eventually alerted authorities.

Kuhse explained that an approach from a friend or respected colleague often is the entrée to a slippery slope. It begins with an apparently insignificant decision or proposal that may involve bending, but not breaking, a law. That is followed by subsequent decisions driven by elements such as greed, a belief that one won’t get caught, a sense of entitlement, or rationalizations that “everyone else is doing it.”

Of his presentation and the motivation behind it, Kuhse explained, “It’s the wake-up call I wish had been given to me years ago. I chose to ignore the warning signs. I want to show you how to pay attention and recognize those signs before you, your loved ones, and/or your employees become lured in — before seemingly unimportant decisions change a life forever.”

Said LEF copresident Jules Seeley (HBS ’04), the event’s organizer, “Patrick highlighted for us students how easy it can be to let your standards slip over time and the importance of conscious consideration of business ethics. We were struck by how open and honest he was with us and how ‘normal’ he seemed. Compared with a classroom discussion, this was a totally different angle on business ethics. In the future, we hope to arrange a prison visit, to talk with white-collar inmates.”

This article is based in part on material reported in the Harbus by HBS research associate Carole Winkler.

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