Caught with his hands in the cookie jar: Money laundering expert cleans cash for unknown
Colombian nationals (2017-2019)
In November of 2019, Bruce Bagley, professor of international relations at University of Miami
and world renowned expert on Drug Trafficking, Money Laundering, and general corruption in Latin America, was caught laundering money for a corrupt businessman from Latin America. He set up a business account under the name “Bagley Consultants”, and used it to wash cash for an individual who has been identified as Alex Saab, a Columbian businessman. [Herald] At the beginning of 2019, Saab employed Bagley as a business consultant, to assist in winning a “no-bid contract” to import food to Venezuela, a deal made with the Maduro administration,
well known for its corruption and general mistreatment of the Venezuelen people. Winning this contract led to the FBI sanctioning Saab, as they had suspicion of corrupt profits being made off the deal. This led to them monitoring accounts that he had relations with, in an attempt to catch any suspicious bank activity, which led to them discovering that Bagley was passing large sums from Saab’s food company through his business accounts (opened under “Bagley Consultants), siphoning a percentage of the money before distributing the remainder to Saab. It has been reported that this money was originally meant for the food project and was being misappropriated, though whether this was due to corruption between Saab and the Venezuelen government or solely on Saab’s behalf is still unclear. The implication here is that Bagley could claim the money left in his account as his consulting fee, therefore disguising any illegal activity under the ambiguity of what consulting an international businessman about winning a government contract might entail. As the details of the case continue to come to light, Bagley has altered his legal strategy; Originally pleading not guilty, as of March 20th 2020 he’s accepted a guilty plea deal, admitting to 1 count of corruption.
- Venezualan public at large
- Venezualan government
- Colombian nationals, their unknown constituents
- Bruce Bagley
- US Federal Government
- University of Miami students and
- Alex Saab
According to the Stanford Encyclopedia of Philosophy, Utilitarianism is the Moral Theory wherein we should seek to have the consequences of our actions result in the greatest good for the greatest number of individuals (Driver). It is also from the consequentialist school, a type of moral theory that measures worth of action on the consequences of that action, rather than any inherent principle in the action, or moral measure of the action in itself. In the case of Bruce Bagley, it seems that he was not acting in accordance with the tenets of utilitarianism; his laundering of 3 million dollars takes away any potential benefit that may have been generated by those funds had he not deemed it permissible. It seems that Bagley was acting in his own self interest. We can only compare the opportunity cost of him stealing and facilitating the transfer of the money to how that money would have been used otherwise. To clarify, it is a guarantee that if that money had not been stolen it would have gone to food supplies for the Venezuelan people, resulting in widespread benefit for the population. 3 million goes much further there than it does here. We can see clearly a utilitarian would not have condoned Bagley’s actions, on the basis of them resulting in less happiness than if he had refrained from acting. The consequences of his actions were not, by any measure, maximizing the potential benefit of the situation.
According to the Business Ethics Case Manual, Kantianism is the most popular derivative of the branch of moral philosophy known as deontology. Deontology focuses on the morality of an action itself, rather than the consequences of that action [Salazar]. This morality is determined by a set of rules or laws governing the sorts of actions that are impermissible, permissible, and supererogatory. In Kantianism, these rules come from Kant’s three formulations of what he calls the categorical imperative. This set of rules is justified by the pursuit of what Kant refers to as “the good will”, which can best be understood as the need to treat reason (and the ability to reason) with respect; to allow each rational free agent (read:healthy adult human) to act as if they have complete control over their own destiny; such that they have autonomy. The formulations are as follows: 1. Act only according to that maxim whereby you can at the same time will that it should become a universal law. The second formulation of the categorical imperative is more intuitive: “never treat a rational free agent as a mere means, only ever as an end unto itself”. In layman's terms, this means that we should seek to treat every other thinking person as someone capable of leading themselves; we should never take advantage of a person in pursuit of some other end. The third formulation follows from the previous two; we should make laws that follow these guidelines, then choose to abide by those laws for the benefit of society.
A Kantian would agree with the utilitarian that Bagley’s actions were impermissible, but they would do so on the basis of an entirely different perspective on the situation. Rather than focusing on whether Bagley’s actions led to some positive or negative impact on himself and others, they would focus on the principles of the actions themselves. This means evaluating the motivation behind Bagley’s actions, and determining whether he was in pursuit of the good will, and if his actions abide by the categorical imperative. Stealing for self interest at the expense of a whole country, lying about it, and seeking to cover up the actions, does not pass the first formulation of the categorical imperative, and clearly demonstrates that Bagley sought to use free agents as a mere means in selfish pursuits. Having violated the first and second formulations, the Kantian would conclude that Bagley was not acting ethically when he chose to launder money for Alex Saab.
According to the Business Ethics Case Manual, Individualism is the moral perspective that, when in a business setting, any given company is obligated to maximize profit, and gains for the owners, within the rules of the law. It is obligated to do so because fair and equal competition leads to innovation and general benefit across socioeconomic class. When analyzed from the individualist’s perspective, Bagley’s actions were clearly impermissible. While he did seek profit for his company, and therefore profit for the owners (him and his wife) he did so by violating the law, and covering his actions up as best as possible. He acted dishonestly, and therefore is in violation of the principles of individualism, and his actions would be deemed impermissible.
Virtue ethics in the branch of moral philosophy that focuses on the character of an agent, and whether the actions of an agent are indicative of someone embodying virtue. Specifically, the theory focuses on achieving eudaimonia or flourishing, so called because it is the state achieved by an agent who has properly weighed each virtue and chosen to ask in the way that best suits the situation and the individuals involved. For the purposes of analysis in business ethics, there are 4 main virtues keep in mind while evaluating a scenario, and they are: Courage, Temperance, Honesty, and Justice/fairness [Presentations].
Subjecting Bagley’s circumstances and actions to the tenets of virtue theory, we can see that he was clearly acting unethically. Stealing money from a worthwhile cause is as far away from just as an action could be, and is clearly indicative of a lack of temperance and self control. Stealing for the sake of personal benefit, and being dishonest about it, violates the virtue of honest, and displays cowardice in the face of confrontation. Given the facts of the case, it seems obvious that a virtue theorist would condemn Bagley for his lack of ethical fortitude.
Justificated Ethics Evaluation
When evaluating Bagley’s case from a personal perspective, I feel obligated to subject the
circumstances to my own general morally relevant ethical guidelines. Namely, 1. Act rationally,
seeking to treat other people as if their experience is just as important, relevant, and beautiful as our own and 2. Establish a doctrine of intense personal accountability, and seek to act in order to avoid negative consequences for ourselves and others. I chose these as guidelines because I feel they embody the collective sentiment of both sides of the “moral theory” coin; Both the principles of our actions, and the consequences of those actions, are relevant and valuable to the judgement of the entire picture of an ethical dilemma. At the core of all of the moral theories is the idea that any action can have a moral weight, and lean towards a good or evil outcome. This goodness or evilness varies in both basis and method of measure, but the core idea remains the same; that we should act in a way that leads towards goodness.
Analyzing Bagley’s case under my personal justificated system, we can see that his actions are not at all morally permissible. He failed to treat the value of the money he stole as if it were just as vital to the Venezuelen people as it was for him personally. Rather than weigh the potential consequences of his actions against the benefits of them, he chose to act in a self-interested manner, and it resulted in his imprisonment, as well as suffering for untold numbers of hungry citizens in South America. He sought out consequences that would lead to personal gain and negative consequences for others, and showed no remorse for his actions, showing that he lacks strong integrity or personal accountability, again violating the tenets of my personal ethical theory. In all aspects, and subjected to analysis from varying moral perspectives, Bagley acted in a morally impermissible fashion, and should see consequences for it.
Bagley’s first moral misstep came when he lied about his guilt after first getting caught. Attempting to ride on reputation in the face of hard evidence made his trustworthiness in the public forum fall through the floor. Bagley should have come clean during his original indictment, and parlayed this confession into a deal where he could help to catch his co-conspirators. Ideally, admitting to laundering the money would have gotten him a lighter sentence and would have allowed him to be an aid to law enforcement in catching the people whose money he was actually laundering. From an external perspective, Bagley lied to protect a corrupt businessman and to attempt to keep a sum of 300,000 dollars, at the expense of a food supply project for the people of Venezuela. Faced with this reality, the professor should have sought to create the greatest good for the greatest number, take responsibility for his role, and reverse the circumstances he helped to facilitate. As it stands, Bagley should continue with his guilty plea, and seek to be held accountable for the crime he commited. Being in the unique position of essentially being the only employee of the guilty company, Bagley will most likely go to prison, and Bagley Consultants will go out of business, but if by some stroke of luck he happened to avoid prison, here is how the professor should reorient his business to atone for the crime and adapt to the new circumstances:
“Bagley Consultants, where we seek fair, honest, and fruitful solutions for all of our clients international needs™” (they didn’t have a mission statement, or even a website, so I’m hoping international needs covers the sort of work the company claimed to do)
This mission statement covers the basics of what Bagley Consultants should seek to represent itself as following Bruce’s transgressions. The company should seek to remain fair to all parties involved in a negotiation, they should be truthful in the manner in which they conduct business, and they should seek profitable, beneficial solutions for the parties involved. In addition, Bagley consultants should seek to maintain meticulous personal accountability and integrity. Having been caught with his hand in the proverbial cookie jar, the Professor should take as many extra measures as possible to catalog his financial and business related dealings, and allow public access to them for any party that may have a vested interest in them. This includes potential clients, government officials, potential employers, any party that might have reason to be distrusting of the tactics Bagley has demonstrated over the course of the money laundering case. Employing this strategy will force Bagley to be completely honest and transparent about any of his methodology, as well as the services he provides, and will lead to increased levels of trust over time if he continues to operate within the law. This can be done through maintaining records of accounts and transactions, notes on meetings, any sort of information catalog that could be referenced if necessary. This sort of accountability would allow for some latitude in Bagley’s decision making and general actions, while keeping him aware of the circumstances he created.
In addition to assisting law enforcement in catching co-conspirators and reorganizing his business’s operational structure, Bagley should make a sincere and public apology to the people of Venezuela for his role in their ongoing battle with corruption. Doing this, as well as making a statement about the other actions he’s taking as a result of his conviction, would demonstrate how he’s seen the error of his ways and is seeking to both right his wrongs and perform better in the future. This attitude of honesty and humility should extend into whatever hiring, firing, or promotional methodology Bagley uses going forward; he should let employees know clearly and upfront how business is conducted, and why its being tracked and cataloged the way it is. He needs to make it clear through any sort of marketing or media material that he is aware of his mistakes and is working to reverse their effects.
Having a history as one of the world’s foremost experts in Central and South American business and politics should afford Bagley plenty of future opportunities to perform his services under similar circumstances to the ones he must have found himself in when he first met with Alex Saab. What matters most going forward is how he alters his posture towards these sorts of situations, and that is best served by shifting his perspective and methods to be more focused on accountability and honesty, rather than personal profit. If he seeks the most benefit for his clients within this new moral structure, this attitude towards his work will in turn lead to increased opportunities.
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Salazar, In class Presentations
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