Transcripts For CSPAN2 Book TV 20140315

Tap, turn the volume to 11, get staired and, oh, by the way, trust me to give the solution more you. For you. And instead we have to turn this issue into something where we understand that as long as we use the internet, there will be cybersecurity and cyber war threats. Its all about how do we manage them, how do we become more resilient in our both technical approach, but i would argue even more so in our psychological approach to it. Did they fall into certain categories . Professors of Computer Science at a University Like this would say be useful to you . How did you inform yourself about this issue . Great question. One is the challenge for journalists, it is actually two ways. One is the challenge of how do i report on this space on cybersecurity . There is an assumption it is this feels, into one little area, everything from the wall street beat to the china beach, cybersecurity woven into it. You cant tell the story out target is going to be in the next quarter to u. S. china relations without understanding these parts of it and the we have to demystify it. The second is by the way, journalists being targeted, being targeted because of what the report on and the information they have inside. Famously in the book we examine the case where the New York Times was hacked back to a Chinese Military unit that is right beside a massage parlor and a wine store. The point is they went after the New York Times not because it was a traditional intellectual property. And times reporters, doing a story about corruption in the senior levels of chinese government. The second question was methodology. Your methodology. Your methodology has to involve the versification of sources and so you want you will notice for example, different nationalities, reference different agencies. You want to be reaching out to experts and academic journals in different fields, also again, you will notice, referencing numbers and leaving anecdotes and numbers, they are powerful, they illustrate something, when you have an issue where there is not firm in data, one example of an anecdote, the data set is a certain way. The numbers matter and compare things across but that is one of the things that has been in the news stories very challenging for reporters because they are trying to balance both capture an area they fear their audience doesnt understand and also rewarded for height. We talk about this story that was covered by major media and fox news had it and it was a warning that the internet was going to break. Millions are going to lose access to the internet with headlines. It was really at play, there was a case involving fbi and the like. The point is journalists today, more rewarded for the eyeball grabbing headlines than substance and so that means you will often see these things reported as fact. If you pullback you go that is not the case. That would be everything from famously, stunningly, 60 minutes reported a story about a cyberattack that took down a brazilian power grid, didnt happen, just didnt happen to more recently a couple dudes to use rifles to issue Power Transformers at a single site. I did become a major news story in the wall street journal. I then got a series of phone calls from journalists calling for my opinion on this cyberattack. It is a daughter who a double layer thing. The last question about hysteria and psychological approaches, 600,000 people in pennsylvania without power, wall street journal has a news story about an attack by rifles that didnt leave anyone without power but you also have a bunch of people interpreting that as a cyberattack. This is a problem set. Maybe one more question. Question here . May be another professor of computers . [inaudible] there is no global mechanism to unfolds another three. Information and Something Like that. In that case [inaudible] and people in the country. That is the moment. Great question. I was flashing my head to indicate washington as well. What can we do about this anonymous group. One is to better understand it and picture their lives differently and particularly because it is iconic use of waste portrayed in the media. One to understand the group and understand it is not centralized, understand the group and understand the motivation, what can we do . One is consistently the groups that it targeted have been groups that in some way, shape or form threatened internet freedom. That chapter begins by saying with all good stories it begins with tom cruise. It is one of the first major incidents when he had an embarrassing video online and scientology tried to rip that off on line and put them on the radar screen and essentially anonymous versus scientology but it went on against groups against authoritarian regimes that were trying to cut off their internet and in turn particularly linked to the wiki leaks episode governments like the u. S. That are unhappy with transparency. One is dont get on their target list. Not being on their target list is not to threaten internet freedom. I got to deal with the response. That is where there is nothing specifically unique about anonymous. Many of the things you were talking about, not sharing information, not having records. You know this, it is not just about records to know what happened but to establish a baseline so you could see when anomalies are happening, building up so you could deal with it before hand. Everything i set applies to an extra attack by some group, the estate group or a non street actor and applies to Insider Threat situations. Wherever you come down on manning or ed snowden we can agree the organizations that they are in were not following some basics of good cybersecurity. Manning famously download the massive amount of information about lady gaga. It is not because of his taste for lady gaga that wasnt a good protocol, but because in those cases you had an individual with wideranging access in many ways they shouldnt have had. You had individuals given in some cases passwords by others and the like and you had an anomalous amount of information being gathered and ed snowdens case for example was reportedly using a weapon to do it for him. These are the kind of things, that should pop up as something to look out for not just in a military organization but if you are running of bakery, giving an individual wideranging access. In the course of the job of a person in this role they typically axis these files and this information, why is this person having 100 times that amount of activity, they have been given a new assignment or Something Else is going on. Lets go down and ask them, those of the things that are happening. My broad point is the basics of Cyber Security would apply in a lot of different situations. It would go a very long way to aiding things, whatever the threat you are talking about. By the way you are never going to get 100 security, just like in life so anyone who is telling you if you do just this one thing or this one product or give me and my organization this much more power budget we will solve this problem for you. To go to the earlier question they are taking advantage of you. Taking advantage of the ignorance. Thank you for joining us today. [applause] paperback and recently right. [inaudible conversations] you are watching booktv on cspan2, 48 hours of nonfiction authors and books. This weekend Jonathan Allen and amy discuss the secret and the rebirth of Hillary Clinton followed by washington d. C. Party to mark its release. On our afterwards program george nash and amity sclaise discussed Herbert Hoover and programs on the federal budget, Harry Trumans white house a visit to tallahassee, fla. For the full schedule visit booktv. Org. We are here today at the state Library Archives of florida, the middle of three stack boards at the archives. What you see behind you is a cubic foot box of those 45,000 cubic feet we have 30,000 cubic feet of state records from the legislative branch of government, judicial and executive branch. We have 15,000 cubic feet of records which fall under our manuscript collection, private donations from individuals everything from letters and journals to photographic collections. This is what is known as the patriot constitution of 1812. Theres a lot of history behind this particular document. In 1812 a group of georgia settlers known as the patriot army invaded northeastern florida and they were operating with the assistance of citizens living in spanish florida. It was still a colony of spain and the motivation for the group of individuals, to come in to florida, from george and come in to florida and they were going to encourage citizens of spanish florida to rise against their government and proclaim independence. Booktv and American History tv take a look at history and literary life of floridas state capital, tallahassee and noon eastern on cspan2 and sunday on cspan3. Catherine neal talk about the rise and fall of tycos Dennis Kozlowski. Catherine neal had access to Dennis Kozlowski and the District Attorney who prosecuted him. All of the people involved in the case and the media that reported on that actives unethically at some point. This is an hour and 10 minutes. One of the greatest offenders in my life began three years ago but i did something outside my comfort zone. At the time it seemed like a very small and insignificant act that turned into something really, really important. My adventure has taken me to places i have never been like a hardcore new york state prison. And the swanky wall street law firm where president Franklin Delano roosevelt once practiced law. I have been to a corner cafe in new york city where i met and interviewed a stranger i tracked down on facebook. I have learned more than i ever thought i was capable of learning. I have met people i never would have met and i have gotten to do a lot of really fun things like being here tonight. This is such an honor for me on my campus with my colleagues and students and former students. A real pleasure to be here and i am thrilled to be here. Always these things happen to me because i did one small thing. I asked a question. Have you ever found yourself in a situation where you dont know what to do next . You have questions you dont have answers, this could be when your boss gives you a project you are responsible to complete and you are not sure what to do or you are a little lost and not sure what the first step should be or the next step should be. Anyone ever been in that situation . Dont know what to do . It happens to all of us. I have been there many times. Why is it so difficult for us to ask questions . Does anyone know others and me . I hate to ask questions and i hate to ask for help bland i am not really sure why. I dont know if it is because of the selfesteem problem in that i dont think i am worthy of someone elses time . When you ask for help and ask questions of other people you are asking for their most valuable resources, their time, their knowledge, their skills. So you feel like an imposition. I dont know if that is why i and others have a difficult time asking questions and asking for help. I dont know if it is because we feel the need to be polite and it feels impolite to ask others to help us when we are having difficulty. Sometimes i wonder if it might be arrogance. You heard the old adage you want something done right, do it yourself, right . We think we can figure it out all by ourselves and we dont need anyone elses help. And i am right there, probably one of the worst offenders in this category. I dont like to ask for help and i rarely do it but in this case i did reach out and asked a simple question and it led to the largest and most significant accomplishment in my professional career thus far. It is work that i am very proud of and thrilled that i have had a chance to work on and move forward. Of very important goal in my career, very enriching experience. Have you ever had a goal . Did you see the goal but dont know how to get there . I think that is a situation we all find ourselves in in small ways or large ways in our lives and careers, sometimes when we get there it can be paralyzing. You dont know what to do next so you stop. It is easy to report to the scarlet ohara method of problemsolving. We stopped. I wonder how many great ideas have ended at this stage. Got a great idea but dont know what to do with it, dont know what to do next. What i learned over the last three years through the process of researching and writing my book are valuable lessons i think are applicable and usable by everyone in helping that you get to the goals you set for yourself and helping you achieve what you want to achieve for yourself so that is what i want to share with you tonight, what i learned about asking questions, how to ask, when to ask, who to ask and i will share that as i tell you about the process of writing my book taking down the lion the triumphant rise and tragic fall of tycos Dennis Kozlowski. I started working on this project because i had some nagging questions about a case study in my Business Ethics courses. I had been teaching a case study about the Tyco International corporate scandal since the fall of 2005 which is when i began, it was my first semester, talked about the Tyco International corporate scandal. At the time, the criminal trial related that scandal that ended in the summer and the executives who were charged and convicted had to be sentenced. I had been talking about this case from the beginning. For anyone in this room who is a former student of mine, i often have students present case studies in our classes, not because i am lazy. It is good for you to do that. For a few years i had students presenting the tyco corporate scandal case study. This case study focuses on the former ceo of tyco. Man by the name of Dennis Kozlowski. The students present the case study do a great job but i would find myself every semester spending 30 or 40 minutes after students presented saying i dont understand this case. With the facts available in the textbook and other resources i kept looking at it and looking at it and with other Major Corporate scandals like it makes sense of what went wrong, where the bad decisions were made, where the crimes were committed. Much easier to understand but in the tyco scandal like couldnt make sense of it. On its face it didnt make sense to me. Eventually because i found myself real explaining more explaining i didnt understand after the students groups presented the case study i decided to take it back and do it myself every semester so i could say i didnt understand it instead of telling students they dont understand it this was a case that nagged at me for many years. It began as a small New Hampshire company in 1960 doing non glamorous types of work, in the room, in these areas of business or industry, they acquired some brands, Security Systems is the most wellknown tyco subsidiary. The company was a smallcompany group. There was a man who became the ceo and he is the most closely associated person with Tyco International. You might have heard of Dennis Kozlowski. He has been covered broadly by the media. You probably a few you are most familiar with the fact, 6,000 shower curtain, he threw a 2 Million Birthday Party for his then wife for her 40th birth day just off of italy. He flew Jimmy Buffett to the party, 250,000 if you guys are looking into that. These i the fact that most people know about Dennis Kozlowski but there is a lot more significant factor that helped us better understand what happened in this case. Kozlowski grew up with a modest background, in newark, new jersey, at neither his mother nor his father, he was a firstgeneration college graduate. He grew up in four room apartment. He shared a bed room, a they shared a bed and he slept on a pot. You worked from the time he was a child delivering newspapers and worked throughout his life, never stopped working until he was in prison and he worked in prison but a different kind of job. He went to college at seton hall university, lived at home with his parents which some of our students here can relate to, lived with his parents, hated them through college, worked in a pharmacy and played guitar in a band for several years and that is how he paid College Expenses including room and board, adam. And he graduated with a bachelors degree in accounting in 1968. Sounds like he intended to have a career business but he had forgotten a career in business, he wanted to be a pilot. You wanted to fly jets in the military in vietnam in 1968 when he graduated from college, the United States was involved in a war in vietnam. Kozlowski tried to join all the arms of the military and he was turned down by all of them for a variety of reasons, to be a pilot in the air force and the navy, his eyesight wasnt good enough. The army wouldnt take him because of flat feet. He is trying to get into the military during a war and they wouldnt take him. So he went to arizona to do pilot training. He did that for almost a year. When he finally figured out he was never going to get into the military and wasnt going to go to vietnam and fly jets he decided he did not want to be a commercial pilot as a career. Pass up his car, drove across the country, back to his parentss home in newark, moved back in with them and report jobs. He had a couple jobs in new york city with companies you might have heard of, smith corona for those of you who remember what a typewriter is. In 1975 when he was 28 years old head hundred came looking for him and told him about a Company Called tyco. U. N. To intervene with the ceo of tyco and was hired as an internal auditor lowlevel land remembered what his starting salary was because he said his salary by his age. What kind of formula that is. He started with tyco, lowest level, worked his way up the ranks. According to everyone i spoke with he was the hardest working guys in the company. One of these people who literally worked 18 hours days, 6 or 7 days a week for decades, he was very successful he and ultimately in 1989 he was named chief operating officer, was given a spot on the board of directors. In 1992 kozlowski was named the ceo of Tyco International. When kozlowski joined the company in 1975 tyco had annual revenue of 20 million. By the time kozlowski finished his decade as ceo in 2002 the company had 40 billion in annual revenue. Most of that growth happened in the decade tyco was under kozlowskis leadership. You was known as a very successful manager. Started getting a lot of media attention, attention from analysts. People on the street, was known as an aggressive ceo. One of the ways he grew the company was by acquiring other companies and did so aggressively and frequently. During the ten years he was ceo he acquired a thousand companies and when i was researching the book i looked to see if anyone had direct experience with mergers and acquisitions as kozlowski and i couldnt find anyone. He was directly involved in all those acquisitions. He was known as a brilliant acquirer. He had a gift for improving companies and bringing them into tyco and provide more value for tyco shareholders. The media loved him. Cover of a magazine, business week, he was sun business week again. In january of 2002. This is significant because january of 2002 business week was holding him up as one of the top managers in the country, managers to watch. Unfortunately for tyco and kozlowski, the great decade they had under kozlowskis leadership ended pretty abruptly. If you remember the 1990s, the strongest economy in history for almost a decade. To kozlowskis benefit was the decade he was the ceo. He began to run the company during an economic boom. Recession hit the United States in 2001 and tycos severed not as badly as other companies but tyco suffered and other companies suffered severely. Then we had a terrorist attacks in september of 2001 and that was a devastating blow to the economy as well. On top of this there was a wave of highprofile corporate scandals that began at the end of 2001. Began when an ron declared bankruptcy and at the time was the largest bankruptcy in history. I dont know if you remember the story of an ron but accounting fraud, tens of thousands of employees lost their jobs, tens of thousands of retirees lost their entire pension in a few days time. People were a angry, upset, suspicious of large corporations and their leaders. After enron shortly following and ron was worldcom declaring bankruptcy surpassing the size of enrons bankruptcy. Martha stewart faced criminal charges in the same six month period. So the environment was hostile to large corporations and their leaders and especially for corporations that had experienced very rapid growth as tyco had. People were suspicious and there was extra scrutiny for a company like tyco. On top of the problems at tyco they had just made at 10 billion acquisition in mid 2001 and because of all the problems with the economy and the corporate scandals, their Credit Rating dropped, the acquisition was going very poorly and kozlowski had a stellar record of acquiring companies and have them go well, very successful. This one was going badly and they knew almost immediately they were going to have to spin off the company. The board of directors is and tap the about that, shareholders are not happy about that. There began to be internal disagreements between members of the board of directors, between the board of directors and management. I strongly believe had sting still been going well, the stock price is up instead of down these disagreements would not have happened but when people are under pressure, tends to be some conflict. The price of tyco stock was down for the first time in a long time. If there had been a great decade everyone was happy. Under kozlowskis leadership tyco experienced 40 consecutive quarters of significant growth. Everyone is happy and everyone thought kozlowski could do no wrong and the board of directors said please keep doing what you are doing, in this perfect storm of 2002, that ended abruptly. The big low for kozlowski happened in june of 2002 when he was charged with sales tax on the purchase of some pieces of art. This was not connected to tyco. These are personal purchases. In new york city if you buy goods, outside the city bringing them into the city you have to pay an 8 sales tax or use tax. The manhattan District Attorney prosecutor in new york city found out many people were buying expensive art outside the city, bringing in but failing to pay that sales tax so as they were watching galleries and large purchases, happened to see purchase where the sales tax wasnt paint and saw the name Dennis Kozlowski, a name the prosecutor recognized and this is someone who had been on magazine covers, had a very big presence in new york city and so the manhattan d. A. Brought the sales tax evasion charges against kozlowski. Think about when you make a purchase. Do you submit the sales tax to the state . Personally, for everything you buy . Isnt that the normal way we do . Your total of the Purchase Price, you assume the sales tax get submitted to the state. That is what kozlowski thought about his art. When he was told to Purchase Price he paid the gallery or the art agency submitted the sales tax when in fact the sales tax was never submitted. It would have been the obvious thing would be to charge the agent or the gallery but he gave them immunity and instead went after the highprofile chairman and ceo of a large multinational corporation. Little known fact, almost everyone who knows something about this case believes Dennis Kozlowski is in prison for evading taxes. Not true. These charges were dropped by a judge later. There is no crime in new york for a consumer failing to pay sales tax so the prosecutor overstepped a bit and the indictment, charges were later dropped but for kozlowski the damage was already done. Remember, a bad time at the company. Things are not going well. When he informed the board of directors he was going to be indicted they found out on friday he called all the directors individually over the weekend and said i am going to be indicted because he is the ceo of a huge publicly traded corporation, has a duty to report this to the board of directors even though it is not connected to the company is personal life is of interest to his shareholders. They fired him the day before he was indicted, like that. No innocent until proven guilty. He was out. Shortly after he was out the company hired an attorney to come in and perform an internal investigation. In a very short number of weeks this private attorney in conjunction with the manhattan d. A. Saw evidence of serious crimes at tyco involving the ceo and the cfo at the time, Marc Schwartz. The most serious of those crimes was grand larceny. Dennis kozlowski was accused and convicted of stealing about 100 million from tyco. Most of that was in the form of bonuses. Kozlowski was sent to this day continues to be a very strong believer in a for performance. He thinks the best way to motivate people is incentive pay. Incentive pay with no caps. You can make as much money depending on your performance, that is how he paid people in the company and that is how he was paid. There were years, a few consecutive years where kozlowski made 100 million a year. That is a lot of money. Of that amount about a Million Dollars was in base salary. That is all that was guaranteed. The rest of that was all paid because of the pay for performance programs in the company. There was a written policy about how bonuses would be calculated. These four bonuses he was convicted of stealing were all mathematically correct. The amounts were correct. The problem was the board of directors was supposed to approve those bonuses before they were paid to the executives. There was no documentation of approval of the board and directors got on the stand during the trial and said the for they didnt recall approving the bonuses or they in fact did not approve the bonuses and that is how kozlowski and Marc Schwartz were convicted. The media that loved Dennis Kozlowski as the ceo turned on him very quickly. New york city is the largest media market in the world and they look for stories and they turned on kozlowski pretty quickly and he was called all kinds of derogatory names like pig, dennis the menace which is an obvious one, and he really became the face of corporate greed, the face of everything that was wrong with corporate america, overpaid executives, a court decisionmaking, unethical behavior, all attached to his face. There were two trials, kozlowski and schwartz. After six months, the second trial lasted five months, the conclusion of which they were convicted of 22 of 23 felony counts against them and they were both sentenced to 25 years. This is in a hard core state prison, not in sometimes you hear about clubs said, federal prisons where whitecollar criminals serve time, a federal prosecutor feel about that, i have been to the prison where kozlowski served time and found no Tennis Courts or swimming pools or anything. It looked very prisony. I talked about this case must didnt. We use case studies a lot in Business Ethics for a very simple reason. We look at the mistakes of others have made and learn from them so we dont make them in the future. I kept trying to figure out the case from what Mark Schwartz did so they wouldnt repeat the mistakes and end up in prison. One of my former business students, a picture on a newspaper, mug shot where they have gone to prison for unethical behavior. I am sure that will never happen. I have some questions that made this case confusing to me, big ones. Almost every corporate scandal at that time to this day the charges are almost always brought by federal prosecutors, our esteemed president used to be. And tried in federal court. It is federal law. Go take a look at it. The charges brought by a local District Attorney which is what happened in this case. I knew u. S. Attorneys investigated tyco and Dennis Kozlowski, the sec investigated, federal authorities declined to charge anyone, they didnt see any costs and the local da stepped in. And comes up with this huge indictment, the original indictment was 90 pages and it read like the script of the Television Show law and order. It was very dramatic. The first 50 pages were charges that were the new york state equivalence of rico charges. They accused kozlowski and schwartz of running a criminal enterprise out of their corporate offices, those charges were dropped before trial but it makes for a dramatic indictment, good reading. Interestingly the manhattan d. A hoot charged kozlowski and schwartz, his name is Robert Morganth morganthal, he was the a from 74 until he retired at the age of 90 in 2009 and he in fact was the inspiration for the Television Show why and order. It makes sense the indictment reads like that so that was confusing to me. The evidence was confusing to me because nothing was hidden. The evidence they used against kozlowski was all taken from the books and records of Tyco International which had been audited by Price Waterhouse coopers, one of the most respected Accounting Firms in the world. It is interesting you are presenting evidence prosecution was presenting evidence and the defense would have used the same evidence. Nothing was hidden. No second set of books. No employees were told to hide anything. Peculiar circumstances. Another big difference between tyco and other corporate scandals at the time is tyco remained a strong company. And ron went bankrupt. Worldcom went bankrupt. Mobile crossing with a corrupt, tyco remain strong to this day. No one lost pensions. It was a different circumstance that made this case stands out to me and these questions nagged at me for a number of years and january of 2011 was in my office on campus, putting my syllabus together for the Spring Semester thinking about this case study and i really wish i could figure out what happens here. I was clear the board that day in my office. The most random thing. I would love to ask Dennis Kozlowski what really happened so i got on line, you can buy anything you want on line, any piece of information is out there somewhere. Looked to see if i could find an address and i found an address for a prison in upstate new york, that is where he was at the time. I put together a simple letter, sent it to that address and asked him if he would answer my question. Pretty straight forward. What happened . That is what i said to him. What happened . Stock it in the mail and really didnt think about it again. I didnt know if it was the correct address or if he would open an unsolicited piece of mail, if he would ever see it, put it in the mail and didnt think of it. Three weeks later i walked into a department office, academic coordinator and said you have a letter from a prison in your mailbox. I went in and it was handwritten envelope with a handwritten one page letter from Dennis Kozlowski saying yes, i will answer your question. In my letter i offered to do it over the telephone or through email. Informs me he didnt have those luxuries as a prisoner of the state of new york so he had to do all the communicating through handwritten letters so for several months i sent him letters asking questions, he and wrote the answers and send them back to me. It became burdensome to hand write his history for every question i asked him so he said if you can travel why dont you come up to the prison and we can cover a lot more ground facetoface. So i did. I went to the prison, which was quite an experience, in this process, and it was one of those experiences, new york, in the middle of nowhere, near the theory can now. You have to get there early in the morning. For me 6 30 is really early in the morning. It is very foggy and you see the first picture on the top lefthand side. Is a long tree lined lane, foggy, like driving into a horror movie. You know the part of the movie where you say who would go in there . Why would they do that . Who would go in here. Start driving down the lane and start seeing the wire and guard towers, hearing the gates clanged shut behind me which is the new feeling for me going in as the visitor, disconcerting because it closed behind me. Before i went in, he could only have visitors on the weekend, saturday and sunday. He said aside a whole weekend for me, 7 hours on saturday, 7 hours on sunday, didnt have any of his other friends or family coming in and just for me. I wasnt allowed to take any notes in. No paper, no pencil. This is my only shot to get all the information i want from this guy. I study for the visit like i was studying for the bar exam because i couldnt have any notes and needed to know the case very well, needed to remember the questions i wanted to ask off the top of my head. I sat 7 hours on saturday, got in my car, had a digital recorder, recorded everything i could remember that we talked about. I dont know if you remember the last time you had a seven our conversation with someone uninterrupted. Facetoface. 7 hours uninterrupted. You can cover a lot of ground in seven hours of uninterrupted conversation. It was hard to remember everything we talked about in those hours but as we talked, it was kozlowski suggested i might want to write a book. No one had written a book. There had been several books about the Major Corporate scandals, and wrong, there is a book called the smartest guys in the room which you may have read or seen a documentary that was made based on that book but no one had written a book about kozlowski or the tyco scandal and he had been approached by people he never agreed to cooperate with. They agreed to cooperate with me. This is the first question i asked that he agreed which is shocking to me. Why would he agree to work with me . I began researching. This is my kitchen. I wrote the book on my kitchen table. My house became covered with all things tyco. For about a yearandahalf every surface was covered with all things tyco. Did you see the movie a Beautiful Mind . I began to look and feel like that. I would sit down, didnt change out of my pajamas for two or three days in a row. It was a little bit frightening especially for my family who had to survive that. Really got into it and because i knew he was controversial, my research was meticulous. I wanted to make sure i got it right. That was my primary objective. I wanted it to be accurate. My first draft of the manuscript i sent to the publisher had almost 1500 end notes because i wanted the information to be cited, any reader could look and see where i got the information from because again i wanted it to be the true story. Throughout this process, a crazy year, i was eligible for a sabbatical from the university. I applied and was granted a sabbatical, could not have completed this project without it. I couldnt have done it. It was a godsend for me and the great benefit and one of the great benefits of being a faculty member. Real luxury to have your employer give you time to work on a special project. Something very few people get and all wonderful method so between 15 to 18 hours a day, 7 days a week for months. It was intensive research. I had thousands of documents, transcripts from both a criminal trials which totaled 28,000 pages. I spoke to anyone who might give information, talked about the person i met in the corner cafe, it was the guy who was the foreman of the jury to convict him. He was 22 years old during the five months he served as jury foreman. I did literally find him through facebook. I became a really good private investigator. I talked to him and everyone. It surprised me over and over when i asked people to talk to me. They would read. Why would they . People i was shocked how willing people were to help me out when i asked attorneys for documents, evidence used during trial, they gave it to me. I kept asking, just like asking more people to help me. Here is what i learned about asking people for information or asking people to help me. It is important how you ask. First big important thing to remember, do your homework before you ask. Dont expect the person you are asking for help to do the work for you. You have to know what you are asking for, have to know what you are talking about, and i did that. I made sure i was well prepared before i ask anyone to help me. The three ps, be prepared. Be prepared before you ask. Be polite. I know this seems simplistic, i honestly believe many of these people spoke to me because i asked them professionally, politely, my secret weapon i used before i was on this project, handwritten notes go a very long way with people. I think everyone used handwritten note. Is antiquated but especially in a day of email, try it. I am telling you. Go to a job interview, send a handwritten note after words. Someone does something for you, helps you out in your career, gives you information that you need, send a handwritten note. I and telling you it works. It is a simple thing but it works. Thank people for helping you and be persistent. One person i wanted to talk to was general counsel for tyco at the time the scandal happened. A guy who was a highprofile litigator in new york city joined tyco year, a couple years before the scandal broke. He was also charged criminally and tried separately from the cfo and he was acquitted of all criminal charges against him, found out where he was at a time he was teaching as an adjunct professor at peppersdine law school, kept contacting him through email, linkedin, follow up every few weeks. At one point reapplied and and said he would be willing to talk to me but he never did so i kept contacting him very politely. One night, after midnight, it wasnt in california so there wasnt a time difference. After midnight he called me. Picked up my finance that i get it, you are persistent, i will talk to you. I was getting in bed. How weird it is my life . This is a persons name i have talked about over and over in classes as part of a class study. I feel i should know these people because i have spoken of some so many times that sitting in bed talking to mark zelnick about this case. Was odd. He said it was because i was persistent. I just kept asking. I suggest the persistent. Who should you ask . We have something called the best evidence rule that says when you are in court you should present the form of evidence that is the best, the original copy. I suggest the same when you are thinking about who to ask to help you or who to ask questions of. Go to the person who has the most information, the person who can most tell you. Start there. That is what i did. I went to kozlowski first. I went to the other executives at the time. Another person i went to was Robert Morganthal, the prosecutor. Imac with him last year. Age of 93, still sharp as the attack. We disagree as he spent an hourandahalf discussing the case in issues. I used a variety of ways to contact people, email, facebook, handwritten letters. I contacted Robert Morgan fall, 93 years old through email. When i found the email address does he really use email . He does. At least his assistant who is also in her 90s. She arranged the visit and was there. They both told me, she has been my assistant for 381 2 years. They were both very specific, the last six months, very specific, 381 2 years. She email me and said he would be happy to meet with you next time you are in new york city. Knowing he was 93 i thought i should book a flight right away and get there just in case. I went and met with him, spent an hourandahalf. I met many attorneys in new york working on this project. How did you get him to meet with you . He doesnt meet with anyone. I said interestingly enough he told me why. After an hourandahalf i believe it is office, thanked him and as i was walking out the door he said do you want to know why i met with you . Sure. Because of my charm . I am the light for . He said because you are from Northern Kentucky university. That is a direct quote from him. That is why he met with me. People contact him from i believe oswald, i believe Business School all the time. I think sometimes we think that might be a disadvantage that we are from Northern Kentucky university but in this case it served as a great advantage to me. That is one of the reasons kozlowski spoke to me and asked me to write the book. They trusted me. They looked at my credentials, looked at Northern Kentucky university and they spoke to me. The most frequent question i have been asked since i wrote the book is why did i write this book . Why did i write this story . Is a fascinating story. Even if you dont like business or law and who doesnt like business and law . It is a fascinating life story to see someone go from humble beginnings, selfmade business executive, the top of his game, making as much as anyone and beating a very Successful Company and then bottoming out. It was the same thing. He was in protective custody because they felt he would be at risk in the general population because his high profile person and had a lot of money. They were afraid he would be distorted. He was in maximum security building, second floor of the same building for more than six years. When i met him, he was so pail, never been outside, ive never seen a person that pale whostles so alive. He was, you know, he had not been outside, six by nine cell, no window, a steel box, steel floor, steel walls, steel in the walls, with a mrs. Take mattress, but he had egyptian cotton sheets twice a year. Think about the shift in the lifestyle. I dont know how you adjust psychologically. I asked at one point how he kept from going insane, and he said, well, how do you know i didnt . Touche. So, yeah, i looked at this case, and once i really started getting into it, i found that so much of him was misreported. I looked at the facts. I looked at the evidence in the trial. I looked at the charges in the indictment, and i did not see enough evidence, not even close, to support the charges. I dont know how he was convicted. Its a mystery to me, and i think it was a great injustice. I wrote the book because it was the truth and no one had written the entire truth about this case, and i can say its rewarding. Even if no one read the book, and i hope you all will, buy and read it, it for me, it was a great project because it mattered. You know, it matter the someone write the story accurately, looked into it, the real facts, took the time to figure out what the real facts were, you know, unfortunately, we are more and more a short headlines type of readers, you know, and the interpret doesnt help that. You know, i Google Search is not thorough research, fyi. To dig deeper than that takes time and effort, and i think that that is what happened in this case. I think that journalists were lazy and didnt understand the material, so they just wrote about the things they knew and could understand, like, howry kick louse it is to buy a 6,000 shower curtain or throw a 2 Million Birthday Party. That was easy to understand, so that is what written about. For me, surprisingly, i shared my work to broad audiences, and thats been great. National television and some of the best outlets my writings been featured in. Thats been great for me. I have to say the best moments for me was the first day i saw the book in hard cover. You see i look happy there. After all that work, it was nice. The picture on the right is i was in new york city, the day the book was released, and between appointments, slipped into a barntion barnes noble and saw it on the shelf. First time i saw it on the shelf. That was great too. My advice to you, what i learned on the project, and i tell you it continues to pay off to this day, to this very day. Theres another huge corporate scandal i thought about years, a company, a southern company, the ceo charged with crimes, acquitted, convict of other charges for bribing a judge, but, yeah, he was acquitted of the charges related to the corporate scandal. A couple weeks ago, i met the producer at fox business because i was on neil cavutos show a couple times, and i got to know the producer pretty well and helpful to me, and a couple weeks ago, students are working on a case study right now in my business 330 classes, and i said, you know what . I might be able to get you access to richard. I knew he was on the show after me when i was on in january. I called eric, the producer, i said, eric, hey, do you think eric would answer questions for me for students. He said hed probably go to cincinnati to answer them if youd ask them. Thatd be awesome. Today, this afternoon, my phone rang as soon as i got in the door. I didnt recognize the number, answered it, and he said, katherine . Yes. This is richard. Like, really . [laughter] it i dont know if you understand how weird it is to talk to people from my textbooks. We study these people. We i said their names hundreds of times to hundreds of students, and for him to call me up is just weird. Awesome. Its such a great you know, its so much richer learning experience for the students and for me if we hear it straight from the people involved, and thats been great. Again, that just came from asking a question. Im asking questioning all the time now because it works. Thats what i encourage you to do. You have a new business you want to start, you want to invent some great new revolutionary product or service, you want to be more innovative in your career, ask questions. Ask people to help you. Worked for me. I think it would work for you as well. Im happy to answer any questions that you might have. [applause] questions . [inaudible] yes. [inaudible] the customers were coming to the party, and it was really an entertainment event like bringing clients to the super bowl or something . Yes. It has been reported that the company paid for the Birthday Party, yes, thats what you will read. Now, heres the real facts of what happened. If you read the book, youll see that dennis exercised poor business judgment a number of times. My first visit, do you think you made mistakes . He said, yeah, probably. I have a list so, lets discuss them. Already easier to do when hes an inmate rather than a ceo, you know. [laughter] he has in europe that summer, for creating a new business with air bus and spent several weeks that summer in europe, and he was going to the Paris Air Show the week after the party. He was there and many time of people were in europe that summer. He had thrown a Birthday Party for his girlfriend them wife by 2001 when the birthday took place. He true it for her every year at their home in nantucket, but because he was in europe, he decided to bring the party to him instead of him going back to nantucket for the party, so he planned this party in italy, on this island. Now, the instructions in the testimony in trial were consistent on this. The instructions were any personal expenses charged to him personally and business expenses charged to the company. There was a Board Meeting of subsidiary that week, but on the same island, now, poor Business Decisions here. Its not enough separation between personal life and Business Life and personal expenses and business expenses. According to the testimony and the records, and ive seen the actual accounting for the party was charged for the party and expenses with the party and company charged with the expenses sorted with the meetings happening. Now, and the people who flew from the party paid their own travel expenses. You know, but it did appear that the company in that this was not the only incident. The party was one of many incidences. The party grew very quickly, but he was proud of the fact he kept corporate operations small, the same 140 people ran corporate operations even after the company grew to 250,000 employees. Its still ran like a mom and pop shop, informal, and he was pops. When he said do something, you know, there was no record, bob said to do this, to do that, mary said to do that, and so it was all very informal and did not keep a clear line between business i mean, he tosh too closely associated himself to the company. Like, it looked like he believed it was his company, not a Company Owned by shareholders. So, yea, so, yeah, the party was ridiculous, played video of the party in both trials, even though there was not a charge in the indictment related to the expenses, not a single charge. They played 40 minutes of the video. He thinks he would not be in prison today if there was no video of the party. It was a themed party. The bet cake was a life size woman with sparklers on her breasts. It was classy. A life size sculpture of the statue of david that urinated vodka, and he flew jimmy buffet in for the party, so, you know, it was extravagant. You know, a mistake in retrospect, and he was convicted so it was a loseloselose for him. Any other questions . Yes . I think if you surveyed the jury after they left the courthouse, they could not tell you what the charges were. He did not understand what he was convicted of. He was 22 years old. Thats really young to have that much responsibility, a fivemonth long trial with the most sophisticated business evidence seen anywhere, and so he even said to me, you know, there were several jurors who im sure they were going to vote not guilty, and the jury foreman said to me, i wrangledded them, his words, and he said once we reached the first verdict, the rest fell like dominoes. It sounds to me there was not a lot of consideration of each individual charge, and i dont explaning facts, why didnt they explain it like that to us in court . I dont know. So, but he was convinced they did the right thing, to this day, hes convinced they made the right decision, felt he understood the evidence, and he felt like he had the 23 year sentence was a life sentence. Those are his feelings about it to this day. Oh, he was the only person on the jury with a College Degree also. Not saying they were not intelligent people, but, you know, i spent two and a half years trying to make sense of the evidence, and im an attorney and business professor, and it was difficult for me. I wonder how much they absorbed. Given the jury had trouble understanding this, what is your opinion on the idea of a jury of your peers when it comes to business trials like this . I mean, it doesnt paint a, you know, hes not someone thats a sympathetic figure. You know, theres been over 70 Insider Trading cases convicted in the last year, and the system is equipped for this case, and its not limited to just business cases, but any cases where theres some technical, very sophisticated evidence where you need a certain background to understand it. Now, taking a step back, one of the first perps i asked was why he didnt waive a right to a jury. In a criminal defendant, he said i dont want a jury, just the judge to be the judge and the jury, and rules of thumb i learned in law school you might not want a jury if the defendant is not sympathetic, and, face it, hes a very wealth y executive, not a sympathetic defendant, and if the subject matter is very complicated. In this case, it would have been the perfect case, in my opinion, to waive the jury, but they didnt. I talked to robert about this, actually, spent time speaking about it, and i asked him this question, and he went off on this, thought he had a moment of, you know, humility when he was telling. He was, like, i had a case in 197 o run down the hall to get a copy of whatever the case was; and hes telling me about a case that he tried, and sophisticated business evidence, and it happened to have the jury happened to have two africanamerican women on the jury, which in 1970 was very unusual, and he said, that jury had six or seven business mech that were a clique and overheard one of the africanamerican women say to the businessmen, hey, dont you know what this case is about . His point to me was jurors dont have to understand the details as long as they get the gist of it. Thats what he said to me. Now, with all do respect, if im on trial, i i want the jury to understand the details, not just get the gist of it. Your question about whether you can get a jury of your peers, i dont think you can in many cases. In this case, youre in manhattan, think, okay, theres people from wall street will be on the jury or other business executives. These trials were set for six months, who can walk away from their job on wall street for six months or who would . You know . You claim Financial Hardship and youre dismissed. Thats what happened in the jury pool. They were people who had better backgrounds to understand, you know, corporate government and speedometer of directors and officers of a corporation, but they said Financial Hardship and were dplisessed. The people left on the jury had no background or education or experience that help them understand it, and in this is not limited to just business cases. I think that youre example of Insider Trading case is the same thing. I dont know that our system is equipped to fairly ajude cat kate adjudicate the cases. I dont know the answer, but i read an article where someone suggested theres an interimmediate charge. Its not criminal, but not civil, something in between, some kind of hybrid, you know, trying to solve that problem. [inaudible] ill preface the question, im a former employee of him, and the company i workedded for for 15 years, a manager at at t capital corporation, purchasedded by two companies prior to tyco purchasing, involved in direct relation to what took place, so the question to you is what basis do you have to state that there were no job losses as a result of his subordinate during the time frame . Well, he was known as a job cutter. When he acquired companies, thats what he did was cut excess people, try to combine forces. Now, his explanation for that is that the companies they acquired were already struggling. Thats why aacquired them, and so ultimately, they would cut jobs that then the company would become healthier and rehire, and, you know, in the scheme of things. Now, for someone like you, the individual who loses the job, thats little comfort. My point was, as related to the scandal, the company did not ever bottom out. It was not close. There was testimony in the trial that the company was viable during trial. You know, so, you know, i have sympathy for anyone caught in that. He was known to do that hundreds of times, and he would acquire companies and first thing on the list was to cut as many jobs as he could. That was his mo. Thats what he did, and, you know, i spoke to him about that multiple times, and he justifies it by saying we never acquired a heat company. The company was already struggling in the long term. We made it a healthier company, and people were, you know, there were more jobs created, but, yes, for individuals, yes, i see where thats a problem and hurtful. Yes . [inaudible] whether or not the cit group was the company referred to a moment ago during yes, the cit group was thats what i thought. The acquisition in 2001 that went badly quickly, yes, and they spun it off shortly after he left the company, they sold cit group. It was a very costly mistake for the company, yeah. Do you touched on his transition in life from Top Executive to prison inmate. How have you, personally, been able to handle the transition with this becoming an all consuming part of your life like any entrepreneur would . The last three years of my life have been abnormal. [laughter] i have to you know, give props to my family who tolerated my strange schedule and house covered with research and i checked out for a very long time. The weab baby that was here earlier, cheering for me, she was born the 4th of july, last summer, i took two full days off, a big break for me, but other than that, i was i was pretty much buried, and it was tough. Since the book released, i thought the work would end once the book was finished, but the attention received, national and international, was is prize to me. I didnt expect it. Its outside my comfort zone, especially the television stuff. Im not a fan of being on television. I love to watch it, but i do love having the chance to talk about my work, and it was awe huge adjustment, the sabbatical, and it was yeah, its been quite an adventure. I have to say, though, its been the most rich and rewarding experience. I learned more about business and law and people than i expect the. I worked harder than i ever expected by about a million times when i set out to write a book, but its a great experience. I think any experience, a big big of advice i give as entrepreneurs, dont do anything youre not passionate about, youll give up. If you dont love studying and learning and doing, something that you love, if you dont, youll never finish. If i didnt think the project was important and have interest in the subject matter, i would have quit. Lots of times. You know, initially, you got people around you a great support system because you need it. By the way, he was paroled a month ago. I should have finished the story. Sorry. After eight a third year in prison, he was paroled january 17th. He still have a restrict schedule. The dean actually invited him to be here tonight. He was not allowed to live the five burroughs of new york city. He was not able to be here. This is like a showandtell thing. That would have been fun. [laughter] he, of course, thrilled about parole and is looking forward to doing something productive with his life. Might be difficult to believe, but a lot of journalists wrote opeds since paroled saying who would hire him. He received job offers daily, proved himself as a brilliant, businessman, and not about my conclusion, and so he has a long line much people who want to hire him to consult or work for their businesses. He wants to get back out there and made the comment that he wants to prove hes fantastic, still the same ambitious guy hes always been, i guess. Thank you so much for coming. [applause] in Excellent Health setting the record straight on Americas Health care. Thats the name of the book. The awe shore . Dr. Scott atlas, md, but also a senior fellow here at the Hoover Institution at the campus of stanford. Dr. Atlas, what working about the American Health care system when you look at it in the larger sense . Guest yeah, that could take off the entire day. Way works, really, is, in essence way a lot of the book is about, and that is the actual medical care both viability or access as well as implementation or introduction of diagnostics and therapeutic or treatment of diseases. It is superb in quality of care. It is an issue, and its welldocumented, and i concur there the u. S. Is the most exceptive system for health care in the world more than any other metric, and this is really the major problem with that shiewb where the reforms are to bringing down cost. Host dr. Atlas, some of the reforms have been directed towards bringing down costs. Have they not worked in your view . Guest well, if you talk about the basic affordability care agent now called obamacare, you look at the numbers, the projections under obamacare are not that the costs come down. It was put forth as one of the reasons why reform is so essential, yet when you look at even at the governments own estimates, centers for medicaid and Medicare Services swelt all the other agencies, none of them project a decrease in Health Care Expenditures compared to preobamacare. This is really one of the ironies of this whole discussion about health care. Host well, Health Care Costs have never gone down, have they . Caller Health Care Costs, and you make a good point, dont go down historically because its not necessarily desirable to make them go down for a variety of reasons, the most important of which is technology and medical care advancing so much over the past 50 to a hundred years that we dont want to dial back the clocks to say when i was born in the 1950s when the bedside diagnosis was the essence of the diagnosis, for instance. We want the technology. The technology whether its diagnostics or new drugs or minimally invasive safer treatment have been the boom in quality for medical care. Theres a driver of cost we dont want to scale back on, and that is actually things cost money. However, theres ways to increase the kind of ill use the word control of costs, but as a believer in free market controls, and that is let people decide what value medical care has for them, unleash competition, get rid of the barriers to competition, give the information access, and by virtue of those kinds of things as an every other service or good in the United States, the price does come down, and you may ask, well, what is the fair price . I get asked this by my own children. The fair price is the price that people are willing to pay for something. Thats the fair price, not, in my view, some arbitrary price fixing or price setting by some central authority. Host are you a practicing doctor right now . Guest i have been up until literally one year ago where i moved from being head of neuroradiology where i was for about 13, 14 years in stanford, and before that, the previous 15 years practicing clinical med sip and also doing research and teaching. One year ago, i move full time to hoover. Host did you accept medicare and medicaid patients . Guest yes. I always worked in an Academic Medical Center such as Stanford University Medical Center and similar places before that, but, yes, we did. Host did they pay did the government reimburse at a fair rate . Guest well, thats a difficult question to answer because that implies a subjective term of fair. Did they reimburse at a set rate . Yes. The rate was arbitrarily determined. It was always significantly less than the private insurance policy, and i guess one way to assess is it a fair rate would be to judge how doctors, in regime, not my own self, how they reagent to the reimbursement rate, and when you look at how they reacts to the reimbursement rate, reaction is theres a increasing number of doctors that are accepting medicare and medicaid parties because, specifically because, the lower rates such that they lose money for parties, and as we all know from the old joke, you dont you cant make up for that in volume, losing money per patient. Host dr. Atlassings you peek about in excellent heflt some of the bare owes to the fair market rate for health care. What are some of those bare owes youd like to see removed . Guest well, one of the biggest kind of bare yores is really the Third Party Payer system in general, and that is the barrier is lack of information. People use this good or service, medical care, and its the only one like this, without knowing what it costs. You dont know where it costs until after you already used the product. Obviously, theres no possibilities of making a valuebased decision on that. Secondly, essentially, all of medical care, and this is a little bit of an overstatement is covered by the insurance itself. What i mean by that is the way Health Insurance evolved, its changed from the Way Insurance was intended, which is a way to reduce risk of exposure to unanticipated large expenses, and now Health Insurance is almost everything aside from a small copayment or a small relatively small detucketble for most people, paid for by the insurer. You dont really care what it costs because, quote, someone else is paying. Of course, youre paying in the end, but its very complicated indirect route. The biggest barrier, i think, is that theres no incentive to even look at the costs, and when something is free, youre tendency, is, hey, lets consume as much of it as we want was im not paying for it. That is the number one barrier. Second barrier, id say, is the government created Health Insurance coverages themselves, and that is that as we know, the states, and the United States control Health Insurance, so thats kind of two sub segments to that question. One is youre not allowed to buy insurance from a state outside the state in which you live. This, of course, is nonsensical and doesnt really exist in other goods or services, and its in an archaic paternalistic way to view things, oh, were afraid you dont know what youre doing if you go of course, if you live in new jersey, i dont know why nay cant shop in pennsylvania or vice versa. Thats a problem. It sets up monopolies and barrier to competition for . Ups, and the second issue with the states is that there are now over 2,000 mandates that is requirements for all policy in the state to cover things that many people, obviously, would never want to pay for. For example, massage therapy, invitro, and when i give a lecture to people, the average age is 60, i look at audience and they know you wont use that, but your insurance is required to cover that. They have to ramp up the cost of Health Insurance by as much as 50 . Theres a barrier to competition because theres not the opportunity for people to buy the Insurance Coverage they actually want, which would be cheaper. Theres a whole host of these kinds of things that i think government has an opportunity, a big one that i failed to mention, actually, is the lack of information. Its knot just about price. Its about quality. Theres no transparency, for instance, you go and you get an mri scan, and you dont know not only what it costs, but you really dont know who the doctors are. You dont know if the place has Board Certified doctors, people who have training. You dont know when you get elective surgery if youre going to a place where they do a lot of these procedures and have good outcomings and so theres a human amount of information that is necessary if people are expected to make valuebased decisions. Of course, the question then comes, are people able to make these decisions, medical care is so complicated, how can you make a decision like that . My answer to that is theres no question to make decisions like that as patients in concert with doctors because we do this all the time with things we dont understand. For instance, im not sure many people can explap how a computer really works in a very great detail, yet were good shoppers for computers, and so i think in concert with doctors and particularly now in the age of information, people actually are very good at talking to from the party side about what the incentive is, and theres a variety ways to do that. Costs come down. Host withdrawn of the major factors in the Affordable Care act is the market place, the socalled marketplace created where people can shop for insurance and perhaps theres me competition. Is that a step in the right direction in your view . Talking about the Health Insurance exchanges, now termed Health Insurance market places on the government website. In general, i would say that the idea of a cop sent of the Health Insurance exchain is very good. The problem is that the implementation of the good idea, the execution of that idea is really the key. When you look at the Health Insurance exchanges that are set up under the affordability care agent, theres problems so bad they cant really possibly function well. Ill go through thee basic problems. The first problem is that theres this saul minimum essential benefits coverage. This is a minimum essential benefits, sounds inconstitutively attract. Theres such an enormous whats call the comprehensive list of medical benefits that the price of the policy to cover the things is high eliminating the possibility for people to buy insurance policy tailored to what they want. Prices are jacked up because all coverage is require of all policies eligible to be sold on the Health Insurance exchanges. Secondly, theres something called the minimum loss ratio, an edict by the affordability care act that quantifies how much Insurance Companies can make profitwise and declare as loss. You have necessarily limited or excliewted the coverageunderpar socalled high detucketble health care plans, and these are not only cheaper, but more desired, most popular choice in five years, the increase in that choice of employer sponsored Health Insurance by employees. Why . Because they are cheaper. You get to take money for this against that high detucketble, put it 234 a savingsing the, and you get the money afterwords, and its associated with better Wellness Program uses and other screening tests that people want and encourage healthy living. These things are excluded by the minimum loss ratio or limited by the loss rash crow. The third, and perhaps the most important thing that well really make the Health Insurance exchanges not function is the idea that Health Insurance now, the insurance policies must use guaranteed issue which is no matter what preexisting condition you have, you must be able to get the insurance and eliminates the waiting period. You are able to buy insurance if you wait until the days you have no problem. It makes people say, okay, why would i bother to have insurance until the day i got sick . That would be the rational way to think through this, and then the third problem is that theres no real difference in the premiums for your risk factors except for cigarette smoking. Youre not allowed to change the prices on the basis of much of anything so everyone has the same prices guaranteed issue, no matter what risky behavior you are engaging in, and theres no real delay in buying insurance, so, again, these things are going to make Insurance Companies kind of a nowin situation. Its not really possible to exist under that kind of scenario. Host the argument set forth in in Excellent Health and the facts, is it too late to implement them since were on the road to aca . Guest well, this is something that is very good question. I dont have a real answer to that. Although, we can say i think its clear that unless something dramatic happens in the elections, obamacare, the aca is really law and dont see it being completely abolished. Im sure people disagree with me, but given that scenario, there are things that can be modified. For instance, theres bills passed all the time, not really by one house, they are not implemented yet, and im not sure they will be, to get rid of some of the negative edicts of the act, the tax on medical Device Companies that necessarily cause job loss, but also a lack of access for patients and things a loot of Congress Members agree on. For instance, theres ideas how to change exchanges. I dont think its too late to modify and even dramatically change parts of the aca. I have a feeling that its unrealistic to say that the entire law will be repealed. Host dr. Atlas, you talked about americans having good access to health care. Its is some of that access, however, through Emergency Rooms . Guest well, if you look at the data host too much guest yeah, i think the answer is probably no to that. Theres two parts of the question. One is there to clarify, there is a huge difference in access to health care no matter how you define it whether its access to general care or access to procedures or for americans far more than any other country held up as a model for health care reform. Do people get care in the Emergency Rooms . Well, sometimes they do. No one is saying that its better its just as good to have no insurance as it is to have insurance. Regimely, its the thought that a lot of people go to the emergency room to get care; however, a lot of the care given to people, even the uninsured, is not through emergencies, and i cite specifics in the book, but this its a misconception that people without insurance dont get access to care. Theres some of the issue is true they get help in the Emergency Rooms that really dont need care, and ordinary person, its markettedly distorted. Cspan the embarrass of thement government restricting access, government officials themselves put on restrictions when their National Health care is at stake. Britain spent 1. 5 Million Pounds for its members to leapfrog the waiting list. Italy had a cardiac pacemaker surgery at the renowned Cleveland Clinic in 2006, and whether when president obama on the record supporter of single payer system was asked pointedly in 2009 to promise he would not seek out of map help for his wife or daughters if they became sick, the president refused saying if its my family member, my wife, if its my children, if its my grandmother, i want them to get the very best care. Guest thats right. I think i i think people ought to know that even the most vocal proponents in the United States of Single Payer Health care, themselves, for themselves , the need for health care, to do sering they can to manipulate the system and access their own right, which is they want choice to per sue the impies for themselves. How do i know this . Im one of the doctors sought out frequently by several people including many who are not on the record so i will not say, but one who is which is senator ted kennedy, a proponent of single care health care, and i feel good about reviewing this because it was in the public record, and i did l mri scans of him when he had a brain tumor. Its not that he was my patient. He sought out the best doctors to help him, even though in the political world he was a Single Payer Health care like the rest of us. You make a prodder point i want to emphasize is when you look at other other countries whether its canada or the others in the western, individually seek out out its in the law they seek out medical care in private care centers in their country or even outside their own country because they cannot handle this from their own country, and so while we in the u. S. , some of us leaning towards a more nationalized system. The countries that have the experience of nationalized systems, have made significant movements towards privatization. Host scott atlas, theres people watching this interview saying to themselves, well, you know, hes a doctor. He makes x amount of dollars. He needs to make less dollars. Hes making too much. Guest well, you know, i think thats certainly been said many times. Its not a surprise. Unfortunately, i dont make that much money, but thats besides the point. I think we have to look at this is a tricky part of health care. This is the kind of moral dilemma that gets into the discussion, which is people saying, okay, health care is different from Everything Else because health care is a right. In the ideal world, of course, everybody would have everything for free, and they couldnt pay somebody else okay, this may be the ideal world in peoples minds, but we dont have that attitude about clothing. We dont have that add to do about having a home. Everyone should have clothing and the government should pay for it . Everyone should have food. Everyone should have this. It doesnt work that way. The reality of live life is that things cost money. Somebody has to pay for it. Now, do doctors make too much money . Im op the campus of size that i dont think theres anyone that should say someone makes too much money. The u. S. Only, and this is a broad philosophical question, and i dont want to go down this path, but the point of the United States is this is the land of opportunity. As long as theres opportunity, nobody guarantees equal outcomes. I dont buy into the argument that, okay, you shouldnt make that kind of money. Apply that to doctors, you know, you get what you pay for in some sense, and if you want a medical system where everyone, dictating what they it earn by government, you better be prepared to have medical care function like the u. S. Post office or the other things. Theres a reason why doctors flock from all over the world to be taught by the doctors in the United States. I have been engaged for many, many years on continuing medical education courses both here and abroad. By far, the leaders in innovation, leaders in world doctors are american doctors. We dont go to other countries to learn new medical care. They all come here. This is generally true, overwhelmingly so. If you want to make doctors forced into this widget of a public employee, you get what you pay for. Actually, were already seeing a little of that. You look at the surveys of doctors and their future plans, many doctors are getting out of the field, and youll see, if you want the the socalled best and brightest in the field, im not arrogant to enough to say the best and brightest are in madison, but theres very, very good people in medical field in the United States if yo clamp down and tell them what to earn and all the other things of the delayeded return on investments, if you dont make money into nor mid30s, as i was in that boat, then, personally, no, you get what you pay for. Host what do you say to people who say, doctors order too many tests, they are gaming the system, thats how they are making tray money and everybody has to pay for them. Guest well, i think there is certainly some medical waste and redundancy in the system. No question about that. Stls distortion in determines of doctors gaming the system. Not saying it never happens, but people think, oh, this radiologist, for instance, ordering mris and ct scams to make money, no, thats illegal in the United States. Thats not true. Nobody can afford a diagnostic test and that never really in other countries, thats why comps dates back, but not in the United States. Its true theres redundancy and waste in the u. S. There are attempts now to streamline the system, get rid of that waste and redundancy and excess cost in the system. I would say that thats not the biggest problem at all in terms of the ways in which National Health expenditures are going. Host scott, the World Health Organization often rates the u. S. Health care system lower than what youre saying. Guest well, the actual study themselves, which i did, and i wrote it after the second Michael Moore movie, random numbers thrown out and u. S. Health care system in the World Health Organization reported 191 nations ranked 37th in the world. Amid countries like crotia, cuba, italy, and no common sense assessment, okay, let me look at the studies in specific details u and when you scrutinize the study, and this is done now in the academic literature of public health, we know that the studies were skewed somewhat, and almost twothirds of the rankings was compromised of scores based upon equality rather than quality. So in essence, that was rewarding countries that have medical care where everyone got a c. That was deemed better than a country where some people in that country got an a, and some people got a c. That makes no sense. Its better to be equal by worse in the eyes of the who report. Theres many other things that are set up in that main report of the year 2000 such as when there was no Data Available to poem who designed it, they just filled it in. They literally filled it in. It was so bad that in 2009, the oecd, head of health care, which is the organization of basically economically advanced countries, said the who report is one of those studies that, quote, we wish would just go away. It was so poorly done. It got a lot of tractioning and, n. , still does. If you listen to our own government leaders, they talk about how the u. S. Has inferior health care, and they base it ton these kinds of rankings, and when you look at rank, like Life Expectancy and mortality, they are so flawed, and, actually, our response in ways that the u. S. Would necessarily have a bad ranking. When you look at what i think i try to do in the book, you realize the truth. Host what do you think of the may owe model where doctors are on salary . Guest i think the mayo model works well for what it it. Its a unique place amongst all Medical Centers in the United States and Health Care Delivery in general. The referral center. Theres a certain kind of reputation where they can kind of thats a gorilla in the room in terms of perceived quality, and theres theres also an excellent place, and so they do things their own way. Its worked well for what it is. Im not sure, really, that it leads to you know, they have all kind of things going on, and, in fact, right now, its more attractive to high end cash paying patients, for instance. They are having their own economic challenge as well. Talking with scott here at the Hoover Institution in Excellent Health, setting the record straight on Americas Health care name of the book. Dr. Atlas thank you for being on booktv. Cspan pleasure to be here. Special collections room, and this is the library, main reading room where we research and interact with the materials. Special collections, archives, maintains an extensive rare book collection dating back to the 1400s through 20th century publications, and then like some of the material we see today, the collection as well as business history, scientific history, the collection of the papers of paul, a Nobel Prize Winning citizen, one of the core collections, and as well as the long history of Florida State university, and its predecessor institutions. By the early 1960s. The institute for the french revolution was established here at fsu as an institute in the History Department for the study of the french revolution and particularly the warrings and one of the first professors sorted with the program, dr. Horwood, now professor of the american a military historian, and he is in the era, and through his research, his travels around the world, his connections with collectors, rare book dealers, but also with scholars, the french government, he began to work with the long time director of fsu library, charles miller