In It To Win: Jack & Overconfidence Bias

Abramoff’s version of overconfidence bias, which is our tendency to be more confident about our moral character and our ability to act ethically than is objectively justified.

Discussion Questions

1. Can you explain the overconfidence bias in your own words? How does it affect moral decision-making?

2. How does the overconfidence bias apply to Jack Abramoff? What examples from his story can you cite to support your argument?

3. Can you think of an example from your own life where you or someone else fell victim to the overconfidence bias?

4. How might you anticipate and/or mitigate the effects of the overconfidence bias in your own life or decision-making?

Case Studies

Abramoff: Lobbying Congress

On March 29, 2006, former lobbyist Jack Abramoff was sentenced to six years in federal prison after pleading guilty to mail fraud, tax evasion, and conspiracy to bribe public officials. Key to Abramoff’s conviction were his lobbying efforts that began in the 1990s on behalf of Native American tribes seeking to establish gambling on reservations.

In 1996, Abramoff began working for the Mississippi Band of Choctaw Indians. With the help of Republican tax reform advocate Grover Norquist, and his political advocacy group Americans for Tax Reform, Abramoff defeated a Congressional bill that would have taxed Native American casinos. Texas Representative and House Majority Whip Tom DeLay also played a major role in the bill’s defeat. DeLay pushed the agenda of Abramoff’s lobbying clients in exchange for favors from Abramoff.

In 1999, Abramoff similarly lobbied to defeat a bill in the Alabama State Legislature that would have allowed casino-style games on dog racing tracks. This bill would have created competition for his clients’ casino businesses. Republican political activist Ralph Reed, and his political consulting firm Century Strategies, aided the effort by leading a grassroots campaign that rallied Alabama-based Christian organizations to oppose the bill.

As Abramoff’s successes grew, his clients, political contacts, and influence expanded. He hired aides and former staff of members of Congress. In 2001, Abramoff began working with Congressman DeLay’s former communications director, Michael Scanlon, who had formed his own public affairs consulting firm, Capitol Campaign Strategies. The Coushatta Tribe of Louisiana hired Abramoff and Capitol Campaign Strategies to help them renegotiate their gambling agreement with the State of Louisiana. Abramoff, however, did not disclose to the tribe that, in addition to his own consulting fees, he also received a portion of the fees paid to Scanlon’s firm.

In an effort to protect his Coushatta clients in Louisiana from competition by a new casino near Houston, Texas, Abramoff successfully lobbied for a state gambling ban in Texas between 2001 and 2002. Incidental to this ban was the closure of a casino in El Paso, Texas, owned by the Tigua Tribal Nation. The Tigua were another one of Abramoff’s casino clients.

Later in 2002, Abramoff made a pitch to the Tigua to work to oppose the ban for which he had previously lobbied successfully. With the Tigua’s money, Abramoff took Ohio Representative Bob Ney and his staff on a golfing trip to Scotland. Abramoff hoped to convince Ney and his colleagues to slip a provision into an election-reform bill that would grant the Tigua gaming rights. Abramoff’s efforts did not pay off, and the deal he sought fell through, but he did not inform the Tigua of this outcome. Rather, Abramoff continued to give the Tigua hope for the provision’s success, while also continuing to charge them for his and Scanlon’s services. And, in their email exchanges, Abramoff and Scanlon often mocked their tribal clients as “morons” and “monkeys.”

Throughout the course of their work with Native American tribes, Abramoff and Scanlon charged upwards of $66 million. The Coushatta paid over $30 million to protect their casino and to stop competing casinos in Texas. The Tigua paid $4.2 million to try to continue operating their casino in Texas. Abramoff has stated that he donated much of the money he made to charities, schools, and causes he believed in. But he also spent millions of dollars on activities or contributions in connection with politicians and campaigns he sought to influence. Furthermore, he evaded taxes by funneling money through nonprofit organizations with which he partnered.

After his conviction in 2006, Abramoff cooperated in the investigation of his relationships with Congress members, including aides, business associates, government officials, and lawmakers. Representatives DeLay and Ney both stepped down from their positions in Congress. DeLay, who had risen to the rank of House Majority Leader, was charged with money laundering and conspiracy of funneling corporate contributions to state candidates. Ney plead guilty to conspiracy to commit fraud and making false statements. In exchange for gifts, lavish trips, and political donations from Abramoff, DeLay and Ney had used their positions in Congress to grant favors to Abramoff’s clients and lobbying team. Abramoff served three and a half years of a six-year prison term. He was released on December 3, 2010.

Since his release, Abramoff has spoken out against corruption in politics. He has stated that he believed himself to be a “moral lobbyist” and has apologized for his actions. In a 2011 interview, he said, “What’s legal in this system is the problem,” and in his memoir, he wrote, “Unfortunately, I was a miniature version of that system.” But not everyone perceived his redemption as a genuine effort. Tigua tribal leaders said his apologies were too little, too late. Rick Hill, former chairman of the Oneida Nation of Wisconsin, stated, “You look at Jack—though he took money from my elders and our kids, and now he comes here, and he gets to prop himself up, and it’s an acceptable part of [Washington] D.C. culture. He wouldn’t stand a minute on the reservation.”

Others point to the American political system, and see Abramoff as a symptom of broader corruption. Investigative journalist Susan Schmidt stated, “Abramoff couldn’t have flourished if this system, itself, was not corrupt, where the need for money—the members of Congress and their need for money—is so voracious and so huge that they don’t have their guard up.” California Representative Dana Rohrabacher said, “What Jack had been doing was what had been done before. People should pay more attention to the fact that we have got some enormous special interests in this country who are having incredible influences on policy.”

In his memoir, Abramoff reflected on personal and professional reform: “Regardless of my rationalizations, I was the one who didn’t disclose to my clients that there was a conflict of interest… I wasn’t the devil that the media were so quick to create, but neither was I the saint I always hoped to become. …I decided that, in order to move myself close to the angels, I would take what happened in my life, try to learn from it, and use it to educate others.”

Discussion Questions

1. Abramoff had an established set of morals in his personal life, and was deeply religious. He believed he was a ‘moral lobbyist’ who fought hard on behalf of his clients, and he donated much of his proceeds to worthy causes. Do you think the blame of his lobbying tactics primarily lies with Abramoff individually, or with the system within which he operated? Explain.

2. To what degree do you think individuals have a responsibility to act ethically within a corrupt system? How would an individual act ethically in this context?

3. Lobbying is a high-pressure, high-stakes business. Although lobbyists typically try to fly below the radar-screen, sometimes their business is high-profile as well. How might these situational factors affect lobbyists’ ability to act ethically?

4. Why do you think Abramoff and his associates would mock clients who were paying them millions of dollars? How does one rationalize or explain such behavior?

5. Since his release from prison, Abramoff has advocated for political reform, but many do not see his efforts as genuine. Do you agree with the view that Abramoff is a morally bankrupt felon who has no business advocating reform? Or do you agree with the view that Abramoff is a fallible human in a unique position to help us learn from his moral mistakes and reform a broken system? Explain.

6. Many politicians who received contributions from Abramoff or his clients donated portions of the funds they received to charity. Only a small fraction of politicians donated the money to Native American tribes. Do you think politicians who received these funds had a moral obligation to donate their money to Native American tribes? Why or why not? Do you have a different opinion of those who did donate to Native American tribes versus those who didn’t? Explain.

7. If you were hired to lobby on behalf of both the Coushatta’s casino in Louisiana and the Tigua’s casino in Texas, how would you negotiate the potential conflict of interest? Explain.

8. How many basic ethics and behavioral ethics concepts can you identify at work in this case study? Explain and discuss their significance.

9. What legal reforms would you recommend that would make lobbyists more likely to act ethically? Why would you recommend these reforms, and how might you implement them?

Bibliography

Investigating Abramoff – Special Report
http://www.washingtonpost.com/wp-dyn/content/linkset/2005/06/22/LI2005062200936.html

Capitol Punishment: The Hard Truth about Washington Corruption from America’s Most Notorious Lobbyist
http://www.worldcat.org/title/capitol-punishment-the-hard-truth-about-washington-corruption-from-americas-most-notorious-lobbyist/oclc/746839199

How a Lobbyist Stacked the Deck
http://www.washingtonpost.com/wp-dyn/content/article/2005/10/15/AR2005101501539.html

A Jackpot From Indian Gaming Tribes
http://www.washingtonpost.com/wp-dyn/content/article/2006/03/06/AR2006030600702.html

Jack Abramoff Confronted by Native American Tribes
http://www.huffingtonpost.com/2012/03/07/jack-abramoff-native-american-tribes-crimes_n_1326917.html

For Ex-Lobbyist Abramoff, a Multimedia Effort at Redemption
http://www.nytimes.com/2011/11/13/us/jack-abramoff-making-a-multimedia-effort-at-redemption.html?rref=collection%2Ftimestopic%2FAbramoff%2C%20Jack

Abramoff and 4 Others Sued by Tribe Over Casino Closing
http://www.nytimes.com/2006/07/13/us/13tribe.html?rref=collection%2Ftimestopic%2FAbramoff%2C%20Jack

Abramoff Effect: The Smell of Casino Money
http://www.nytimes.com/2006/01/16/opinion/abramoff-effect-the-smell-of-casino-money.html

The Fast Rise and Steep Fall of Jack Abramoff
http://www.washingtonpost.com/wp-dyn/content/article/2005/12/28/AR2005122801588.html

Trial Money Linked to GOP Fundraising
http://www.washingtonpost.com/wp-dyn/articles/A26015-2004Dec25.html

‘Operation Open Doors’
http://www.washingtonpost.com/wp-dyn/articles/A30123-2004Dec2.html

A Lobbyist in Full
http://www.nytimes.com/2005/05/01/magazine/a-lobbyist-in-full.html

Lobbyists, Clients Undeterred by Scandal
http://www.washingtonpost.com/wp-dyn/content/article/2005/06/25/AR2005062500983_pf.html

Lawrence Lessig interviews Jack Abramoff
https://www.youtube.com/watch?v=pkvIS5pZ0eI

Casino Jack and the United States of Money
http://www.worldcat.org/title/casino-jack-and-the-united-states-of-money/oclc/646071490

Heist: Superlobbyist Jack Abramoff, His Republican Allies, and the Buying of Washington
http://www.worldcat.org/title/heist-superlobbyist-jack-abramoff-his-republican-allies-and-the-buying-of-washington/oclc/69241491

Teaching Notes

This video introduces the concept of overconfidence bias in the context of the story of former lobbyist and convicted felon Jack Abramoff. During the Bush Administration, Abramoff was the most influential lobbyist in Washington, D.C. He was also at the center of one of the most significant political scandals since Watergate.

The overconfidence bias is our tendency to be more confident in our ability to act ethically than is objectively justified by our abilities and moral character. For more details and examples of this concept, watch Overconfidence Bias. To understand how overconfidence bias affects the actions of leaders, watch Ethical Leadership, Part 1: Perilous at the Top. To learn how overconfidence bias may affect our ability to make the right decision, watch Being Your Best Self, Part 2: Moral Decision Making.

The kinds of decision-making errors that are the subject of Jack & Overconfidence Bias and the other five shorts in this video case are the focus of a field of study known as behavioral ethics, which draws upon psychology, cognitive science, evolutionary biology, and related disciplines to determine how and why people make the ethical and unethical decisions that they do.

This video draws from footage shot at The University of Texas at Austin when Abramoff visited campus to talk about his life and corrupt lobbying in Washington, D.C. It is part of a video case that includes a 25-minute documentary, In It to Win: The Jack Abramoff Story, six short videos that focus on specific behavioral ethics biases illustrated by Abramoff’s story, and a written case study. The documentary exposes personal and systemic ethical concerns in government and illustrates how well intentioned people can make serious ethical errors—and even commit crimes.

To learn more about the scandal that ended Abramoff’s lobbying career, read the case study on this page. For a case study on overconfidence bias, read “Approaching the Presidency: Roosevelt & Taft,” which explores how this bias may have affected Roosevelt and Taft and their opposing views of their roles as President of the United States.

Terms related to this short video and defined in our ethics glossary include: behavioral ethics, fundamental attribution error, moral reasoning, moral psychology, and overconfidence bias.

Additional Resources

Books about the lobbying scandal include Jack Abramoff’s own account, “Capitol Punishment: The Hard Truth About Washington Corruption from America’s Most Notorious Lobbyist” (WND Books, 2011) and an exposé from journalist Peter H. Stone, “Heist: Superlobbyist Jack Abramoff, His Republican Allies, and the Buying of Washington” (Farrar, Straus and Giroux, 2006).

Movies about the scandal include a documentary, Casino Jack and the United States of Money (Dir. Alex Gibney, 2010), and a dramatization starring Kevin Spacey, Casino Jack (Dir. George Hickenlooper, 2010).

For more resources on teaching behavioral ethics, an article written by Ethics Unwrapped authors Minette Drumwright, Robert Prentice, and Cara Biasucci introduces key concepts in behavioral ethics and approaches to effective ethics instruction—including sample classroom assignments. The article, published in the Decision Sciences Journal of Innovative Education, may be downloaded here: “Behavioral Ethics and Teaching Ethical Decision Making.”

A detailed article by Robert Prentice with extensive resources for teaching behavioral ethics, published in Journal of Legal Studies Education, may be downloaded here: “Teaching Behavioral Ethics.”

Another article by Robert Prentice discussing how behavioral ethics can improve the ethicality of human decision-making, published in the Notre Dame Journal of Law, Ethics & Public Policy, may be downloaded here: “Behavioral Ethics: Can It Help Lawyers (And Others) Be their Best Selves?

A dated but still serviceable introductory article about teaching behavioral ethics can be accessed through Google Scholar by searching: Prentice, Robert A. 2004. “Teaching Ethics, Heuristics, and Biases.” Journal of Business Ethics Education 1 (1): 57-74.

Transcript of Narration

Overconfidence Bias (From the Concepts Unwrapped Series)

Written and Narrated by

Robert Prentice, J.D.
Department of Business, Government and Society
McCombs School of Business
The University of Texas at Austin

“Good character can be undermined by overconfidence.  David Brooks wrote in his book The Social Animal that human minds are “overconfidence machines,” and the psychological literature bears that out.  A substantial majority of people believe erroneously that they are better than average drivers, more likely to be able to afford to own a house than their peers, and more accurate eyewitnesses than most other people.

Entrepreneurs like Bernie Ebbers of WorldCom and Richard Scrushy of Health South, who built small, obscure companies into economic powerhouses, may gain a sense of invulnerability through a series of successes.  Their minds underplay any role that luck had in their success.  Indeed, a 2012 Empirical study indicated that overconfident executives with unrealistic beliefs about their future performance are more likely to commit financial reporting fraud than other executives. Essentially, they are more likely to get themselves into predicaments where committing fraud seems the only way to deliver on their promises.

People’s irrational overconfidence also applies to the ethical correctness of their acts and judgments.  In one survey, more people thought that they would go to heaven than that Mother Teresa would!  Other individuals surveyed reported that they were twice as likely to follow the Ten Commandments as other people. In fact, 92% of Americans report that they are satisfied with their own character.

This same overconfidence manifests itself in the work place where impossibly high percentages of people believe they are more ethical than their competitors and coworkers.  In one study, 61% of doctors believed that the “freebies” given out by pharmaceutical companies affected the judgment of other physicians, but only 16% believed that their own judgment was similarly affected.

Most of us simply assume that we are good people and therefore we will make sound ethical decisions.  This overconfidence in one’s own moral compass can lead us to make decisions without any serious ethical reflection. When hints of the Enron scandal first began to appear in the press, Enron employees’ overweening confidence in the competence and strategies of their company, often named the “most innovative” in America, caused them to express surprise and indignation that anyone would question the ethicality of many of the firm’s actions. Any outsider who questioned Enron’s tactics or numbers was told that they “just didn’t get it.”  That’s ethical overconfidence in action, and it’s part of the reason that Enron no longer exists.”

 

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