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Talk Of 'Accountability' Is Cheap For ChoicePoint

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Unless you’re considerably past your wonder years or are a devotee of 1970s news milestones, you probably don’t remember the name Spiro T. Agnew. Yet, if not for a certain court pleading back in the day, Agnew could well have been president of the United States.

Agnew was vice president under Richard Nixon and he would have succeeded to the presidency when Nixon resigned under the weight of the Watergate scandal. But before that could happen, Agnew himself would resign after he pleaded nolo contendere to charges of tax fraud.

That plea, which translates as “no contest,” essentially “has the same effect as a plea of guilty, as far as the criminal sentence is concerned but may not be considered as an admission of guilt for any other purpose,” says the online Electronic Law Library. By pleading nolo contendere, the defendant is not admitting anything, so the plea cannot be used in another trial to show admission of guilt.

A more recent plea that bears similarity to Agnew’s came from ChoicePoint Inc., an Alpharetta, Ga.-based company that is a major supplier of consumer data to the insurance industry. ChoicePoint will have to pay a record $10 million in civil penalties and $5 million in consumer redress to settle Federal Trade Commission charges that its security and record-handling procedures violated consumers’ privacy rights and federal laws, according to the FTC. The charges stem from a security breach in fall 2004 that compromised personal financial records of more than 163,000 consumers in ChoicePoint’s database.

Certainly, the fine and the setting aside of funds to reimburse victims of the breach were sensible and just steps. As part of its settlement with the FTC, however, ChoicePoint noted in a press release reporting revenues in excess of $1 billion in 2005 that “the Company does not admit to the truth of, or liability for, any of the matters alleged by the FTC.”

Am I the only one on the planet who thinks that there is something seriously twisted in that? So, let’s see, we will pay the record fine and give you an extra $5 million to reimburse people who were harmed by the breach, but we don’t admit that we have done anything wrong?

Oh, I know there are some who would say that such language is common in these settlements and justify that position by noting that the company is just trying to protect itself from further lawsuits or charges. But what if those lawsuits or charges have merit? Are we simply to ignore them because the federal government got its share of the pie first?

In considering this further, however, I began to think I was being a bit na?ve. After all, this kind of thing probably happens more often than most of us know, and that’s just the way things are. Despite its rather absurd denial of culpability, ChoicePoint is paying its due penalty, so maybe I should just let it go at that.

But then I saw something that took this situation beyond the slightly slick. In a statement released to the press following the FTC’s announcement of the settlement, the defendant said: “ChoicePoint supports accountability for all entities that handle personal information.”

Accountability? The last time I checked, part of being accountable is admitting you have done something wrong. Yet, ChoicePoint has chosen to be less accountable by denying responsibility and making a deal to help protect itself from others to whom it might be accountable.

Sadly, the minimizing of accountability doesn’t stop there. ChoicePoint Chairman and CEO Derek Smith noted in a statement: “ChoicePoint, and indeed the entire industry, has learned a great deal.” He also said that the changes his company has undertaken to strengthen data security “were not only the right thing for this company to do, but are equally important for the entire industry to consider” (italics mine).

No, Mr. Smith, they are not equally important for companies that already have sufficient safeguards in place. These statements are a not-so-subtle attempt to spread the blame, punctuated by another press statement from ChoicePoint: “Breaches have occurred at other companies that have affected millions of people.”

That’s like being pulled over for speeding and telling the cop, “But officer, others are speeding, too.” The policeman’s answer–and indeed the answer to ChoicePoint–should be, “Yes, but I caught you.”

The late Mr. Agnew once accused the media of being “nattering nabobs of negativity,” and lest I be similarly characterized, let me add that ChoicePoint has done right by taking steps to prevent a recurrence of the breach in question, including tightened credentialing policies, improved customer notification procedures, and the appointment of a chief credentialing, compliance and privacy officer.

And last March, reported that Mr. Smith had offered an apology to a congressional committee for the incident, admitting that ChoicePoint had undergone some “serious soul searching.” Since the company has admitted no wrong, however, one wonders what it unearthed on that search.

There is a lot to be said for humbly admitting fault, quietly taking your medicine and moving on with restorative measures. Trying to shift blame to others and minimizing your own responsibility are not the actions of a company that paints itself as accountable.


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